Are you a small business looking to penetrate deeper into your niche market? Well, needless to say, that is indeed the ultimate goal of every startup. Every small business starts with the idea of going big. However, that surely seems easier than done given how competitive the business environment is.
The fact of the matter is that to acquire more customers and establish a strong presence in your niche market, you need worthwhile strategic planning. Eventually, the effectiveness of your strategic planning as a leader will determine how far your startups go. Among different dimensions of strategic planning, you need to be specifically brilliant with your market penetration strategies. Just to be on the same page, let us look at the definition of market penetration for once.
What is market penetration?
In the simplest terms, market penetration is a measure of how much share your business has in a specific market. For instance, Tesla owns about 75 percent share in the United States electric vehicle market. To look at a more technical definition of market penetration, the market penetration of your business will be a measure of how much your products or services are selling in the market proportional to the total market for those products or services.
Now that there is absolute clarity on what market penetration is, let us get started with market penetration strategies tailored for small businesses.
Actionable strategies for market penetration
- Build strategic partnerships
Small businesses cannot work out mergers and acquisitions to enhance their market share and this is self-explanatory in itself. As a small business owner, you would not even want to think of mergers or acquisitions for greater market penetration.
However, you can still work out strategic partnerships with other small businesses to enter mutually beneficial arrangements. This could be a great opportunity for your business to attract a new bandwagon of potential customers brought to you by your partners.
Let’s try and understand this through a practical example. Let’s say you are a digital marketing startup offering personalized marketing campaigns to corporate clients. You primarily offer performance marketing campaigns to your clients. Now, to further expand your business, you can work out a strategic partnership with a startup that offers SEO solutions.
Let’s see how this will work. When you have a strategic partnership with a SEO startup, you can outsource the SEO vertical of digital marketing to them. At the same time, you can pitch performance marketing and other verticals of digital marketing to their SEO clients. Sounds amazing, isn’t it? In this way, you can penetrate the market for digital marketing in a more worthwhile way and escalate your growth.
2. Diversify your marketing strategies
When it comes to market penetration, brand awareness and authority hold the key. You can sell to more people only when people are aware of your brand and its authority in the market. Do you think your niche customers would buy from a brand they do not trust or recognize?
Having said that, your success in terms of market penetration will have a lot to do with your brilliance and innovation in marketing. You need a spectrum of diverse digital marketing strategies that can create greater brand awareness in little time. This has to be one of the most effective ways of getting quality leads.
What is more important is that these marketing strategies should be in alignment with the latest digital marketing trends. For instance, in contemporary times, personalization is one of the most vital trends in digital marketing. Besides, optimization of digital marketing campaigns through AI, VR, AR and other technologies is another vital trend you need to embrace.
All in all, your marketing strategy needs to be aggressive, engaging, comprehensive and diverse. From search engine optimization to Instagram marketing, you need to tap every marketing strategy with a meticulous approach to build brand authority.
In fact, the best thing about social media marketing is that Instagram and Facebook offer direct selling features to businesses which can make a significant difference to market share. However, what you also need to ensure is that you are tracking the success of your strategies with marketing KPIs.
By tracking the metrics of digital marketing success, you will be able to figure out which strategies are working the best for your brand and which are not. Accordingly, you can enhance the strategies and make refinements in your digital marketing plans.
3. Implement customer feedback
Customer relationships and experiences are pivotal for acquiring more customers. When you deliver exceptional services and experiences to your customers, they are likely to make repeated purchases. Besides, they are highly likely to recommend your business to their near and dear ones. This is exactly how word of mouth marketing works.
The question is, what does it take to offer great customer experiences? Well, of course, the idea of perfect experiences is centered around best quality and best price. However, another unique approach that startups can take to enhance customer experiences is to collect customer feedback and implement it.
Needless to say, it will not be feasible to implement all that your customers are suggesting. Moreover, not every customer feedback will make sense. However, when it does make sense, you should try and implement it. Not just that, after you implement your customers’ feedback, you should inform them and express gratitude with a strong sense of personalization.
In this way, you can cultivate greater trust and stronger relationships with your customers. Subsequently, the perception of being a customer-centric brand will give a major boost to your company’s reputation. In this way, you can build an extensive customer community for your brand leading to optimized chances of greater penetration.
4. Be a cost leader in quality
Can there be a better approach than offering the highest quality to your customers at a price they love? In the initial phase, when you are looking to make your business scalable and acquire a greater share in the market, you will have to emerge as a cost leader.
Once your customers fall in love with your quality and the experiences you deliver, they would not mind paying premium prices in the future. Having said that, cost leadership is indeed a promising pricing strategy that can propel the growth of startups in a worthwhile manner.
Give your target audience the best of quality at the best of prices and see how your customer acquisition rate goes up. In the initial phase, you may feel slightly dissatisfied with the profitability scenarios or the financial ratios of your business. However, once you start acquiring new customers at a pretty brisk rate, it will all seem worth it.
5. Product diversification
Product diversification and market penetration go hand in hand. Simply put, to attain a greater share in your niche market, you need to constantly update your products and diversify them. You need to keep bringing new products into the market that can serve diverse needs of customers with varied preferences.
To explain, product diversification can be explained as an effective strategy for optimizing business profitability by introducing new product lines. In fact, both market penetration and diversification are crucial elements of the Ansoff Matrix, a widely applied strategic planning model.
When you offer a wider range of products or services to your potential customers, the chances of attracting new customers increase by default. Besides, as a startup looking to thrive in a competitive market, product diversification could very well be the game changer.
Let us look at an example to understand diversification and how it can benefit you. Let’s say you are a skin care startup offering organic beauty and body products to women. Although being an organic brand is quite a unique proposition, you are only targeting a specific gender in an otherwise extensive market for organic skin care products.
However, by following the diversification strategy, you can also introduce exclusive skin care products for men. In this way, you can penetrate the organic skin care market in a more successful way. With a new product range dedicated to men, you can then attract a new target audience looking for genuine skin care products.
This example surely gives you far more clarity on how product diversification can prove to be a vital growth strategy. The sooner you implement the same the better it is for your small business.
To encapsulate, for startups and medium enterprises, the business ecosystem is more competitive than ever before. It will take some outside the box exploration and effective strategic planning for small businesses to attain a greater market share. For that, the above strategies and tactics are among the most actionable approaches to market penetration.