Two main pathways exist to improve the overall performance of your business: efficiency and sales. When you focus on your approach to sales, you drive up revenue. When you increase efficiency, you reduce costs and improve your margins.
There are multiple options for addressing efficiency and sales, but this article focuses on growth strategies for sales that can help you in any market.
What Is a Growth Strategy?
A growth strategy is a business's plan to increase its size and value. The goal of most companies is business growth, so you need a clear plan of attack to accomplish this goal. No matter the market, these strategies can help companies keep and grow revenue when deployed correctly.
In general, business growth strategies break down into four major categories: market penetration, which is low risk; market development, which includes some risk; product development, which also carries some risk; and diversification, which is the highest risk approach.
With market penetration, your current market is expanded, maximizing the potential of your existing products. Many companies still need to employ refined sales and marketing practices, so putting those into place allows for steady growth.
Market penetration is also usually the first strategy to employ because we can see success quickly with products you already have in an established market. It can be the shortest way to win if you don't have full market penetration. The key to understanding market penetration is understanding your total addressable market, knowing how much your product or service sells to customers compared to the estimated total demand in your market for that product or service.
To calculate your market penetration, we use a simple formula.
The higher your market penetration, the more you become recognized as an industry leader with established products or services, and you develop a well-known and respected brand identity.
With market development, you expand outside your current market and introduce your products or services to a new target audience.
As you penetrate your existing market, you can pivot to reach new audiences, enter new territories, and identify and target clients you should be serving but who don't know about you yet. Understanding other industries that may be a good fit for your product or what other regions have an opportunity is critical for success.
Common challenges in market development are focusing on the wrong KPIs or simply mimicking what the competition is doing. There are many factors to consider when employing this business growth strategy, and you should have an expert work with you on it to ensure success.
Developing your market is critical to your business growth. With proper risk management and in-depth market research, you can avoid the most common pitfalls while simultaneously increasing sales and efficiency.
Product development includes improving your existing products and creating and marketing new products. With new and improved products, you lock in your current audience in ways that make them more loyal to your brand.
The key to successful product development is understanding your audience's pain points and how you can address them with a new or modified product.
Take your insights and brainstorm avenues your company can take to meet those needs with your products or services.
Finally, diversification is the highest-risk growth strategy because its similar to starting fresh with new products and markets. These new products and markets may or may not be related to your current products, so the strategy for launching is critical for success.
You can diversify into new regions, into new demographics, or even into new industries.
3 Parts to Creating Growth Strategies
Whatever strategy you decide to employ for business growth will involve three major parts: the challenge, the frameworks, and the action.
First, you must define the challenge you are facing as you see it. You will do this by setting measurable goals, identifying your competition and where you stand against them, and understanding your landscape and value proposition to your clients.
Once you have outlined your challenge, you will establish a framework for what will come.
A framework for your business growth strategy will include creating compelling and consistent messaging around your product from your client's perspective.
It will include identifying your product's technical specifications, the everyday struggles you will face, and the highlights for your target persona.
You must develop a persona or a specific avatar representing your ideal client. Know your persona through and through. Who is your audience, why do they care, and how are you helping them?
Finally, you will begin the planning stage, laying out how to achieve your goals through your messaging and product frameworks.
The third part of your growth strategy will involve taking action. You will need tactics, operations, and execution for your action strategy. Tactics should include specifics on execution and details for your team to work from.
Your action plan will outline how this strategy will travel through operations to completion, including logistics, customer service, and delivery of goods.
Execution is your final task, and it simply involves a consistent execution of your action plan. Consistency is vital; with it, the program will see more success.
Map to Success
Deciding which avenue is best and mapping out a plan are essential to your success. You may be tempted to skip steps to see results faster, but taking the time to vet and evaluate your options will pay out in the long run. Suppose you need help deciding which avenue may be best for your company. In that case, TANK New Media has experts who can guide your decision and help with the consistent planning and execution of your program so you can see success in any market.