Just because your business is performing well doesn’t mean you should put growth on the back burner. The reality is, your business is growing each day. And you need to continuously plan to scale and provide bigger and better services for your customers.
Since 71% of successful companies have plans, it’s not something you should neglect. At Pinpoint Management, we believe working smarter is always good business. With the help of a business growth consultant, your team can receive customized, one-on-one coaching that identifies areas for improvement and leads your company where it needs to be.
Let’s dive into the four main growth areas you should leverage and where our team can help.
The 4 Main Growth Strategies
Growing and improving your business requires envisioning the big picture and establishing the right milestones. This entails four key strategies—marketing penetration, product development, marketing development, and diversification.
With these four, you can ditch the “business as usual” mentality and instead focus on optimizing your organization for long-term growth. We’ve listed these in order of least to most risky.
- Market Penetration
According to CB Insights, 35 percent of small businesses fail due to a lack of market demand. This is where market penetration is useful.
Market penetration aims to help your business win a higher market share. This is done by tapping into your competitors’ audience and finding ways to sell more in your current market.
You can view market penetration as the “low-hanging fruit” in the business growth journey—you’re expanding the sales of your existing products and services in your existing market.
Some market penetration strategies may include:
- Conducting a competitor analysis to assess how to refine your product or service. This might involve actions such as reducing your prices or offering a limited-time deal.
- Reworking your marketing campaign to bolster your products’ online visibility and capture more leads.
- Identifying new territories to expand your business. For example, you might consider pursuing franchise opportunities with your brick-and-mortar company.
- Partnering with a business growth consultant to identify blind spots and lucrative opportunities that boost your ROI.
- Product Development
Product development aims to craft new products and present them to your existing market. During your market penetration phase, the data you collect can help identify new products and services that sharpen your competitive edge.
Here are a few examples of product development tactics:
- Modifying an existing product or service based on customer feedback
- Producing different variants of a product to elevate its value
- Repackaging existing products in a way that provides an easier customer experience and/or is aligned with customer values (e.g. sustainability)
- Developing related products or services that can enhance customer loyalty
- Improving the quality of your customer service to improve customer satisfaction and loyalty
Whichever product path your team decides to pursue, it should then follow a streamlined development process that entails:
- Prototype creation: Creating a draft of the proposed product
- Analysis: Analyzing market research to assess potential roadblocks the product or service may encounter
- Production: Developing a final product that aligns with market research findings
- Market testing: Releasing the product to a smaller focus group and collecting customer feedback
- Commercialization: Making adjustments per feedback and releasing the product into the general market
- Market Development
Compared to market penetration and product development, market development is more risky. Rather than targeting your existing market, market development focuses on targeting new markets.
In other words, you’re trying to reach new customers with your existing products/services. This can be an effective way to foster growth, especially if your current market is very competitive.
Market development strategies may necessitate:
- Conducting market analysis to identify potential geographic markets that may be interested in your products or services. This analysis should also entail potential threats that exist in those new markets.
- Using market segmentation to target unique messages to different demographics. Over time, this can help you assess which market segments are more likely to purchase a product or service.
- Testing out new marketing and sales tactics to identify what types of channels your target market responds well to. For example, if you’ve primarily invested your efforts on email marketing, you may want to try out paid or organic advertising to see what strategies resonate with specific audiences.
Diversification takes market development a step further in that you’re trying to reach new markets with new products.
This strategy carries a lot of risk, but if it works in your favor, it can actually result in lower overall risk for your business. By investing in various markets and products, you’ll make your profits less vulnerable to market-specific changes.
But of course, reaping the benefits of diversification takes plenty of courage and strategy to get it right. The key is to think about the areas where your business performs better than your competitors. This ensures you’re adding value to a new market and to your business.
There are four different diversification strategies:
- Horizontal diversification: Adding new products/services that lean primarily toward your existing customers’ needs. For example, if you’re a home flooring business, you may venture into doing flooring for commercial settings such as business offices. This is the least risky diversification approach.
- Concentric diversification: Entering a new market with new products/services that are similar to your current offerings. This may be advantageous if one of your products is declining in sales, and you need a way to offset the sales loss.
- Conglomerate diversification: Entering new markets with new products/services unrelated to your existing offerings. This is common among conglomerates that own businesses in entirely different industries.
- Vertical diversification: Expanding vertically in the supply chain to streamline and own more parts of your operations. For example, you might combine two or more stages of production that separate companies normally run. Retailers may pursue this to mitigate costs.
Lean on a Trusted Business Growth Consultant
You have enough on your hands—let Pinpoint Management take some of the load. We’ll help you acquire quantifiable metrics to develop a clear path forward by partnering with us. This path will not only be aligned with your long-term business goals, but it will also equip you with the right tools to hit those targets.
For a less chaotic growth journey that brings a high ROI, contact the team at Pinpoint Management today for a consultation or take things a step further and complete your business profile survey to help us review your goals.