Our guide to unlocking market share growth in stagnant markets

In several B2B markets, growth, demand and profitability all appear to have stalled. These trends are impacting industries as a whole; in other words, it’s an issue linked to external drivers rather than anything organisation-specific.

This is a classic market stagnation scenario. And given that every market has its own lifecycle, it’s a fact of life that you will be faced with it at some point.

But while specific market stagnation is inevitable; terminal damage to your business is not. This is something we’ve seen before, and experience shows us that even in flat markets, organisations who can get on the front foot can still grow their market share through out-performing the competition. To respond, re-pivot and to regain a valuable competitive edge, here are some suggested courses of action…

B2B Segmentation

However, the true situation could be more nuanced. While demand among certain groups of customers may indeed be in decline (dragging down the headline figures), the same may not be true of everyone. In fact, in some areas, there may be untapped market potential that’s ripe for exploitation.

To unlock new pockets of market share growth, consider carrying out a segmentation exercise: i.e. dividing your wider target market into groups that share distinct characteristics, needs and behaviours. We’ve outlined our approach to B2B market segmentation in a recent blog.

Are there particular groups that continue to offer growth potential? For instance, while so far your consumer tech offering has been aimed mostly at millennials, does an unmet need among older groups still exist? By default, your B2B product has been targeted at enterprise, but this market appears to be reaching saturation. Is there still a demand among early and growth stage companies, as well as specific industry sectors? Is performance better via some channels than others?

In this way, segmentation can help to highlight valuable opportunities, even in highly mature markets.

Up-to-date market research 

The drivers of demand shift constantly. Tastes and preferences move on. A particular product may become less desirable as innovation brings substitute solutions to the marketplace. Social changes may occur (e.g. the rejection of throwaway consumables for greener alternatives). It may simply be the case that customers are tired of approaching a problem in a particular way and are looking for something new.

Against this changing landscape, remember that market research is not a one-off event. Especially when faced with declining demand, it is vital to collate and interrogate market data; to challenge your assumptions and to ensure that your value proposition remains relevant. A key element of this is understanding your competitors – Ellen discusses how you can do that in her latest blog.

Identify the cash cows

Segmentation is critical in identifying the areas with the greatest market share growth potential by distinguishing between profitable and non-profitable market sectors. In a similar way, you should drill into your product or service range to distinguish between winners and losers.

It may be, for instance, that while sales for your most advanced offerings were initially strong, the numbers have dropped off considerably. Meanwhile, performance of your basic range has held up well. It could be an indication that this latter category is continuing to meet a fundamental need, while customers have lost interest in gimmicky extras.

Again, research is needed. Find out why customers continue to be drawn to a particular product and focus your efforts in promoting it. At the same time, consider ditching poor-performing offerings. This approach can lead to much more targeted and effective use of resources.

The importance of proposition that is founded in customer needs is highlighted in Hal’s blog – check it out if you’re considering developing a new proposition.

Refresh and rebrand

We’ve seen this before and how leading companies can seize opportunities to innovate to meet customer needs and steal a march on their competitors. For example, RAC capitalised on the fact that on average, drivers cover 20% fewer miles than a couple of decades ago, which was dampened even further by the pandemic. In response to this, RAC launched a pioneering ‘no ties’ pay-by-mile insurance product in 2021.

It’s a reminder that even in the most mature, saturated markets there is still often scope to generate new ideas to respond to shifting needs and shift the market dynamics. New problems still require new solutions. It may be a case of tweaking your product range or developing a new offering to take into account altered need states. It could be a matter of rebranding to appeal to an as-yet underserved demographic or market niche. Or it could be a combination of the two.

To explore how you can grow your market share in stagnant markets, speak to White Space Strategy today.