5 Proven Strategies to Increase Your Market Share in 2024

Market share is the holy grail for most businesses. According to McKinsey, companies that increase their market share by 1% see a 1.8% average increase in revenue. Bain & Co. found that over a 5-year period, operating margins were 7 percentage points higher for share gainers versus share losers.

But with rising competition and accelerating change in customer needs, growing market share is harder than ever. In this article, we lay out five proven strategies for increasing your slice of the pie, with in-depth insights and real-world examples.

1. Find Your Niche and Dominate It

In a crowded market, one of the best ways to increase share is to narrow your focus to a specific customer segment or product category where you can establish a dominant position. The more precisely you can define your niche, the easier it is to tailor your offerings and message to really resonate.

Focusing on a niche enables you to capture a higher percentage of a smaller market, rather than a miniscule share of the mass market. According to Harvard Business Review, "niche titans" – companies that focus on a tightly defined market – achieve 2-3X the total shareholder returns as companies that pursue a broader strategy.

For example, Walmart is the world‘s largest company by revenue, but it only has a 4% market share in the $800 billion US grocery industry. Meanwhile, Trader Joe‘s has carved out a 10% share of the natural and organic foods niche with a curated selection of unique private label products and a quirky in-store experience.

To find your niche, consider:

  • What specific customer segments have needs that match your unique strengths?
  • What product or service categories align with your core competencies?
  • Where do you have the potential to be the best in the world?

2. Know Your Competitors Better Than They Know Themselves

To gain ground against the competition, you need to have a deep understanding of their moves and anticipate their next moves. According to Crayon‘s State of Competitive Intelligence Report, 59% of businesses say they‘ve lost revenue to a competitor they didn‘t see coming.

Some key aspects of competitors to continuously monitor include:

  • Marketing: messaging, ad spend, content, SEO, social media
  • Products: new launches, pricing, promotions, packaging
  • Customers: satisfaction, sentiment, reviews, loyalty
  • Financials: revenue, growth rate, profitability, valuations (for public companies)
  • Personnel: executive leadership, key hires, job openings

There are many tools that can help automate the process of tracking competitors, such as Google Alerts, SEMrush, Similarweb, and Owler. McKinsey recommends a structured approach called "war-gaming," in which a team roleplays as competitors to uncover risks and opportunities.

The most common disruptive moves competitors make to steal market share include:

  • Launching a new product or entering a new market (31%)
  • Making a significant marketing investment (30%)
  • Dramatically undercutting on price (22%)

The key is to identify competitors‘ blind spots and points of vulnerability, then develop contingency plans to defend your share or go on the offensive.

3. Innovate and Evolve as Customer Needs Change

Customer preferences and behaviors are changing faster than ever, driven by demographic shifts, technology adoption, and cultural trends. The average lifespan of a company on the S&P 500 has fallen from 61 years in 1958 to less than 18 years today, largely due to the accelerating pace of change.

To stay ahead of evolving customer needs and grow market share, innovation is essential. McKinsey research shows that the top innovators achieve 2.4X the revenue growth of industry peers over a 3-year period.

Consider these statistics on the importance of innovation:

  • 84% of executives say innovation is important to their growth strategy
  • 80% of customers say the experience a company provides is as important as its products
  • 63% of consumers say they are more likely to buy from a company that offers new products

To uncover emerging customer needs and trends, methods like social listening, sentiment analysis, and ethnographic research can be extremely valuable. The key is to look beyond what customers say to understand their underlying intents, pain points and aspirations.

Once you‘ve identified an opportunity for innovation, it‘s important to move quickly to capitalize before competitors. For example, Domino‘s Pizza grew its market share from 9% to 15% between 2009-2016 by making big bets on mobile ordering and autonomous delivery innovations that dramatically improved the customer experience.

4. Make Customer Engagement an Ongoing Conversation

Acquiring a new customer is 5-25X more expensive than retaining an existing one, so deepening engagement and loyalty is critical for increasing market share in a sustainable way. Highly engaged customers buy 90% more often and spend 60% more per purchase, according to Rosetta.

The key is to think of customer engagement as an ongoing dialog, not just a one-time transaction. Some effective strategies include:

  • Personalized communications: Segment customers based on their behaviors and preferences, then tailor messaging, offers and content. 80% of consumers are more likely to buy from brands that provide personalized experiences.
  • Omnichannel experiences: Provide seamless experiences across channels (web, mobile, email, chat, phone, in-person) so customers can engage on their terms. Companies with strong omnichannel strategies retain 89% of their customers on average.
  • Loyalty programs: Reward customers for repeat purchases and referrals. 84% of consumers say they‘re more likely to buy from a brand with a loyalty program. Successful examples include Starbucks Rewards and Amazon Prime.
  • Customer communities: Bring customers together to learn, share and collaborate. According to Salesforce, customers who are part of an online brand community spend 19% more on average.
  • Voice of the Customer (VOC) programs: Continuously gather and act on customer feedback through surveys, interviews, advisory boards, and other listening posts. Microsoft used VOC insights to redesign its Surface Pro tablet, leading to a 38% increase in market share.

5. Acquire Competitors‘ Market Share Through M&A

If you‘re looking to rapidly boost market share and have the financial resources, acquiring a competitor can be a very effective strategy. The total value of M&A deals worldwide hit a record $5.9 trillion in 2021, up 62% from the prior year.

There are several compelling reasons to buy a competitor:

  • Increase scale and capacity to meet customer demand
  • Expand into adjacent product categories, geographies or customer segments
  • Acquire unique assets like talent, technology, intellectual property or data
  • Eliminate a key competitor and reduce pricing pressure

For example, in 2020 Morgan Stanley acquired E-Trade for $13 billion, increasing its market share of US wealth management assets from 15% to 18% and adding 5.2 million new customers overnight.

However, achieving the desired market share gains from an acquisition is not guaranteed. According to Harvard Business Review, 70-90% of M&A deals fail to achieve their anticipated strategic and financial objectives.

Some key success factors for acquisitions include:

  • Strategic fit: Ensure there is a shared vision and strong cultural alignment between the two organizations
  • Integration planning: Assign a dedicated team to manage the process of combining systems, processes, products and people
  • Customer focus: Minimize disruption and demonstrate the value of the combined entity to customers
  • Talent retention: Create financial and non-financial incentives for key employees to stay on through the transition

With a carefully planned and executed acquisition, it‘s possible to achieve significant increases in market share. Bain & Co. found that companies that are frequent acquirers achieve 1.8X the revenue growth of infrequent acquirers over a 10-year period.

Putting It All Together

Increasing market share is never easy, but it‘s more important than ever in today‘s hypercompetitive and rapidly changing business environment. The strategies outlined here – focusing on a niche, understanding competitors, innovating around customer needs, engaging customers, and making strategic acquisitions – are proven approaches for gaining a bigger slice of the pie.

The key is to develop a customized plan that aligns with your company‘s unique strengths, goals and market position. By combining multiple strategies that work together in a cohesive way, you can create a sustainable competitive advantage that‘s difficult for rivals to match.

Start by assessing your current market share position and identifying the biggest untapped opportunities for growth. Next, engage your leadership team to align on the right mix of strategies and develop a roadmap with clear owners and metrics. Finally, don‘t be afraid to think big and move quickly to seize the moment before your competitors.

The rewards are well worth the effort. Increasing your market share drives higher revenue, profits and valuation, creating a virtuous cycle that provides the resources to reinvest in your business. Are you ready to start taking share in 2024?