Virtually every business needs or wants more customers. Why? To stay in business. As CB Insights found in their analysis of nearly 300 failed start-ups, no market need (i.e., customers seeking a solution) was the top reason for failure. To this end, if you have customers, then why stay in business? Many answers exist, but the essence is to serve a need (i.e., solve a problem). To continue solving a problem—or creating value—many businesses must grow, which can mean different things to different people. The more a company grows, the more resources it can devote to creating value. Growth comes in many varieties, including financial (e.g., gross margin or net income), customers served, personal (e.g., leadership and professional development), and mindset (e.g., abundance instead of scarcity), amongst others. The bottom line is customers, especially new ones, validate a business’s reason for being. Otherwise, failure, idling, or decline occur.
Business growth occurs in four ways, all of which revolve around your product or service offering and its market (i.e., distribution). Igor Ansoff was an applied mathematician and business manager who consulted and taught at many distinguished universities. He’s known for developing strategic management and corporate strategies—one that suggests growth occurs through one of four product-market strategies called the Ansoff Matrix. This happens when existing or new offerings (i.e., products or services) are introduced to existing or new markets. The result creates different go-to-market strategies that support each growth goal.
Why Customers Are the Key to Growth
One option is to increase your market share. It’s easy for businesses with existing customers and an established distribution channel (or more) to select this path. This is the best option if you want to grow an existing market with the same product or service. Customers, offerings (i.e., a given product and/or service), and a distribution channel are used as the foundation for growth through increased market share. And, ideally, your market is growing. But, in short, this growth path means you intend to take customers away from competitors.
In addition to taking customers away from competitors, increasing your market share typically means your business has the ability to incorporate additional marketing tools. Discounting and promotional options are common tactics that, when added to your competitive advantage, create growth potential. As a business leader, this path also means you have a lower risk tolerance and want a smaller, more immediate return than developing a new offering and/or market. If this sounds like you, then here are five ways to increase your market share.
Five Ways To Increase Market Share
- Leverage your assets and opportunities. Many challenges seem overwhelming to consider, let alone overcome. As a result, it’s easy to repress them and hope they go away while they linger and actually get worse over time. That’s why STRE.ME’s Value Shift process uses clarity and structure to develop solutions that are based on your unique goals, challenges, assets, liabilities, opportunities, and threats. This is a great way to start the process.
- Create or refine a sustainable competitive advantage to overcome your competitors’ weaknesses. Sometimes this is as simple as refining and repositioning a product. You can also clarify your message by understanding your customer and problem(s), offering empathy and authority in a handful of steps, and showing success or failure in all marketing assets. StoryBrand is an amazing way to develop and implement this approach.
- Find a way to increase promotions, marketing, and distribution support with your refined competitive advantage. Creating a sustainable competitive advantage will make it easier to increase relevant promotions, marketing, and distribution support. It gives you something to talk about through all media (in person, digitally, and through print). In turn, it will help to convert sales by solving customer problems. Benson Shapiro’s Harvard Business Review article, “Improve Distribution with Your Promotional Mix,” provides a great structure for putting this into action.
- Experiment with temporary price reductions or product bundles to convert sales. These short-run tests can help to spur sales and qualify leads. Just be sure to track conversions through your sales funnel and into your CRM. This will help to assess lead quality and customer retention. Competera’s blog, “How to Use a Bundle Pricing Strategy to Increase Sales,” outlines the advantages and disadvantages of this approach.
- Think outside the box by acquiring a rival or refining your product. This can be beneficial if you’re able to integrate both firms’ operations, cultures, and distribution channels. This Angel Investor Report post, “Growth Plans and Investment: Growth Through Acquisition,” outlines good considerations for growth through acquisition.
Outcomes from Increasing Market Share
To recap, increasing your market share is the way to go if you have:
- An existing offering (i.e., service and/or product), market (i.e., distribution), and customers
- The desire to take customers from competitors (i.e., increase market share)
- The ability to increase your marketing efforts and mix (e.g., discounts, bundles, promotions, etc.)
- A lower risk tolerance
- A desire for smaller, more immediate returns
This whole process will enable you to develop and implement a vision for making money, saving time, and reducing risk. The more you follow this path, the more your business will create a growth cadence around the priorities that matter most. And, the more you consistently focus on this path, the more you increase the likelihood of success by leverages what makes you better. There’s no sure bet here. But, as the saying goes, luck favors the prepared.