Do you ever feel like David in a world of Goliath's? It is a common feeling in the construction industry with smaller companies who are competing with many "seasoned pros" for the client. David had his victory and so can you.
Successful small-business owners may know that the secret to thriving in an industry is nabbing the lion’s share of market. Those companies that manage to corner the market of loyal customers in their industry may achieve greater scale in operations, resulting in exponential profits.
Though it might seem like some industries are hard to crack when it comes to market share because of domination by well-established industry giants, with the right tactics, small businesses may be able to work their way into the top tier of an industry. Take the athletic apparel company Skechers, which, according to The NPD group, saw a significant increase in second quarter 2015 sales that jettisoned the company to number two in all athletic categories.
“Another great example of David taking on Goliath is Chipotle,” says David Glickman, CEO of Ultra Mobile, which was founded in 2011. “Chipotle has done a tremendous job of stealing market share by offering something that didn’t previously seem possible—fresh, healthy food that is also consistent, fast and affordable.”
When trying to grab market share, keep these five methods in mind.
Find Your Niche and Fill the Gap
Clearly define your business, so you can differentiate your company from others in your industry. Doing this can help you to pinpoint gaps your company can fill. “Find your niche by identifying a segment of customers that you know best and can service better than any of your competitors,” Glickman says.
Those companies that identify gaps may find they can fill voids and dominate their respective industries, adds Vinay Tannan, a registered U.S. patent agent and innovation strategy consultant with Taan Consulting.
“When you identify gaps and seek to address them in unique ways, such as with an innovative technology or process, you can slip in and dominate a market,” Tannan says. “Uber, for instance, created a technological infrastructure to address the need in the marketplace to unite people who want to make money using their cars with passengers looking for easier, more convenient transportation.”
Know Your Customers
To build your market share, you should identify your current desired customers and know them well, as they can serve as a GPS to attracting even more of the same type of winning client. “Listen to your customers—not just by what they say, but by how they spend and what they spend their money on,” Glickman says. This information can give you valuable clues as to how to approach new business. Also take advantage of existing customers by mining them for potential referrals. One of the best ways to gain market share is to do so through word-of-mouth advertising and referrals.
Employ Forward-Thinking Employees
Who you hire to drive your business can be critical to gaining market share. “Employees must be innovators with an entrepreneurial spirit who will be the growth drivers of your business,” Glickman says. “This desire for such innovative employees must be at the cultural level of your business, or it won’t flow through to execution.”
Attracting and retaining the best employees requires that you provide competitive salaries and benefits, as well as flexible schedules and work environments that promote creativity thinking.
“Keep in mind that hyper-growth requires hyper-flexibility,” says Glickman, who advises always keeping an open and positive mind when new ideas and opportunities are brought to you. “It’s too easy to say no when a little thought could turn something that seemed less relevant into something very interesting. By creating a flexible business and hiring flexible people, you are set up to seek out, recognize and convert opportunities as they come through. The key is to create new ways of doing old things.”
Acquire a Competitor
If the opportunity arises and your company can afford it, one way of increasing market share is to buy out a competitor and add their business to your portfolio. Doing this may not only increase your customer base; it may also reduce the number of competitors on the playing field, which can further help you build market share. View more from AmericanExpress