Boosting Market Share: Tricks for Early-Stage Startups
If the word “search engine” comes up, there is a very high probability that you will instantly recall Google. Similarly, if there is a discussion about smartphones, you will inevitably think of Apple or Samsung. While there are multiple reasons as to why these names pop up first in our heads, one major factor is the tremendous market share that they have maintained in their respective fields, despite having competition.
Today, Google has upwards of 90% in market share and its closest competitor, Microsoft Bing, has about 3%. See the difference? But before we move further, it is important to understand what market share stands for and how it is calculated.
Market share is the percentage of total sales of an industry that is generated by the company in question. It can be calculated through the following formula:
Market Share = (Sales of a company in a given period) / (Total sales of the industry in the same period) x 100
Since having a strong market share is a clear indicator of competitive advantages and good products, most startups keep a check on this figure. However, it takes time and consistent effort to become a market leader.
Here are some ways in which early-stage startups can start penetrating the market and grab a bigger share.
Remain Customer Focussed
Market share is directly proportional to the number of sales you make, and you are wholly dependent on customers for those sales. Therefore, it is only intuitive to keep the customers in the spotlight.
If you assess any of the big household brands, one thing that they have achieved and held on to is customer loyalty. By providing great user experience and support, they have ensured that people come back to them time and again. The focus was on elevating all parts of the customer journey, not just one.
The power of loyalty is such that no matter how many brands try to enter the space you are in, none may be able to displace you. Small but regular initiatives to become a customer-centric company will help you improve on your share in the market over time.
To quantify this impact, a Deloitte research found that customer-centric companies were up to 60% more profitable than the ones who weren’t. Apple, one of our primary examples, holds an exceptional 87% brand loyalty across the US and Europe.
Satisfy the Fringe Markets
It is pretty common for entrepreneurs to look at big companies and try to replicate their success in the same field. While there is no harm in considering these opportunities because they have a proven audience, it is a great idea also to explore niche and underserved markets.
Fringe markets are sometimes understandably mistaken to be unprofitable or too small in size. However, an in-depth analysis can reveal the complete opposite. Instead of only focusing on mass markets, look at specific concerns that do not get the limelight but continue to exist.
Building genuine, need of the hour products can help you uncover a market potential that was comfortably ignored by others. You can get some significant advantages by being the first-mover and can develop customer relationships, build loyalty and grow organically through word of mouth. That’s ticking all boxes to capture a decent market share.
Be Creative in Building a Consistent Brand Image
The best brands tend to stand out because of a few distinct yet strong characteristics, such as their logo or tagline. Even if you see a company having a distorted version of Nike’s logo or a unique play on Apple’s “Think Different”, you’ll probably think of these brands first and not focus on the company who used them.
This is essentially the strength of a brand image- it allows people to register them anywhere, and everywhere they see it. If you are a young startup, it is a good strategy to not only focus on building this image but also do it consistently, i.e., have the same versions placed across products and channels.
For example, Nike has used the same logo and tagline throughout their apparel, shoes, packaging and marketing content over time. This has allowed customers to think of the brand every time they see it (or even something similar) and link it with good quality.
Though all companies have to evolve with time, leading to adjustments in the brand image, it is important to keep the overall theme cohesive for customers. Once people start identifying some key characteristics that you have and relate it with a positive thought, you will be able to get hold of more market share.
Stay Relevant and Innovative
At the end of the day, the best way to boost market share is by beating the competition. And the best way to do so is by being innovative with the product line and marketing strategies. There are new things coming up every day and brands run the risk of becoming obsolete quickly.
As important as innovation is, it is a tough task for early-stage startups. This is because it requires R&D, resources and time on the part of the team. However, innovating does not mean big changes; small tweaks are mostly enough to help you stay relevant.
Engage with your customers often to see what they expect from you and the issues they face. Get your team together for a brainstorming session and let the creative juices flow. You will be able to come up with a few solutions that can be implemented well. Stay updated with all that’s new in your target market, and you’ll be on track to boost your share.
