It's All About Market Share

In today's slow-growth/no-growth economy, the fact is that often the only way to increase your sales is at someone else's expense. When new prospects don't "magically" appear in your market, you have to take away someone else's customers and get them to buy from you instead. For many companies, building market share is the only way to win in today's recession-plagued markets. And we can help.


When the economy was growing (back in the day, before the recession,) people had money to spend, loans were easy to get, and the pie kept getting bigger and bigger. And in the classic self-fulfilling prophesy, businesses invested because they expected that the economy was going to continue to grow. As a result, your prospects could justify buying on the basis of some projected ROI, or even some forecasted savings, that you promised; and you rarely had to worry about competition. Even better, there was always another new prospect around the corner; and new solutions were coming out of the woodwork. Sure, you may occasionally have had to work a little bit to kick out an incumbent vendor, but your argument was made a lot easier because there was, at least, money to spend, and people willing to spend it.

Today, though, we're suffering from the "paradox of thrift," where people aren't spending money because they simply have less of it. And what they have, they want to hold onto for an emergency. Since prospects are hoarding every penny they have, the only way for you to win is for someone else to lose. And that means you have to unhook your competition - whether it's a direct competitor or an indirect competitor - and take away their market share.

"But We're Unique!"

To be sure, if you're like most businesses, you've probably spent years convincing yourself that you don't have any competition. You probably put a lot of effort into creating arguments that your products or services are so unique and so special that no one would ever consider not using you - and that your competitors aren't even in the same league.

That may work for training your salespeople, but the fact is that even if your products or services are unique, if the prospect is going to buy them under today's economic conditions, they have to not buy something else. Either they have to stop buying from your "direct" competitors, or they have to stop buying from one of your "indirect" competitors: substitutes, alternatives, or even products or services that are totally unrelated to what you do. In fact, today you have to consider salaries, retained earnings, and every other expense to be your competition - because that may be where the money is going to come from to pay for your product.

Today, every business opportunity and every market strategy has to be viewed through the lens of taking market share away from someone else. Strategies that ignore the win-lose nature of sales today are simply delusional, and destined to fail.

In this regard, there are three ways to build market share. The hard way: head to head; the expensive way: through acquisition; and the easier way: change the game.

The Hard Way to Build Market Share

In head-to-head competition the prospect compares your features and price to those of your competition (both direct and indirect), weighs the cost of change, and (most of the time) decides to stick with the incumbent. (Companies that play this game are called "column fodder," by the way.)

The Expensive Way to Build Market Share

The expensive way to gain market share is to buy your competitors. And if you can do the deal, go ahead. But it's generally very expensive, and you can only play the game for so long. When you've bought up all your competitors, where do you go next? And what if you can't buy them?

The Easier Way to Build Market Share

The easier way to win is to change the game. This may mean getting there before your competition. It may mean going after decision influencers, rather than decision makers. It may mean finding needs that your competition isn't meeting, or getting specced in so your competition is locked out, or coming out with a new product. It may mean repositioning your entire product line, or your entire company, so that it's measured on a different scale. It may require a new channel, a new sales team, a new justification, a new marketing strategy, or a whole new paradigm - or maybe just a tweak to what you already have.

However you do it, building market share ultimately means getting the prospect to stop doing something that he is currently doing and instead do what you want him to do. (Or, more specifically, to stop spending money with someone else and instead spend it with you.) But this means you have a lot more to answer for than just your traditional benefits. You have to, either implicitly or explicitly, unwind someone else's justification.

And while such an approach may appear at first to be uncomfortable and costly, changing the game is almost always easier and more effective, and a whole lot less expensive, than beating your head against the wall, or trying to buy a competitor who won't sell at a price you can afford.

The Impact of a Market Share Strategy

A market share strategy doesn't change your basic business model; it changes the coefficients in your business model - dramatically improving your ROI. Thus, in the simplified B2B example below:

  Traditional Strategy Market Share Strategy Impact
Total Market Opportunity
(total potential prospects)
5,000 5,000 A Market Share Strategy typically doesn't increase the total size of your market.
Addressable Fraction 40% 60% But it can greatly increase the fraction that you can realistically go after.
Addressable Market
(realistic prospects)
2,000 3,000 And therefore it increases your Addressable Market size.
Appointment Rate 20% 40% A Market Share Strategy can significantly increase your prospects' interest level.
Qualified Leads 400 1,200 As a result, a Market Share Strategy increases the number of qualified leads you can generate.
Close Rate 25% 35% A Market Share Strategy can also increase your close rate (i.e. your Win Rate.)
Closed Sales 100 420 As a result, a Market Share Strategy increases your number of closed sales.
Willingness-to-Pay $10,000 $12,000 And a Market Share Strategy also tends to increase the prospect's willingness-to-pay.
Gross Revenue $1,000,000 $5,040,000 As a result, a Market Share Strategy increases your gross revenue.
Market Share 2.0% 8.4% And, of course, the result is an increase in Market Share.

Where a Focus on Market Share Shows Up

A strategy to build market share can often enable you to increase your sales significantly, often for a very marginal cost.

Impact of a Market Share Strategy
Traditional Strategy Market Share Strategy
Market Share Matters

Its benefits are felt on your top line, shown below.

On Revenue

And on your bottom line.
And On Profits

As a rule, for every dollar you spend on developing and implementing a Market Share Strategy, you'll net $100 in gross profit, and potentially more depending on what implementations are required. For most companies a Market Share Strategy is the best investment you can make in a recessionary economy.

In addition, when the economy does finally turn around, you'll be the dominant player in your market. As a result, your revenues and profits will grow disproportionately faster compared to your competition when the economy turns up.

JV/M Can Help You Change the Game

At JV/M, we've helped hundreds of companies increase their revenue and profitability by helping them increase their sales and market share. With a Market Share Strategy you can find new revenue opportunities in a down market, and steal customers from competitors you didn't even know you had. Because at JV/M we know what works, and how to make it work for you.

Call us, and find out how we can help you change the game.


[Why wouldn't you want to build market share?]

JV/M, Inc. 1221 N. Church St. Suite 202 Moorestown, NJ 08057 Tel: 856-638-0399 Fax: 856-316-7465
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