In this article, we’ll explain what “Your potential sales” is and, above all, what’s stopping you from achieving them. But first, we need to introduce some previous concepts.
Market potential refers to the total sales that could be generated in a specific market if maximum demand were reached. It’s like the “size of the pie” available to all competitors.
In order to analyze the market potential, we must analyze its characteristics:
Market size: Large markets with high sales potential but usually more competition; small markets with more limited sales potential.
Market concentration: Concentrated markets where a few players dominate the market, making it difficult for new competitors to enter; dispersed markets with many smaller players, making it easier to enter, but where competition is intense.
Difficulty of entry: High-barrier-to-entry markets that require significant investment, advanced technology, or strict regulations; low-barrier-to-entry markets that are more accessible to new entrants but face greater competition.
Market growth: Growing markets that offer high sales potential due to expanding demand; stagnant or declining markets that present challenges, but also opportunities for product innovation or repositioning.
Market segmentation: B2B (Business-to-Business) markets focused on higher-volume business-to-business sales; B2C (Business-to-Consumer) markets focused on direct sales to consumers.
Once we know the potential of a specific market, we can estimate “Your market potential,” which would be the share of that market you could capture, considering your positioning strategies, the segments you want to focus on, the products families you want to work with, etc.
Unfortunately, you won’t be able to achieve your full potential market share; you’ll have to settle for “your potential sales”. These potential sales refer to the maximum sales you could achieve based on all the demand you’ve managed to attract to your company. Finally, we face another challenge: transforming “your potential sales” into “real sales”.
But what’s stopping us from transforming 100% of “Your market potential” into “real sales”? Basically, two concepts:
In the following schemas we can see how the “Unreached Market” and “Lost Sales” stop us from reaching our full market potential:
To be able to reduce “unreached market” and thus ensure that “Your potential sales” are as close as possible to “Your market potential”, we must implementmarketing strategies, optimize distribution channels, etc. The marketing department or specialized external companies play a fundamental role here.
To be able to reduce “lost sales” and thus ensure that “Your real sales” are as close as possible to “Your potential sales”, we must improve the customer search experience, optimize the product range, run offers and promotions, seek customer feedback, etc. Both the sales and IT departments must address this issue.
At Factory Data, we specialize in helping you reduce your lost sales by up to 99%, so you can reach the most of your potential sales!
