How to increase share in a changing market.
Market share is often compared to and even visually depicted as a slice of pie. In essence, how does your slice compare to your industry? However, there is a limitation to that analogy. Get that visual of a sliced apple pie out of your mind when it comes to industry because it has you concentrated on a stagnant circumference.
Think of market share like this (whatever this is)…
rather than this…
Industry is fluid and it can be expanding or contracting year-to-year. In turn, your piece has to adjust right along with it.
Calculating your market share is simple and a formula you are probably familiar with.
Market share = Your company’s total sales over a specified time period divided by your industry’s total sales over the same specified time period.
What’s so complex about market share is the process of continuing to evaluate your industry and growing your share as the industry around you fluctuates. While there is no simple formula for that, here are a few key ways you can defend and even expand your share in an ever-changing market:
Calculate and adjust your Share of Voice
Share of Voice (SOV) may not be a term we hear as often but it’s one we [marketers] should be more familiar with. Especially when competitors are all shouting at similar audiences. SOV, as you have most likely figured out, is a measurement of your advertising and marketing efforts relative to your industry. How much are you spending on marketing and what is brand awareness in comparison to your competitors?
There is strong evidence that proves market share and share of voice have a symbiotic relationship. When your SOM and SOV should be in equilibrium. Even more important, when your SOV is greater than SOM, your share will grow, so you need to know if you are underspending in advertising in regards to your market. While calculating SOV looks simple on paper, there are endless channels and elements of advertising to monitor. Using tools such as Brandwatch and Awario will give you a more holistic and accurate look at the overall industry voice and what you occupy.
Identify market gaps and opportunities
One of the most difficult things to do when it comes to growing your slice is taking customers away from your competitors. Alternatively, try to pinpoint attributes that make you different or current gaps within your industry. Instead of stealing hard-to-convince loyalists, recruit potential customers that are new to the market entirely. This is a winning combo because you will be growing the industry, while expanding your share at the same time. A great way to zero in on those gaps is using the Blue Ocean Strategy (a highly recommended read). To summarize, Blue Ocean is an analysis that has you searching through uncharted waters and “unknown market space.” Whether you are looking to increase your share or just enter an established market, this is a great way to claim new territory. Think of Uber and disruption within the transportation industry.
Rethink your distribution strategy
Innovation is imperative to remain relevant. One of the last places tend to think of when you think of creativity in marketing is distribution. Most of your competitors are looking at the same distribution metrics including revenue and category revenue distributions within the market, which means you are most likely competing for the same space. This is where it counts to think outside the shelf. Companies such as Chick-Fil-A and Timex added non-traditional distribution channels to their strategy.
The main takeaway: Never look at your industry as an old-fashioned pie and a simple calculation. Instead, approach market share with an innovative mindset looking for intuitive tools that are more accurate, explore untapped needs to attract new consumers, leverage your unique attributes as a brand, and reposition your product/service strategy.