Strategies for Regaining Lost Market Share: Tips and Tactics for Companies

Losing market share can be a significant challenge for businesses, but it’s not the end of the road. There are various strategies companies can use to regain the market share they have lost. This article explores some of the tactics that companies can use to regain lost market share.

Understanding the Reasons for Losing Market Share

Before companies can start implementing strategies to regain lost market share, they need to understand the root causes of their market share loss. Some of the reasons companies may lose market share include:

• Failure to innovate: Companies that fail to innovate and keep up with changing customer needs and preferences are likely to lose market share to competitors that are more agile and responsive.

• Poor customer service: Companies that fail to provide excellent customer service are likely to lose market share to competitors that prioritize customer satisfaction.

• Pricing: Companies that set prices too high may lose market share to competitors that offer more affordable options.

• Competition: Companies that face increased competition may lose market share to competitors that offer better products, pricing, or customer service.

By understanding the reasons for their market share loss, companies can develop strategies that address the root causes of the problem and help them regain lost market share.

Introduction of New or Improved Products

One strategy companies can use to regain lost market share is to introduce new or improved products. By developing products that are more attractive to customers than those of their competitors, companies can win back market share. To develop new or improved products, companies should:

• Conduct market research: Companies need to understand their customers’ needs and preferences to develop products that meet their expectations. This involves conducting market research, analyzing customer feedback, and monitoring industry trends.

• Innovate: Companies need to develop products that are innovative and different from their competitors’ products. This involves investing in research and development to create products that offer unique benefits and features.

• Test and refine: Companies need to test their products and refine them based on customer feedback to ensure that they are meeting customer needs and expectations.

Examples of companies that have successfully regained lost market share through product innovation include Apple, which regained market share in the smartphone market by introducing the iPhone, and McDonald’s, which regained market share by introducing new menu items and offering healthier options.

Offering Lower Prices

Another strategy companies can use to regain lost market share is to offer lower prices than their competitors. This can be a particularly effective strategy if the reason for the market share loss is pricing. To offer lower prices, companies should:

• Analyze the competition: Companies need to understand their competitors’ pricing strategies to develop pricing that is competitive and attractive to customers.

• Consider cost savings: Companies can offer lower prices by finding ways to reduce costs, such as by streamlining operations or negotiating better supplier contracts.

• Communicate value: Companies need to communicate the value of their products to customers, even if they are offering lower prices than their competitors. This involves highlighting the unique benefits and features of their products.

Examples of companies that have successfully regained lost market share through pricing strategies include Walmart, which regained market share by offering lower prices than its competitors, and Coca-Cola, which regained market share by offering discounts and promotions to customers.

Investing in Marketing and Advertising

Companies can also regain lost market share by investing in marketing and advertising. By increasing their visibility and promoting their products through targeted marketing and advertising campaigns, companies can win back customers. To invest in marketing and advertising, companies should:

• Define their target audience: Companies need to identify their target audience and develop marketing and advertising campaigns that are tailored to their needs and preferences.

• Use multiple channels: Companies should use multiple marketing and advertising channels, such as social media, email, and television, to reach their target audience and increase their visibility.

• Monitor and adjust: Companies need to monitor the performance of their marketing and advertising campaigns and adjust them based on customer feedback and market trends.

Examples of companies that have successfully regained lost market share through marketing and advertising include Nike, which increased its market share by investing in targeted advertising campaigns, and Pepsi, which regained market share by investing in advertising campaigns that emphasized the unique benefits of its products.

Improving Customer Service

Another strategy companies can use to regain lost market share is to improve their customer service. By providing excellent customer service, companies can build customer loyalty and win back customers who may have switched to competitors. To improve customer service, companies should:

• Train employees: Companies need to provide training to employees to ensure they have the skills and knowledge necessary to provide excellent customer service.

• Communicate effectively: Companies need to communicate effectively with customers to understand their needs and resolve any issues they may have.

• Provide incentives: Companies can incentivize employees to provide excellent customer service by offering rewards and recognition for exceptional performance.

Examples of companies that have successfully regained lost market share through customer service improvements include Zappos, which increased its market share by providing excellent customer service, and Amazon, which regained market share by offering fast and reliable shipping and excellent customer support.

Acquiring or Partnering with Competitors

Finally, companies can regain lost market share by acquiring or partnering with their competitors. By joining forces with competitors, companies can expand their customer base, increase their market share, and gain access to new products and technologies. To acquire or partner with competitors, companies should:

• Identify potential partners: Companies need to identify potential acquisition targets or partnership opportunities that complement their existing products and services.

• Conduct due diligence: Companies need to conduct thorough due diligence to ensure that potential partners are financially stable and have a good reputation.

• Negotiate effectively: Companies need to negotiate effectively with potential partners to ensure that the terms of the acquisition or partnership are favorable and aligned with their strategic goals.

Examples of companies that have successfully regained lost market share through acquisitions and partnerships include Google, which regained market share by acquiring YouTube, and Facebook, which regained market share by acquiring Instagram.

Conclusion

Losing market share can be a significant challenge for businesses, but it’s not the end of the road. By understanding the root causes of their market share loss and implementing strategies that address those issues, companies can regain lost market share and thrive in competitive markets. Whether through product innovation, pricing strategies, marketing and advertising, customer service improvements, or acquisitions and partnerships, there are various tactics companies can use to regain lost market share and achieve long-term success.