Are you happy with your business growth hacking tactics? Or are you struggling to keep up with your competitors? You would be surprised how many of our clients say they are happy with their size and therefore don’t have a growth strategy. To exploit change as an opportunity, like Peter Drucker would say?
The entrepreneur always searches for change, responds to it, and exploits it as an opportunity.
In the life of a business, there are only two options … you can either keep up or surpass your competitors through a business growth strategy or lose market share. Business growth obviously can be planned in various degrees. If your business is at the size you desire, a minimum or status quo strategy may be the best for you. In any case, you need to execute some form of a growth strategy to at least maintain the status quo.
In a time of overwhelming competition, increasing rate of marketplace change, and significant marketing message noise and clutter, even maintaining your current customer base is difficult … and real growth even harder.
Peter Drucker defined growth capabilities, as shown in the figure below … with four necessary components. Growth depends on effectively adapting to change, improving your customer insights, then turning them into improvements in customer experience and service. It also depends on engaging and building communities with your target customers, improving the effectiveness of your marketing to be heard and remembered, and adding creative channels to communicate your value propositions. And it certainly depends on the quality of your employees, their training, and their ability to operate as a team.
Let us discuss each of these important growth components:
Growth hacking … build customer relationships and trust
Customers choose businesses based on their confidence, strength of relationships, and trust.
Today there are many communication channels to engage your customers, build communities, display your brand’s values, deliver on your promises and ultimately build relationships and trust. Every customer touchpoint in each channel is an important marketing opportunity.
Growth hacking strategies … integrated marketing strategy
Creating marketing messages that will be heard, remembered, and, most important, talked about, is very difficult in a world where customers have precious little time to listen.
Achieving creativity in your marketing messages delivery is essential to winning your customers’ choices, and then their loyalty.
Adaptability to change
The digital and network revolutions have unleashed rapid and significant marketplace changes that impact your ability to engage customers … and the rate and amount of change is accelerating. Businesses must interpret and understand the implications of these changes and rapidly respond with creative ideas and innovations to maintain their competitive edge.
Growth hacking techniques … building an effective team
Your team is your business, quite literally. It is only as good as the weakest link and your ability to provide strong and effective leadership.
Related post: Beware: Characteristics Which Destroy Effective Teamwork
You, as a business leader, must be a talent hound for future hiring, be a strong mentor and coach, and continually work to build your leadership skills and a staff that works effectively as a team.
Here are five growth strategies that Peter Drucker would recommend for small businesses to consider. Not every strategy will be right for your situation, but some of these will offer an opportunity for your business.
The least risky growth strategy for any business is to simply sell more of its current products or services to its current customers. Think of how you might buy a six-pack of beverages, then a 12-pack, and then a case. Finding new ways for your customers to use your product—like turning baking soda into a deodorizer for your refrigerator—is another form of market penetration.
Build new market segments
The next rung up the ladder is to devise a way to sell more of your current product to an adjacent market—offering your product or service to customers in another city or state, for example. Many of the great fast-growing companies of the past few decades relied on new market segments as their main growth strategy. Market segments simply means picking a sub-set of the entire marketplace that you can organize your sales efforts around. Out of all the people in the world, who will you try to sell to?
Red Bull gets its energy drinks in front of a young, adventurous crowd: its segment of the market. Have you wondered why Red Bull owns a Formula One racing team? That’s why.
Pepsi was losing its battle with Coca-Cola to become the heavyweight cola company. Instead of trying to beat Coke at its own game, Pepsi focused on a young, fun-loving demographic. Many Pepsi commercials show younger music stars, celebrities or other young status symbols. In other words, Pepsi stopped targeting the over-30 crowd. Coke is still the top dog, but thanks partially to new market segment focus, Pepsi has grown a very successful brand as well.
Most small business owners would be happy with building the next Pepsi, but many are afraid to eliminate part of a potential market. It can seem scary, but you need to focus on your core customer if you want a clear path to growth.
Further segmenting your market comes down to making choices. Who will you serve? Who will you avoid? And which segment can you focus on to improve profitability?
Create new selling channels
This growth strategy involves pursuing customers in a different way such as, for example, selling your products online. When Apple added its retail division, it was also adopting a new selling channel strategy.
Using the Internet as a means for your customers to access your products or services in a new way, such as by adopting a rental model or software as a service, is another type of selling channel strategy.
Add new products and services to your portfolio
A classic strategy, this one involves developing new products to sell to your existing customers as well as to new ones. If you have a choice, you would ideally like to sell your new products to existing customers. That’s because selling products to your existing customers is far less risky than having to learn a new product and market at the same time.
Pursue white space: new products for new customers
Sometimes, market conditions dictate that you must create new products for new customers. The example we would use here is Polaris, the recreational vehicle manufacturer in Minneapolis. For years, the company produced only snowmobiles. Then, after several mild winters, the company was in dire straits. Fortunately, it developed a wildly-successful series of four-wheel all-terrain vehicles, opening up an entirely new market.
Similarly, Apple pulled off this strategy when it introduced the iPod. What made the iPod such a breakthrough product was that it could be sold alone, independent of an Apple computer, but, at the same time, it also helped expose more new customers to the computers Apple offered. The iPhone has had a similar impact.
As an example, let’s assume your small business makes golf clubs and you have a technology that makes the clubs more effective in distance and accuracy. The product is great, but you don’t have a manufacturing facility, a distribution channel or any of the other parts of the golf equipment supply chain to scale your operation. All you have are great handmade golf clubs.
You may not be able to compete with the big industry players like Nike, Maxfli, Ping, Wilson, or Calloway for sponsorships or tournament partnerships, but you could partner with one of the manufacturers and or distribution companies. In fact, you could partner with them without having to pay a cent for your own factory or distribution. Just pay your partners a portion of the profit every time you sell a tennis ball.
The result? You negotiate for mainstream production and distribution without paying the huge upfront cost of building a plant or hiring a shipping company. Now you can focus on selling your golf clubs instead of worrying about making them.
Keep learning: The Business Intelligence Process Part 4 SWOT Analysis
Large businesses can pay for partnerships up front, but as a small business you have to negotiate for partnerships that pay per sale.
If you choose to follow one of these growth strategies, you should ideally take only one step up the ladder at a time, since each step brings risk, uncertainty, and effort. The rub is that sometimes, the market forces you to take action as a means of self-preservation.
So what’s the conclusion? The conclusion is there is no conclusion. There is only the next step. And that next step is completely up to you. But believe in the effectiveness of business growth strategies. And put them to good use.
It’s up to you to keep improving your creative marketing efforts. Lessons are all around you. In this case, your competitor may be providing the ideas and or inspiration. But the key is in knowing that it is within you already.
All you get is what you bring to the fight. And that fight gets better every day you learn and apply new lessons.
When things go wrong, what’s most important is your next step.
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All you get is what you bring to the fight. And that fight gets better every day you learn and apply new ideas.
When things are not what you want them to be, what’s most important is your next step. Call today.
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Mike Schoultz is the founder of Digital Spark Marketing, a digital marketing and customer service agency. With 40 years of business experience, he blogs on topics that relate to improving the performance of your business. Find them on G+, Twitter, and LinkedIn.
Digital Spark Marketing will stretch your thinking and your ability to adapt to change. We also provide some fun and inspiration along the way. Call us for a free quote today. You will be amazed how reasonable we will be.
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