Are you wondering how many customers you have in comparison to other companies? The information you’re seeking is called market penetration. Market penetration is the extent of a product’s or service’s sales volume, relative to the total sales volume of all competing products/services. This number is expressed as a percentage:
Your Sales Volume X 100 ÷ Total Sales Volume of All Competing Products or Services
You can determine this percentage for any single ZIP code, an entire state, or even the entire country depending on what you’re looking to accomplish.
Market penetration can also measure how effectively you are penetrating your market, and how many opportunities are being “left on the table.” You may want to compare your customers in any given area (for example, a ZIP code) to your non-customers to determine which areas are well (or poorly) penetrated.
Here’s an example: There are 400 households within a 2-mile radius of your grocery store. Data reveals that only 71 have shopped at your location.
71 X 100 ÷ 400 = 17.75 %
You’ve successfully penetrated close to 18% of your 2-mile geographic market, but that means nearly 80% of the households have not been reached. You may want to increase your marketing efforts in this particular area, seeing as your store is a quick and easy commute for these people.
Whether you’re looking to see how much business you have in comparison to others (which customers you can attempt luring away) or you’re looking for customers that don’t currently utilize your type of product or service, your market penetration percentage provides important information so that you don’t waste time trying to penetrate markets that are already heavily populated with your existing customers.
You want to focus your efforts on areas where the most rewarding opportunities are. But how do you gain access to the “big data,” such as the total number of consumers in your zip code, or total sales volume of all competing products? Simple: with the help of Natimark!
For over 20 years we’ve been providing businesses, both small and large, with better results through better data. Contact our team to learn more about your company’s current market penetration and where the best opportunities for attracting new customers are.