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How to Understand Market Penetration and Create a Strategy With STP Marketing

How to Understand Market Penetration and Create a Strategy With STP Marketing

Sustainable business growth is paramount for longevity.

That growth comes as a result of implementing an effective market penetration strategy. Learning how to make more high-quality leads aware of and interested in your brand is how this becomes possible.

The optimal strategy for achieving high market penetration is known as STP marketing.

However, before we get caught up in the details, let's step back and evaluate what these ideas represent. Let's first identify what we mean by market penetration.

What is Market Penetration?

Market penetration refers to the amount of sales transactions that occur between a business and customers that belong to a specific market segment.

That market segment refers to only the customers that exhibit interest or could benefit from the products or services your brand provides.

In other words, your market is not defined by every individual in your area. It only applies to the potential persons that would be in the market for your offerings.

Importance of Market Penetration

Understanding and regularly measuring market penetration is a direct indicator of both your marketing and sales performance.

When more of the market is aware of your brand, the more likely they are to use your company for their needs. If your brand is at a high level of market penetration, they're likely to dominate the mindshare, making other options seem less desirable.

Here are some indicators and benefits of achieving high market penetration:

  • Your brand is well-known among your target audience
  • You achieve high sales with regularity and are trending toward growth
  • You’re capable of opening multiple locations in an area and sustaining each
  • Influencers and industry leaders reference your products or services

All of these are the desired goals for any growing brand. However, using market penetration strategies incorrectly can also create undue pressures and strains on your existing operation.

Ways Improve Market Penetration Strategy

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Now that we better understand market penetration, let's explore how your brand can take action.

You'll learn how to calculate your current level of market penetration and learn about specific STP marketing strategies that can get you better results.

How to Calculate Market Penetration?

We know that market penetration is the relationship of your product's sales in conjunction with all related products a potential customer could buy. Therefore, the equation looks something like this:

Market Penetration = Number of Existing Customers & Sales / Total Possible Customers in the Market x 100

The total possible customers refer to those that specifically qualify for your product. It's important to discern the difference between low-quality leads and high-quality leads for this reason. The resulting percentage indicates how high your penetration rate is.

Juggernaut companies like Amazon boast market penetration rates as high as nearly 60%.

For smaller, local businesses, an average market penetration rate is anywhere between 2% and 6%. Achieving a number higher than this indicates that your brand is already faring better than most across the nation.

However, it also demonstrates just how stiff the competition is for small business owners. It's a difficult situation as resources are tighter for small brands in a scenario where it's already tough to stand out.

It can feel hopeless, if not impossible, for your new brand to succeed.

The good news is that you don't need to let these figures intimidate you. What you need is a powerful market penetration strategy using STP marketing.

In the next step, let's define what STP is so that you can leverage it in your local and digital marketing.

What is STP in Marketing?

STP is now the gold standard for digital marketing.

Rather than wasting time and resources appealing to a wide consumer base, STP marketing carefully directs efforts to highly-qualified prospects.

The acronym STP stands for:

What is STP in Marketing?


Segmentation, in marketing, is the process of dividing an established audience into distinct segments.

While your entire audience shares a mutual interest in your offerings, sections of the audience can be effectively classified through different characteristics.

This information becomes valuable as it allows you to better understand why specific individuals come to your brand.

For example, a computer company can have success selling its computer products to almost any demographic. However, an 18-year college student and gamer will benefit from different selling points than a 35-year old office manager.


By segmenting these customers into different groups, you can determine which groups are worth targeting.

This is especially important for smaller brands that may currently lack the resources to capitalize on every possible segment. Instead, you can review your existing marketing and sales data to determine which segments demonstrate a better ROI.

However, it's worth making note of other possible segments to pursue as your brand begins to scale.


Now that you've created your segments and narrowed your targeting, it's time to position yourself for success.

Understanding your target segment allows your team to create highly-personalized ad campaigns. The better your proposition speaks to the unique needs of the prospect, the more likely you are to drive conversions.

A beautiful aspect of STP marketing is that it is proven to benefit any business regardless of size or industry. As marketing becomes increasingly competitive, bespoke advertisements will always yield better results than minimal, generalized efforts.

Effective Market Penetration Strategies (with STP Marketing)

Market penetration is a relatively safe, effective strategy for every brand. The primary reason for this is that it allows you to move in on audiences that you've already established.

This is, as compared, to diversifying your audiences and/or products, which can often have unpredictable results.

Instead, these market penetration strategies should help you connect with more qualified customers and reinforce relationships with existing ones for continued transactions.

1. Personalized Marketing Campaigns

For starters, we're leaning into the ideas discussed when introducing STP marketing.

Your ad campaigns thus far have landed your brand its current customer base. While your efforts are connecting with these individuals, they're not quite pushing audience segments to convert.

To further your market penetration, you can begin to explore those audience segments that are still on the outside looking in. We recommend utilizing marketing analytics tools like Google Analytics to study audience behaviors.

You can use tools like these to analyze your ads, landing pages, sales funnels, and more. Determine which part of your pitch is causing customers to drop off, and begin to rethink your approach.

Instead of having one campaign for a large audience, start to develop highly-personalized campaigns that speak to specific demographics. This will position you to speak better to the problems they face and explain why your brand is the solution.

What is Personalisation?

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Not only will this grab their attention, but it also allows your brand to cut through the noisy competition by offering something unique and special.

2. Reconsider Your Pricing

We specifically mention pricing only as increasing OR decreasing your prices could be beneficial. Whichever action you choose to take depends upon careful research of your target audience.

The price of your products and services can communicate a great deal of information to a prospect before you even make your pitch.

A product marked above the industry average might communicate that your brand cares about maximizing profits over the consumer. However, with careful marketing, it can also communicate that your product is simply of better quality when compared to competitors. This may boost conversions with the right audience simply to gain access to superior goods.

On the other hand, intelligently lowering your prices can make your products accessible to new audience segments. Slashing prices, so long as it doesn't harm your bottom line, can instantly improve your market penetration.

Be aware that lowering prices can also create the opposite perception of raising them. If consumers see that you're comfortable with lowering the value, it can lead them to believe that your goods are of subpar quality.

How Does Penetration Pricing Work?

3. Introduce New Products or Update Existing Ones

To sell more of your product or service, you need to satisfy all of the customer's needs.

Those needs include:

  • Features
  • Build quality
  • Price point
  • Warranty / protection

If your product fails to meet any one of these standards, you're likely to lose a potential sale. The same is also true if a competitor has a similar product that exceeds your standards of yours.

In this scenario, you have a couple of options. The first is to consider the features your products lack and consider how you can create a superior model.

A second option is to introduce a new product into your offerings.

A great example of this is Apple's iPhone - one of the most popular products in the mobile tech world.

They recently released the iPhone 13 which features all of the latest upgrades to display, memory, and camera functionality. However, it retails for $999, which is a hefty price point considering that new ones appear each year.

Understanding cost is a barrier to market penetration, they introduced another low-cost model known as the iPhone SE. This product costs only $429 in comparison. Of course, it lacks in features and build quality in comparison. This is the trade-off made to protect the bottom line.

However, having this affordable option suddenly makes iPhones more accessible to the greater market. Furthermore, consumers feel empowered by having options and the ability to choose what's best for their needs.

Finally, having different options negates the potential drawback of altering base prices. Consumers that want to pay a premium for a superior product still have that option available.

4. Introduce Referral / Loyalty Programs

A great way to boost brand awareness and market penetration is to empower your existing customers to help.

Many brands institute referral programs that provide the customer with rewards or discounts for every new customer they bring to your brand. It's an easy sell as existing customers can already speak to your brand positives, while also getting a small reward for minimal effort. Positive word of mouth from trusted sources can help push prospects to convert.

Likewise, you can further boost that engagement and loyalty by rewarding customers that shop regularly. Brands like Best Buy offer points for each dollar spent, which can then be converted into discounts.

Referral Programs vs Loyalty Programs

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5. Position Your Sales Reps for Success

Your marketing team may be doing a great job of attracting new leads.

However, having more leads than your sales team can handle may cause you to lose customers permanently.

Having an effective sales management system is essential for boosting market penetration and achieving business growth. DashClicks' own Inbound software is an excellent example of this.

The Inbound tool allows you to quickly integrate all of your marketing campaigns into one dashboard. Filter all of your leads from Facebook, ClickFunnels, and CallRail, for easy access.

With all of your leads in one place, you can automatically:

  • Assign leads to sales reps by campaign or round-robin style
  • Track close rates by campaign/channel
  • Track close rates by sales rep
  • Track time to respond to new leads
  • Reassign sales reps at any time

All of these features ensure that you capitalize on fresh leads by giving them immediate attention. Your analytics will demonstrate the areas in which your team requires improvement.

Furthermore, DashClicks offers the ability to automate emails and text messages within the same platform. This way, even if a rep is unable to manually communicate at a given stage, you can trigger personalized messages to go out regardless.

Boost Market Penetration With DashClicks Inbound Tool

6. Expand Mark eting Efforts to New Channels

Finally, making the effort to reach new audiences through different means can help boost market penetration.

Paid ads on platforms like Facebook and Google are some of the more common digital marketing methods. However, not all potential prospects are interested in clicking on ads or reading landing pages.

Social media is a popular marketing channel that's often neglected by smaller businesses. An estimated 7/10 U.S. residents use at least one social media platform in 2022. Instead of working to get everyone on your website, brands should make the effort to reach the market where they spend most of their time.

Consider all of the options you aren't currently using and determine how they might help boost your market penetration. Other channels we recommend are:

Implement Market Penetration Strategies to Grow Sustainably

Market penetration is essential for brands that seek continued growth and longevity. It allows you to continuously pursue the individuals whom you already know to be in the market for your offerings.

Understanding and utilizing STP marketing will universally boost the effectiveness of all of your marketing efforts. Likewise, making key adjustments that are appropriate for your brand and offerings may suddenly make your products and services accessible to new audiences.

The best part is that all of these strategies are relatively low-risk and low-cost to implement. Select the right strategies, test and measure results, and continuously refine your efforts until you perfect the process.

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Unlimited Sub-Accounts

Unlimited Users

All Apps

All Features


Active Community

Mobile App

Live Support

100+ Tutorials

Unlimited Sub-Accounts

Unlimited Users

All Apps

All Features


Active Community

Mobile App

Live Support

100+ Tutorials