A few days ago, I was part of a discussion where we discussed why a few old marketing terms should be redefined in marketing dictionaries and reference books. One of the key items that was discussed was how the term Market Share for B2C retail intensive businesses lost its old meaning and the new defintion.

Meaningless Marketshare in Retail Businesses

In our fathers and grandfathers days, retail organizations loved to say we own X% of market share for a particular product/service category in a particular geography. In those days, they were not interested in the returns the business got from their formidable market share, I would think it is becuase of their inability to measure such a metric or they might have perceived it as a waste of time to calculate such a value.

But in today business world, the more the customer an organization has in its portfolio, business men and markters understand the associated customer in acquiring them and servicing them! And, as all of us would agree, today’s customers have access to vast amout of information thus are empowered than ever before -so, if you do not serve them well, from distance they can comfortably ring your competitor’s bell.

It is imperative to know what sort of customers are to be acquired basis the intensitve analysis done on your existing customer base.

Let me explain this point - “Using Analytics (statistical techniques), you entire existing customer base should be categorized into fine segments and with the power of statistics and business intelligence framework you should monitor each segments performance over the others and determine the returns each segment bring to you table.”

If you happen to discover Segment-A (for example) is giving maximum returns among the segments in your retail business, you must apply this learning on new customer acquisition as well without worrying about a potentially empty-nest called Market Share i.e., your brief to your advertising and external marketing agencies should go beyond how it is traditionally done, explain to them the aforesaid segment analysis and provide contexual information and the underlying data to substantiate your claim. These agencies should revert to you with strategies and tactics to acquire new customers who are close to Segment-A of your existing customer base.

The communication that is devised by the agency thus should reach audience satisifying various criteria for Segment-A. This ensure the newly acquired customers are highly potential to become profitable customers.

As you must have have gotten

• The aforesaid framework does not guarantee anything on improving your (meaningless) market share, but increase the likelyhood of good returns from your marketing investments and bring good customers to your books.
• It is important to have a layer of strong analytical framework supported by business intelligence functionalites in your marketing process

(A Point to note: If you are looking at any Marketing Automation initiatives, the solution that you short list to evaluate must have formidable Analytical mechanism coupled with Business Intelligence features/functionalities as part of the over all offering)

Your views and comments?