When seeking inspiration for business growth, the first place to look is most often "on your own doorstep". No-one knows your business, and therefore its opportunities, better than your own staff, channel partners, customers and suppliers. They are a veritable goldmine of market intelligence and useful information.
In my recent blog posts "Where to start growing a business" and "Where to start growing a channel business", we looked at a methodology for segmenting your business opportunities. First, maximising your business with existing customers and existing offerings. This is typically easiest because you already have resources, relationships and understanding. And only then expanding into new product offerings and new customer markets.
Surely we know this already?
The key to success is a clear understanding of your existing business, capabilities, offerings and customers. If, for example, you know what value your existing customers derive from your existing offerings, you can begin to identify new offerings that will also deliver value to the same customers. This may seem obvious and most companies possess this level of information but, in my experience, it is rarely gathered in one place and isn't readily available for decision makers.
Sales staff, channel partners, support staff, managers, executives, finance staff and others may each hold part of the information but not all of it. Piecing this all together is the key to making the most of your existing business and then building upon it.
What information is most useful?
To help you identify what information can usefully be gathered, we use a methodology based on the Ansoff Matrix (as above) and drill into each area in turn. I've also written an accompanying set of articles suggesting typical questions for each segment.
Market Penetration
What can we achieve by looking at our current business? Why prioritise existing business when there are shiny new opportunities and customers to pursue? How would we go about improving our existing business? What information would help and where can we get it?
What can we achieve with existing customers and existing products?
Revenues. First of all, we can focus on maximising revenues and, in particular, recurring revenues which will drive the sustainability and value of your business.
Efficiency. We can fine tune and optimise existing operations to maximise productivity from existing resources and relationships.
Resource allocation. Can we achieve the same result with fewer resources? Sometimes, it is better to focus scarce resources on doing less but doing it better and more effectively. This can lead to cost savings or freeing up resource to address new opportunities.
Why focus on existing customers and existing products first?
Relationships. Your company already has relationships with existing customers, suppliers and channel partners. It’s easier and less risky to do business with people that you already have relationships with, and to work with products you are already familiar with.
Knowledge. Knowledge gleaned from those you already have a relationship with is vital to inform future market activities. It’s easier to use information your company already has, and to get more information from people you already know, than it is from people you don't yet know. Obtaining information from strangers is more difficult, more time consuming and less reliable.
Understanding. The way in which your company works today in selling and delivering existing products to existing customers and channel partners provides vital insights into the operation of the company and how it can be optimised.
I've put together some suggestions for the information you might consider gathering and how you might do so in my blog post "In detail: Growth by Market Penetration"
Product Development
Your business is going well; customers and staff are happy. But what next? What are the next steps in growing your business? Having optimised your existing business, you’re now looking to expand your product offerings. Where better to start than with the customers you already know?
From the exercise above, you should have a wealth of information regarding your existing business and which can be used to develop your product business further still.
But how can we gather information about products we don’t yet sell?
The scarcity of reliable information limits successful growth and explains the difficulty of breaking into new markets. Market research is expensive and time consuming and therefore out of the question for most small-to-medium businesses.
But there is a way to maximise opportunity and minimise risk. You can gather the facts which are available and make decisions based on what you do know, rather than what you don’t know, guesswork or intuition.
Where can we get this information?
Informed decisions can be made when you have the facts at your disposal. But most companies don’t know, or more typically, don’t have access to, the store of intelligence that already exists among your existing staff, channel partners, customers and suppliers.
What can we achieve?
Identify new opportunities. By fully understanding existing customer needs, you will be better able to match new offerings that will satisfy those needs.
Identify ability to deliver. Understanding the reality, and equally importantly the perception, of existing delivery capabilities will help you select new offerings to maximise customer satisfaction and value.
Identify sales and marketing plans. Understanding existing sales capabilities will help you develop a strategy for each new offering that will maximise the likelihood of success.
Why focus on new offerings for existing customers second?
Relationships. Because you already have relationships with existing customers and understand their requirements. It’s easier and less risky to do business with customers you already have relationships with.
Knowledge. Knowledge gleaned from existing customers is vital to shape future activities. It’s easier to use information you already have and to get more information from people you already know. A strong understanding of customer needs will help narrow the field of potential new offerings which could satisfy those needs, sometimes down to specific products, other times to product ranges and areas of interest.
Understanding. The crucial understanding and experience of how your company has been able to successfully deliver value to customers in the past is the guide to delivering new offerings in the future. The better your understanding of what works today and the resources at your disposal, the better you will be able to deliver successfully tomorrow.
I've put together some suggestions for the information you might consider gathering and how you might do so in my blog post "In detail: Growth by Product Development"
Market Development
Having expanded your product offering you’re now looking to find new customers for your business. What's the best way to do this and how do you know what to look for?
Intelligence gathered from your existing business is a great foundation to help identify new customers. Understanding what works already helps figure out what will work next.
As before, the key to success is gathering the right information and intelligence that will help you choose the way forward; this article suggests information you might consider gathering and what you can achieve by doing so.
How can we gather information about customers we don’t yet know?
Building new relationships takes time and typically requires specialist skills and/or staff. In addition, the scarcity of reliable information limits successful growth and explains the difficulty of winning new business.
But there is a way to maximise opportunity and minimise risk...
What can we achieve?
Identify new customers and markets. By fully understanding existing customer needs, you will be better able to identify new customers with the same or similar needs.
Identify ability to add value. Understanding the reality, and equally importantly the perception, of the value your company delivers to existing customers will help identify the value you can deliver to new customers.
Identify sales and marketing plans. Understanding existing sales capabilities will help you develop a strategy for each new target customer type that will maximise the likelihood of success. In other words, how to play to your strengths.
Why focus on new customers for our existing offerings next?
Relationships. You already have good relationships with those involved in delivering your existing offerings and understand their requirements. It’s easier and less risky to do business when you already understand what is involved.
Knowledge. Knowledge gleaned from existing customers is vital to shape future activities. It’s easier to use information you already have and to get more information about offerings you already know. A strong understanding of the needs which existing products satisfy will help narrow the field of potential new customers who could have those needs.
Understanding. The crucial understanding and experience of how your company has been able to successfully deliver value to customers in the past is the guide to delivering value in the future. The better your understanding of what works today and the resources at your disposal, the better you will be able to successfully deliver tomorrow.
I've put together some suggestions for the information you might consider gathering and how you might do so in my blog post "In detail: Growth by Market Development"
Diversification
It is a challenge to pursue sales of unfamiliar products to customers you don't have a relationship with. Surely there must be easier opportunities with existing customers and existing offerings?
But sometimes, companies have no choice; for example, business startups with no customers and a shiny new product. Or established companies where all existing avenues have already been exhausted.
Even in these situations, the right information and intelligence will help you choose the way forward and navigate to the most realistic opportunities with least risk (or at least, with manageable risk).
How can we gather information about customers and offerings we don’t yet know?
Breaking into completely new markets is difficult. That is why so many startups fail and why existing companies rarely succeed in entering completely new markets.
But there is a way to maximise opportunity and minimise risk by utilising the intelligence at your disposal and devising new ways of establishing a connection with new customers and markets.
What can we achieve?
Identify similarities and synergies. People, and especially companies, do not buy products they have not come across before. To establish an interest, it is necessary to communicate in terms the customer can relate to. This is most easily achieved by making your offering appear similar to an existing offering that the customer can easily grasp.
Identify added value. Once an interest and connection has been established, the added value of your offering becomes relevant. But again, this will only be meaningful to customers if it is presented in terms they can relate to. For example, presenting the value of your offering in comparison to something that they already appreciate the value of.
Identify sales and marketing plans. Understanding why and how customers buy existing similar offerings will help you formulate a plan that works in a way that customers, your staff and your channel partners can understand and relate to.
Market Intelligence. Investigating new markets is a valuable source of intelligence that can be used to inform your existing strategy. What new ideas are transforming other markets? How can these be used to enhance our current offerings? Are there potential acquisitions, mergers or acquirers that we can connect with?
Why focus on new customers and new offerings next?
Relationships. It's unusual for people to buy anything of value from people that they have no connection with. But everyone has relationships and establishing new connections is possible through companies and contacts that already exist. You know people that know other people; you know companies that other people do business with and so on.
Knowledge. Knowledge of how existing offerings are marketed and purchased enables you to formulate your plan to promote comparable offerings. Knowledge of existing customers and how they like to do business helps you formulate your sales plan. Knowledge of how customers derive value and from what helps you shape your value proposition.
Understanding. The crucial understanding of how other companies have been able to successfully deliver value to customers is your guide to delivering to new customers in the future. Likewise, the understanding of how customers have been able to derive value from products in the past is your guide to delivering value in the future. The better your understanding of what worked in the past and the resources at your disposal, the better you will be able to deliver successfully in the future.
I've put together some suggestions for the information you might consider gathering and how you might do so in my blog post "In detail: Growth by Diversification"
What's the bottom line?
I have suggested a lot of information that could be gathered and how this might help:
Can you see how this intelligence would be relevant to your business?
Do you have all this information at your fingertips right now?
Could you make better decisions if you had access to this knowledge?
If you could make better informed decisions, would you be able to grow your business more quickly?
Business growth is in your hands.
Ash Madden is Founder and Director of Madden Associates Limited, the Specialist Channel Sales & Partnering Consultancy
Comments