By Pat Hinds
In my blog last week entitled, Building Market Share: Vertical Business Intelligence, I wrote about how companies need to focus on acquiring market share in specific verticals/market segments in order to grow business in a recessionary environment. The blog focused on methods of how to segment verticals and relate this vertical information to your company’s specific products and services. The next step in transitioning from an opportunity focused sales organization to a market share focused organization is to become market share aware, by determining the vertical market model.
I use the term “market share aware” (MSA) to describe a process that goes beyond determining a company’s percentage of market share to include the process that integrates market share directly into a company’s marketing and solution selling. I have listed three examples below of different stages companies are at as they relate to market share awareness:
• Opportunity Focused: Companies that have a target market, but have no idea how much of the market share they own. These companies are 100% opportunity selling focused.
• Market share Knowledge: These companies often measure market share, but lack the commitment to integrate market share selling directly into their direct sales and marketing activities. These companies are focused on opportunity selling.
• Market Share Aware: These companies measure market share and integrate the market share tactics directly into sales and marketing activities.
The first step of making the transition to a MSA company starts with determining market size and market share.
Market size: A group of consumers or organizations that are interested in the product and have the resources to purchase it. The market definition begins with the total population and continually narrows as a company completes the business intelligence. The final stage is to determine the total dollar amount of potential sales to all customers within a given market.
Market share: According to Carlton O’Neal, market share in strategic management and marketing is the percentage or proportion of the total available market or market segment that is being serviced by a company. It can be expressed as a company’s sales revenue (from that market) divided by the total sales revenue available in that market. It can also be expressed as a company’s unit sales volume (in a market) divided by the total volume of units sold in that market.
In future blogs, I will speak to the process of using market share numbers to set sales targets for sales teams.
Topics: Business Intelligence