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Are you searching for ways to grow your startup business? We have provided a few tips to make your business great.
What Is The Meaning Of A Market Share?
A business market share refers to the size of the market/ customer base where a business sells its products and services. One of the main goals for small businesses or any business is to expand its market share in a bid to increase the total profits realized by the business. This is because a bigger market share means the business will make a higher number of sales.
One way for a business to grow its market share is to innovate as well adding affordable venture capital funding to expand investments for innovation. Another way to increase the market share is to improve the quality of customer relations or take over the competition.
What Is Market Share About?
A business’ total market share is determined by calculating the percentage of the products/units and services sold in a particular market. For instance, if company A makes $1 million every year and its gross revenues in the market are $100 million, this means the business commands a total market share of 1%.
On the other hand, we can use a percentage of products/units method. For instance, if a business can sell 50,000 units/products when the entire industry sells a total of 5,000,000 units/products, then the business has a market share of 1%.
Your business will have a greater competitive advantage as it progressively grows its market share. Apart from the realization of higher sales, having a larger percentage market share allows the business to profit from the economies of scale. To illustrate, the business can negotiate better rates with its suppliers or distribution partners. By dealing with huge orders, businesses have more purchasing power and can significantly lower the cost per unit/product or the cost per business customer.
Strategies To Grow A Business’ Market Share
One of the best and easy strategies to increase your business’s market share is investing in innovation. For instance, the business may consider adopting a new means of technology to enhance operations or develop a new product. One of the main goals for innovation is developing an edge over your competition, by offering better quality and reducing your business’ operating costs. That way, the company can deal well with emerging business issues or reach out to a new customer base.
Additionally, offering better quality products and services and value for money than the competition will pull most of the customers to your side. Most of the customers your business attracts by offering innovative products and services are highly likely to remain loyal to your brand for a long time.
Another way to win and guard your business market share is to enhance the quality of customer relations. The power of good customer relations should never be underrated. It can withhold customers from leaving even services and products that are not the best in the market. Having quality goods and products and an excellent customer service department will attract new customers and retain the old ones for long or use them as your brand promoters.
The loyal customers will increase your business’ revenues and also your business’ turnover by referring their family, friends and work colleagues to your business. Word-of-mouth customer referral is an extremely effective business advertising and marketing strategy and does not cost you a dime. If the referral is not happening via word of mouth, the other is social media; in today’s time, many people use social media to share their experiences from using certain products or services.
The Best Strategies For Maintaining Your Business’ Market Share
The pros advise businesses to develop real-world strategies to increase their market share while retaining their existing market share. You will need to use skilled and motivated employees to win over new clients and maintain the old customers with the same zeal. Employing skilled professionals to guarantee quality services and products is the ultimate strategy to retain the market share your business has grown in the past.
You do not want to continually hire essential employees and train them while losing the old core that made you successful; it will be hard to retain the skills that first set you on a path to success. Ensure all your employees have a good working environment, culture and are always treated with the dignity they deserve.
Another way to take over extra market share is to buy out a company with a good market share using the financial opportunities available for your business. Buying a company with existing relationships in the real world and also through good online marketing with many customers gives your business access to the same customer base. Additionally, it eliminates the need to grow new relationships with the customers or steal them from your competition. The acquisition provides a useful way to expand your businesses quickly in a market with stiff competition.