Ambitious business owners need to discover their customer appeal…
(As published in the Sunday Star Times, August 3 – read it online here.)
Achieving growth in a business is easier than you might think.
So why do some businesses succeed whilst the remaining majority stay in “average performance mode” 24/7?
Stating the obvious, it is because they do the wrong things and focus on the wrong things.
If you do not take time out to have a big think about the reality of your business, your performance and what you should be focusing on, you will very much remain with the status quo and perhaps even start to go backwards in your performance levels. The problem is that it is a too competitive a world out there to remain the same.
But of course there is more to business success than making the time to think.
I have an underlying frustration with businesses of all sizes. The average business does not know how to come up with a good growth strategy. Hopefully, by sharing some real life examples I have seen – good and bad – you might be able to come up with a great growth strategy yourself.
I think the starting point to understand when defining a growth strategy is to know why customers choose you in the first place. How do you work out the best ways to grow if you do not have clarity on why customers go with you over a competitor? There are many reasons why you are the chosen one:
You might be like Air New Zealand and be “differentiation” led. This means most customers of Air New Zealand go with them due to enjoyment of the whole experience. So, Air New Zealand is very smart when they focus on growth by trying to make their fans enjoy them even more as it should work and also it may convert those who are not fans already.
Or, are you like Jetstar who are “cost leadership” led? I’m not saying some people do not choose Jetstar due to experience, but the perception is they are going to give you a very good airfare pricewise.
Such a company should focus their efforts on how to drive down their cost of operating, so they can pass on savings to those customers who choose them on price, and this might even bring some new customers who could be swayed from the differentiation offering previously mentioned.
Find a niche
Maybe you are like Barrier Airways who are “niche focus” led. Barrier Airways fly people mainly from Auckland to Great Barrier Island.
They are the main option for travellers who want to go by air to Great Barrier. Whilst they have competitors such as boat or private planes, whatever they focus on should either via price get more people to travel to Great Barrier or focus on being an even more convenient offering.
Niche players need to make the most of their niche. Another example of a niche player might be someone with an extremely high market share in a very narrow part of the market. Some computer part manufacturers fit in here. They dominate a very small part of the market due to efficiencies, but they only play in the narrow niche market.
Once you know why your customers choose you, you can start to think about a growth strategy. Given that money and resources are very scarce, it is time to put it into the right area.
I recently came across an example of a company who had a market-leading niche product that people loved.
They were still very small with tight cashflow, but plenty of room for major growth. They were trying to raise money to make the labelling of their product simpler and more efficient.
I was a little gobsmacked how they thought this was going to be a good use of funds!
This company so needed to be putting any money they raise into simple sales and marketing. Just grow sales by getting the awesome product into more new consumers and watch it grow like wildfire… Then you can start to think about better processes but get the sales first if you are not a cost led product.
Once you know what are your strategic advantages as to why customers choose you, it will really help you to think deeper on how you can take that advantage to help you grow profitably. If you don’t understand this it will be impossible for you to have the right and best strategy for growth for your business.
Zac de Silva is an award winning business coach who owns www.businesschanging.com and the virtual coaching offering and software www.accme.co and is co-founder of www.nurturechange.com the Fiji Business Retreat Nov 11 – 15, 2015.
– Sunday Star Times