If so, identifying your growth strategies should start with which customers. Your core target customers. They are not everyone who will come in contact with your business, but those who love your products and services. Do you know who they are? Who are your best customers that make up bulk of your revenue and profits? Most profitable growth opportunities start with your core business–your core customers and products and services you offer them. Many growth frameworks refer to this as “market penetration”, that is, selling more to current customers, increasing market share. A fundamental growth strategist knows, or helps define, the key competitive market differentiator. Every member of leadership team should know, and be able to articulate, that if your customer chooses your brand instead of the alternative, they get the value proposition you’ve promised. Strong, high impact, differentiating value propositions that leverage a strong position with existing core customers have the highest probability of success.
It may sound easy to focus on your core business and your core customers. But it’s easier said than done. Customers’ needs change, and so do their expectations. You can promise what to expect next, enhance it, hype it, but your customers’ needs and expectations will change by competitive disruption and even their good experiences with you. Expectation can be the brand killer.
The best growth platforms merge customer needs with market trends to provide measurable insights. When you’re focusing on your core business and customers, you’re not trying to create new beliefs and new habits. Beliefs are convictions and concepts we hold to be true with or without evidence. It takes scale, speed and lots of money to create new beliefs and habits. Are you in that phase of your business? Instead, you’re simply understanding their needs and expectations for decisions they’ve already made. And providing a differentiating alternative–or better yet, meeting their unmet needs.
You can also grow by market development/expansion, that is, sell more of current product to core customers in new geographic markets, often referred to as adjacent market. It certainly builds a larger customer base, but also higher risk, higher cost. Or, you can sell through other channels. And there is always diversification and M&A. All good, solid, long term growth strategies. But you’d have to start by focusing on core customers and core business, and be willing to look at your customers–existing and new–through a different set of lenses.
With fast-paced demographics and cultural shifts, it is important to recognize that outdated legacies and historically successful ways of doing business can act as sources of prejudice and bias. As the faces and needs of your customers change, the past competitive advantage for your core business can no longer hold true. To keep ahead, you need to create barriers for your competition by understanding and capturing both the articulated and unarticulated needs of your current and new customers. It takes a business culture that creates innovation and new ways of delivering value for the unmet needs. And by that, I don’t mean a re-invention of your brand. Not at all. First and foremost, you’d need to capture and leverage on all the potential of your current value propositions to sustain and extend your business performance. Then, and only then, you should consider creating new value propositions for extra earnings within the same strategic frameworks. Leave game-changing ideas that require new value delivery system for last.