Find out how to Calculate Market Share [Formula + Guide]

What Is Market Share?

Market share is the share of a selected market served by a selected firm. It signifies how dominant the corporate is in its area of interest and what potential it has for progress.

Extra particularly, market share normally refers to income market share. (The portion of whole trade income attributed to an organization.)

For instance, an organization that generates half of its trade’s income has a 50% market share.

However it’s also possible to measure your market share of particular metrics like:

• Month-to-month energetic customers
• Web site site visitors
• Unit gross sales

Analyses are at all times primarily based on a sure time scale (e.g., the final monetary 12 months). And can be restricted primarily based on geographic areas, shopper demographics, and so forth.

All of it is dependent upon what’s helpful in your evaluation.

What Is Relative Market Share?

Relative market share exhibits what quantity of the market you serve in comparison with your strongest rival. It helps you perceive your aggressive standing.

For instance, if you happen to generate half as a lot income because the trade chief, your relative market share is 50%. 

As with commonplace market share, you may calculate your relative market share of various metrics, for various time ranges, and for various segments.

What Is the Market Share System?

The usual market share components is:

Market share proportion = (firm income / market income) x 100

Let’s say the U.S. smartphone trade generated $80 billion of income final 12 months.

If Apple generated $40 billion of these gross sales, it had 50% market share—(40 billion / 80 billion) x 100 = 50.

To make market share calculations of particular metrics, use this components:

Market share proportion of metric = (firm metric / market metric) x 100

Let’s say the smartphone trade made 1.2 billion shipments final 12 months.

If Apple made 240 million of these shipments, it had 20% market share—(240 million / 1.2 billion) x 100 = 20.

And that is the relative market share components: 

Relative market share proportion = (firm market share / strongest competitor’s market share) x 100

Let’s say Apple is the market chief with a 25% market share. And its greatest competitor is Samsung, with a 20% market share.

• Apple’s relative market share is 125%—(25 / 20) x 100). This implies they’re the market chief. And their market share is 25% bigger than their strongest competitor’s.
• Samsung’s relative market share is 80%—(20 / 25) x 100). Their market share is 20% smaller than their greatest competitor’s.

Find out how to Calculate Market Share

To find out market share, it’s worthwhile to divide your organization metric (e.g., income) by the equal market metric. Then multiply by 100 to get a proportion.

However what information must you use? And the place can you discover it?

Let’s clarify calculate market share of various values step-by-step. We’ll additionally share a free template you need to use.

1. Supply Market Knowledge

The market share calculations you may make are usually restricted by the market information accessible. 

So, we advocate that you just accumulate market information first. And work from there.

Potential sources embody market analysis instruments, databases, and trade reviews.

A Google search like this will help you discover the info you’re fascinated with:

In case you can’t discover information in your area of interest, strive collating it your self.

For instance, you may obtain your opponents’ monetary reviews. Then, mix their income figures with your individual to get a market income estimate.

Market income estimate = your income + opponents’ income

Similar goes for different metrics, like unit gross sales.

The extra opponents you accumulate information from, the extra correct your market share calculation shall be.

2. Accumulate Equal Firm Knowledge

When you’ve collected your market information, it’s worthwhile to accumulate the equal information out of your firm.

For instance, market income and your organization’s income ought to relate to the identical time vary and geographic location. 

In case you don’t use like-for-like information in your market share calculations, you received’t get a sound consequence.

3. Apply the Market Share System

All that’s left is to make use of your information available in the market share components in your chosen metric.

As a reminder, it seems like this:

Market share proportion of a metric = (firm metric / market metric) x 100

If you wish to ensure you get issues proper, make a duplicate of our market share calculator in Google Sheets.

Merely enter your market and firm information within the higher desk.

Or fill out the decrease desk with your individual and your opponents’ information. This lets you calculate a market information estimate and see every firm’s market share.

(We’ve offered sufficient house for 9 opponents, however you may add or delete rows if essential. Simply make certain to regulate the formulation accordingly.)

Find out how to Calculate Site visitors Share

Site visitors share (or net site visitors share) represents the portion of visits that go to your web site out of all the web site visits made in your trade. 

This helps you perceive how sturdy your corporation’s on-line presence is.

And with Semrush’s Site visitors & Market Toolkit, you may calculate your site visitors share in seconds. After coming into the toolkit, simply head to the Market Overview dashboard for market share information. 

This dashboard will establish your greatest site visitors opponents and conduct a market evaluation. (Primarily based on the time scale and placement chosen on the high.)

Go to “Market Gamers” part of the dashboard to see your individual and your opponents’ share of site visitors:

You may also use the Site visitors Overview dashboard to see site visitors shares by channel. This may reveal which opponents personal essentially the most market share particularly advertising avenues: 

• Complete: Visits from any channel
• Direct: Visits made when customers sort the URL right into a browser or use a bookmark 
• Referral: Visits from hyperlinks on exterior domains
• Natural Search: Visits from unpaid search engine hyperlinks
• Paid Search: Visits from search engine ads
• Natural Social: Visits from unpaid social media hyperlinks
• Paid Social: Visits from social media ads
• E mail: Visits from electronic mail hyperlinks
• Show Adverts: Visits from show ads (e.g., banner advertisements)

With these insights, you may flip to the Channel Particular dashboards to dive deeper into competitor methods. That is particularly helpful in case your market share is low in a selected space, and also you wish to revisit your advertising technique.

For instance, you probably have a comparatively small site visitors share in natural search, contemplate testing the Natural Search dashboard. 

​​Site visitors & Market Toolkit offers you entry to quite a lot of different insights. So, make certain to discover all of the dashboards and reviews.

Find out how to Enhance Your Market Share

Growing market share is about getting clients to decide on you over opponents.

Listed below are eight ways it is best to learn about:

Outrank Your Opponents in Search Outcomes

Outranking your opponents for related search engine queries (or key phrases) is among the finest methods to divert helpful site visitors from their websites to your web site. To contribute to the next share of gross sales.

You could find alternatives with Semrush’s Key phrase Hole software.

Enter your area and a competitor’s area.

Then, select your nation and click on “Examine.”

Scroll right down to the key phrase desk and click on the “Weak” tab. This exhibits key phrases that the competitor outranks you for.

You’ll be able to see each of your positions within the desk. 

It’s a good suggestion to prioritize key phrases that:

• You have already got a excessive rating for (so you have got fewer positions to achieve)
• Have a excessive search quantity (so the potential site visitors good points are greater)
• Have with a low issue rating (this means it’ll be simpler to enhance your rating)

Try our information for detailed recommendation on bettering your Google rankings.

Use a Aggressive Pricing Technique

Pricing is usually one of many essential elements in shopping for choices. Particularly on the subject of merchandise which might be accessible from a number of shops.

In case you reassure clients that you just’re by no means overwhelmed on value (like Greatest Purchase does), you might be extra more likely to safe gross sales.

You’ll simply have to guarantee that this method works in your model id—and your monetary mannequin.

In case you can’t decide to completely decrease costs, strive attractive clients with particular gives and gross sales.

Upon getting the client in your books, they could be extra possible to purchase once more. 

Talk a Distinctive Promoting Proposition

A singular promoting proposition (USP) explains what separates you out of your opponents. Or what makes you particular.

Some key components of Apple’s USP embody:

• Design excellence
• Consumer-friendly interfaces
• Emphasis on privateness and safety

Creating and speaking a robust worth proposition offers clients a motive to decide on your model. So, it might probably play a key position in growing your market share.

Be Progressive

Whether or not it’s introducing new product options or bringing a brand new service to the market, improvements will help your corporation stand out from the gang. And remedy shopper wants that nobody else can.

You’ll have to conduct market analysis to make knowledgeable choices about any wanted analysis and growth (R&D) designed to gas innovation.

For instance, you need to use surveys to collect suggestions about your concepts. And monitor developments in shopper sentiments and behaviors. 

Strengthen Buyer Loyalty

The stronger your buyer loyalty, the much less possible you’re to lose market share to opponents.

Not solely are loyal clients extra more likely to make repeat purchases (or keep subscribed to your service), however they’re additionally extra more likely to advocate your model to others.

Listed below are a number of the finest methods to construct loyalty:

• Ship nice customer support
• Launch rewards and referral packages
• Supply unique offers to current clients
• Solicit and act upon buyer suggestions

Among the finest methods to maintain earlier clients engaged is thru electronic mail advertising. Try our information for recommendation on making it work in your model.

Goal New Demographics

Increasing your target market into new demographics might be some of the efficient methods to extend your market share.

Think about the story of the Stanley Quencher.

This sturdy water bottle was initially marketed to development employees and out of doors fanatics.

However when the corporate pivoted to concentrating on girls, gross sales skyrocketed. 

The technique shift helped Stanley develop its annual income from $70 million to $750 million in 4 years, CNBC reported.

Purchase Your Opponents

You probably have the capital accessible, buying or merging with a competitor may very well be essentially the most environment friendly method to enhance your market share.

For instance, Fb (now Meta) acquired WhatsApp to strengthen its place within the messaging house.

Whereas Sephora acquired Feelunique to help its enlargement into the U.Ok. market.

Study from Key Gamers in Your Business

By analyzing the important thing gamers in your trade, you may uncover methods to emulate their success. And establish gaps available in the market. Then, use these insights to extend your market share.

Listed below are a number of the finest instruments for aggressive analyses:

• Site visitors & Market Toolkit: Study the place your opponents get their site visitors from and what audiences they entice. You may also uncover their most visited pages and rather more.
• Natural Analysis: See which natural key phrases drive essentially the most site visitors to your opponents’ websites. And analyze their top-ranking pages.
• Promoting Analysis: Get insights into your opponents’ paid search methods. You’ll be able to see what key phrases they’re bidding on, view their advertisements historical past, and extra.
• EyeOn: Discover out when your opponents publish new weblog posts, social posts, Google Search Adverts, and webpages. You’ll be able to observe their social engagement, too.

To strive these instruments and dozens extra, begin your free Semrush trial at this time.