Most of you new venture founders I meet as an angel investor seem convinced that starting the business is the hardest part. You look forward to the day when your business becomes self-sustaining, and settles into a long-term growth curve, ensuring financial success. Unfortunately, sustainability is proving to be a more and more complex challenge in this era of rapid change.
I’m sure you can all think of several examples of businesses that popped up quickly, with great business models, but then faded just as quickly. Examples would include Pets.com, Webvan, and Blockbuster. Most executives will tell you that sustaining top-line growth with bottom-line profitability is perhaps the most persistent and vexing challenge they face on a daily basis.
The problem, according to Tiffani Bova in her new book, “Growth IQ,” is that it’s never just one thing. It’s all about picking the right strategy, right deployment context, with the right combination of initiatives. As the Global Customer Growth Evangelist at Salesforce, with implementation roles at many other companies, she makes a host of relevant observations for every business owner.
Based on my own experience of many years in businesses of different sizes, I’ve prioritized a few of her top recommendations here:
- Make every total customer experience memorable. These days, customers remember the total experience with a company longer than they remember the price they paid. This experience includes browsing your website, social media interactions, the sales process, as well as your support and follow-up. Problems in any of these areas will stall growth.
- Focus on selling more to your existing customer base. According to the Harvard Business Review, acquiring a new customer is anywhere from five to twenty-five times more expensive than retaining an existing one. You need to talk regularly to existing customers, find what they like about you, and welcome them every time they show up.
- Accelerate growth by expanding into new geographies. Instant global communication now makes it easy to reach new markets without rethinking your entire product strategy. The work required here is a full analysis of the best markets to pursue, based on future growth projections of your customer segment, as well as those to avoid.
- Expand your product line, staying close to the core. Totally new and risky products will dilute your focus and may confuse existing customers. For example, adding new but similar cosmetics is better than adding hair care or dermatology products. Another approach is to add services that are related to your current product line.
- Pursue strategic alliances and partnerships. Partnerships work to accelerate growth when the sum of the whole is greater than independent efforts. For example, you may have a product, but not a strong distribution channel. An alliance with a distribution organization enhances the value to existing and new customers of both your solutions.
- Find ways to work with your competition. This approach to growth, usually called “coopetition,” capitalizes on the unique strengths of close competitors for a win-win situation for both. For example, I once worked for a small software company selling a sophisticated enterprise workflow solution fighting a similar solution in the marketplace.
We provided an industry-leading graphic development interface, but were not strong on modeling and simulation. Our competitor was strong on the simulation end. A friendly cross-recommendation alliance allowed both of us, as well as customers to win.
- Highlight your social and environmental commitment. Companies with a real commitment to a higher cause, such as TOMS Shoes, which provides a free pair to a person in need for every pair sold, have seen their growth accelerate dramatically.
From organic candy that promotes world peace to reducing environmental pollution by eliminating plastics, there is no category that should be off-limits. These efforts also lead to a highly engaged workforce, which is also key to productivity and sustainable growth.
As your business matures, you can never be complacent about growth. The market and world is changing around you, and new competitors, sensing your traction, will be nipping at your heels. You need to explore all these growth choices and others and plan experiments to measure their value and timing. A business that is not attracting new customers is dying. Don’t let it be yours.
