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Strategies for achieving and sustaining growth

“Failure to increase is decrease.” You might have heard business gurus or keynote speakers say this before. At first glance though, this may appear paradoxical but the simple statement holds a lot of truth. Many businesses have settled into the complacency of consistent performance, yet this philosophy of mere maintenance where you are neither growing nor declining can be costly. Often this apparent stability in small businesses is short-lived when confronted with periods of financial distress or the loss of even one major client. In spite of this pitfall, a few proactive steps can often avert disastrous outcomes.

“Prevention is better than cure”, right? Well, in the early stages when any company starts showing signs of stagnation, the senior leaders should respond by evaluating the growth potential of the core trading activities. They should also evaluate the growth potential associated with creating innovative value propositions for untapped customer groups. This process should reveal if and when management should explore further core and non-core growth options.

The following three strategies could be implemented to stimulate further growth.

1. Develop and grow the core business

This consists of maximizing your primary target market; the core customers who trust you and know that you can deliver. Cross-selling is a great way to sell additional products, features, and packages to your existing customer base. Although you normally would not need to expand your infrastructure to supply these additional revenue generators you need to ensure that these complementary products and services are value-adding. Failure to do so may disrupt existing healthy relationships.

2. Grow by sub-segmenting your customers

Very simply, a market segment consists of individuals who have similar preferences. A sub-segment is a categorized component of the entire sector. For instance, online education is a sub-segment of the overall education market in South Africa. The marketer has to analyse the needs and preferences of the individuals belonging to each sub-segment. Dividing customers into groups based on buying patterns and contribution to revenue allows you to focus on the most attractive buyers and in doing so grow.

3. Grow adjacent opportunities

This is a viable option for a business that, although still growing, is operating efficiently and generates some additional cash reserves. Essentially, a company could consider stimulating growth through non-core or adjacent opportunities if they have an established and trusted customer base – but are not satisfied to remain at that level. The cost involved in attracting existing customers through existing stores, channels, and systems, is much lower than through capital-intensive avenues like the media or call centres. An example can be observed in the petroleum or oil and gas industry. Convenience stores do very well adjacent to forecourts of most service stations. The sale of consumer goods is completely unrelated to the sale of fuel – yet the convenience factor makes it such an innovative and lucrative idea.

4. Do cross-marketing

Cross-marketing is a form of marketing promotion where customers of one product or service are targeted with the promotion of a related product. However, cross-marketing could also entail two or more companies working together in a way that benefits both. A gym could partner with a biokineticist and offer a gym membership with a free introductory course with a biokineticist. The most significant advantage of this innovative approach is the fact that the cost of promotion is reduced. It is also a win-win situation for both companies, which is likely to stimulate a fruitful long-term partnership.

Focusing on the core, as well as adjacent business opportunities enables companies to entrench deeper brand loyalty and add greater value while growing their market share and business.

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