There are an estimated 400 million small businesses in the world, with an extra 500,000 founded each month. It is believed that 65% of these startups fail within the first 10 years of opening. Yikes, that doesn’t sound promising.
But wait one second; let’s not throw in the towel just yet. Yes, it is undeniable that the current market is oversaturated. However, that doesn’t necessarily mean your dreams of running a successful business are out of reach. Trust us, we have the solution.
In this fiercely competitive environment, growth is not just a goal; it is the route to success that propels small businesses into industry giants. Whether you are an entrepreneur kickstarting your new business or an established mega-corporation, this blog will deliver seven business growth strategies guaranteed to grow your brand.
What is business growth?
Business growth is all about your brand becoming bigger and better. Think of it as grabbing a mushroom in the Mario games; you increase your power, reach new areas, and collect more coins.
Contrary to popular belief, business growth is not only about making stacks of cash. In fact, it comes in various forms, including:
- Revenue: Increasing the company's sales and revenue through the sale of products or services.
- Market share: Capturing a larger portion of the market by attracting more customers or taking the current market share from competitors.
- Profitability: Increasing profit margins by either reducing costs or increasing prices.
- Geographical: Expanding operations into new geographic regions, whether locally, nationally, or internationally.
- Product: Introducing new products or services to meet customer needs or entering new market segments.
- Customer base: Attracting and retaining new customers by increasing customer acquisition or reducing customer churn.
- Diversification: Expanding into new business areas or industries to reduce risk and open up new revenue streams.
- Employee: Expanding the workforce to handle increased demand or to support new business initiatives.
- Digital: Leveraging technology and social media platforms to reach a broader audience and increase online sales and presence.
- Partnerships: Collaborating with other businesses or forming strategic partnerships to access new resources, markets, or capabilities.
There are two distinct approaches to expanding business: inorganic and organic growth. Check out the table below that highlights the key differences between them.
Our top 3 business growth strategies to level up your brand
Are you ready to take your business to the next level? Here is our in-depth walkthrough that showcases the 3 best types of business growth strategies guaranteed to supercharge your brand.
1. Market penetration strategy
Home is where the heart is, but also where businesses can thrive. Your current market is a source of untold growth. Most brands overlook this, opting instead to explore new markets and demographics for expansion.
This is where a concrete marketing penetration strategy comes in. Hang on one second; who is laughing over there? Listen, if you keep interrupting every time that word is mentioned, this will be hard work.
Now, before you start blushing, let's start talking about this incredible growth strategy. Essentially, it is all about diving deeper into a brand’s existing market instead of expanding into unknown territories or introducing new products. The aim here is to grab a bigger slice of that market share pie.
Imagine this: a once bustling nightclub has hit rock bottom with dwindling profits and lackluster door sales. Even the club regular is starting to have second thoughts about dancing alone.
Instead of packing up and moving to a cheaper location, the owners decide to slash admission, crank up the volume with banging tunes, and overhaul the dated decor to attract the locals. Soon, the club is bouncing again, all thanks to a brilliant market penetration strategy that improved the current product offering for its target audience.
But what techniques can you use to penetrate your market? Here are our top suggestions to get the ball rolling:
- Competitive pricing: Lowering prices to make products more appealing to your target audience, potentially luring them away from competitors.
- Advertising: Utilizing advertising campaigns to raise awareness of the brand and its offerings, emphasizing the benefits of choosing the company over competitors.
- Product enhancements: Improving the quality of existing products or implementing new features to make them more attractive to customers.
- Distribution expansion: Expanding distribution channels to reach more customers within the same market, such as entering new regions or partnering with additional retailers.
- Customer retention and loyalty Programs: Implementing strategies to retain current customers through excellent customer service, loyalty programs, and personalized marketing efforts.
- Conduct market research: Conduct research to understand customer preferences, needs, and trends within the target market to optimize products effectively.
- Competitor analysis: Studying competitors to identify weaknesses and areas where the company can gain a competitive advantage.
2. Market development strategy
Is your current market starting to feel a bit snug with no wiggle room for expansion? It is important to concede when a market becomes too restrictive. It can sometimes feel like squeezing into running shoes that have become too tight. You want to be at top speed, but your market leaves you stumbling at the starting line.
Market development is a business growth strategy that involves expanding a company's existing product or service into new markets or segments.
But what exactly are market segments? Companies use market segmentation as a strategy to divide a broad and diverse market into smaller, more manageable pieces.
Brands use four key factors to segment a market, which are:
- Demographic: This involves categorizing the market based on demographic factors such as age, gender, income, education, marital status, and occupation.
- Geographic: This divides the market based on geographic factors like location, region, climate, or population density.
- Psychographic: This focuses on consumers' lifestyles, values, interests, and attitudes.
- Behavioral: This categorizes consumers based on their purchasing behavior, such as their usage patterns, brand loyalty, benefits sought, or response to marketing efforts.
How exactly can a brand infiltrate a new market? Well, we believe to be successful, it is important to focus on the following five steps:
- Perform market research
- Adapt your product
- Establish distribution channels
- Form strategic partnerships
- Develop a marketing plan
Take a look at the fictional example below for a more in-depth look at these steps in action.
Imagine you are the owner of a successful surfboard company in Bondi Beach, Australia.
While your surfboards are immensely popular among your loyal customer base, the market is oversaturated, and surf shops seem to be popping up on every corner.
It’s time to take your surfboards to new horizons, and you have set your sights on the untapped haven of Mozambique. Here's how you put your market development strategy into action:
- Market research: You start by researching the Mozambique surfboarding scene. You discover that it offers truly phenomenal waves, but the majority of surfers are South Africans.
- Product tweaks: You make some product adaptations to cater to this new market. This includes designing surfboards that function better in the local wave conditions and climate.
- Local strategic partnerships: Form collaborations with local surf instructors and schools to enhance your reputation amongst locals.
- Marketing: Create a marketing strategy highlighting Mozambique's unparalleled waves and the customized surfboards designed for these conditions.
- Distribution channels: Establish effective distribution channels, including physical retail outlets and online platforms, to ensure your products are available to both locals and visitors.
3. Word-of-mouth marketing strategy
We have saved the best for last; word-of-mouth marketing is the ultimate method to organically grow your business. This method involves users spreading positive customer experiences about a brand to others through conversations.
Think of word-of-mouth as an enormous game of telephone where brand information and stories bounce from one person to another, shaping perceptions and influence as they spread.
Is it effective? You bet it is! It has been shown that 92% of potential customers trust recommendations from friends and family more than any other type of marketing.
This trust translates into increased website traffic, more sales, and boosted brand awareness. In fact, word-of-mouth is believed to account for an incredible 13% of all consumer sales, which is worth about $6 trillion worldwide.
Want to get in on this action? Here are our top tips for business owners wanting to use word-of-mouth to drive business growth:
- Focus on customer delight: Make it your mission to consistently surprise and delight customers, sparking organic conversations filled with enthusiasm about your brand.
- Embrace customer testimonials: Encourage customers to share their positive experiences on your website and other review platforms.
- Start a referral program: Create an exclusive club that rewards existing patrons for introducing new members to your brand.
- Utilize social media: Turn your social media platforms into engaging and interactive hotspots that ignite lively conversations.
- Craft shareable content: Build content that is so compelling it practically begs to be shared far and wide.
- Collaborate with influencers: Forge alliances with industry influencers who can preach your brand to their loyal legions.
- Sign up to GrowthPanels: Use this miraculous service to easily build an affiliate program to reward your cherished customers when they take desired actions.
Other notable business growth strategies
There are countless other business growth strategies that can skyrocket your brand to new heights; here is our pick of four other techniques to explore.
- Product development strategy: Involves creating new products to meet evolving customer needs and market demands.
- Business partnership strategy: When a business enters a strategic partnership with another company to achieve common goals via their combined resources.
- Diversification strategy: Also known as product expansion strategy, this is when a business creates a product line or service within a new market.
- International market expansion: A business attempts to expand into international markets.
Measuring growth goals
You have finally taken the plunge into uncharted waters and implemented a business growth strategy. Congratulations! But the odyssey doesn't end here.
To ensure that your newfound strategy is a success, it is crucial to monitor the following metrics:
As you voyage through the ocean of business growth continues, the entire team at GrowthPanels wishes you a successful journey. Bon voyage!