Market share is the most important metric that marketers can use in
order to judge the effectiveness of marketing campaigns. This includes
branding initiatives, advertising campaigns, CRM programs and any other
revenue generation effort. Market share metrics are more important than
ROI measurements. The reason is quite simple. Market share is a
relative measurement against external benchmarks. Market share tells us
how we are doing relative to our competition.
It amazes
me how many enterprises ignore market share and focus on internal
metrics like awareness, loyalty, churn, leads, recall, revenue growth,
margin improvement etc. The problem is that internally focused metrics
can be deceiving. While the inwardly-focused enterprise may be happy
with it’s results, this satisfaction can be delusional if the
enterprise is performing below par relative to competition. Which is
one of the reasons why many customer-centric enterprises are excellent
targets for attack and dislodge campaigns – they never see you coming.
While market share is the most important metric other measurements are
needed to develop a complete picture. Units, revenues and margin must
also be tracked in order to determine the ultimate value of your market
share. There are many ways to measure share. The easiest is to rank
revenue or measure absolute volume in unit sold or gross sales
generated. By itself volume measurements are a start but need to be
further described by the value of your market share. Having 70% share
of a market in which you are losing money is not a sustainable
strategy.
Download vSente’s Free Campaign Planner to learn more about how we help marketing managers battle larger competition.