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Sometimes Profitability is NOT as Important as Market Share

profitability marilynOf course, the ultimate goal of any business is to create profitability for its owners, shareholders and stockholders. Without profitability, the business will cease to exist.

To quote Kenny Rogers, sometimes you need to know when to hold up and when to fold up, though. There are times when a company is in a significant competitive situation where it needs to go into the market guns a-blazing and grab as much market share and mind share as it can.

In the market we're in right now, some might think the worst is over. They may think it's time to start "milking" the business trying to extract as much profitability as they can. WRONG Answer! I have lived this dream myself, so I would like to give all business owners and leaders a piece of advice learned in the School of Hard Knocks.

If your market share is not growing then it is actually declining, even if your market share is significant. If you're not getting better you're actually getting worse, because there are others that are getting better around you. Business marketplaces are not static. There is always someone gaining and someone losing. If you're "stable" that means you're actually losing because there's someone else that is growing.

Here are some signs that you're falling into the profitability over market share trap.

  • You fundamentally believe that it's okay to have stable market share and don't consistently chase growth
  • Customer service is left up to each individual agent or customer support manager – you're not measuring the company's customer satisfaction scores on a regular basis because the customer "isn't equipped to provide educated feedback about what we do"
  • You've decided to spend LESS on customer-facing programs because your market share is stable and strong
  • You're decided to invest LESS in training or technology because you have invested heavily in the past couple of years
  • The core focus of the company is to find to make your internal processes more efficient