Market Share Can Boost and Improve Your Marketing Strategy!
By RJ Licata, Marketing Director, Terakeet
Market share is an essential tool in a marketer’s toolkit. It can provide invaluable insight about where your brand stands in its industry, which competitors to chase, and which of your tactics are most effective.
Take this example. Say your town has four bars in it, and your company always chooses one of the four for happy hours. If you and your coworkers celebrate every Friday for a month, and choose the bar closest to your office three out of the four times, that bar owns 75% of the market share from your company.
For that bar, it’s nice to know they have the majority of that market segment covered, but it also demonstrates that they might be able to increase their overall market share by hosting events specifically geared toward other businesses to expand their customer base. For the other three bars, this knowledge is also valuable in steering their marketing strategies.
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Why Is Market Share Important?
Market share typically reflects a brand’s level of innovation and marketability. But it also impacts a company’s profitability, stock performance and scalability. How?
Market Share Indicates Where You Stand
Whether your industry consists of a dozen brands or thousands, determining your company’s share of that market can help you understand where your brand stacks up against competitors.
The standard way to calculate market share is to divide your company’s revenue by the total sales of the entire industry. But, if the only way you look at market share is overall industry revenue dominance, you might be missing the bigger picture.
Consider the share of organic search traffic that your business receives, for example. This is an often overlooked, undervalued metric across all industries. Google reports that 53% of shoppers perform online research before making a purchase decision, so significant search market share can ensure you have multiple customer touchpoints throughout the buyer’s journey, earning their trust early in the process and positioning you to sell to them later on. Serving customers long before they’re ready to buy is a huge opportunity to differentiate from your competitors.
Understanding where your brand falls in the market both in online search and overall revenue can and should help inform your next marketing strategy to push out your competitors and bring in more customers.
Market Share Informs Brand Growth
Your brand’s market share and penetration is critical to understand as a piece of the larger brand growth and diversification puzzle. The more you know about your current place in the market — your strengths and weaknesses, your competitors, and potential opportunities — the more clearly you’ll be able to prioritize growth strategies for your brand and mitigate the risk inherent with new ventures.
Put simply, if you’re able to understand where your brand is winning and why, you can more accurately assess future market growth strategies. It puts your organization in a better position for success.
Ideation for new goals, strategic plans for entering different markets, and product development for current and new offerings, all provide the opportunity for renewed expansion, and all rely on current market success and insights.
Market Share Measures Marketing Success
If you run a marketing campaign, how do you measure its impact? Web traffic, conversions and units sold are common performance indicators for sales, but what about brand awareness?
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A brand’s share of voice and its market share are often directly related. After all, a person will only buy from your company if they are made aware of your offering and why it’s better than your competitors’. As you start to control more of the industry narrative, your brand will continue to grow, and so will your market share and the separation between you and the competition..
Therefore, changes in your market share over time are a reliable source of measurement for your brand’s marketing success and overall brand awareness. It provides insight into the efficacy of your strategies. If your market share is increasing, your brand building efforts are likely effective. If it’s stagnant or, even worse, declining, you’ll likely want to reevaluate your marketing efforts.
How to Grow Your Market Share and Boost Your Marketing
Knowing the value of market share is one thing, increasing it is another. Below are some tips for growing your competitiveness, and ultimately your profitability.
Increase Investment and Commitment to SEO
Modern consumers use Google search for every stage of their buying journey, from the initial research, to comparisons, to a final product search. It’s critical that your brand reaches them at every step of the funnel with engaging, informative, and search-optimized online content. Investing in internal audits of your site’s content, user experience, and technical elements, and external validation of your site’s content and authority can have huge impacts on your brand’s visibility at all levels of the sales funnel and help increase your overall competitiveness.
Be Open to New Business Opportunities
Businesses that remain agile and avoid pigeon-holing themselves to one revenue stream scale the fastest and set themselves up for long-term success over competitors. Get creative with your offering. What are your blindspots? Is there an impending cultural shift that will impact your offering? Are there new markets for your product that you haven’t considered? How can you expand your customer base to new demographics? Don’t be afraid to transform your company and diversify your product suite to better suit customer trends, or even rise to fill new consumer needs.
Focus on Customer Retention
Existing customers are 45 percent more likely to support a new product offering than new customers. This means they not only cost less to sell to, but that they’re also inclined to support your brand long-term. Investing in customer loyalty will build your brand’s relationship with current customers, empowering you to confidently develop new products, generate authentic customer brand ambassadorship, and increase your market share and revenue.
Use Market Share to Improve Your Business
Young startup or steady titan, every business needs to understand where they stack up against competitors. When evaluating any performance metric, it’s important to consider the broader context surrounding it. As such, market share is one of many worthwhile KPIs to track. It’s a critical one, however, because the information provided can help you reach more customers and drive better strategies while building a brand that’s more impactful, more appealing, and more profitable.
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