How to grow market share for your business

Seven ways you can use market share to increase revenue

Market share is one of the most essential yet underrated metrics organisations can use to gauge the effectiveness of business activities like marketing campaigns, showing:

How you’re doing compared to your competition
The correlation between your strategies and business results
Insight into your performance.

Despite this, many businesses ignore market share, focusing only on internal metrics like awareness, engagement, and satisfaction. These are certainly important, but they can be misleading. Your internal metrics might be great, but are they driving up your market share? In a face-off with your competitors, who would come out on top?

what is market share?

Market share is the percentage of the sector for which a business's product, service or software is responsible. You calculate it by dividing a company's total sales by its industry's total sales over a set time.

It indicates the size or power of a business compared to its competitors, which can influence the size and scalability of its operations.

Seven ways to use market share insights to increase revenue

A company that knows its position in the market can understand whether its current strategies and tactics are working and where it can improve most effectively. Here are some ways businesses can leverage the insights gained from market share reports across their teams:

understand your context

It’s important to compare an organisation’s market share metrics in the context of the total market they operate within. A tech company's revenue may be increasing, but is it increasing relative to the wider market? A fast-fashion business's market share might be declining if the market has outgrown it and its competitors have gained more traction. By understanding your context first, you can start to look at ways to accelerate growth and improve even more.

Understand customer spend

Customers can be expensive and timely to acquire, so most businesses will be looking to get the most value out of the customers they already have, also known as maximising customer lifetime value. With market share data, companies can track and analyse key strategic pricing initiatives, such as upsell opportunities, and where and when they best apply.

Knowing where the money is going enables businesses to determine how best to capture their share of customer wallet, which measures whether customers are increasing their spend with the company. It also gives more insight into where else customers spend and what they buy.

Evaluate marketing initiatives

A market share analysis can be an excellent tool for guiding appropriate investment to maintain market share and customer value growth over time. This data can lay the groundwork for marketing teams to assess whether their current campaigns' ROI is acceptable or if something needs to change. They can look at initiatives like the media channels their customers use and review whether to develop new strategies to attract more customers.

Know how competitor groups are performing

If a business has just discovered it is losing market share, the next step is to find out why. What its competitors are doing can provide helpful insight into their strategies, potentially illuminating opportunities to do things differently. For instance, competitors might be promoting new products and services or targeting new/different customer segments. There might also be new competitors that alter how customers spend in the competing market.

Gauge what affects customer behaviour

It is important to ask and understand what is currently driving any change in customer behaviour. Many factors can affect customer spending habits, from increased competition to a reduction in discretionary spending overall. Businesses can use market share data to determine how the behaviours are trending and whether they are worsening - and then create action plans to implement change.

Track customer loyalty with segmentation

Segmentation enhances the insights gained through market share, enabling businesses to determine which of their customer segments are more loyal than others or which groups spend more, as well as which are growing, holding steady or shrinking. Altering marketing campaigns to target these customer groups differently is an excellent strategy for improving market share performance.

This is exactly the technique we used when our team of data experts helped leading Australasian furniture chain, Freedom, use segmentation to discover that customers spend up to 22% more when they signed up to their loyalty programme.

BETTER INSIGHT LEADS TO BETTER STRATEGY

Market share reporting supplements management reports, providing another lens through which boards can provide good governance and monitor performance. Companies can use market share to help steer the organisation towards its goals and ensure their management aligns consistently with their vision day-to-day.

HOW to Get the most out of your market share data

Here are some quick-fire ways to utilise market share data more effectively:

Fast data equals fast decisions

A daily market share feed is most relevant if a business uses that information every day, perfect for retail or FMCG. If you need to react tactically to competitor activity weekly, you need that data on hand. Our market share data service is designed to be modified for each company's needs - daily, weekly or monthly, with a granularity that gives you the most confidence. It’s about consistency and timing.

Integration is key

Market share becomes extremely powerful when combined with other data sources, such as competitor marketing or other promotional activity. Together, these services can provide more context to changes in market share and help your business objectively understand which levers are moving the needle the most.

Know your competitors

Defining your key competitor groups is essential for creating a market share reporting strategy. These should also be regularly reviewed and updated – markets evolve, and sometimes brands that were not competitors in the past can become competitors in the future.

HOW A PARTNER LIKE Datamine can turn your market share into a competitive advantage

If market share is so important, why is it so underutilised? For most organisations, it’s because they don’t have the competitive data needed. That’s where Datamine’s RetailWatch can add real value.

We help our clients understand their market share and the impact their business strategies and execution have on revenue. This allows you to evaluate your short and long-term trends in market share and competitive presence and, ultimately, achieve better results.

What Should you do if you're losing market share?

To understand the ‘why’ behind a change in market share, you need to aggregate the data at a level that makes sense for your organisation. With readily available data and efficient drilling-down processes, you'll be ready to use it in your decision-making. Explore our free downloadable guide to give you more of an overview on market share tools and solutions we offer.