Market penetration is a traditional business metric.
There are two related concepts, however, that provide more
actionable information: customer preference and relationship share.
Any successful marketer is
striving to satisfy the
buyer’s unmet needs. Those who satisfy buyer needs more efficiently than the next
guy, gain competitive advantage.
Buyers not purchasing from your firm generally fall into
two categories. There are
those who have requirements that your current products and services cannot
satisfy – customer preference. And
then there are those who simply are unaware of your ability to satisfy
their needs – relationship share.
Preference - Meeting the Buyers' Needs
Customer preference surveys enable marketers to ensure
their value proposition meets the needs of the market.
Understanding how well your company’s value proposition is
aligned with the market needs and making appropriate adjustments will
certainly impact your success rate for turning prospects into customers.
A simple yet effective market
research survey will measure the buyer’s:
Most important purchase decision criteria: quality,
Annual purchase volume
Brand awareness: top of mind, others brands named, have
heard of brands
Brands shopped: brands known for quality, service, price
Brands bought: why/why not, have they switched brands
Recommended improvements in service and offerings
From whom the purchase was made, how they became aware,
method of first contact
There are a variety of inexpensive survey instruments
available for conducting customer preference research.
They include mail surveys, POS questionnaires, invoice inserts,
store intercept interviews, and traditional telephone surveys.
A brief questionnaire requiring less than ten minutes of the
respondent’s time should provide acceptable response rates and deliver
meaningful information to help you best position your offering.
Share - Creating Buyer Awareness
Once you have validated your value proposition,
relationship share should be the next consideration you make.
Relationship share is simply the number of prospects that are
familiar with your company out of all potential buyers in your market.
Regardless of how well suited your offering is for the market, if
your potential customers do not have knowledge of your product, you
won’t have buyers.
The first step in building relationship share is
understanding your market. How
many businesses are out there, where are they located, and what do they
look like. See Amy Hamman’s
Your Own Virtual Marketplace for a discussion of database marketing
techniques aimed at identifying your market potential.
After you’ve identified your market opportunity, you
should ask yourself, “how can I most effectively create awareness with
my potential buyers?” There
are three major components to successful awareness building: the message, reach, and media.
Your message should reinforce the distinctive features and benefits
from your customer preference survey.
Reach refers to the question, “how do I target my message
so that I maximize exposure?” You
can improve the effectiveness of your marketing campaigns by identifying
groups of buyers with similar needs.
Sources include: industry
associations, trade magazine subscribers, national and local business
journal readers, and chamber of commerce members.
Finally, when developing your marketing program, your
choice of media is an important factor in the success of delivering your
message. As you evaluate the
format of your message you should be evaluating cost as a function of
response rate. B2B marketing
requires a media that can convey an often-complex value proposition to
specific audiences. Trade
magazine and business journal advertising, chamber of commerce and
business club newsletters, direct mail, e-mail, and the Internet are all
common B2B marketing tools. Again
when making your media decision you will want to choose the mode that
provides the most exposure at an affordable cost.
If you’re serious about increasing your market share,
strive to become the preferred supplier to your target prospects and build
relationships. Plan to
conduct annual or bi-annual benchmark research surveys.
As customers’ needs and your competitor’s offerings change
it’s important that you remain a step ahead.
Maintain your market database of prospects and customers and use
that database to effectively communicate with your potential buyers.