This is the first of five articles addressing strategies – other than discounting – that can be applied to increase market share. Of course, prior to implementing one or more of these strategies, businesses should determine whether increasing market share is desirable. Profits are generally more important than market share, and increasing market share does not always increase profitability. Indeed, Venture Capitalist, Mark Cuban, talks of the advantages of identifying the smallest possible market.
Research in the United States in 2018 found that businesses satisfying an accepted criterion for being considered ‘customer focused’ were on average 60% more profitable than business not considered customer focused.
A second study suggested that 90% of marketers in the United States were developing or implementing strategies that would enable them to offer a more customer focused and ‘individualised’ product.
Jeff Bezos, CEO of Amazon, contends that, ‘the most important single thing is to focus on the customer. Our goal is to be the world’s most customer-centric company’.
Over recent years, much has been written about the FAANG group of businesses – Facebook, Amazon, Apple, Netflix and Google. These are arguably the most successful businesses in the world. Each has in place sophisticated technology designed to provide high quality data on every aspect of the customer experience, customer needs and wants, and to identify strategies that will increase customer loyalty and encourage them to spend.
These businesses use highly sophisticated algorithms to monitor customers within an inch of their lives. The aim is to know them as well as it is possible to know them, and be able to address their needs as well as possible.
What is more, these businesses focus far more on their customers than they do on their competitors. Jeff Bezos explained, ‘we’re not competitor obsessed, we’re customer obsessed. We start with our customers and work backwards’.
The more a business understands its customers, the better it can exceed the expectations of those customers and acquire more customers on the back of referrals. The more a business understands its customers, the more it can exceed their expectations, drive repeat business, and increase margins through customer loyalty.
In 2018, respond to customers not competitors.
Every year – put the facts ahead of intuition and guesswork.
Sources of core statistics – Goodreads, Entrepreneur, WebFX, Educba, CMO, Crowdspring, V12Data and Forbes