What Are Business Growth Strategies?
As a startup or expansion stage company, your goal is to continually increase the size of your business, growing the top and bottom lines over the long term, while creating competitive advantage in the market.
So how do you do that? Designing and executing a set of business growth strategies is a big first step.
Quite simply, your business growth strategies can be the most important — and effective — tools for developing and maintaining the growth of your company.
I’ve written about the link between competitive advantage, business growth strategies, and company development strategies before. But before you digest how each of those components can work in harmony to help your company prosper, it’s important to understand how each one is defined and why they’re important on their own.
So what are business growth strategies?
Business growth strategies can be described in a variety of ways. I find that the best way to narrow your business growth strategy is to identify the three core “whats”:
- What is your target customer segment? For example, your target segment can be determined by demographic or psychographic characteristics for consumer segments, or industry vertical company size or department for business segments. (Note: there are many, many different customer segment dimensions. Those are just a few starting points).
- What is the whole product you will deliver to that segment? Whole product development is the comprehensive set of activities and interactions intended to design, create, and deliver valuable and unique whole product experiences for your users. The whole product is your core product, plus all of the ancillary touch points that your product users experience, including pre-sales experiences, professional services, and ongoing user support.
- What are the customer development channels you will use to find, acquire, and grow your customers? Customer development is the design, creation, and delivery of all the touch points that your product buyers experience to help them find, perceive, try, and purchase your products and services. It also allows them to renew and grow their relationships with your product and company over time. This includes the comprehensive set of content, activities, and interactions with your market participants that are intended to design, create, and deliver valuable and unique experiences to help you realize your buyer oriented goals.
Those core questions define the target customer segment, the product that will be delivered, and the customer development channels that will be used. If you have multiple business growth strategies, you should describe those three dimensions for each strategy.
There are some additional “whats” that you should also consider answering before moving on:
- What are your goals for the strategy?
- What are the anticipated results from your strategy (e.g. economic results)?
- What are the expected competitive advantages that will be created in the target customer segment?
- What are the resources needed to support the business growth strategy?
- What company development strategies are necessary to support the business growth strategy?
- What are the anticipated risks?
- What are the anticipated obstacles that need to be overcome?
Once you’ve answered each of those questions, you’ll be ready to determine how to address them. For example:
How will you develop and deliver the whole product? Will you build the product internally, hire a company to build it, or buy a company that already has the basics of the product in place? Those are just a few possibilities.
How are you going to design and develop your customer development channels? For example, will you build organically, partner with others, or buy a company that already has these customer development channels?
How are you going to support the product and customer development with company development strategies? It could be with people, organizational approaches, operational processes, legal, or financial support. But you need to answer that question.
Now you can better support the “whats” and “hows” by answering the “whys” of your business growth strategy. After all, you need to be sure that this is the best possible strategy for your company right now. Does it align with your mission and vision? Will it actually create competitive advantage? To find the answers to those questions, ask yourself:
- Why will this strategy best help the company align with its aspirations?
- Why will this strategy best help the company meet its goals?
- Why are other customer segments less attractive?
- Why is this whole product the best one for the chosen customer segment?
- Why is your whole product better that the alternatives for your chosen customer segment?
- Why are these customer development channels the best ones for this customer segment and this whole product?
- Why will this strategy create competitive advantage?
- Why are your answers to the “how” questions the best options for your company?
These are broad brush strokes that will help paint a complete business growth strategy.
Defining the customer segment, the target product, the target customer development channels, and addressing the rest of the “whats,” “hows,” and “whys” will set you up with the best business growth strategies, making it easier to drive them into your operating rhythm.
If you can clearly articulate, execute, and iterate on your strategy, you should also evolve to the point of achieving a really high market clarity score, which is a measurement we developed to assess how well companies understand (and are understood by) their target market.
Once your business growth strategies are in place (and you’ve made sure they align with your aspirations), it’s crucial that you continue to iterate that strategy as it moves from design to execution. The best business growth strategies clearly and accurately describe your business and evolve as that clarity becomes greater over time.
So can you clearly articulate your business growth strategies? If you can’t, why not?
Scott Maxwell founded OpenView Venture Partners in 2006 and has worked in venture capital for over 11 years. For more insight from Scott, you can visit his blog and follow him on Twitter @scottsnews.