5 Levers you can pull for explosive growth in your business
[vc_row][vc_column][vc_column_text] In a business environment obsessed with short-term business growth strategy, it’s easy to fall into the trap of focussing on tactics that produce the fast results, such as direct response digital marketing. But this approach distracts businesses from putting focus into other tactics that may have a slower delivery but are actually essential for building a sustainable long-term business. The key to balancing the long and short of it, for any CEO or board looking to deliver shareholder value, is to master the activation of the full suite of available growth strategy levers. For the purposes of this article we are going to assume that growth means an increase in the overall value of a business to shareholders or private owners over a period of time. ”All brands are smaller than they want to be”Byron Sharp And we’ll explore a range of tactics B2B and B2C businesses can flex to generate longer term sustained brand growth: 5 Levers You Can Pull for Explosive Growth in Your Business There are 5 levers you can use as part of a business growth strategy, to grow your business. The balance is between capability (people and culture) and budget (resources) as to the mix of the levers you use to hit growth goals. Geography – which markets you are in Channel – how you sell to consumers Customer – the types of customers you target Category – your product or service offering M&A – Mergers and Acquisition Find out how your business can grow by applying the 5 Levers of Growth Book at free30-minute consultation here 1. Geography All businesses market within particular regions and those areas of focus can range from international down to individual suburbs, depending on the scale of the organisation. Large FMCG brands like Coca-Cola sell in most countries of the world, telcos such as Optus or Telstra sell their services to people and businesses all around Australia while dentists have a hyper-local market with most of their customers coming from a few surrounding suburbs. Expanding outside the geography that businesses currently operate in is a fast way to grow their brands and acquire an entirely new set of customers previously outside their reach. To activate this lever of growth, companies should first test if there is demand in new geographic regions and if their existing product or service will have traction with customers there. Once a market opportunity is identified the cost of opening up that new region needs to be established so business leaders can decide if the investment is a viable one that will deliver a return. Moving into the massive Chinese market can be a very attractive proposition, but with high barriers to entry, it can be very expensive, and many businesses have tried and failed. Done well, opening up new geographic markets can deliver fast customer acquisition and new brand growth. 2. Distribution Channel For many businesses, the advent of digital in the early naughties provided new channels to reach customers. Previously limited to retail stores or face-to-face sales for B2B, companies were limited in the ways they could sell to customers. With the rise in the always on customer it is important for businesses to make sure their product or service is easy to buy, by being just a click or walk away from wherever customers are. Always on and omnipresent is the name of the game to make sure customers spend their hard-earned with our brands rather than competitor brands. To test this Growth Lever, organisations need to make sure they have recent customer research that addresses the question of where potential customers want to be able to purchase (what they say they will do) and where they might purchase (what channels they are active in). If customer behaviour insights identify channels that may drive additional sales with existing customers, or acquire new customers entirely, then the business should activate these new distribution channels as soon as feasible. Some of the distribution channels available include; Two-sided Marketplaces – B2C platforms like ebay and Amazon and B2B platforms like Alibaba and Joor Three-sided Marketplaces – platforms like Deliveroo where they connect three parties: customers, restaurants and delivery riders Physical Retail – traditional brick & mortar Automated Retail – self-service kiosks and stores like AmazonGo Ecommerce – direct to customer online sales Social Media Shopping – growing quickly on Instagram and Facebook Wholesale – establishing a reseller network White Label Sales – allowing resellers to rebrand your product Value Added Resellers – working with resellers who might install or customise your software Personal Selling – face-to-face sales Sales Outsourcing – using a third party to sell Multi-Level Marketing – the model whereby independent contractors or distributors also make money by recruiting other contractors to sell 3. Customer Customer retention is vital for business survival and stability, but new customer acquisition is the best way to drive growth. This can be through marketing and advertising that ensures the brand is front and centre when target customers are considering purchasing. But more importantly, using this Growth Lever means finding new customers outside of existing target customers and then targeting them with marketing and advertising to put a brand on their consideration set. Once the existing target market opportunity has been filled, acquiring more customers within that group will have a high CPA (Cost Per Acquisition). A high CPA can be an indicator to look elsewhere to find new customers to the buying category. By widening the top of the funnel with more prospects, the customer base can be expanded, and revenue grown. Finding different customers to the product or category means a larger prospective market. This could include targeting a different demographic with similar drivers to a business’ customer, particularly if they risk saturation with their core customer. A recent
The 5 Levers of Growth REVISITED: How to activate them for your business post-COVID19
Recent events have played havoc with the growth plans of almost every business. As we collectively work through the 3 phases of the COVID19 crisis – Response, Recovery and Revival – businesses are required to put greater focus on growth strategy. But they are required to do it at a more rapid pace than ever before, whilst also remaining agile enough to keep evolving as market conditions change. In the Response phase, we saw fashion houses move into making personal protective equipment for medical staff, high-end restaurants doing meal deliveries, and bank tellers retraining as call centre support staff. It was an intense period of innovation by necessity, whilst fear and uncertainty reigned. At this point in time, the businesses who have survived are sitting between the Recovery and Revival phases. We have a much clearer line of sight into the changed conditions we’ll be facing in the next 6-12 months. We also have a firmer understanding that a number of our pre-pandemic activities and behaviours will never be quite the same again. We can consider emerging key trends and scenario-plan for multiple eventualities. This makes it the perfect time to start thinking about the levers of growth with greater clarity and intention. The 5 levers of growth have not changed. What will change is the emphasis placed on one over the another due to the changed market conditions and what may lie ahead. In the article that follows we have left our original piece largely intact, explaining the fundamentals of each lever – but we have also added new commentary around the key considerations in the current business environment. As always, we like to remind our clients that the best way to respond to the future is to create it. This has never been more true, particularly considering that after every crisis we see the emergence not only of new business models but entire new systems that challenge old ones. Post-GFC saw the rise of cryptocurrency, the sharing economy and the gig economy. The courageous who dare to innovate whilst tapping into changed sentiment and behaviours will emerge the victors, with truly future-fit businesses. So as we settle into the ‘new normal’, don’t forget that you play a role in shaping what that looks like through your selected growth pathway. “Only those who will risk going too far can possibly find out how far one can go.” T.S. Eliot How to Activate Them for Your Business Post-COVID19 Levers of Growth There are 5 key levers you can use to grow your business: 1. Geography All businesses market within particular geographic regions. Those areas of focus can range from global down to individual suburbs, depending on the scale of the organisation. Large FMCG brands like Coca-Cola sell in most countries of the world, telcos such as Optus or Telstra sell their services to people and businesses all around Australia while dentists have a hyper-local market with most of their customers coming from a few surrounding suburbs. Expanding outside the geography a business currently operates in enables the acquisition of an entirely new set of customers previously outside their reach. To activate this growth lever, a company must ascertain demand in the target geography. This will entail understanding whether their existing product or service will have traction with customers there, or whether it will need to be adjusted to be more locally relevant. In the case of modifications being necessary, it’s important to weigh up any lost economies of scale, and whether the expansion will deliver an acceptable return in the required timeframe. Moving into any international market can be a very attractive proposition, but when barriers to entry are high, it may be more prudent to extract growth in known environments by activating one or more of the other levers. Done well, opening up new geographic markets can deliver fast customer acquisition and grow overall business value. NEW CONSIDERATIONS: With cross-border travel grinding to a halt during the peak of the crisis, and international travel set to resume later in 2020 and under very changed conditions, entering new territories may be logistically challenging. At the same time, there will be international markets whose own changed conditions may have created a growing demand for your product or service. In this case, do utilise digital means for establishing and building the local relationships that will be essential to you opening in those international markets. AusTrade will be your friend – use any resources they make available. Keep in mind that even pre-COVID19 there have been businesses who have established new distributorships or license agreements internationally without setting foot in the new target market, so it can be done. In the short to medium-term, national (and Trans-Tasman) growth presents lower barriers to execution. But this must be evaluated versus the return on effort versus pursuing a more complex but potentially more lucrative international expansion. 2. Distribution Channel For many businesses, the advent of digital in the early 2000’s provided new channels to reach customers. Previously limited to retail stores or face-to-face sales for B2B, companies were limited in the ways they could sell to customers. With the rise in the ‘always on’ customer, it is important for businesses to make sure their product or service is easy to buy, by being just a click or walk away from wherever customers are. To activate this, Growth Lever organisations need to make sure they have recent customer research that answers the question of where potential customers want to be able to purchase (what they say they will do) and where they might purchase (what channels they are active in). If customer behaviour insights identify channels that may drive additional sales with existing customers or acquire new customers entirely, then the business should activate these new distribution channels as soon as feasible. Some of the distribution channels available include: NEW CONSIDERATIONS: The rapid adoption of new technologies during lockdown has clearly demonstrated a greater openness to online sales platforms as well. In the fashion industry,
The Top 5 Things to Consider When Choosing a Business Consultant
At one point or another in its journey, every business will need to reach out for help to improve its performance. Whether the problem applies to the total business or to one division, once it’s clear that internal attempts at improvement are failing, it becomes necessary to search out expert advice. But the questions business owners and leaders face is which advisor to select, how to decide and what they need to know when choosing a business consultant. We’ve identified the top 5 key criteria to consider in evaluating an outside advisor for your business. The Top 5 Things to Consider When Choosing a Business Consultant 1. Independent Business Consultant, Boutique Consultancy or Enterprise Management Consultancy? There are pros and cons that go with each of these choices. With the Independent Consultant you won’t find your business flooded with inexperienced first-year university graduates doing the initial assessment work. The level of direct involvement by the principal consultant will be high. But, if the scope of the project broadens there is a risk that it could stretch beyond the competencies of an individual consultant. With a consultant with a narrow field of expertise, you may find yourself having to reach out to other consultants to bridge the gaps. With Enterprise Management Consultancies there is rarely an issue with their breadth of competency. But the engagement will undoubtedly be an expensive one and the face-time with the organisation’s top talent can be very limited. The old adage is that these groups pitch with the A-team and deliver with the B-team. Depending on the size of the business and budget available, a boutique consultancy can be a good solution. These mid-sized consultancies are generally made up of a small group of senior advisors with a variety of skills, and with a strong network of external resources to bring in should the scope broaden. 2. Experience & Credentials The first consideration is whether the consultant has competencies that stretch beyond what you already have in your organisation. Or would they be another pair of hands helping you to work on a problem? If it’s the latter, your risk not getting the value this type of investment should produce. You want to be certain that they are asking the sorts of questions that no one else is asking. And they are sharing the type of knowledge that is currently absent in your business. Your consultant should also be capable of taking a holistic business view. Will they understand complex key stakeholder relationships and expectations? Particularly for projects where stakeholders extend beyond the immediate organisation – they might include shareholders, investors, suppliers or community groups – your consultant should have experience managing stakeholder expectations at critical milestones throughout the process. As for validating experience, whilst case studies are valuable, it’s important to go a step beyond and ask deeper questions. Ask what type of process the consultant applied and how challenges were overcome in the course of a project . References can be invaluable. Direct introductions to project leaders within the organisation in the case study is a great way to assess the experience of working with the consultants. 3. Flexibility The process for running a successful consulting project must have the discipline to keep agreed outcomes on track. But it mustn’t be so inflexible as to not allow for the specific characteristics of your business culture and go-to-market approach. Is the approach proposed by the consultant respectful of the unique aspects of your business? Does it consider what is currently effective and important to team engagement and performance? Or is the consultant applying an inflexible boiler-plate process against your project? If so, you may want to re-evaluate their suitability. With the speed of change in business increasing rapidly it is critical that your consultant has their finger on the pulse of the evolution of business. Do they deeply understand what it takes to thrive in the new economy? Beyond this, will they undertake the project with enough agility and flexibility to ensure that any unexpected discoveries get acknowledged and addressed? You want to be certain that their approach is outcome-focused versus process-centric. 4. Critical Thinking The biggest difference between outstanding consultants and the rest is their problem-solving capability. You are engaging a consultant to solve a business problem, so ultimately you need creative problem-solving skills. Beyond the case study outcome, you must look for evidence about how insights were interpreted in a novel way. Even more importantly you will want to see how the application of innovative solutions created a significant advantage in moving the organisation forward. Take the time to get to know the team who will be working on your project. Look for evidence not only of exceptional analytical skills, but also the ability to apply creative and imaginative solutions to problems, in a way that will create value. That value may manifest across a diverse range of critical metrics that underpin the success of the project. 5. Principled & Purposeful Finally, you will be looking for exceptional professionalism. Or what is often referred to as an ‘unimpeachable character’. The consultant must demonstrate that they are able to put the client’s best interests ahead of their own. This comes down to individual and organisational purpose. You will want to explore whether the consultant and the organisation they work for are genuinely driven by the desire to help organisations fulfil their potential, or whether other motivations are at play. A principled consultant will be highly empathetic and will care deeply about their client and their goals. A principled consultant must also be willing to tell the client things that they may sometimes not want to hear. Often these unwelcome messages outline changes needed to achieve the desired outcomes. This entails putting honesty before politics, even if it means risking future business for the consultant. This type of candour, whilst sometimes confrontational and difficult to digest, should be highly valued. Conclusion Your criteria for choosing a business consultant should reflect the priorities and values
