A growth strategy is a company’s long-term strategy for increasing revenues, income, and market presence. A growth plan may be either organic or inorganic.
Organic growth can occur through market expansion, which occurs when a business uses its market to broaden its existing goods and services. Market development occurs when a company expands to a new market using its current products or services. Product development occurs when new products are launched, or diversification occurs when a company introduces new products to explore new markets. The concepts can be well-summarised by the flowchart developed by Sun Wu in Strategy for Executives.
Typically, there are four types of strategies:
Product development strategy – entails increasing the market share by creating new goods to meet the needs of that market. These new products should either solve a new problem or add to the current situation that your product already solves.
Business growth strategy – helps increase your market share by creating new market segments, extending your customer base, or increasing the use of your product by existing customers.
Market penetration strategy – entails increasing your market share by bundling merchandise, lowering costs, and advertising. This approach is always mixed up with business growth strategy.
Diversification strategy – entails increasing the market share by targeting whole new markets.
Understanding the growth strategies is easier when you know the principles and outcomes obtained by developed platforms.
Clearbit – give away free tools! Gain lifetime trust!
Clearbit launched the popular API tools for the developer – they experimented, studied the developer needs. Soon there were thousands of people who were heavily dependent on the product. This free tool allowed users to understand – and soon, 100K leads were available to their existing products.
Twitter – a simplistic yet powerful product
Twitter had a simple growth strategy – made a simple product. Well, now we all know how popular the platform is! Yes, simple design attracted people from all age groups, and they are ready to engage and use the product at ease.
Another reason behind Twitter’s success is they were able to deliver what the customer wants. Trends like mentioning users with ‘@’-symbol or highlighting a post with ‘#’-signs were initially developed here. Soon many other platforms like Facebook, WhatsApp, Stack Overflow adopted the same.
CRED, American Express, PayTm – Provide rewards to customers
When initially launched, services were given out by these products – and referral programs were found. The program provided benefits to old customers when they bring in new people. In turn, new people can do the same – exponential growth.
The case studies discussed provides a basic understanding – but there are many more. How to choose the best one? Where will you start? Well, this section will answer these questions.
Product-Led Growth (PLG) Strategy
PLG – a significant buzzword in B2C and SaaS companies. It states that “your product is your main marketing resource”, and with some strategic thinking, the profit can be maximised – turning it into an ultimate tool for marketing and customer acquisition.
Does this imply that you can abandon the rest of your marketing campaign? No, it does not. Many of the digital marketing tools will be used as part of your PLG strategy. Having one does not render the other obsolete.
Tools like landing pages, online or offline advertisements and email campaigns all can support your PLG strategy directly or indirectly if played well.
Loyalty programs were launched by many – like the Future Groups Loyalty Program: PayBack or the Jet-Privilege Program. You don’t only acquire customers – but also understand what your customers want – and upgrade/ update your product accordingly; else, you cannot sustain in the market when a similar product with a better facility is launched.
The loyalty program gives you the tools to analyse the customer needs and demands, but they can rise as a separate product altogether. For instance, when Jet Airways was dissolved, its loyalty program took its turn, and a new product was launched – the interMiles. Bottom Line – customer relationships matter.
Choosing the Right Growth Strategy
Growth strategy and customer acquisition go hand-in-hand. With proper techniques and approach, your business grows with the rise in customer base. No matter what you choose, four key ideas to be kept in mind.
- Gather data – understand the customer demand and the features or upgrades they want.
- Learn and understand – your current potential vs what can be delivered in time to address the customer need.
- Apply the concepts and release feature updates.
- Communicate with peers, customers, and end-users if the product is meeting their needs and what can be done.
Value your customer and their demand
Sometimes during the product growth cycle – often, the existing customers are neglected. For instance, referral marketing is a perfect strategy – but it should not be aggressively used to create an impression that you are only looking for new leads without providing solutions to existing customer problems.
The critical understanding is, as expert Nir Eyal states, “users who continually find value in a product are more likely to tell their friends about it.”
- You can read about significant learnings we discovered in successful companies and strategies in this article.
- As you may have noticed, launching great products does not guarantee success on its own. Companies had to use a lot more to make headway in this competitive market.
- You can add a lot to your set of business growth tools by analysing a portion of the reasons they grew.