Developing new revenue streams is always a business challenge. Developing a long-term growth strategy requires imagination, creativity, and a significant amount of focus. Knowing how to manage your growth while ensuring your ability to deliver exceptional service to your customers are paramount for long-term success.
While many strategies can enable small and medium businesses to achieve growth, here are several basic concepts that can get you started and warrant your consideration and potential implementation.
- Focus on current customer relationships. According to Marketing Metrics, increasing customer retention by five percent can increase profits between 25 and 95 percent. Providing exceptional customer service that creates long-term and loyal customers is a sound strategy to grow your business. Upselling or cross-selling current customers is significantly more effective and cost-efficient than securing new clients.
- Perform a white space analysis. Identifying the “whitespace” in the market is essential to building a successful brand and stimulating business growth. Exploring the competitive landscape and identifying whitespace that your brand can “own” provides an opportunity to recalibrate your business focus, determine what makes your offering unique and valuable to customers, and strengthen your brand.
- Expand your product and service offerings. Your customers and their needs are constantly evolving. So should your product and service offerings. Focus on your customers’ long-term needs. Be aware of industry trends which will enable you to anticipate their future needs and position your company to service them. This approach also allows your company to be first-to-market and a potential industry disruptor.
- Develop a new adjacent industry customer base. Data suggests that selling to new customers is between 5 and 20 percent successful. Notwithstanding this data, a focused effort to attain customers in new sectors, geographies, or segments can be prudent. Knowing when to engage in new client acquisition opportunities requires a well-thought-out strategic approach and flawless implementation.
- Move on Up (or Down) the Value Chain. All businesses operate along some type of value chain. From suppliers to distributors to marketing and sales, your business is somewhere along the chain from the source to the consumer. Moving up or down the value chain is about identifying ways to take over more of the processes along the line.
- Develop strategic partnerships. Many small business owners can benefit from strategic partnerships that enable them to serve a more extensive client base or business opportunities together. Strategic partnerships are often an ideal way to build brand traction, expand your audience and customer base, access additional resources and talent, and stimulate revenue growth without acquiring another company. When formalizing a partnership, make sure you understand the value you both bring, how that value is enhanced, and what additional customer-centric value is generated through the partnership.
- Increase your geographic reach. Geographic expansion can help you gain access to new markets and talent pools, reduce costs, and perhaps most importantly, provide a robust pipeline to fuel your company’s future growth. A diversified growth strategy protects your company from country-specific economic downturns: You reduce risk by broadening your presence. Further, if you don’t take your products/services global – if you don’t adapt to this ever-flattening world –your key competitors will. Developing opportunities to expand your customer reach is an effective growth strategy that should be pursued in a phased approach to ensure that additional customer requirements, logistics, and costs are all addressed effectively.
- Establish a formal referral program. A variety of industry research conclusively demonstrates that customer referrals are a significantly effective but extremely underutilized business strategy. According to industry statistics, customers acquired through referrals have a 37% higher retention rate. According to Dale Carnegie, 91 percent of customers would give a customer referral, but only 11 percent of customers are asked to do so. Creating a formal referral program can allow your customers to help you grow by becoming a brand ambassador for your company.
- Change your Sales Compensation Plans. The sales staff that are not motivated with financial, social, and other incentives will underperform, leaving potential revenue on the table. However, some revised compensation plans encourage undesirable outcomes like selling higher volumes of shorter contracts, which is why revenue implications must be considered when drafting compensation structures. Sales compensation planning is a multi-step process–from planning to introducing and rolling out new plans to monitoring, analyzing, and tweaking plans throughout the year. However, the process doesn’t need to be difficult or time-consuming. With careful consideration and strategic design, you can inspire your teams and empower them to perform above and beyond the competition.
- Become a recognized industry thought leader. Based on your industry and business, sharing thought leadership content can be an effective strategy. Being a thought leader can open doors to new opportunities for yourself and your organization. It can transform your brand and position your organization as a leader in the industry. More importantly, it is a reliable way to elevate your reputation, build brand equity and attract ideal customer.
Whether your business is newly launched, is ready to grow, or is in a holding pattern, the thoughtful implementation of these growth strategies can help you succeed well into the future.