What’s more important than being ranked number one by market share?

If McDonald’s is not your favourite restaurant, you know that biggest is not always best.

Even if you are “number one”, most clients are more interested in how you can solve their problems than they care about your calculated market share.

I believe that the best way to demonstrate how you can help prospective clients is through testimonials.

To make your testimonials more powerful, get them focused on answering these three questions:

1. What was the specific difference you made to the process?

2. How did the result benefit the client (or their business)?

3. Why they would recommend others to work with you?

For more details on why market share is misleading (that’s a whole other can of worms!), and what you can do to convey more value – check out episode 85 of CRE Success: The Podcast.

Episode transcript:

Market share is not always the best yardstick by which we should be measuring our performance.

Sometimes it's good. But sometimes we don't want to have market share being quoted.

And we want to find ways to, one, discredit market share, and two, change what we're talking about as the yardstick by which we are measured. That's what we're covering in today's episode of the show.

Hi, and welcome to episode 85 of CRE Success: The Podcast. My name is Darren Krakowiak. I work with commercial real estate leaders to develop their people and grow their business.

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So, let's get into today's topic. And it's all about lies, damned lies, and statistics.

Now we've all heard of that statement, or we probably have. And what I want to talk about today is lies, damned lies and market share.

Because sometimes market share can be misleading, it can be irrelevant, and also it can be inaccurate.

And that statement that I've just made about the unreliability of market share is a point that you can use in your favor, if market share isn't a great indicator for you.

So, if you've got a competitor in the market, who's constantly talking about their high market share, a great objection handling technique.

And if you joined our objection handling free workshop a few weeks ago, you'll probably know I'm about to say we want to change the meaning here about what's important.

It's not about market share, and I'll give you some more relevant yardsticks by which performance can be measured in the market in this episode.

But ways that we can discredit market share when it's been used against us is just to talk about the fact that these statistics often miss certain deals.

So sometimes when the big outlets like your RCA, quoting global market share of capital markets transactions, first of all, who cares who’s “number one” across the world, unless you own properties all across the world, and you're looking to appoint somebody to handle your global property portfolio.

I think that's probably a fair statement. Unless, of course, you are “number one” on “number two”.

But really, from a client's perspective, what's important is what's going on in their market.

And if you're dealing in a local market, and you've got somebody quoting that they're “number one”, I think you can really respond with, "Well, where are they “number one”? And how are they going in this local market. And also, the statistics that they're quoting well, what's the benchmark by which data is included?"

So sometimes the thresholds and it might only include deals above for a global statistic.

They're probably not counting the two, the five, to $8 million deals off market that are going on in your neck of the woods.

And if that's your bread and butter, then you don't want your performance to be measured against a global benchmark.

I think also, some organizations will be using market share if they're not using an RCA number globally, or here in Australia, there's the Property Council of Australia.

So, if you're doing office leasing, for example, and you know that there has been, according to The Property Council, 50,000 sqm of net absorption in a quarter and you've done 10,000 sqm of leasing deals, you might be able to boldly claim that we've got a 20% market share.

But what if the yardstick by which you're measuring your deals is not the same as the PCA?

So, the PCA is measuring based on changes in occupied space, but you're measuring based on deals signed, that's not an accurate reflection of your market share.

There are so many different ways that you can slice and dice data.

And another thing I know that goes on is that sometimes property service companies will be calculating their own market share.

So, if they're not using the global statistics to calculate market share, they might.

And I've been involved in these meetings. They'll be sitting in the room with a research team. And they'll go through all these deals.

And they'll say, "We did that one, that one, that one, that one." And then what about that one? I wouldn't know who did that. What about that one, we don't know who did that.

They are not as curious if you like about their deals that are not done by them, which means that they're probably more likely to capturing more of their deals, and therefore their market share is probably going to be higher than it would be if someone else was measuring it.

Another thing I can tell you actually, while we're talking about ways that market share can be not manipulated, but perhaps put in a light, which is more favorable.

And this is one that you can use as well, even if you don't work for a big agency is just by tightening the definition by which you are calculating market share.

So, one that I used to use when I worked in Seoul, South Korea, in tenant representation was I personally have a greater than 50% market share with global financial institutions here in Seoul.

And I think it was probably true, or definitely I thought it was true, because we listed all the global financial institutions that were operating and sold that we knew of, and we knew that we'd done more than half of them. So, boom, we had more than 50% market share.

But we weren't looking at the size of the transactions, we weren't looking specifying a period of time over which that happens.

So perhaps if we looked at the last time a transaction occurred, that might be true.

But if we looked at the last 12 months, one of our competitors may have actually been more active in that period of time.

And from a client's perspective, or from a prospect’s perspective, perhaps the most recent deals done may have been more relevant.

So, the point I'm trying to make is that one's calculation of market share is offered artificially and inherently inflated.

So, we want to be careful of comparisons of market share data between organizations.

If someone else is saying that their market share is x, and they're quoting other's market share, or we've got a market share that we think is x, and then somebody else says that their market share is y and y is bigger than x, that doesn't necessarily mean that we're doing less work, or that we have a lower market share than them.

It's just that we might be measuring it differently.

So, the other thing I want you to sort of think about is the importance of relevance.

It’s not necessarily relevant for a client to be thinking about working with the “number one” provider, if they're operating in a very localized market.

So, I think instead of quoting market share, what we want to do is quote comparable transactions and highlight relevant case studies.

And I think that we can do that by one using stories, which we have, but also leveraging testimonials.

And if you're wondering, well, how do I sort of make sure that a testimonial is going to be something which builds my case, make sure that it is relevant to the opportunity that you're looking at.

So, if you're pitching on a, let's say, a transaction size of 5000 sqm, we don't put up 200 sqm. examples.

Vice versa is the case, too. So, if you're pitching for a 200 sqm deal, you don't show 5000 sqm transaction, because that smaller tenant is going to feel like, "Hey, you're going to think I'm important if you're doing all of these bigger deals."

So, we want to show relevance to make sure it resonates with the prospect. But also, we want to make sure that the testimonial contains a few things.

And a good little framework for understanding about testimonials is making sure it shows the situation that was there before the client started working with you or the problem that existed.

How you solve the problem. So, what it is that your work did to overcome that challenge. And then what you doing to overcome that challenge has meant in terms of some can be a quantitative or qualitative outcome.

So, what has been the ongoing benefit of that work? And if you've got a testimonial that can show that before and after, it's kind of like those weight loss videos, where you see an overweight person, and then someone who's looking trim and terrific, that's the before and the after, and that's what we want to try and get across in testimonials.

One other thing I want to tell you today is about if you're the market leader, how do you know if you can't rely on statistics?

So, how do you sort of measure your own performance?

And I believe that you're the market leader in your market, however you want to define that. If you are winning 80% of the opportunities you're going after.

If you've got a lower hit rate than 80% of the deals you're going after, then you can improve.

I think once you hit 80%, it's pretty difficult to get much higher than that it does depend on how tight you want to define your market. It depends on how many opportunities you decide not to bid.

And I think the more opportunities you don't go for, the higher your likelihood is of winning if you are focusing on opportunities that you're likely to win.

But once you hit that 80% level, then I think it's time to start one, give yourself a pat on the back for being the market leader. But two, you might want to start expanding your territory or your reach to push out and to become the market leader across a wider market.

I'll talk to you in a future episode about why it's important to continue to challenge and push yourself once you do become a market leader.

You don't want complacency to set in. You want to continue to look for bigger markets to concur, but we'll cover that in another episode.

Before we wrap up today, just to quickly wrap up. Market share; make sure that we understand what's being measured, it can be very misleading.

I would recommend that if you're not the top dog, and if you are the top dog nothing wrong with saying, “hey, we're “number one”.

That's great if the data does work for you, but if you're not, then one way that you can change the importance of market share is to talk about testimonials.

And if you are “number one”, then one way that you can reinforce your market leading position is by using testimonials, case studies stories to demonstrate how relevant your recent track record is to that particular prospect.

And also understand, you know, if you're the market leader, you're probably winning most of the time more than 50% is good. 80% means it's time to start to start branching out and looking for a bigger territory to cover.

10 ways to kill any commercial real estate if you've enjoyed today's episode, I know you're going to enjoy this lesson.

I've put together. It's the 10 things that you can do to really, as the title says killer in commercial real estate.

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That's our episode for today. Thanks so much for listening, and I will speak to you soon.