Start-ups and small businesses usually set out into their chosen markets fueled by ample enthusiasm and positivity. This may take them far, but to truly succeed in competitive markets it is prudent to have a tangible long-term business growth strategy in place.
The unfortunate truth is that many start-ups or small companies fail because they haven’t taken this crucial step. Without it, a new business can reach a plateau far sooner than expected; this stage may even be a death knell, yet it is possible to turn things around quickly by implementing some appropriate business growth strategies.
If you are at the stage where your business needs a boost – and fast – it is time to figure out which growth strategies can be put in place. This article aims to help you understand how to accelerate business growth so that
your business has every chance of long-term success.
Here are our top 6 strategies to grow your business:
1. Market penetration
Market penetration aims to increase market share for an existing product, or to successfully promote a new product. Useful strategies include advertising, bundling products into attractive, saleable packages, offering discounts on larger orders and lowering prices to beat competitors.
Although it may seem unappealing, lowering prices can be a good short-term expansion strategy for businesses selling products similar to those sold by their competitors. For example, businesses with relatively generic products (such as household cleaning supply businesses or stationers) can benefit from adopting this market penetration strategy.
If you can’t increase or improve your product range and must continue to promote existing products, it may be necessary to make products more attractive by coupling them with complementary products in a package, or offering bulk buy bargains.
2. Market development
A market development strategy pertains to promotion of existing products or services to new customers, or launching them in a new geographical area. It might be that your usual market has been saturated or you’re struggling to attract new customers or clients in your local region.
Sales and profits are apt to suffer unless a business finds new markets for its products. A larger-scale example of this would be leading footwear companies Nike, Adidas, and Reebok, which successfully expanded into international markets with original, attractive marketing campaigns.
Small businesses budgets may not be comparable, but it is certainly possible to find new uses for current products or branch out into similar markets. For example, a restaurant owner might consider private catering, or doing some B2B marketing to get well-packaged signature products onto local grocery store shelves.
3. Alternative channels
Utilising alternative channels is one of the best methods of growth in business. Many small businesses already use more than one online platform for marketing, but sometimes switching platforms achieves better results.
The top three marketing channels are email marketing, social media and business websites. 54% of small businesses use email and 48% use social media; it might be surprising to know that less than two thirds (equating to 64%) of small businesses has its own website, according to B2B research firm Clutch.co – yet customers tend to expect to find a website for informational purposes at the very least!
For exclusively offline businesses, it may be time to launch a website with an online product store to gain national or international reach. Trends in recent years show that having both an offline and online presence leads to optimum growth, so it is worth considering.
Small businesses with quality products usually benefit from using alternative channels. Five commonly used channels are Google Ads (pay-per-click/cost-per-click advertising), Facebook, email marketing and remarketing. To give you an idea, remarketing is email-based and relates to the collection of user information for list creation; the lists are then used for future promotional emails.
4. Product expansion
Small businesses can benefit hugely from expansion of product lines or adding new features to appeal to their existing markets. You may be experiencing a lull in sales or profits due to outdated technology or outmoded products. If so, it could be time to expand your product line.
Drinks giant Coca Cola are a good example: in order to outperform competitors, they launched Cherry Coke in 1985. As the first adaptation of the original drink, it refreshed the interest of previous customers and attracted the attention of many more.
Gilette is another company with many variants of similar products in their range. When your product sales start to decline, it’s time to phase out weaker products and introduce newer versions to your loyal customers as a starting point. Any business with products no longer hitting targets can benefit from product or service expansion, but remember that pre-expansion research is key in order to avoid failure.
5. Market segmentation
Another of the small business growth strategies is market segmentation. This simply means to divide your market into various groups (segments) according to customer preferences, interests, locations and other characteristics. These segments allow you to create targeted campaigns according to specific variables, giving the campaigns a much higher chance of success. Typical segments are:
Segmentation is a strategy typically employed by businesses such as cosmetics suppliers, banks, clothing companies and media outlets. If your product or service range is in any way diverse, you can surely benefit from market segmentation.
Note that it will involve thorough research in order to efficiently profile your customers and tailor content accordingly. Capturing details through email surveys, purchase history and site analytics is a good start.
However, given that 65% of marketing managers admit to struggling with the interpretation of data-driven market segmentation solutions, reducing the complexity of this strategy may appeal to you. If so, there is one very convenient method of segmenting your market: a powerful customer relationship management (CRM) tool can optimise your segmentation effortlessly, saving you plenty of precious time and energy.
Sometimes joining forces with another business is the most viable method of growing your small business. You might choose to do this though mergers, acquisitions or partnerships with other businesses. Provided that the arrangement brings significant benefits to all parties, it can be a true win-win situation that boosts resources in a big way.
Depending on your business type, the possibilities might include extra resources in terms of manpower, skillsets, knowledge, equipment and technology, for instance. There may even be a reduction in workloads or commercial risks. Partnerships tend to suit sole traders who can share clients and collaborate to complete complex projects. For example, carpenters, electricians and builders can help each other to gain traction in the construction industry.
By joining up with a complementary, non-competitive business you can instantly gain access to new customer bases and markets. If going down this route, just be careful to have comprehensive legal contracts in place in order to protect your business in the event of unforeseen issues.
To conclude, by constructing a solid business development strategy you can inject new life into your business – whatever the market. Just keep in mind that no business strategy or plan is the same; it is important to figure out what works for your specific type of business and tailor it according to the resources at your disposal, the needs of your target audience, and your company vision.
Well-executed business growth and expansion strategies will win your business a larger share of the market. Even if it means taking a financial hit in the short-term, they can put you ahead of the competition and keep you there for the long-term. If you’re committed to learning how to grow a business, don’t forget to check out our small business growth hacks too. Good luck!