Growth strategies build competitive advantage
Businesses of any size should have growth strategies. Even if a small-business entrepreneur is content, there should be growth simply to keep up with inflation.
Lebo Lion brings special expertise to the subject. The self-described “marketing disruptor” is a DJ, digital strategist and co-founder of LUTCHA, Africa’s first podcast network. She is adamant about why small businesses should create growth strategies.
“Growth strategies allow a small business to grow into a bigger entity, gain a greater competitive advantage through size, more money and greater influence,” Lion said. “It helps small businesses survive the unpredictable changes in the business ecosystem.
“Growth is about equipping a business with the tools it needs to sustain a life in the market,” she said. “This doesn’t necessarily mean that the business will grow bigger. Sometimes it will just survive with the aid of growth strategies.”
She explained that growth strategies are a road map or plan for the future survival and success of a business. This can include diversification.
“Diversification is incredibly risky,” Lion said. “However, it has high returns when used appropriately. Diversification is used when looking for new markets to sell to. You may discover that your current product or service offering needs changing to suit the needs of your new target market.
If your business can address and solve a pain point stretching across your potential customers, plan for explosive supply and demand. If you can stay ahead of competitors, you will thrive.
Lion gave her most common growth strategies for business:
- Market Penetration
- Market Development
- Product Development
“The extent to which this is effective will depend on the businesses’ appropriate selection and implementation of the strategy,” Lion said.
Creating a customer persona is one of the best growth strategies.
“Absolutely,” Lion said. “A growth strategy cannot be effective without a real knowledge of your customers and their needs. Constantly taking stock of how your business is communicating to and servicing customers is key to growth.”
Growth on a limited budget is hard but can be done, especially if you capitalize on the low cost and high impact of influencers
“That’s a tough one to answer because it really depends on the type of industry the business is in and what their long-term goals are,” Lion said. “Some strategies are expensive today, but are much more cost-effective in the future.”
She believes the best market strategy on a limited budged relies on market penetration.
“This is the least risky business growth strategy but also has the lowest opportunity for growth,” Lion said. “This approach consists of selling your existing identified customer set more of your current products.
“To achieve this, you need to persuade the customer of the benefits of having more of your product or service,” she said. “You also can find alternate ways for your customers to use an existing product or service. For the business-to-business industry, upselling and cross selling is a huge area of focus.”
Lion’s next business growth strategy is targeting new markets with an existing product.
“That means finding and selling into a totally new set of buyers who don’t currently buy from you,” she said.
“In every single growth strategy, you need to know who your customer is,” Lion said. “By itself, knowing your customer is not a growth strategy.”
Referrals have great impact with little cost to attract customers. The strongest referrals originate from your employees and their families. They know the good your company provides and are your greatest brand ambassadors.
“Have wide visibility” Lion said. “Good customer service translates to overall good communication with your market. The communication has to be two-sided and authentic. Successful business talk to their customers and value each interaction.
“Most businesses won’t consider customer service as a way to attract new customers, but it is highly effective,” she said. “Happy customers tell other people about you. Word of mouth is the most powerful and inexpensive customer-acquisition tool.”
Business strategies should include goals with measurable metrics. Check them regularly to be sure you’re on course and tweak when needed — which you’ll invariably need to do. Be flexible, engaged and grow.
“Have a clear vision,” Lion said. “Continually check if your short-term and mid-term progression is moving toward your long-term goals or away from them. This requires discipline, planning and a real passion for what you do.
“Stay consistent with what you offer,” she said. “Always communicate with your customer. Be authentic and genuine in the things you do and say as a business. This makes you credible, competitive and successful.”
Stay ahead of competitors offline by participating in networking groups and talking with customers. Online, the practice is called active listening. Follow competitors and their customers to learn about issues so you can offer solutions.
“Make sure you implement growth strategies aligned to your vision and not strategies that respond to what your competitors are doing,” Lion said. “Don’t compare yourself to your competitors. Simply learn from them and move forward.
“Essentially, the key is not to stay ahead of your competitors but to stay on course with your vision,” she said. “Continually be better than you were the day before. Be your biggest competition.”
On the level
In one of her podcasts, Lion speaks about learning to being a big player in the market.
“Social media is the great leveler for businesses of all sizes,” Lion said. “Entrepreneurs have potentially equal voices. The key is being active, engaged and responsive. The first to satisfy customers wins.
“You grow,” she said. “You make sure that you are bigger and better than you were yesterday, continuously. This is achieved from interacting with stakeholders in your industry ecosystem in ways that help you leverage those relationships and activities in the future.”
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