Market share…. In essence, how much of the pie you have, as compared to how much your competitors have.
If you’ve ever worked for a medium- or large-sized firm, you’ve probably seen people getting upset about market share percentages and how they’re decreasing, or not increasing as planned.
Granted, it’s nice to know where you rank in the eyes, or better yet the wallets, of your target audience, but there are some reasons why market share can, at times, be overrated.
First, market share is dependent on which target audience we define as the denominator. Is it the local market? The regional one? The national one? Is it the B2B or B2C buyer segments? The younger or older or middle-aged audience? How you define the market obviously impacts that market share percentage.
Also, are you looking at sales revenue share? Sales volume share? Number of clients? Number of locations? There’s so much potential for ambiguity and variability that making comparisons to competitors is sometimes confusing unless you’re winning on all fronts.
But more than this is the truth that profits can be spent while market share cannot.
Always remember that market share is good to have, but profit is essential.
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