Growth strategies are vital to business success. Our economies are built on growth trajectories. Investments are made based on expected growth. The market fluctuates depending on the perceived level of growth.
There has been a move in the needle when it comes to the idea of growth strategies in this decade. COVID-19, Brexit & B Corp have shifted business owner’s perspectives.
There is a new school of thought that champions sustainable growth strategies and growth of businesses as a force for good in society.
But what are the growth strategies we’re likely to see in 2022?
What are growth strategies?
Gartner define growth strategies as “an organisation’s plan for overcoming current and future challenges to realise its goals for expansion. Examples of growth strategy goals include increasing market share and revenue, acquiring assets, and improving the organisation’s products or services.”
A growth strategy is more than just a marketing strategy. It needs to align all areas of the business & it’s goals.
To start defining your business’ growth strategy, you’ll need to consider:
- Goal: What do you want to achieve?
- People: How is each department impacted by your goal?
- Product: Is your product positioned to help you achieve your goal?
- Tactics: How will you work toward your goal?
Do I need a growth strategy?
According to the Bureau of Labor Statistics, approximately 20% of new businesses fail during the first two years of being open, 45% during the first five years, and 65% during the first 10 years. Those numbers are generally consistent across most industries — but they also highlight how important it is to plan for growth from day one.
So in short, yes. Without one, you’re at the mercy of market fluctuations and consumer changes.
Key types of growth strategy
- Product development strategy—growing your market share by developing new products to serve that market. These new products should either solve a new problem or add to the existing problem your product solves.
- Market development strategy—growing your market share by developing new customer segments, expanding your user base, or expanding your current users’ usage of your product. This strategy is sales-focused.
- Market penetration strategy—growing your market share by bundling products, lowering prices, and advertising — basically everything you can do through marketing after your product is created. This strategy is often confused with market development strategy, but the approaches are distinct in emphasizing either sales or marketing.
- Diversification strategy—growing your market share by entering entirely new markets. Rather than expanding within your existing market, you’re launching into the unknown with new products or services in a new market. This strategy is often the riskiest but can have huge rewards if successful.
These are high level concepts. It can be hard to see how to implement them.
Think about these tactics when you’re looking to define the ‘goal’ of your strategy. Assess the product & people impacts. Then we can get down to business with the tactics.
Marketing to drive growth
As mentioned above, growth strategies are more than just marketing. Marketing teams are often siloed in one area of the funnel. A growth strategy needs to bring all tenets of the business together.
“Growth marketing isn’t about fixating on one part of your funnel. It’s about looking at your entire customer lifecycle and using those insights to create compounding returns that drive more engaged customers.”
Matt Bilotti – Drift
Marketing teams, and campaigns, however, can drive this.
Growth marketing prioritises metrics and KPIs that demonstrate genuine growth. This requires a multichannel strategy that optimises the entire customer journey with three key objectives:
- Maximise lead generation
- Maximise lead conversion
- Maximise customer retention & lifetime value
A successful growth marketing strategy ensures your business continues to grow, even as competition intensifies in your industry. The more clout you have, the more difficult it is for rival businesses and newcomers to take your place. At the same time, you become more resilient to market disruption and business challenges.
In other words, you can’t have a growth strategy without a growth marketing strategy.
What are the growth strategies we’ll see more of in 2022?
Incentivising growth with referral programmes are a common growth strategy tactic that isn’t going away. What we’re likely to see more of though, is less financial rewards and a focus on rewarding with more service. This locks customers in better than one off financial rewards.
The Dropbox referral programme was so successful that it drove 3900% in the space of just 15 months.
We are in the age of innovation. This growth strategy enables businesses to differentiate; meet the needs of customers that competition cannot; and penetrate the market with new products and services. Don’t underestimate the power of innovation in your business. New bold ideas & effective execution can be the wind beneath your growth wings.
Chrome’s story is a great example of innovation to overtake Internet Explorer. Their partnership with Android sealing the deal.
Every business pitch deck will start with a ‘problem’. If your business isn’t solving a problem, it’s unlikely to succeed.
This can also be a core function in growth strategies, as your business continues to identify problems in the way things are working now, you can make life easier for your customers.
Many businesses actually do a whole load of nothing. They’ve identified a need and an accessibility issue to the solution. Their entire focus is on building a bridge between the need and the supply. It’s important for businesses of this ilk to grow quickly to solidify their position in the market and avoid copycats (who could be innovating or problem solving better than them).
We’ve already identified that one of the key marketing trends for 2022 is injecting social impact. With the rise of B Corp, business as a force for good and the importance of CSR driven by Gen Z; this can be considered the most exciting growth strategy of all. It not only supports business growth, but also creates a positive social impact in lockstep.