I was reading the Three Minute Manager in the March 30 issue of Fortune magazine. The first question asked to the CEOs of Staples, TD Ameritrade and Head of Global Customer Strategy for Bain & Co was “Is it really a good time to go after market share” and their answers were a resounding “yes”.
Most of your competitors are in the same place you are – focusing on revenue and expenses.
You may have gone through your first, second and maybe even third round of cost cutting.
The last thing on your mind is market share. You figure your competitors are most likely cutting their marketing budgets so things should remain status quo except for the one or two weaker competitors who go out of business.
Since when is status quo okay for business?
A recession – especially a deep recession – is the best time to increase market share since it is significantly cheaper to stand out compared to your competitors who may no longer be marketing.
Think about share of voice – similar to market share but determined by your share of media impressions.
For example, everyone in your industry spent a total of $10,000,000 in advertising last year. Your ad budget was $1,000,000 giving you a 10% share of voice.
This year your industry’s ad spend is only $5,000,000. If your budget remains at $1,000,000 you grow your share of voice to 20% thus taking a more dominant role in your industry without increasing your cost. That increased share of voice leads to greater awareness and ultimately more prospects. (Sorry, but it is still up to you to close the sale).
If you reduce your budget by 25% to $750,ooo you are able to achieve a 15% share of voice – thus spending less, yet achieving a greater impact than the $1,000,000 investment made the year prior.
By continuing to market your company, you can actually gain market share more cost-effectively and be in a stronger position when the economy rebounds.
But you have to continue to market because if you stop marketing – even to your customers – someone will take your share of the market.
It is your job to market frugally, but not so much so that it is ineffective.
Here are some things you should consider to hone your marketing effort:
- Look at what tactics are having the greatest return on investment. (A previous post on tracking speaks to what you can do to know what marketing tools are working best.)
- For example, if you are in a service industry like plumbing, HVAC, etc, the thought of cutting Yellow Page advertising is terrifying, so move slowly by cutting your ad from a spread to a single page and track the changes.
- Continue to aggressively pursue inexpensive ways to market to your customers.
- Email newsletters
- Service reminders
- Phone calls
- Implement a customer referral program
- Look for affiliation marketing opportunities.
- For example, if you belong to your local chamber of commerce, provide all other chamber members a discount on your products/services.
- Volunteer/Donate services – the free publicity will help you reach a broader audience
These are just five ways you can market smarter so that you can gain market share while it is cheaper to do so.
We hope you’ll use the comment section to tell us how you are gaining market share during the recession.