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What Is Your Market Share?

In a recent survey of local advertisers we asked what questions local business owners would ask of a marketing consultant. One of their questions was, “How do I measure my market share?”

A very important question indeed, particularly when you consider the doubling effect of market share. You see, local advertising generally does not affect market size, but it dramatically affects the advertiser’s market share.

Advertising won’t make more people buy cars or get a haircut; however, it can persuade the marketplace to buy from you instead of your competitor.

The ‘doubling effect’ occurs when your advertising persuades a customer who usually buys from a competitor to switch and buy from you. For example, if I had my hair cut at the same shop the first week of every month but switched to your salon this month, the net difference between your business and your competitor’s would be two haircuts, not one. That is one your competitor lost plus one you gained, making a net difference between each salon two haircuts, not just one.

And because advertising generally does not increase market size, its real measure is market share. Your overall market may be down 10%, but if you’re only down 2% you’re doing something right….your market share is actually up!

The answer to, “How do I measure my market share?” is not quite as simple. In larger ticket or larger volume operations the data is usually readily available through government or industry association statistics. But for smaller businesses or niche markets, it’s a little tougher to measure.

In our Seven Ways to Estimate Market Share, method number one is to, “Talk to your suppliers.” They generally have a good handle on who is buying what and can often give you a pretty good idea how your industry is doing overall and what your share might be. Those with integrity won’t tell you how a specific competitor stacks up, but they will share with you an estimate of your share.

Click here for me to deliver our free Seven Ways to Estimate Your Market Share.