Gain market share in bad times

Survive and thrive – it’s all in the maths.

We’re in an economic downturn, right? Everyone feels financially vulnerable, with markets and property values falling faster than Robbie Williams off the end of the charts.

Every day your customers are telling you they’ve got no money, that their expansion plans are on indefinite hold, and that they may even have to lay people off so they can ride out the storm.

Aside from the fact that much of the doom and gloom is self-perpetuating and self-fulfilling (you think it’s bad, therefore it becomes so), what can ambitious business owners do next?

The first thing to do is look at some maths. How much of the total market for your products or services did you enjoy back in the “good times”? Unless you have a unique offering, chances are you would never have met much more than 10% (at best) of the available demand in your sector.

One of my clients is in car leasing. Last year they financed 200 cars, which represented about 1% of all cars leased in their area.

This year, they’re on track for only 100 cars, which still equates to around 1% of the now depressed market.

The market doesn’t need to bounce back – you simply need a bigger share of it!

Instead of resigning themselves to similar results next year, they want to get back to 200 cars in 2009. I’ve shown them that although the market has contracted, there’s nothing to stop them getting a bigger share of it. In fact to recover their position, the market doesn’t even have to bounce back; they simply have to double their market share to 2% of the available business!

Whilst their competitors are battening down those hatches and tightening their belts, a process which inspires neither customer confidence nor loyalty, they need to pick up just a tiny proportion of disillusioned clients from each of them to get their business back on track.

There’ll never be a better time to gain new customers, and if you can impress them now when they really need you, they’ll probably stay with you for ever.

I’ll leave you with this thought – If my clients double their market share now to 2%, when the economy bounces back to normal they’ll be doing 400 cars a year; or twice as many as they ever did before!

Like I said, it’s all in the maths.

Jon Cooper is the founder of JupiterDawn.com - business consulting that works!
Email jon@jupiterdawn.com with feedback and business strategy queries.