Field service companies, pour yourself some coffee and take a seat. It's time for you to put your marketing hats on and learn about one of the most crucial growth metrics for your business—market penetration.
Market penetration is a key performance indicator (KPI) that measures how much of the market your company currently serves. In other words, it directly reflects your company's success at penetrating the market and gaining market share.
There are several reasons why growth is closely related to market penetration. For one, the amount of revenue a company generates is tied to the number of customers they have—more customers are better than fewer customers. A company with a solid customer base that is not haphazardly wasting resources is in an excellent position to perform well.
But market penetration is essential for another reason—it helps you build brand awareness and credibility. When potential customers see that you're serving a large number of people in their area, they are more likely to trust and do business with you.
Market Penetration: Is it Worth it?
Penetrating a market is not easy, but it is worth the challenge. Let's take a look at a few of the benefits that come with increased market penetration.
Increased revenue is the most apparent benefit of market penetration. Simply, the more customers you have, the more money your company stands to make.
A study by McKinsey found that the top 20% of companies in terms of market share generate 80% of the revenue in any given industry. So, to be a big player in your industry, you need to start by increasing your market share.
Improved Brand Awareness and Credibility
People are social creatures. As a species, human beings rely on each other for emotional connection and access to resources. We are wired to see what others are doing and weigh it heavily in our decision-making. In short, people are more likely to trust you when people already trust you. The same holds true for companies.
When people see your company as a good option, the visibility granted by a significant market share helps increase brand awareness—and the brands people know about benefit from a credibility boost that smaller-time players simply don’t have.
When you have a larger market share, you can spread your fixed costs across more customers, allowing for better use of resources, increased efficiency, and higher profits.
For example, a study by Harvard Business found that companies with a market share of 30% or more are twice as profitable as companies with a market share of 15% or less. It is evident that growth for field service companies is directly related to market penetration, and any company with an eye on expansion needs to keep that in mind.
The more customers you have, the larger your market share will be. And the larger your market share, the harder it will be for your competitors to steal customers away. Domination of a market puts a company in a position to set rules and dictate terms—making it much harder for everyone else to compete. If you are not paying attention to your place in the market, you can be sure someone else is—and “your” customers may be their next snack.
How to Grow Your Field Service Business
Learning how to grow your field service business can be a daunting task. But don't worry, we're here to help. Here are some helpful tips to get you started on the path to market domination.
- Focus on Your Customers
- Invest in Marketing
- Improve Your Customer Service
- Use Smart Tools and Technology
As the world's most comprehensive tool for field workforce collaboration, Zuper is uniquely positioned to help you grow your field service business. Our digital booking, intelligent dispatching, and best-in-class reporting and analytics features will help you increase market share, improve efficiency, and deliver a fantastic customer experience.
Get started for free today by scheduling a demo and see how we can help you grow your business. We can't wait to show you what we can do.