The Four Growth Strategies for One Focused and Confident Team
Can your whole team articulate your growth priorities?
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....
The 4 ways businesses grow
So, what are the four major growth strategies?
- Sell More Stuff
- To More People
- More Often
- For More Money
We can thank Sergio Zyman for this framework. He was the CMO for the launches of Diet Coke, Cherry Coke, and New Coke (a good reminder that not all innovations under these 4 ways to grow will be successful!).
Bringing the Growth Strategy Framework to Life
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?
Sell more stuff – we can sell Mike fries and a drink
To more people – we can sell a burger to Mike’s friend Steve
More often – we can sell a burger to Mike every week
For more money – we can sell Mike that same burger for $5
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.
Examples from the Business World
While this is an overly simplified example, we can see this framework playing out in the business world every day.
Bank of America offers checking accounts, savings accounts, retirement accounts, brokerage accounts, etc
Apple sells iPhones, AirPods, MacBooks, etc
Google offers Gmail, Chromebooks, YouTube, Google Search, Google Drive, Google Sheets, and maybe 100 other products and services
You may also hear this driver called: Domain expansion, line-extension
To More People
Six Flags offers a "Bring a Friend" Discount Day
Old Spice revamped their marketing to bring in a completely new demographic
Coca-Cola created the "Share a Coke" campaign, encouraging people to share a coke with someone else, even putting names on bottles for more personalization
You may also hear this driver called: Category Penetration (bring someone into the category), Brand Penetration (bring someone into the brand)
Crest reminds you to brush your teeth after lunch
Sephora has a loyalty program that encourages repeat purchases with perks
Lays reminds you that you can't eat just one chip
You may also hear this driver called: Consumption, Loyalty, Purchase Frequency, Trips
For More Money
Bottled and flavored water brands like La Croix and Fiji command a price premium
Grocers raised prices on just about everything during a supply chain crisis
You may also hear this driver called: RGM/Revenue Growth Management, NRR/Net Realized Revenue, Buy Rate (also impacted by More Stuff and More Often), Purchase Size
Summing It Up
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.
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Melissa Jacobs is the founder of Crow and Pitcher LLC, a Strategy and Innovation Consulting firm. Businesses ready to accelerate their revenue growth hire her to create profitable growth strategies, solidify brand positioning and develop winning marketing plans.
She draws on her experience in both marketing and engineering/research to bring a proven, disciplined approach to creating Strategically Sound, customer-focused growth plans and getting innovation to market faster.
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