One of the biggest challenges facing business leaders is effective growth. For many it's a thorn in their side which is causing considerable frustration.
Managers facing this challenge may be wondering why their product or service is not bringing in the sales required, or why their marketing is not working as expected, or why customers are not sticking around.
For a business to grow, marketing needs to be focused on three core areas, namely:
These core areas work in cycles and so it is important to identify the maturity of your business in the context of the current market segment. A more mature business may be ready to expand their footprint in other segments, however a business that is not as new may still need to penetrate the existing market and acquire enough customers.
An established business that hasn't reached full maturity within their market segment maybe required to target their existing customer base and increase the volume of sales or the sales frequency and build customer loyalty.
Each phase of the maturity cycle will be characterised by different trigger points, and hence there is no one-solution-ﬁts-all approach to growth. Identifying your business' maturity within the current market space is the ﬁrst step to take.
In Part I of the Marketing Leadership series let's kick off by having a look at the more mature businesses ﬁrst.
Expand in to New Territory
The ﬁrst step of any growth strategy is to identify the barriers in the minds of customers that stand between what they currently do, and what you want them to do. Businesses need to address how they will overcome these barriers and attract consumers to them, as opposed to their competition or even inaction. This can be done by harnessing insights: the understanding of customer needs, the type of products, tone and manner of communication aimed at connecting with consumers at a much deeper level and inﬂuencing them to buy or continue buying from the business.
Highly mature businesses will ﬁnd that consumers are not responsive to their brand and marketing in their current market territory. The reason why is often puzzling to many businesses, but here’s the thing: the answers are often right under their nose! Here’s where customer insights can be found:
Venturing into the Unknown
When you are expanding into new territory, you’re not always equipped with a GPS.
However you can still map out your journey if you ask the right questions. The right questions will uncover the road you need to take, and help you to identify the obstacles that you may face.
Once you have this knowledge you can then take steps to remedy the obstacles and expedite your journey into successfully establish your business in the new territory.
Questions should be asked in the following areas to help you to extract the insights from the sources and give you direction on how you should approach your business expansion:
1. Responsiveness: Are consumers unresponsive to the beneﬁts offered by your brand?
2. Trust: Do consumers lack the conﬁdence that you will deliver for them the beneﬁts of your brand?
3. Competition: Do consumers believe they already have these beneﬁts through another brand?
As you collect data from answering these questions, you will be able to identify certain obstacles - or gaps - which you will need to manage in order to ensure that your growth plans are successful. Again, we need to ask the right questions so that from the ensuing answers we can bridge the following gaps:
Entering into new market segments can be emotionally and mentally challenging because as a business leader you are literally venturing into uncharted waters, and this can be quite risky. This also takes an immense amount of courage and the best way to check if you’re on the right path is by consistently testing and measuring the results of those tests.
We recently helped an IT company to expand in this way. Based out of Sydney, NSW, our client had reached saturation within the NSW geography. We’ve been working with this client in exploring and uncovering opportunities in not only new geographies like Victoria, and also by exploring the possibility of them expanding into new demographies, like age segments.
This will take testing and measuring and it is important to test each phase and measure the results before going all in with guns blazing.
Once you have enough data from the questions that you’ve asked, you may wish to employ one or more of the following tactics to fulﬁl on this strategy:
Expansion into a new territory is an activity that only a business with a high level of maturity in that market segment should actively pursue.
For businesses that do not have a strong foothold within their market segment, their primary goal should be new customer acquisition, with marketing activity to be focused on new lead generation.
Whilst many businesses are quite proactive in acquiring new customers, it is just as important to retain and nurture your existing customer base through building customer loyalty.
Part II of the Marketing Leadership series will focus on new customer acquisition within the current market segment, and the tactics that will support this strategy.
Part III of the Marketing Leadership series will focus on building loyalty with your existing customer base and how to strategically leverage your customer relationships to deliver more value and keep them coming back for more.
Kam Ozonaran is Managing Director of Marketing Temps an on-demand marketing recruitment firm specialising in flexible resourcing solutions. Kam helps organisations to build their strategic mechanisms for better marketing capability, flexible recruitment; competency based training and marketing operations design.