What is the goal for your business? Is it market share or profits? You can’t have both in equal measure.
Why? Because focusing on market share (the % of buyers who purchase from you) in an average or slow growing market drives prices down and consequently your profit decreases.
What if you proactively focus on generating higher profits from a smaller market share?
Consider these results from the auto industry. It’s an industry that includes options from Common to Exceptional:
A review of profit reports about the auto industry reveals the following:
  • The profit on a mass-market ride like a Toyota Corolla is very different from profit on a Mercedes-Benz S-Class. Large pickup trucks like the Ford F-Series are more profitable than mid-size sedans like the Honda Accord. Luxurious SUVS such as the Mercedes-Benz GL are worth more to a dealer than a compact crossover wagon along the lines of a Honda CR-V.
  • The average return on sales of a dealership for 2014, the most recent year available, is 2.25 per cent.
  • The average return on sales for Bentley in 2014 is 10%
Which is your business going to be: Honda or Bentley?
Every company in every industry has to make three choices:
  • What are you offering? Common, Uncommon, or Exceptional?
  • What is the value of your Uncommon and Exceptional offerings?
  • Who is the best market for these offerings?
When you choose to focus on Uncommon and Exceptional offerings with incomparable value you will attract buyers who gravitate to high value at a price commensurate with that value. You then drive your company to achieve the goal of profit even though you have a smaller share of the market.