10 Strategies to Ensure Business Growth

Business Growth

Image Credit: Anirudh Koul on Flickr

Business owners have one (big) expectation from Marketing: to dentify strategies and implement programs the lead to business growth.

The number of Facebook fans, e-mail open rates, number of visitors on the website- these are meaningless statistics without a quantifiable impact on the bottom line.

I am not saying these metrics are not important. It’s just that we need to find ways to translate them into positive sales results.

How To Generate Business Growth

Simply put there are basically four ways to grow your business:

-sell more existing products to existing customers

-sell more existing products to new customers

-sell new products to existing customers

-sell new products to new customers

The ideas below fit one or more of the four strategies above. Not all of them will be applicable to your business, so use this list for inspiration only.

10 Way to Grow Your Business

Launch a New Brand

Many consider this business growth strategy only when the existing brand(s) are struggling. However this is not always the case.

Lululemon Athletica is a well known designer and marketer of yoga-inspired athletic apparel. The brand basically owns the Canadian yoga apparel market, by offering a distinctive product line backed by a strong community-focused marketing approach.

In 2009 the company decided to leverage its expertise and target a different, younger audience. That’s how Ivivva Athletica was born as a line of “dancewear and activewear for girls”.

There are a lot of scenarios where launching new brand makes sense:

-the company wants to enter a new market segment where the current brand image cannot be leveraged.

-existing brand has become irrelevant as consumer needs are changing. Kodak was the leader in film photography,  but the brand could not be stretched and adapted to the digital photography revolution.

-price pressure from new market entrants. This is a scenario that many premium North American brands are having to deal with as they  face intense competition from imported products.

Many companies choose to stretch the existing brand into the new category (brand extension). The safest option, while more time consuming and expensive, is to launch a stand alone brand with a meaningful positioning in the new category.

Expand Internationally

Today’s global economy makes it easier for brands to expanding beyond their national borders. Depending on the product offering, and with the help of today’s technology, a company can expand internationally with much less investment than even 5 years ago.

The Internet is an invaluable tool for researching various trends and attitudes of the international market you are targeting.

Most governments have programs in place to help companies expand their reach globally through financial support, market research data and even joint trade missions to specific countries. Check out my article on global marketing for further information.

Identify and Target Complementary Markets

The first step when pursuing this strategy is to ask a simple question: “What business is my company in?”.

An insurance company might provide the following answer: “We are in the business of selling insurance products such as life, home and auto insurance to our customers”.

This is a very simplistic answer that does not enable business growth.

When answering this question, one has to think of the following: “What client needs does my product/service addresses?”

“What benefit do my clients seek for when buying my product?”

Coming back to our insurance company example, one answer might be “we are in the business of providing our customers with peace of mind by having them covered when the unexpected happens”.

This much broader definition allows the development of additional products and services for a market where “piece of mind” is a valued benefit.

Launch a New Distribution Channel

If you feel the current distribution channel does not provide the much needed business growth, then it’s time to revise your  strategy. This process might present some challenges, so careful planning is required.

The most common obstacle is channel conflict. A company that has built its business selling through independent distributors, might have a hard time making drastic changes.

Distributors want exclusivity and don’t like competition, in particular from the online channel.

The reality is that modern consumers have many shopping options: some of them prefer brick and mortar stores where they can touch, feel, and try the product before buying it. These “traditionalists” will be loyal to that channel, no matter how tempting the online channel is, and is willing to pay a price premium for this privilege.

Others prefer the convenience of buying online, in which case the distributor will not get that business anyway.

With careful planning and integration, using multi-channel distribution system should help a business improve its bottom line.

Implement a Loyalty Program

If you are not convinced of the benefits of implementing a loyalty program, check out these interesting facts.

A loyal customer base is a characteristic of a strong brand.

Besides encouraging repeat purchases, a loyalty program allow brand owners to influence customers’ buying behavior,  identify purchasing habits, and a positive brand image through word of mouth.

A common perception among small business owners and new entrepreneurs is that loyalty programs are for big budgets only. This is not the case as there are companies offer online loyalty platforms that fit most marketing budgets.

Focus on the End-User While Keeping Distributors Happy 

Independent distributors are rarely loyal to a particular brand. They are in the business of making money and, unless their customers ask for a specific brand, will push whatever brand brings them the most profits.

Many companies that sell through distribution use e PUSH strategy exclusively.  They are afraid that distributors will not be happy if communication campaigns are directed at end users.

However brands are built with the ultimate beneficiary of your product, the end user. A joint programs with distribution to target the end-users could be the win-win solution. You bring more business to distributors while selling your products in the process.

Invest in Your Brand Image

We feel most comfortable with people we know. As consumers we tend to choose brands we are familiar with.

Investing in marketing programs that creates awareness and demand for your brand a proven method to grow sales.

While word-of-mouth recommendations is the most desirable outcome of your communication efforts, gaining people’s confidence happens slowly over time. Social media is a great way to establish one to one dialogues with your customers and transform them in brand ambassadors.

Develop New Products

New product introductions is a classic method of generating business growth. The most successful and profitable new products dramatically enhance performance within an existing category or create a new category.

Even existing products in the brand portfolio that customers are not aware of could also be considered “new”. Take a look at products that were introduced 2-3 years ago but didn’t gain much traction. The solution might simply be a revamped communication strategy.

A new product launch reignites the dialog with your customers and energizes your sales force. They offer a reason to call back on old customers with exciting news.

Explore Co-Branding Opportunities

Developing a product or service is partnership with another brand can offer a significant boost in sales. Co-branding, carefully planned and executed, will provide positive results for both brands involved in the process.

There are many benefits of using this strategy: exposure to a complementary market your brand doesn’t currently serve; positive brand associations; reduced product development costs; and lesser risk associated with a new product launch.

On the negative side if the partner brand goes through an image crisis, your brand will probably suffer as well.

Co-branding has to make sense in order to work: the partnership between Intel and big computer makers such as IBM under the “Intel Inside” campaign was a huge hit, as the two brands complement each other.

Franchise Your Business

A popular strategy for expanding the brand rapidly and cost efficiently into different geographical markets is by franchising it.

Not all business can be franchised: in many instances, a particular business model is location or staff dependent and cannot be replicated. That being said, franchises bring benefits for both the franchiser and franchisee.

The initial franchise fee and on going royalty certainly improves the bottom line. These funds can be used to promote the brand and build a more desirable franchise.

The franchisee avoids the higher costs of having to build a business model and a brand from scratch. Initial training and ongoing support also increases the chances of success.

In the end a good fit between the two parties is essential to success.

Your Thoughts On Growing a Business

This list is by no means comprehensive. I am sure you have your ideas and experiences.

Feel free to share them with us in the Comments section below.

Comments

  1. Adomas, thank you for your comment and subscription to my blog. Your company is very interesting-I will definitely contact you with any project that involves beverage development.

    Michael

  2. Hi Michael, great article.

    I agree with you that it is way much reasonable to create a new brand in a new category than making extensions of your current brand. Although it is an easier and cheaper way, but it is not the smartest way. Moreover, I like to diversify risk by having several different brand in different categories.

    Anyway, great post. I’ve subscribed to your blog ;) In case you will need any help in beverage development projects – contact me!

  3. Thank you for your comment Amber. I think the biggest challenge we have is growing the business without loosing its focus and direction. We see too many brands stretching into new categories so much that they become non-relevant to their core audience.

  4. Excellent tips. As a business, it is important that it keep growing. Perfect a product and service but at the same time do not close your doors for new opportunity. Be open of learning new things.

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