How to grow your market share

Even when you can't grow your turnover or profits, you can still aim to take a larger slice of a shrinking market. We look at tactics to win business from powerful competitors.

Paul Bennett, managing director of printed label company Fascia Graphics, carved out his share of the market by winning over industry giant James Dyson in the mid-1990s.

‘We approached Dyson about the labelling on its vacuum cleaners because we believed we could do it better. I went in with some samples I’d produced expecting to pitch to a sales manager, and was surprised to be speaking to James Dyson himself,’ recalls Bennett.

‘He was a really nice, down-to-earth man and I just answered his questions on why I believed our labels were tidier and cheaper than the ones he was currently using. ‘We won the contract because I think he appreciated the fact that we had gone out of our way to prove ourselves without asking for any orders or financial commitments first.’

The deal proved crucial. ‘At that point our competitors were much bigger than we were because we were still in the start-up stage. But the first two to four years of the business were built on the back of our contracts with Dyson,’ he says.

Powered by technology

Susan Segal-Horn, professor of international strategy at the Open University Business School, believes that technological changes are creating a means for growth-hungry small businesses to expand rapidly in crowded marketplaces. ‘These days, if you have a stellar business proposition, it’s possible to go from small to big very quickly, with people running global businesses from their bedrooms. The time to market and speed of expansion has become very short indeed.’

However, she says that in order for a company to be successful it needs more than just a good grasp of technology. ‘The strategy basics remain the same. You must have adequate resources in place, particularly to last through the first 12 months. The idea needs to be a distinctive proposition, rather than just another copycat one, and you must have a realistic marketing plan in place,’ she adds.

Paul Turner, COO at virtual call centre provider NewVoiceMedia, claims that being one of the first companies to spot an opportunity and being quick to act was fundamental for the company’s progress.

‘We were able to create brand exposure through a partnership with BT, which really helped as it’s a name that people know. We’re also in the process of undergoing another partnership with a large telecoms company. Combined with our use of technology, this means we will be able to quickly scale the company up without having to invest huge amounts of money.

‘Next year we’re looking at becoming more aggressive with our marketing,’ says Turner, noting that at the moment, service and price remain top of the agenda.

Recession beating

It’s not just the information revolution that has acted as a catalyst for business. For Bennett, the economic downturn galvanised his company into taking more ownership of the market. ‘As your business grows, it’s easy to get complacent and forget the little things that are important. In a sense, the recession has been good for us,’ he says.

‘We’ve done a lot of work with Google to increase our search ratings, rebranded the company, developed the website and brought out a new brochure design. Since we’ve looked at our operations more closely, we’ve managed to bring in 20 new customers a month over the past 14 months. And half of our growth can probably be attributed to taking share away from our competitors,’ he reports.

The final weapon in Bennett’s armoury has been to undercut some of his competitors. He says: ‘This isn’t to the point where we have reduced our margins. Instead, we’ve been making sure we’re getting the best possible price from our suppliers. Where we haven’t been able to do this, we’ve walked away from the business rather than chase turnover for its own sake.’

In certain sectors, the recession has created fierce competition, especially as markets start to shrink. Darren Leppard, owner of recruitment company Select, says: ‘There’s only so much pie out there, so we all have to pinch from where we can. Obviously, recruitment is an area that has been hit very badly by the recession; it’s been a question of looking at the industries that have not been affected too much or that are doing well and targeting those areas. We’re following the news closely and monitoring things like the price of the pound to see how that’s likely to affect areas such as manufacturing.’

Face-to-face meetings and research can make a world of difference. ‘The key to securing market share is to get in front of the right person, as there are so many recruitment companies trying to do the same,’ says Leppard. ‘At the moment, we’re putting in twice the work for half the returns in terms of emails, calls and networking. But it’s paid off insofar as we haven’t had to make any redundancies and we will hopefully be well placed when the upturn comes.’

Know your markets

Ed Taylor, owner of picture framing company Framecraft, agrees that the market is tough at the moment, but says standing still in terms of sales is tantamount to winning a larger share. ‘We are operating in quite a crowded market – there are six or seven other framing companies in Bath and there’s only so much business available. Because our sales have remained unchanged while the market has shrunk, we can assume that we’ve taken some of our competitors’ share.’

Confident in his business strategy, Taylor is marketing harder. He’s in the process of opening another framing shop and has started to sell art materials via the web. ‘When it comes to selling online, you need to market yourself through the discounts you offer because it’s very easy for people to shop around to get the best deal, whereas in the shop our emphasis is on the quality of the products,’ he says.

On price alone, Taylor cannot compete with the likes of Ikea or the supermarket giants. But that doesn’t have to be a hindrance, he says. ‘I’m also qualified through the Fine Art Trade Guild, and that’s something we draw people’s attention to. It makes us stand out as a place of quality products.’

Bennett agrees: ‘We tell customers that if they’re not happy with our products we won’t charge them. We’re confident in the quality of what we sell, and I think people appreciate that when you’re prepared to put your money where your mouth is.’

The message seems to be: if you’ve got it, flaunt it.

See also: Smart marketing tips for start-ups

Nick Britton

Nick Britton

Nick was the Managing Editor for when it was owned by Vitesse Media, before moving on to become Head of Investment Group and Editor at What Investment and thence to Head of Intermediary...

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