Sure, there are plenty of fancy marketing words to describe growth strategies - penetration, consumption, domain expansion....and we'll cover those later. But in my experience, the most success comes when the goal is easy to understand, so everyone gets it. That's why I'm an advocate of using plain English, which doesn't require an MBA, to build a business.
Having a growth strategy framework that easily defines the different ways to grow a business is a powerful tool. Not only does it simplify the process of defining your goals, but it makes it so much easier to get (and keep) stakeholders aligned.
So, let's get into it....
Here's an example to bring this framework to life. Let’s assume we started a burger business. In our first month, we sold exactly 1 hamburger for $3 to our first customer, Mike. Not the best start, but let's go with it. How can we grow revenue?
Knowing which of these are our primary goals, we can then develop an innovation plan. For Sell More Stuff, it’s pretty obvious we need to innovate. If we’re selling a burger to Mike, we can do market research to understand what else Mike would be interested in purchasing at the same time as his burger. Like fries and a drink. Or maybe a dessert.
If we’re trying to sell To More People, our market research would need to focus on either finding more people just like Mike who want the burger we already sell. Or, we could learn about the people Mike is most likely to bring with him and understand what they might want. For example, maybe Mike’s friend Steve would only come with him if we offered a cheeseburger or a chicken sandwich or a veggie burger. That can drive our innovation plan in a different direction.
If we’re trying to get Mike to visit our restaurant More Often, we need to understand what is preventing Mike from coming back again. Maybe he’s concerned about the cost of eating out weekly. We can offer him a coupon good for his next visit within 2 weeks. Maybe he’s going to other restaurants for a different burger. We can offer him a loyalty program. Or maybe he just doesn’t want to have a burger every week, but he’d come back if we offered a chicken sandwich.
There can be overlap in the innovation – for example the chicken sandwich that gets Steve in the door and brings Mike back the following week. But, knowing WHY we’re innovating the chicken sandwich is important for our messaging and targeting.
And lastly, if we want to sell that hamburger For More Money, we need to know how much Mike likes this burger compared to his alternatives. How much he’s willing to pay. Then we can predict how much to raise the price, without losing his business.
While this is an overly simplified example, we can see this framework playing out in the business world every day.
To More People
For More Money
Now you know the 4 ways businesses grow: Sell More Stuff, To More People, More Often, For More Money.
If you’re a business owner, you can use this framework to build strategically sound growth plans, organize your innovation approach, and align your stakeholders to reduce swirl.
If you’re a market researcher, you can use this framework to have a different dialogue with your clients. The more you understand their business goals, the more you can tailor new data and insights to be more actionable.