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Market share refers to the percentage a company controls of the total market for its goods and services. It’s an important metric as it typically reflects how profitable and successful a business is.
Market share affects various aspects of a business, from its pricing to its stock market performance. This effectively means that a greater market share leads to greater profitability. As a result, many business owners ask the question: “how can you increase market share?”
In this post, we’ll take you through some of the key ways you can gain a greater market share for your company.
How can companies increase their market share?
Even companies that already dominate their market should always be looking to gain greater market share. This is because the market will expand as the industry expands, so company’s need to be proportionally growing their market share in order to remain competitive.
Below are some ways companies can increase their market share.
Constantly innovating is an excellent way to grow company market share.
There are a number of ways to do this, for example, through innovative technology, product improvements or novel marketing techniques.
Although it's easier said than done, the trick is to always stay ahead of the curve. Once your innovation starts transforming into better sales, you can guarantee that your competitors will come up with something similar.
2. Build customer loyalty
Focusing on building customer relationships in order to gain their loyalty is an excellent strategy for acquiring market share. This is for several reasons. Firstly, it prevents existing customers leaving your company and going to your competitors. Secondly, it allows you to utilise the benefits of word-of-mouth marketing, whereby your loyal customers tell their friends and family about you too.
Reinforcing customer loyalty can therefore help you retain and attract new customers, in turn leading to gains in market share.
3. Employ a skilled workforce
Increasing market share can be achieved by focusing on attracting and retaining gifted employees. This is because talented employees that feel appreciated in their job often become dedicated to the company. This results in fewer costs pertaining to hiring and training down the line. Plus, it goes without saying that a skilled team will help you achieve innovation, better products and services, sales and higher customer loyalty rates.
In order to recruit the best employees, you’ll need to offer attractive salaries, benefits and potentially options for working from home. It will also be important to develop strong employee engagement. It will be worth it though, as investing in the right team will help your business perform better in the future.
4. Consider acquisitions
In order to obtain favourable market share and outdo competitors, companies can also consider buying out its competition through acquisition.
Acquisition involves one company taking its competitor out of the market and thereby assuming its market share. As well as leading to market share domination, it also comes with a number of opportunities to develop new products, obtain new loyal customers and expand.
If full acquisition is not financially viable, companies can also consider scouting key employees in competitor companies.
5. Improve advertising
Effective advertising is a great way to gain market share. Launching innovative branding and market campaigns can help attract the attention of new customers and further reinforce loyalty in existing ones.
Successful advertising will require strategy and resources, so again it’s important that you have a talented and skilled team onboard.
6. Lower prices
Reducing prices can also be a good strategy for acquiring a bigger market share. This is due to the fact that lower prices comparative to competitors tend to attract customers, including your competitor’s customers.
As well as lowering prices, companies can also consider offering promotions, coupons, discounts and loyalty schemes to attract consumers looking for good deals.
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