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How to Understand Market Penetration and Create a Strategy With STP Marketing

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How to Understand Market Penetration and Create a Strategy With STP Marketing

Everyone wants their business to grow. This seems pretty intuitive considering effective and successful growth means your business is experiencing boosts in revenue, brand awareness, brand loyalty, and more — and we know this to be true by looking at the most successful and well-known companies today (e.g. Apple, Amazon, etc.).

The question is: What do these highly-successful companies do to ensure they put themselves in a position for strong and consistent growth?

Of course, there are a number of answers to this question based on who you ask. However, the one we’re going to focus on in this blog post is market penetration. So, what is market penetration?

How to Calculate Market Penetration

If you’re using market penetration as a measurement, use the following formula to discover how much a product or service is used by customers compared to its total estimated market. In other words, take the current sale volume for your product or service and divide it by the total sale volume of all similar products available in the market.

(Number of Customers / Target Market Size) x 100 = Market Penetration Rate

Frequently monitoring your market penetration is important in order to identify any increases or decreases in penetration. If you’re wondering how often to calculate market penetration, a good rule of thumb is to calculate it after every marketing and sales campaign you run. This will highlight any changes in penetration — and, as a result, you’ll also have a better idea of the success of your campaign(s).

Next, let’s dive a little deeper into what market penetration is and why it’s such an effective growth strategy.

Understanding Market Penetration

A company can use market penetration at the industry level to review the potential for specific products or services or on a smaller scale as a way to gauge the market share of a product or service. It offers insight into how the market and your customers view your product or service.

What is high market penetration?

When it comes to market penetration, you want yours to be high. There are many benefits to high market penetration.

For instance, think about Nike. The company is a market leader in athletic shoes. When you go to the sneakers section of a store like Foot Locker or Dick’s Sporting Goods, Nike consistently takes up a large portion of the space.

That’s because retailers like Foot Locker and Dick’s know Nike delivers in sales. They also know their customers expect a wide selection of Nike products in their stores. Nike’s popularity and brand name warrant better shelving space and visibility, too. This is all a result of Nike’s high market penetration.

Similar to Nike, when you have a high market penetration…

High market penetration offers a marketing advantage and more potential for continued growth and success as a business. Needless to say, high market penetration is the goal — but, how do you achieve it? Well, market development is a good place to start.

To increase market penetration, focus on market development first. Let’s look at an example.

Example of Market Development Increasing Market Penetration

A successful leggings brand, Booty by Brabants, has made waves in recent years in the athletic-wear industry. The brand has established itself as a seller of high-quality and unique leggings for women of all sizes.

By reviewing their market penetration, BBB was able to identify a small, existing market they could tap into — kids’ leggings. They determined that selling kids’ leggings could help them broaden their target audience and customer base for little added cost and effort.

Although BBB Kids leggings aren’t a major source of revenue for the company, they’re complementary to its existing product line and bring in new customers. BBB was able to identify an existing market they hadn’t taken advantage of yet and determine clear steps to successfully enter that market. As a result, they expanded their product line, customer base, and market penetration.

Now, let’s look at the most effective ways to get started on your market penetration strategy.

As you begin working on your market penetration strategy, you may hear the words: Ansoff Matrix.

The Ansoff Matrix is a tool with four growth strategies listed for businesses to consider.

ansoff matrix growth strategy

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As you move to the upper-right quadrant of this matrix, the growth strategies become riskier for businesses. We’ve included information about the Ansoff Matrix in this article because it further proves and highlights the fact that market penetration is a highly-valuable and achievable way to effectively grow a business, even for the risk-averse.

At this point, you might be wondering about the specific strategies under the umbrella of market penetration that you can deploy at your company — let’s talk about some of those next.

Market Penetration Strategies

Here are some examples of effective market penetration strategies that you may choose to focus on and/or implement at your company.

1. Change your pricing.

Lower or raise the cost of one of your products.

2. Revamp your marketing.

Rework your marketing plan and/or roadmap.

3. Identify the need for a new product and launch it.

Survey and analyze your customers and target audience to identify the need for a new product (or feature). Then, create that product and sell it.

4. Update or change your product (or a specific feature of your product).

Resolve the challenges of your customers and buyer personas more effectively by updating or changing a product or feature.

5. Grow business in new territories and offer franchise opportunities.

Identify new territories in which you can expand and grow your business. Ask yourself: Which new areas can we open our stores or prospect? You might also begin offering franchise opportunities to expand your brick-and-mortar business.

6. Identify a business partner to work with.

Partner or merge with another business in a mutually beneficial way (e.g. run a co-marketing campaign).

7. Purchase a small business or competitor in your industry.

If you have the resources, consider acquiring a small business or competitor in your industry to broaden your base of customers and your offerings/ capabilities. (HubSpot did this a while ago.)

8. Offer a promotional program to boost loyalty.

Give customers an opportunity to sign up for a loyalty program that provides them with perks in return for giving you their contact information (e.g. discounts, birthday gifts, inside information, etc.).

9. Develop a new marketing campaign.

Create and launch a marketing campaign or initiative to promote your product line in a unique and new way that your customers haven’t seen before. Analyze your campaign’s success so you can refer to it in the future.

10. Boost sales rep activity.

Encourage sales reps to increase the number of interactions they have with qualified prospects (e.g. focus on social selling and meeting prospects where they are).

Segmentation, Targeting, and Positioning

STP marketing stands for segmentation, targeting, and positioning. This is a three-step model that helps you to examine your products or services and how you communicate them to your market. Step one is to divide your market into segments. Step two is to target each segment with tailored marketing campaigns. Step three is to position your business and marketing in a way that will appeal the most to each segment.

What’s an example of a successful market penetration strategy?

There are several examples of companies using market penetration to grow their business. For the sake of this piece, let’s look at Dunkin’.

Dunkin’ (formerly, Dunkin’ Donuts) was started in Quincy, MA back in the 1940s. Since then, Dunkin’ has become a globally-recognized brand. Dunkin’ has since grown substantially and opened stores in 46 countries — yet, the company’s most-loyal customers remain in New England. In fact, there are 12,500 Dunkin’s worldwide (9,000 of which are in the U.S.) In terms of market penetration, Dunkin’ continues to tap into their large and loyal market by opening and maintaining that large portion of their stores in New England.

Check out the following map for example — Boston is a small city, and you can walk between almost all 10 of these Dunkin’ locations in just minutes.

dunkin donuts example of market penetration

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Dunkin’ knows where their customers are and that those customers want a Dunkin’ store every… well, city block.

Not only has Dunkin’ successfully penetrated their market by opening and maintaining so many stores in New England, but they’ve also increased market penetration by making specific changes to their branding and menu.

Most notably, they changed their name from Dunkin’ Donuts to Dunkin’. The company does 60% of their business in coffee and other drinks, so the “Donuts” aspect of their original name was arguably a bit misleading. The CEO of Dunkin’ said this move was important because the new name, “… speaks to the breadth of our offerings.”

The brand name change also gives a signal to customers that there are a number of other menu items available, aside from donuts. In fact, the name change was paired with many menu additions, including healthier options as well as offerings for non-dairy and vegan customers including their Beyond Sausage and almond milk.

All of these changes broadened Dunkin’s customer base and target audience by accommodating more people within the market they were already penetrating.

Invest in Market Penetration to Grow Better

We just covered several reasons why market penetration is so beneficial to your business’s long-term success. And as you’ve learned throughout this blog post, it’s a highly effective growth strategy that’s typically low-risk.

There are many market penetration strategies to choose from, plan, and implement at your company, so pick the best option for your goals and get started.

Editor’s note: This post was originally published in August 2020 and has been updated for comprehensiveness.

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How to Increase Survey Completion Rate With 5 Top Tips

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How to Increase Survey Completion Rate With 5 Top Tips

Collecting high-quality data is crucial to making strategic observations about your customers. Researchers have to consider the best ways to design their surveys and then how to increase survey completion, because it makes the data more reliable.

→ Free Download: 5 Customer Survey Templates [Access Now]

I’m going to explain how survey completion plays into the reliability of data. Then, we’ll get into how to calculate your survey completion rate versus the number of questions you ask. Finally, I’ll offer some tips to help you increase survey completion rates.

My goal is to make your data-driven decisions more accurate and effective. And just for fun, I’ll use cats in the examples because mine won’t stop walking across my keyboard.

Why Measure Survey Completion

Let’s set the scene: We’re inside a laboratory with a group of cat researchers. They’re wearing little white coats and goggles — and they desperately want to know what other cats think of various fish.

They’ve written up a 10-question survey and invited 100 cats from all socioeconomic rungs — rough and hungry alley cats all the way up to the ones that thrice daily enjoy their Fancy Feast from a crystal dish.

Now, survey completion rates are measured with two metrics: response rate and completion rate. Combining those metrics determines what percentage, out of all 100 cats, finished the entire survey. If all 100 give their full report on how delicious fish is, you’d achieve 100% survey completion and know that your information is as accurate as possible.

But the truth is, nobody achieves 100% survey completion, not even golden retrievers.

With this in mind, here’s how it plays out:

  • Let’s say 10 cats never show up for the survey because they were sleeping.
  • Of the 90 cats that started the survey, only 25 got through a few questions. Then, they wandered off to knock over drinks.
  • Thus, 90 cats gave some level of response, and 65 completed the survey (90 – 25 = 65).
  • Unfortunately, those 25 cats who only partially completed the survey had important opinions — they like salmon way more than any other fish.

The cat researchers achieved 72% survey completion (65 divided by 90), but their survey will not reflect the 25% of cats — a full quarter! — that vastly prefer salmon. (The other 65 cats had no statistically significant preference, by the way. They just wanted to eat whatever fish they saw.)

Now, the Kitty Committee reviews the research and decides, well, if they like any old fish they see, then offer the least expensive ones so they get the highest profit margin.

CatCorp, their competitors, ran the same survey; however, they offered all 100 participants their own glass of water to knock over — with a fish inside, even!

Only 10 of their 100 cats started, but did not finish the survey. And the same 10 lazy cats from the other survey didn’t show up to this one, either.

So, there were 90 respondents and 80 completed surveys. CatCorp achieved an 88% completion rate (80 divided by 90), which recorded that most cats don’t care, but some really want salmon. CatCorp made salmon available and enjoyed higher profits than the Kitty Committee.

So you see, the higher your survey completion rates, the more reliable your data is. From there, you can make solid, data-driven decisions that are more accurate and effective. That’s the goal.

We measure the completion rates to be able to say, “Here’s how sure we can feel that this information is accurate.”

And if there’s a Maine Coon tycoon looking to invest, will they be more likely to do business with a cat food company whose decision-making metrics are 72% accurate or 88%? I suppose it could depend on who’s serving salmon.

While math was not my strongest subject in school, I had the great opportunity to take several college-level research and statistics classes, and the software we used did the math for us. That’s why I used 100 cats — to keep the math easy so we could focus on the importance of building reliable data.

Now, we’re going to talk equations and use more realistic numbers. Here’s the formula:

Completion rate equals the # of completed surveys divided by the # of survey respondents.

So, we need to take the number of completed surveys and divide that by the number of people who responded to at least one of your survey questions. Even just one question answered qualifies them as a respondent (versus nonrespondent, i.e., the 10 lazy cats who never show up).

Now, you’re running an email survey for, let’s say, Patton Avenue Pet Company. We’ll guess that the email list has 5,000 unique addresses to contact. You send out your survey to all of them.

Your analytics data reports that 3,000 people responded to one or more of your survey questions. Then, 1,200 of those respondents actually completed the entire survey.

3,000/5000 = 0.6 = 60% — that’s your pool of survey respondents who answered at least one question. That sounds pretty good! But some of them didn’t finish the survey. You need to know the percentage of people who completed the entire survey. So here we go:

Completion rate equals the # of completed surveys divided by the # of survey respondents.

Completion rate = (1,200/3,000) = 0.40 = 40%

Voila, 40% of your respondents did the entire survey.

Response Rate vs. Completion Rate

Okay, so we know why the completion rate matters and how we find the right number. But did you also hear the term response rate? They are completely different figures based on separate equations, and I’ll show them side by side to highlight the differences.

  • Completion Rate = # of Completed Surveys divided by # of Respondents
  • Response Rate = # of Respondents divided by Total # of surveys sent out

Here are examples using the same numbers from above:

Completion Rate = (1200/3,000) = 0.40 = 40%

Response Rate = (3,000/5000) = 0.60 = 60%

So, they are different figures that describe different things:

  • Completion rate: The percentage of your respondents that completed the entire survey. As a result, it indicates how sure we are that the information we have is accurate.
  • Response rate: The percentage of people who responded in any way to our survey questions.

The follow-up question is: How can we make this number as high as possible in order to be closer to a truer and more complete data set from the population we surveyed?

There’s more to learn about response rates and how to bump them up as high as you can, but we’re going to keep trucking with completion rates!

What’s a good survey completion rate?

That is a heavily loaded question. People in our industry have to say, “It depends,” far more than anybody wants to hear it, but it depends. Sorry about that.

There are lots of factors at play, such as what kind of survey you’re doing, what industry you’re doing it in, if it’s an internal or external survey, the population or sample size, the confidence level you’d like to hit, the margin of error you’re willing to accept, etc.

But you can’t really get a high completion rate unless you increase response rates first.

So instead of focusing on what’s a good completion rate, I think it’s more important to understand what makes a good response rate. Aim high enough, and survey completions should follow.

I checked in with the Qualtrics community and found this discussion about survey response rates:

“Just wondering what are the average response rates we see for online B2B CX surveys? […]

Current response rates: 6%–8%… We are looking at boosting the response rates but would first like to understand what is the average.”

The best answer came from a government service provider that works with businesses. The poster notes that their service is free to use, so they get very high response rates.

“I would say around 30–40% response rates to transactional surveys,” they write. “Our annual pulse survey usually sits closer to 12%. I think the type of survey and how long it has been since you rendered services is a huge factor.”

Since this conversation, “Delighted” (the Qualtrics blog) reported some fresher data:

survey completion rate vs number of questions new data, qualtrics data

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The takeaway here is that response rates vary widely depending on the channel you use to reach respondents. On the upper end, the Qualtrics blog reports that customers had 85% response rates for employee email NPS surveys and 33% for email NPS surveys.

A good response rate, the blog writes, “ranges between 5% and 30%. An excellent response rate is 50% or higher.”

This echoes reports from Customer Thermometer, which marks a response rate of 50% or higher as excellent. Response rates between 5%-30% are much more typical, the report notes. High response rates are driven by a strong motivation to complete the survey or a personal relationship between the brand and the customer.

If your business does little person-to-person contact, you’re out of luck. Customer Thermometer says you should expect responses on the lower end of the scale. The same goes for surveys distributed from unknown senders, which typically yield the lowest level of responses.

According to SurveyMonkey, surveys where the sender has no prior relationship have response rates of 20% to 30% on the high end.

Whatever numbers you do get, keep making those efforts to bring response rates up. That way, you have a better chance of increasing your survey completion rate. How, you ask?

Tips to Increase Survey Completion

If you want to boost survey completions among your customers, try the following tips.

1. Keep your survey brief.

We shouldn’t cram lots of questions into one survey, even if it’s tempting. Sure, it’d be nice to have more data points, but random people will probably not hunker down for 100 questions when we catch them during their half-hour lunch break.

Keep it short. Pare it down in any way you can.

Survey completion rate versus number of questions is a correlative relationship — the more questions you ask, the fewer people will answer them all. If you have the budget to pay the respondents, it’s a different story — to a degree.

“If you’re paying for survey responses, you’re more likely to get completions of a decently-sized survey. You’ll just want to avoid survey lengths that might tire, confuse, or frustrate the user. You’ll want to aim for quality over quantity,” says Pamela Bump, Head of Content Growth at HubSpot.

2. Give your customers an incentive.

For instance, if they’re cats, you could give them a glass of water with a fish inside.

Offer incentives that make sense for your target audience. If they feel like they are being rewarded for giving their time, they will have more motivation to complete the survey.

This can even accomplish two things at once — if you offer promo codes, discounts on products, or free shipping, it encourages them to shop with you again.

3. Keep it smooth and easy.

Keep your survey easy to read. Simplifying your questions has at least two benefits: People will understand the question better and give you the information you need, and people won’t get confused or frustrated and just leave the survey.

4. Know your customers and how to meet them where they are.

Here’s an anecdote about understanding your customers and learning how best to meet them where they are.

Early on in her role, Pamela Bump, HubSpot’s Head of Content Growth, conducted a survey of HubSpot Blog readers to learn more about their expertise levels, interests, challenges, and opportunities. Once published, she shared the survey with the blog’s email subscribers and a top reader list she had developed, aiming to receive 150+ responses.

“When the 20-question survey was getting a low response rate, I realized that blog readers were on the blog to read — not to give feedback. I removed questions that wouldn’t serve actionable insights. When I reshared a shorter, 10-question survey, it passed 200 responses in one week,” Bump shares.

Tip 5. Gamify your survey.

Make it fun! Brands have started turning surveys into eye candy with entertaining interfaces so they’re enjoyable to interact with.

Your respondents could unlock micro incentives as they answer more questions. You can word your questions in a fun and exciting way so it feels more like a BuzzFeed quiz. Someone saw the opportunity to make surveys into entertainment, and your imagination — well, and your budget — is the limit!

Your Turn to Boost Survey Completion Rates

Now, it’s time to start surveying. Remember to keep your user at the heart of the experience. Value your respondents’ time, and they’re more likely to give you compelling information. Creating short, fun-to-take surveys can also boost your completion rates.

Editor’s note: This post was originally published in December 2010 and has been updated for comprehensiveness.

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Take back your ROI by owning your data

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Treasure Data 800x450

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Other brands can copy your style, tone and strategy — but they can’t copy your data.

Your data is your competitive advantage in an environment where enterprises are working to grab market share by designing can’t-miss, always-on customer experiences. Your marketing tech stack enables those experiences. 

Join ActionIQ and Snowplow to learn the value of composing your stack – decoupling the data collection and activation layers to drive more intelligent targeting.

Register and attend “Maximizing Marketing ROI With a Composable Stack: Separating Reality from Fallacy,” presented by Snowplow and ActionIQ.


Click here to view more MarTech webinars.


About the author

Cynthia RamsaranCynthia Ramsaran

Cynthia Ramsaran is director of custom content at Third Door Media, publishers of Search Engine Land and MarTech. A multi-channel storyteller with over two decades of editorial/content marketing experience, Cynthia’s expertise spans the marketing, technology, finance, manufacturing and gaming industries. She was a writer/producer for CNBC.com and produced thought leadership for KPMG. Cynthia hails from Queens, NY and earned her Bachelor’s and MBA from St. John’s University.

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Revolutionizing Auto Retail: The Game-Changing Partnership Between Amazon and Hyundai

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Revolutionizing Auto Retail: The Game-Changing Partnership Between Amazon and Hyundai

Revolutionizing Auto Retail The Game Changing Partnership Between Amazon and Hyundai

In a groundbreaking alliance, Amazon and Hyundai have joined forces to reshape the automotive landscape, promising a revolutionary shift in how we buy, drive, and experience cars.

Imagine browsing for your dream car on Amazon, with the option to seamlessly purchase, pick up, or have it delivered—all within the familiar confines of the world’s largest online marketplace. Buckle up as we explore the potential impact of this monumental partnership and the transformation it heralds for the future of auto retail.

Driving Change Through Amazon’s Auto Revolution

Consider “Josh”, a tech-savvy professional with an affinity for efficiency. Faced with the tedious process of purchasing a new car, he stumbled upon Amazon’s automotive section. Intrigued by the prospect of a one-stop shopping experience, Josh decided to explore the Amazon-Hyundai collaboration.

The result?

A hassle-free online car purchase, personalized to his preferences, and delivered to his doorstep. Josh’s story is just a glimpse into the real-world impact of this game-changing partnership.

Bridging the Gap Between Convenience and Complexity

Traditional car buying is often marred by complexities, from navigating dealership lots to negotiating prices. The disconnect between the convenience consumers seek and the cumbersome process they endure has long been a pain point in the automotive industry. The need for a streamlined, customer-centric solution has never been more pressing.

1701235578 44 Revolutionizing Auto Retail The Game Changing Partnership Between Amazon and Hyundai1701235578 44 Revolutionizing Auto Retail The Game Changing Partnership Between Amazon and Hyundai

Ecommerce Partnership Reshaping Auto Retail Dynamics

Enter Amazon and Hyundai’s new strategic partnership coming in 2024—an innovative solution poised to redefine the car-buying experience. The trio of key developments—Amazon becoming a virtual showroom, Hyundai embracing AWS for a digital makeover, and the integration of Alexa into next-gen vehicles—addresses the pain points with a holistic approach.

In 2024, auto dealers for the first time will be able to sell vehicles in Amazon’s U.S. store, and Hyundai will be the first brand available for customers to purchase.

Amazon and Hyundai launch a broad, strategic partnership—including vehicle sales on Amazon.com in 2024 – Amazon Staff

This collaboration promises not just a transaction but a transformation in the way customers interact with, purchase, and engage with their vehicles.

Pedal to the Metal

Seamless Online Purchase:

  • Complete the entire transaction within the trusted Amazon platform.
  • Utilize familiar payment and financing options.
  • Opt for convenient pick-up or doorstep delivery.
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Hyundai’s Cloud-First Transformation:

  • Experience a data-driven organization powered by AWS.
  • Benefit from enhanced production optimization, cost reduction, and improved security.

Alexa Integration in Next-Gen Vehicles:

  • Enjoy a hands-free, voice-controlled experience in Hyundai vehicles.
  • Access music, podcasts, reminders, and smart home controls effortlessly.
  • Stay connected with up-to-date traffic and weather information.

Driving into the Future

The Amazon-Hyundai collaboration is not just a partnership; it’s a revolution in motion. As we witness the fusion of e-commerce giant Amazon with automotive prowess of Hyundai, the potential impact on customer behavior is staggering.

The age-old challenges of car buying are met with a forward-thinking, customer-centric solution, paving the way for a new era in auto retail. From the comfort of your home to the driver’s seat, this partnership is set to redefine every step of the journey, promising a future where buying a car is as easy as ordering a package online.

Embrace the change, and witness the evolution of auto retail unfold before your eyes.


Revolutionizing Auto Retail The Game Changing Partnership Between Amazon and Hyundai

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