Companies are always worried about the size of the potential market for their products or services. But they are more concerned about the proportion of that market that actually buy their products or patronise their services—often referred to as a company's market share. The company with the biggest market share is the market leader, and usually has the highest marketing and distribution cost. They also have the capacity to influence changes in market price. Market challengers are the companies working to increase their share. The leader must constantly survey the market because the challengers are consistently trying to capture their share.
The market leader has three options to preserve its market position: expand the total market, protect share, or expand share. Market leaders can protect their market share by observing their position and quickly alleviating any weaknesses. Constant innovation is the best way to protect market share. When leaders become complacent with their products or services, the challengers find it easier to make progress.
There are four basic ways to enhance market share:
- Improve your product quality and lower the price
- Offer special discounts and sales.
- Find new means of distribution so your product can reach more places and people.
- Advertise and promote your product.
Sustaining Market Share Through Customer Retention
Customer retention is one of the most important marketing strategies for any organization that wants to sustain its market share. Keeping customers happy takes hard work and planning, but can yield incredible results. A family of loyal customers will help you maintain your market share. Your ability to keep customers is reflective of your skill in satisfying them. Satisfying customers is as simple as delivering “value” proposition in a timely manner.
To satisfy the ever increasing demand of customers require communication and action. Your language must be specific and consultative, and you must deliver propositions beyond expectation. You must know what competitors are offering, and ask your customers how important it is that they receive this difference. You must improve your service continually to strengthen the relationship. You must investigate and uncover new opportunities for their growth. Most importantly, you must revere your customers and never take for granted the vital role they play in your business. You must also be interested in the growth of your customers’ businesses. By so doing you are ensuring the growth of your own business and market share.
The benefits of customer retention are far beyond prevention of loss to competitors. Savvy marketers know that it is much easier to sell to existing customers because they have experienced your service, and presumably, understand your wares. Current customers also offer the fastest and most economical ways to learn about new needs in the marketplace. They generally are more responsive to conversations about new product development or research.
How can you keep customers buying?
Several techniques can be used by smart companies to help keep current customers in the pipeline. Each method focuses on customers. They can and should be used simultaneously;
- Give them something not offered by any other competitor. A unique offering differentiates us from our competition. Most times this is an added feature.
- Involve customers in their own definition of happiness. Give customers the respect and opportunity to tell you what will make them happy. Ask for their involvement in your joint success. Even when customer interactions are brief, companies can capitalize on customer feedback.
- Make it easier for customers to buy frequently, more efficiently, with fewer problems, or cost reduction. Customers need help to part with their funds and are happy to come back once they can rely on your judgement.
- Building trust takes time and experience. Positive first time experience guarantees more patronage by customers.
- Help the customer identify new opportunities. The company that helps build its customers' business, whether or not it is a money-maker for the supplier, will engender a lasting relationship. Why? In addition to the selfless motive of supreme service, the supplier benefits financially by perpetuating future transactions. It is a paradox of some sort: Keep the interests of the client as highest priority.
- Become a preferred supplier. This can be achieved by providing quality customer service, support and responsiveness. There is the need to focus on making purchasing easy for customers and strive to meet or exceed their requirements. You have to partner with them to solve problems and maximise opportunities. This will establish a lasting business relationship based on trust.
Why Do Customers Stop Buying Your Product Or Service?
1. You may not have met their needs quite satisfactorily.
2. You may have failed to satisfactorily provide solution to their business challenges.
3. You may have lost the customer to a competitor who has identified a new market for the customer, solved the customer’s current business challenges better, or made it easier to do business with the customer by providing incentives or removing barriers.
Sustaining Market Share Through Sales and Marketing
- Create new product or service offerings (and packaging) with recession pricing: To help maintain cash flow, rename, repackage and re-price your offerings to give your targeted prospects multiple price options to buy from you. Make your prospects choose between your options rather than seek an alternative vendor.
- Train your sales team better: Small Business Forum, an association of small business owners, estimated that only 14% of companies invest in organised team sales training. Do you believe that your team is too experienced that they cannot learn at least one new sales technique or marketing technique? Do you think that you pay your sales team so much money that they should just know how to sell? Your sales team is part of your company’s assets and intellectual property. Invest in your sales team and help them sell more.
- Spend more on marketing current and future opportunities while constantly quantifying your ROI: Any investment, including marketing, must have a definable Return on Investment (ROI). Therefore, identifying current opportunities is important because you need to have buyers who are currently in the buying cycle to remain in business.
- Hire slow, terminate fast: You cannot afford to have sales people who are not target oriented. Create a performance reward system that thrives on a thorough recruitment process. This allows for easy identification and replacement of unproductive team members.
- Do not waste marketing expenditures on branding adverts: In business, branding is hard to quantify. Focus your marketing budgets on tactical marketing programs that can create competitive advantage.
- Make ‘cold call’: To increase sales success and reduce sales capture costs, sales people must make cold calls to new prospects. It is the cheapest and most direct way to find buying prospects.
- Cut travel expenses by having your prospects come to you: To have your prospects prove to you that they are qualified buyers and not professional lookers, make them come to your office to view your offerings. Review your current sales cycle and marketing steps and use webinars on the Internet as a tool to communicate your value.
- Focus on few Industries: Do not chase shadows, instead be an opportunist. To reduce sales cost and increase your sales success, your sales approaches should be directed to few industries that you understand their dynamics.
For businesses to ultimately succeed, creative thinking must be preserved. This must be applied to the development of new and innovative revenue streams, whether they relate to the business model that one currently employs or the expansion of one’s personal wealth. By responding to the evolving market trends with brilliant and innovative philosophy, it is possible to grow your business organically, develop multiple streams of income and sustain market share even in a depressed economy.