When looking to grow revenue and business success, one of the most important things business owners can do is identify their most effective growth strategies.
Every business needs to both keep up with the demand of customers and stay relevant in its industry, which is why constant changes and growth methods are vital when it comes to being successful.
Shweta Jhajharia, CEO of Growth Idea states that there are 4 main business growth strategies to implement in business, all of which will create maximum impact when planned and carried out effectively.
These are: market penetration, product development, diversification, market development.
One strategy that every industry has to employ is market penetration. Market penetration refers to the use of existing customers, services and products to bring in new people to a business, either through word-of-mouth or by other means such as digital marketing and advertising.
This means having a successful sales team and ensuring effective distribution channels so that customers can be reached and products and services can be sold easily.
Market penetration also means gaining contact details of people interested in your product or service so they become potential customers further down the line. This could be done by gathering email addresses and sending out a weekly e-newsletter, or inviting potential customers to an upcoming business event or conference.
Successful market penetration is all about being ahead of the competition, so one other method that can be used to gain a competitive edge is product development.
Product development means making sure your business is developing new products and services that are better than other companies in your industry, allowing you to attract customers who are looking for something different and more suitable for them and their needs.
This could also mean finding a customer need and providing a product or service to fulfil this need. By developing new products, you can work on market trends and requests to provide your customers with the best quality of product or service possible while staying relevant in your industry.
Another business growth strategy that is used by companies all over the world is diversification. This means expanding your business into other areas, all of which are related to the main product or service that is being sold, to lead to an expansion of brand and customer base.
For example, if your business is selling juices as its main product or service, diversifying could be as simple as selling a counterpart product that is related to the juices, such as fruit-flavoured water or some kind of dish that can be made with juices.
It’s important to note that diversifying your business should never be seen as an attempt to grow revenue quickly without proper planning and consideration for product development. All products and services need to have the same, if not higher, quality as the original product and service that was sold.
A good real life example of a business using diversification is the toy company Hasbro, which has created games all related to its most popular product, Monopoly. This includes Monopoly Junior for young children, Party Monopoly for teenagers, and other versions such as Star Wars Monopoly and Disney Monopoly.
The final business growth strategy that can be used is market development – this strategy refers to an increase of sales into new geographical areas or demographics.
For example, a business based in Paris could take on interest from potential customers living within a 50 mile radius, or it could target the entire French population by marketing to the rest of France.
By expanding your business into new regions or demographics, there is greater potential for revenue growth than ever before, however you can never be sure of how successful your product or service will do with this new demographic or region.
It’s likely that a product currently targeted at teenagers and young adults won’t necessarily be as successful or popular if targeted at over 50’s, however market development could still be a necessary step if paired with diversification.
As you can see, all of these strategies are in some way related to each other, so they can be easily used in conjunction with one another. It’s important, however, to remember that growth strategies are never an overnight fix and should be developed over time with consideration for product development and market research.
Rushing into big business changes and strategies can often be more harmful than beneficial, so it’s important to carefully consider all of your options and make calculated, well-informed decisions.
Lastly, it’s vital to ensure all strategies are sustainable with the proper marketing plans in place for each, as well as the necessary budgeting and time management. All of these strategies can help to grow your business into something bigger, better and stronger than ever before.
How to work out which strategy is best for your business
To determine where your focus should be, you need to consider all of the available strategies. Identify where your business is currently strongest and where it’s currently weakest, before deciding which strategy would be best for it.
For example, if your company is doing extremely well with market development, for example by selling a product to consumers in the United States, it could be an idea to focus your efforts on diversification instead. This way you’ll be able to expand your brand and customer base, without risking the product development for the product you’re currently selling.
Once you’ve decided on the strategy, it’s time to get your marketing plan in place. Without a well thought out marketing plan, a business is unlikely to be successful at achieving any of their goals.
See Shweta and Growth Idea’s successful framework when it comes to determining which growth strategy is best.