Market Share Acquisition
Building market share is the key to success and profitability in today's recession-plagued market. In fact, a higher market share has historically been predictive of a higher profitability; but in a slow-growth or no-growth market, building market share is often the only way to survive. At JV/M, we can show you how to gain market share on your competitors, both direct and indirect, and increase both your top line and your bottom line.
Whose Pocket Are You Going to Pick?
If your only option for growth is to increase your market share because your market is no longer growing, and there's no viable acquisition strategy, then you need to know whose market share you're going to take away. In other words, where's the opportunity going to come from? And in this regard, people generally think of two categories of competitors that they can go after:
- Direct Competitors
These are companies that sell the same type of products and services that you sell, to the same type of customers that you would like to sell to. So, for example, if you're a car dealer, your direct competitors are usually other car dealers in your area. You can refine your market definition a little, of course. For example, if you sell luxury cars then your direct competitors might be other luxury car dealers. But your direct competitors are generally those companies that show up on your typical prospect's shopping list.
- Indirect Competitors
Indirect competitors are commonly thought of as vendors of substitute products, or products and services that satisfy the same needs as your products, but aren't thought of as interchangeable. For example, an indirect competitor for a luxury car might be fancy vacation. An indirect competitor for an IT system might be a managed services firm. Public transportation is a common substitute for having a car in the city; and outsourcing is a common alternative for hiring. In each of these cases, the potential vendor often has to make his case not only against another vendor like himself, but against another vendor who's selling something completely different.
In developing a market share strategy, though, there is also a third type of competitor, usually referred to as the "implicit competitor," and which also includes the "do nothing" option, that presents both a threat and an opportunity.
- Implicit Competitors
Implicit competition comes in the form of all the other things that your prospect spends his or her money on. And any one of them can become the source of funding for the purchase of your products or services.
Implicit competition also exists where the prospect decides not to make any changes to satisfy the needs that you target. And while this is usually thought of as an annoyance, where you waste time and effort trying to close someone who ends up not buying; in the context of acquiring market share - which is the major goal today - it becomes a critical source of funding, opportunity and potential revenue, and a way to change the game.
The fact is that, even if the prospect doesn't buy anything to satisfy the needs your products address (let's say you're that luxury car dealer,) he's still spending money on something. It may be accounting services, IT and payroll, but you have to ask yourself: If you could persuade the prospect to stop spending money on those other things, and get him to spend some of it on your products or services, would you? If the answer is yes, then these are implicit competitors whose market share you need to go after.
Now What?
With the major categories of competitors defined, we can now populate them, and figure out who's share you're going to steal. We can know what needs they meet, and how to unhook them. We can see how the purchase of your product can be funded. And we can determine how the elements of the marketing mix (product, price, promotion, place and position,) need to be adjusted to make it happen. We'll then put the plan together, and help you execute it.
We'll help you run the attack: We'll train your salespeople, and bring up new channels. We'll create your marketing material, and spec new product. And we'll stay on board - if you want - until your cash register starts ringing again, and your market share goes up.
Summary
Admitting that you have a Market Share problem is the first step to recovery, because denial is easy when everyone around you is crying the blues. But having a vision of success - or even a fear of further failure - is all it takes to get started.
That, and a call to JV/M.
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