Four Questions to ask when considering your small business growth options

Which Box?

If you’ve done any studying around business or marketing, you will remember Ansoff’s Growth Matrix. For those of you who weren’t quite so “lucky”, let me quickly go through it and show you why it is a highly useful tool to help guide your growth planning and therefore your small business marketing.

Image of Ansoff's Growth Matrix to support article on small business marketing and growth plans

 

The matrix has four boxes:

1.       Market penetration = Existing markets buying current products

2.       Product development = Existing markets buying new products

3.       Market development = New markets buying current products

4.       Diversification = New markets buying new products

Where are you now?

If you are still an early stage business, you are almost certainly in the Market Penetration box. You’ve identified a product (or service) and you are working to maximise the size of your client base. You are probably selling to clients who are similar in nature, or need. Your customer base may be across multiple geographical areas, but it if you deliver a service that involves your time, you are almost certainly selling within a fairly tight geographical region. This is simply because of the time, and cost, involved in travelling to other areas.

Moving boxes as a small business growth strategy

The decision to move into a different box, from Market Penetration, is a big one. It is a big commitment and can come with some risk, dependent upon which box you are considering. The decision to move boxes should be guided by your answers to the following questions…

1. Have you maximised sales of your current products to your existing markets?

The answer to this question is almost certainly no. Unless you are the market leader for your region, there will always be the opportunity to sell more. If you are struggling, a market development or product development strategy may work for you. It will depend on whether you believe you know the product or the market more.

2. Are your competitors dominant in your existing markets?

If you were late into the market, it is likely that there are a number of dominant players. They will make it difficult for you to develop your market share, so a different box may be a good alternative for you.

3. Are there products you can sell to your existing market?

If you’re in the technology market, for example, there is always a new product to sell. Many will be updates of what you are already selling them, so that doesn’t count, but there will be alternatives:

  • If you’re an MSP selling on-premise solutions, Cloud would certainly count as new product, as would telecoms.
  • If you’re selling cost savings, are you providing a full range of utilities, plus telecoms or connectivity?

These are just a couple of examples of how moving into the Product Development box may be a good small business growth strategy. However, try not to go too far away from your core products. If you currently provide software solutions, trying to add office furniture to your portfolio is probably a first step too far.

4. Can you properly serve additional markets?

A new market can be one of two things: a new geography – selling in Birmingham, to add to Bristol, for example. Or it can be a new sector – selling to the hospitality sector as well as the leisure sector. If you want to sell to this new sector, can you say you know enough about the sector and their needs to be able to generate sufficient sales within that sector? Developing a good knowledge of the new target market is vital if you want to sell existing products into a new market.

The route through the boxes

Businesses rarely go from Market Penetration to Diversification. Why? It’s simply too much of a risk. Trying to sell products you have little experience of to markets you have limited knowledge of is a gamble. A gamble that most businesses wouldn’t take.

Product or Market Development?

Truth be told, most companies do some of both. Over time, new products appear to sell to existing markets. At the same time, the reach of businesses, particularly in our digital world is constantly extending and orders come in from around the country, or even around the world. “Accidental” market development, however, often means a lower profit margin. Getting your product, or service, to different parts of the world can mean an impact on delivery costs. Customers may not want to pay a premium (at least that’s the way they see the increased costs) to get your product. You then have to decide whether you want to deliver, or not.

If, as a business, you are looking to grow, you will almost certainly have to move into a new box. It doesn’t mean you are leaving the old box behind. Over time, it will actually mean you are working with multiple sets of boxes. One set for each product or market. As you grow you simply move again.

If you are looking to grow your business, consider which is going to be the best first step: product or market.

Of course, if you would like to discuss this in more detail and see how we can help you develop the right small business growth strategy for business, call us on 020 8634 5911 or click here.

Four Changes to maximise growth in 2020

image to support blog post: maximise growth in 2020 Small business marketingJanuary 1st 2020 brought not only a new year, but a new decade. The political scene is one of turmoil and this is going to impact the business environment. As a small business owner, if you want to make the most of 2020 and the new decade, here are four things to do with your marketing to maximise growth in 2020…

Don’t stop talking

When businesses start to worry, they start saving. They stop spending time and money on things they believe they can save on. Talking (or marketing) is one of them. But, when you stop talking, people are quickly forgetting what you want them to remember. We all see too many messages for everything to stick. Only the really memorable, or often repeated, will remain.

As your competitors stop talking to your target audience, you have the opportunity to make more of an impact. With, fewer voices out there, you have a better chance to being the one being listened to and being sought out for assistance.

NEED HELP KEEPING YOUR MARKETING CONSISTENT? CLICK HERE

Talk about your clients – not yourself

There are still too many businesses out there talking about themselves. They talk about how they are “the leading provider of…”, or they talk about the features (and usually complexity – because that means they are clever) of the product or service they provide. The problem here is that they are expecting the target audience to translate that into how it helps them to resolve their problems. Something they simply don’t have time to do.

Take a look at your service/product from the client’s perspective. What is it they are looking for? If you talk about things from their point of view, about how you can help them, they will “get it” faster. They will look at you positively because you’re thinking about them and they are far more likely to get in touch and talk in more detail about how you can help.

Finally, talk in the language of your clients. Using the language of jargon of your industry means you can understand what you’re saying, but you are the person who needs to understand your marketing messages. If your target audience cannot understand your messages, they won’t engage and they won’t talk to you.

Talk to the right people

With reduced investment in marketing comes reduced focus. After all, it takes less time to send, for example, an email campaign to everyone in your mailing list, than it does to segment your audience and ensure the right messages get in front of the right people. Here’s just a few thoughts…

  • Define your Ideal Client(s). The more precise you are, the better you can make the marketing messages you use. You can also use this to ensure your network knows exactly who you want to talk to.
  • Segment your emailing lists, using segment or tags. You may need to add to the data you have in order to do this.
  • Go to topic or industry-specific networking events, rather than the bigger events where you will meet anybody.
  • Consider direct mail campaigns. The higher costs of postage and printing will make you think twice about just how many people you include in the campaign. This gives you the opportunity to make your DM campaigns highly targeted. The more relevant to the reader, the more likely it is to work.

If you really want to maximise growth in 2020, the more focused you are, the better.

Show off your successes

You have delivered some great work for your clients this year. Stop for a moment and think about the projects you’ve delivered and the successes.  Your target audience want the same results, but they won’t know you can deliver those results unless you tell them.  Case studies and testimonials are great evidence that you can deliver on your promises. Add them to your website and use them in your marketing, so you’re spreading the word about just how good you are.

If you have decided to make 2020 the year you really kick start your small business, these four points are where you need to start. Of course, if you would like a hand, get in touch and we will help you maximise growth in 2020.