In the business world, change is inevitable, but growth is not. Your growth depends on the strategies and execution plan you implement to make it happen. Growth strategy depends on your business’s goals and objectives. Read how you can grow.
To maintain steady growth, you can go after markets in your same area – so long as it is not saturated. If there is still market share (TAM – Total Addressable Market) in your current markets, you'll want to go after it because of your brand awareness and access. This is one of the most common ways companies grow.
However, if you feel like your market is saturated, then you may want to look at new markets. A systematic approach is the best way to find a new market. Without it, you could waste a lot of precious resources. Start with:
Coming out with a new product is a good idea if you have a well-established market and credibility. You'll be increasing wallet share with a client if they like your new product. However, according to Nielsen, "95% of new products introduced each year fail."
Why do they fail? According to Oxford College of Marketing, a few reasons the product may fall short is because of inaccurate claims about the product to bad pricing to poorly executed launch. So, make sure you do your research.
Keep your sales structure in mind when introducing a new product. Often salespeople who are used to selling product A will continue to sell product A instead of introducing product B. Or vice versa, and they only sell Product B. One product often cannibalizes another product.
So, adding new members to your team to only sell Product B may be a wise decision.
Another growth strategy is to combine a new product and a new market. You can take a brand new product and move to an entirely new market. For instance, if your ideal client is small to mid-sized, you could go after startups. Or you could go after a new geographic area, like Chicago, with the new product. Or even going after a whole new role, like CEOs or manufacturers.
Test it out with a new salesperson. When you aim for a new area all together then hire someone in that area, like Chicago, and test it out with them. If it works, then hire more people to build around them. If it doesn't, then you will need to do more research and figure out why.
You can modify the pricing of your current products or services.
Another growth strategy to combat market saturation or to grow in general is effective pricing. Companies must adjust their basic prices to account for differences in customers and situations, say a pandemic even. According to Marketing insider, there are several typical pricing strategies:
Adjusting your price can give you the competitive edge you need above your competition to get ahead of them.
The simple fact is if you add salespeople, they will make sales and bring in revenue. But you'll want to know your sales team's capacity, and remember, not everyone will be an all-star and land every opportunity, so you always want to average your team's sales capacity and go from there.
You'll also need to know whether or not you need a hunter or farmer on your team. It would be best to look at the company's needs, the specific role you want to fill, and what skills that person should possess.
The objective of growth through acquisition is to gain market share, acquire a greater resource, and ensure business expansion. Before going through with this particular growth strategy, you must analyze the need for it.
For example, this would be a good growth strategy if your objective is to capture markets held by smaller competitors in local areas of your market. For example, buying smaller rivals who lack big investment to grow, they often have a good market reputation compared to bigger companies.
When your company is not different, then you are the same as your competition. If a customer sees everyone as the same, they will gravitate toward what is cheapest. If your company can define its differentiators to appeal to your customers new and old, that will strongly influence their final decision. Ultimately if you stand out with your customers, then close rates go up, and you maintain margins more effectively.
Most organizations have a couple things they believe makes them different, ex. Customer service, they have been in business for many years, etc. These likely are not true differentiators. The further you go in defining differentiators the more your messaging will resonate with the right customers.
If you find an opportunity, make sure you figure out how big the window is for that opportunity. A very timely example would be a face mask.
The companies who jumped right into or had a foot in the door already with a big distributor were able to keep that opportunity. But the opportunity to be one of the first producers is gone now since so many companies are making masks now. You want to be aware of how short an opportunity window is.
SC Johnson states, " More than 300,000 bottles of hand sanitizer donated to health care workers and first responders across the U.S.”
Honeywell said, "While ramping up production of its N95 respirator masks, Honeywell is temporarily shifting operations at two chemical manufacturing plants to produce hand sanitizer."
Bacardi even stated, "We are shifting operations at eight of its distilleries in the continental U.S., Puerto Rico, Mexico, France, England, Italy and Scotland to make the ethanol needed to manufacture hand sanitizer."
Then, the Local Minnesota distillery Tattersall swapped production and jumped on the hand sanitizer bandwagon. Their site reads, "Tattersall is proud to have provided over 105,000 gallons of hand sanitizer this year to Minnesotans." Which for a company who is known for their gin martinis is pretty impressive.
There are a lot of ways you can grow. Depending on how fast you want to grow, your resources, time, and needs will determine where you should start. Begin with what you know best, which could be your current market, going after companies still within that area, or start hiring more sales teams and increasing revenue that way.
Try not to execute on all of these. That could cause a lot of miscommunication, alignment issues, and loss of focus. Pick one or two and do your research.
A growth strategy is crucial because it keeps your company working towards goals beyond what is happening in your market today. It keeps leaders and employees focused and aligned and provides the opportunity to try something new to bring in more revenue.