Increase your market share

Your customer base is the group of people who regularly buy your products or use your services, providing the most value to your business. They often match a specific target audience or buyer profile.

There are many ways to sell more to existing customers and potential customers like them. But before you start trying to maximise your market share, you need to make sure you understand how you are perceived by your customers.

Key questions to assess your customer base

The first stage is to address the core questions about who buys from you, how and when they buy. You need to be clear about:

• who your customers are
• what they buy
• why they buy
• how they buy
• who else could buy from you
• the typical budget of existing and new buyers
• where else they buy from

See understand your customers' needs.

Understanding future customer behaviour

Remember that the reasons customers buy from you now will not necessarily be the reasons they buy from you in six months or a year. If you consider expected trends in customer behaviour and your market, you may be the first to exploit a niche and gain market share quickly.

For example, how will your customers prefer to place orders? While they may prefer a phone call or face-to-face visit now, is there a trend in your market for online ordering? If you are one of the first businesses in your sector to offer the facility, you could gain significant market share.

Predicted future developments in your marketplace could also provide significant opportunities for growth. For example, with the growth of home computing, IT support developed from a mainly business-to-business service to a larger customer base of consumers.

Use your research to get as clear a picture of the future as you can. It's often difficult to predict with certainty. However, the more you know about how your customers and market will look in the medium to long term, the more likely you are to successfully build your market share.

You can use commercial market research to assess trends in your sector. See market research and market reports.

It's often easier and more effective to sell more to existing customers than it is to acquire new ones. Once you understand why your existing customers buy from you, you can examine ways of getting them to buy more or more frequently, improving your overall customer retention and increasing your business revenue.

Golden rule

The Pareto principle - often referred to as the 80/20 rule - says that 80% of your success in any given field is often due to 20% of your effort. This principle can guide your customer segmentation and sales prioritisation.

You can use the idea as a starting point to analyse how you can sell more to existing customers. For example, if a small number of your products and services account for most of your profit, can you sell more of the less profitable products to your customers through cross-selling or up-selling techniques? Or if your higher-margin products or services are only being sold to a small percentage of your customers, how can you raise that percentage to increase your average transaction value?

Encourage more frequent buying

You can increase market share by getting customers to buy more frequently.

If your customer behaviour research shows customers buy at a particular time, contact them beforehand. For example, if you know that a business buys its stock from you at the end of each month, a courtesy call in the middle of the month can be an effective customer engagement strategy.

You can also add value to your products and services to ensure repeat business. Consider if there is anything you can add to a service at little cost that is useful to your customers. For example, a free overall 'tune up' every time they send their car or computer in for repair?

See retain and grow your customer base.

Build customer loyality

Create a loyality programme to reward your customers. A thank-you discount can be a good start and then gradually increase the value as the customer’s loyalty grows.

Rewards make customers feel valued and appreciated, which helps foster long-term relationships and enhance customer lifetime value.

Get customers to spend more

Where appropriate, encourage customers to buy a premium product or service that better meets their needs and provides a superior return for you. This is known as 'selling up'.

You could also offer purchase incentives and price promotions on items that they usually buy from competitors, such as 'buy one get one free'.

It's also useful to focus on selling complementary products. For example, hairdressing outlets sell hair care products for customers to use at home. See understand your customers' needs.

If people have bought from you before, they may buy from you again. You need to find out why they stopped buying from you and apply that knowledge to regain their custom through targeted customer retention strategies.

Find out what changed

Identify why customers stopped buying from you. Consider whether your product or service is:

• no longer necessary
• too expensive
• unsatisfactory
• being beaten by a competitive offer

Rebuild contact with your customers

Research suggests the reason many customers stop buying is because they don't feel that they have sufficient contact with their suppliers.

Try to have some form of regular contact so that customers don't feel they are being ignored and look elsewhere. This could take the form of:

• monthly or quarterly phone calls
• formal or informal visits to customers
• mailshots
• email newsletters

If you have lost a customer for this reason, your first step is to rebuild contact and prove that you understand their needs. For example, you could send a letter expressing regret that they have stopped buying from you and include a time-limited, personalised offer to encourage their return..

It's worth trying a few times, but don't persist if you aren't getting any response. Many businesses have a limit to the number of times they contact lapsed customers - usually five or seven times. 

Using customer relationship management (CRM) tools can help track interactions and automate personalised follow-ups for lapsed customers, improving efficiency.

Make an offer to tempt them back

Once you know why a customer stopped buying, tailor your approach to make your business more appealing: 

• if price was a barrier, consider offering a time-limited discount, such as 20% off for three months
• if service was unsatisfactory, engage the customer to understand how to meet their expectations and assess if adapting your offering is feasible and profitable

Combining these tactics with targeted marketing campaigns and incentive programmes increases the chances of winning customers back.

Be realistic

While you may be able to tempt many customers back, remember that you don't want them at all costs. You want to build a long-term profitable relationship. It's not usually a good idea to make long-term offers that don't contribute any profit just to get a specific customer back unless there are compelling strategic reasons to do so.

Incorporate your customer win-back efforts into your overall marketing plan. The faster you contact a lapsed customer, the greater the chance they will come back to you. See write a marketing plan.

There are probably many consumers or businesses that don't buy from you that are similar to those that do. You can grow your market share by bringing in these potential customers in a similar way to your existing customers.

This can be an effective route to increasing your market share as you may need to make only small changes to small, low-risk adjustments to your existing products or services to meet the needs of similar customer segments. This also reduces the financial risks of expanding and can help protect your margins.

Find similar customers

You can use market research and market reports to identify groups of potential customers. It's a good idea to follow this up with a combination of quantitative and qualitative research. For example. carry out surveys or sampling with a significant number of responses, followed by smaller focus groups.

Remember, these customers won't be the same as your existing customers. You should get the same understanding of what makes them buy as you have about your existing customers.

You could also ask your existing customers for referrals. If you have a strong relationship with them, your customers will often be happy to let you know of others who may be interested.

Reaching similar customers

Once you have identified your targets, you will have to promote your business to them. There are a variety of options and it's best to build a clear strategy combining them. You can consider:

Direct mail

Sending mailshots, either by post or email, introducing yourself and what you offer.

Direct marketing

Door-to-door or telesales, depending on the nature of your business and potential customers' buying preferences.

Advertising

Local newspapers, trade magazines, radio, television or internet can all be useful. Make sure you're using media that your target customers will see or listen to.

Word-of-mouth and recommendation schemes

A cost-effective strategy, rewarding existing customers for getting new business to come to you. Make sure the incentive you offer is of value to your existing customers. Common examples include gift vouchers, discounts or free products for customers who successfully recommend new business.

See direct marketing and create your marketing strategy.

You may be able to increase your sales and market share by using new sales methods. You could also use other business' customer bases, eg wholesalers and distributors.

Choose the right sales channels

Your choice of additional channels to market will depend on your product or service type and how your customers choose to buy. The key areas to consider are:

Selling direct

You may be able to set up a direct sales operation so customers don't need to go through a third party, such as a retailer or wholesaler. This can be good for your margins as you don't have to pay commission. But you should consider the impact this would have on any third parties that already sell your product or service - they may react badly to you 'competing' with them.

Using wholesalers or distributors

If you are selling directly, you can consider broadening your base by using wholesalers or distributors. This will mean you are 'piggybacking' on their customer bases. Consider pricing carefully as intermediaries will need to make a profit. See sales agents and distributors.

Agents

If you wish to expand into other geographical areas at minimal risk, consider appointing an agent. This can provide representation in areas that would otherwise be difficult to reach. However, you will have to spend time managing the relationship. See using a sales agent.

Online and e-commerce

Setting up an e-commerce operation can break down geographical barriers. You will need to make some form of investment in getting it up and running and pay careful attention to servicing remote customers. See selling through online marketplaces.

Build new relationships

You can also consider taking larger steps to establish your business in new markets and territories. For example, entering export markets or establishing joint ventures and partnerships. See sell into new markets.

Whichever options you choose, you will need to make them integral to your marketing plan.

One of the most radical ways to grow your market share is to move into new markets. The rewards can be significant, but the risks are higher when you contrast this with getting the most out of your existing business and customer base.

Set clear goals for expansion

Before you start, make sure that you have clearly defined goals - it's essential that you set targets at each step of the way. If you don't carefully benchmark your progress at every stage, you can spend a lot of time and money on an unsuccessful expansion effort. If you can't set clear goals, you may be better served trying to exploit your existing customer base more efficiently.

You'll need to spend time researching the market fully, so you understand your potential customers as well as you do your existing customers. See market research and market reports.

You also need to understand the competitive environment in the new sector you plan to enter - it won't be the same as your current market. See understand your competitors.

Market effectively

You should create and commit to a marketing plan. While you can adapt to circumstances as you proceed, you must have a clear framework in place to boost your chances of success.

Remember that you should try to reach the most likely customers first. The best way to do this is to segment your target customer base - which means sorting them into groups with similar characteristics.

See write a marketing plan.

Selling overseas

Exporting can have a significant impact on your sales figures but it will also involve trading differently - customers are more remote and may need more management. See basics of exporting and entering overseas markets.

Team up with other businesses

You can sell into new markets by joining with other businesses, either in formal joint ventures and partnerships or more informal arrangements.

These routes can help get you established in new sectors more quickly and give you easier access to a range of potential customers. However, you will need to spend time managing the relationship and will sometimes have to compromise to keep your partners happy. See joint ventures and business partnerships.

Growth by creating new products or services to sell to existing or new customer bases can be risky, but when handled well, it can transform a business and become a powerful business growth strategy.

What are the risks of business diversification?

If you get it right, diversification could be your biggest driver to growth and profitability. Mishandled, diversification can strain resources, distract from core business, and expose you to unfamiliar market challenges.

You will need to devote time and resources to research and development (R&D). This will have implications for your cashflow. You will also have to ensure your customers still receive the levels of service they are used to while you are working on new projects.

Is diversification right for your business?

Have you got enough financial and human resources to carry out the required R&D? If not, it may be better to increase your market share through other routes, eg joint ventures or informal partnerships.

Remember that you will also need to keep track of market trends in an unfamiliar sector. Will you be able to react to changes in the competitive environment?

Plan the process

Diversification is like setting up a new business. You will need to understand your new market, its customers, competitors and dynamics, just as you would for any new business. You'll also have to create a marketing plan specifically for your new business unit.

See prepare a business plan for growth.

Key points to consider

Diversification is a big commitment and there are key issues you will need to consider and manage on both a day-to-day and strategic basis. These include:

Market knowledge

Make sure you understand your new market as well as your existing one.

In-house expertise

Do you need to hire specialists for the new products and services?

Sales skills

Do you know how to sell effectively to this new and different customer base?

Capacity

Can you continue serving existing customers without alienating core customers?

Finance

You will need to consider how you will fund the diversification. Will you need investment? You will also have to carefully plan sales and your return on investment.

Risk management

Are there any ways to minimise the risk to an acceptable level? For example, could you explore partnerships or distribution agreements to ease your entry into the new market?

Winning new business is crucial part of business growth aspirations. Our top tips will help you make the most of new business opportunities and create sustainable growth for the future.

1. Identify and grasp market opportunities

The economy and individual market sectors are forever changing, and your business should always be alert for new business opportunities to exploit. You need to know where to find these opportunities and understand how to take advantage of them. See find new business opportunities. 

Learn about your target customers, look for market gaps and develop a solution. Make sure you can:

• clearly explain why people should buy from you
• project your expertise
• be confident in asking for new business
• develop high quality business promotional material
• create an appealing website, including case studies to appeal to your target markets

Aim for the benefits of winning new business but keep an eye on the risks too.

2. Grow your market share

There are several strategic options to get the most out of your marketplace such as:

• selling more to existing customers
• focusing your customer service and marketing efforts on retaining customers
• expanding your customer base to include similar people who are not currently customers
• selling through new channels or into new markets
• using your core competences to create new products or services

3. Prepare your business to compete for new contracts

Private and public sector business contracts can be very competitive.  Good preparation will increase your chances of a successful bid, and improve your prospects for future contract work. It's important to show high standards, even at the pre-qualification stage. Consider how your business measures up in terms of employment practices, health and safety policies and environmental compliance.

For help to identify areas for improvement in your business and where to find contracts opportunities, see prepare your business to tender for contracts.

4. Sell your goods and services to the public sector

The Northern Ireland public sector is an important part of the local business market worth hundreds of millions of pounds each year. Your business can reap huge benefits by tapping into the supply chain. Organisations such as departments, their executive agencies and district councils buy a huge variety of products and services, providing a customer base that is stable and pays on time.

For information on the procedures and rules for government tenders, and where to find the latest public sector tender opportunities, see tender for contracts in the Northern Ireland public sector.

5. Look to win new business abroad

Selling your goods or services in external markets can be a lucrative way to win new business.

Increase your chances for success by researching:

• potential customers
• competitors
• the trading environment
• route to market
• logistics
• regulations
• local suppliers 

See entering overseas markets.

This video guide to selling more to your existing customers explains a number of tactics, including:

• up selling
• cross selling
• encouraging frequent purchases
• using a customer database.
• segmentation
• good customer service
• loyalty schemes
• targeted promotions
• referral schemes