Chapter 2
Laying a Foundation for Growth
IN THIS CHAPTER
Determining your market’s growth rate
Operating for growth
Looking at market segmentation
Implementing market share and positioning strategies
Giving growth hacking a try
Staying innovative
A mantra from the Native American belief says that elements of nature provide important guiding lessons for life. For one, we’re taught that we should live our life like a river, always flowing and moving forward; otherwise, we stop progressing and become stagnant, like a pond that can be compromised by moss, fungus, and other elements that hinder growth.
As a business owner, you need to look at your business from this same perspective. Where are the white water rapids, or the growth waves, and can you ride them to capitalize your business?
The simplest and most reliable marketing strategy you can prepare for your business or product is to go where the growth is. One of your top priorities should be finding opportunities that exist today and riding those growth waves as long as you can. Doing so will better enable you to operate at a profit so you can capitalize your next round of product development, marketing campaigns, and expansion into new markets or new distributor relationships.
This chapter helps you determine what the growth rate of your market is and evaluate opportunities to find the best options for both short- and long-term growth.
Measuring the Growth Rate of Your Market
Typically, only a few markets are growing rapidly at any given time in a given economy. Some are actually shrinking. Knowing how quickly or slowly your market is growing is vital because it’s a key driver of your sales growth and profits.
Continuously monitor and evaluate the current growth rate and future growth potential of your primary market and the opportunities or threats it presents to you. These factors should be part of your brand and competitive SWOT analyses, which will help you better determine your brand’s strengths, weaknesses, opportunities, and threats.
Your core market should be experiencing a 5 to 10 percent overall annual growth. Anything slower than 5 percent makes it difficult for any business to thrive. If your primary market isn’t growing fast enough to support your business goals, or is at risk of slowing down soon due to growth in other business sectors, you may need to find new markets you can serve, reinvent your business, or adapt your product line.
To assess your market’s growth potential, you can use simple indicators of your market’s current overall growth rate to guide you. These include
- Year-over-year trends in industry-wide sales
- An increase or decrease in the number of customers in the market
- Changes in the type and size of purchases per customer
Mapping out these growth indicators for the past one to three years can help you see what’s happening and what to expect. Although these indicators will give you rudimentary guidelines that aren’t based on statistical formulas or predictive analytics, they’ll give you indications of growth nonetheless.
Here are a couple of examples of the kind of information you get on various markets from Statista (www.statista.com), a statistics portal that provides data about numerous industries and markets from more than 22,500 sources. Its reports share findings on industry growth year over year, projections for future years, and more.
- If you’re in the home furnishings space, you can review statistics on furniture sales for a given year. Statista’s reports break down revenue per type of store and show the market share, revenue, and sales of top leading companies in the space. And much more.
- If you’re selling mineral water, you can see growth charts for the United States and other world markets, revenue per capita, and consumption per capita, in addition to growth projections and other insightful data.
Explore its reports and those of other market information providers to see whether you can get breakdowns for specific regions you’re targeting. Analyst firms like Forrester (https://go.forrester.com/) and Gartner (www.gartner.com/en), chambers of commerce, and trade associations are also good sources of marketing growth trends.
Also pay attention to the business news in specific cities in which you sell your products. Follow the trends on home sales, new construction, real estate development, job growth or decline, and other economic indicators.
If you find that your primary market is shrinking or static, then it’s time to look for growth opportunities and prepare for change.
Responding to a Flat or Shrinking Market
When faced with a flat or declining market, consider the following adjustments:
- Reduce retail stores and other major investments to avoid losses.
- Look for ways to move your sales online to expand your market reach beyond your current borders. This one step works quickly and powerfully if you’re willing to invest in an e-commerce infrastructure. Be sure you find ways to efficiently fulfill and ship online orders before going this route to preserve your profit margins.
- Eliminate low-margin products from your physical store sales and put those online only. This will help you cut waste from inventory not moving off your shelves while not disappointing customers with fewer options. You see Walmart and Target doing this quite effectively because it helps maximize revenue per foot and lowers overhead costs.
- Look for other places to sell your product by exploring new distributors, intermediaries, online channels, and collaborators. You can also look to renegotiate your terms with existing partners to help increase your margins. The win for them is that they don’t lose a client, end up with less to sell, or have to replace you with another account.
By keeping an eye on market growth rates and your focus on growth markets, you set yourself up to grow your sales and profit potential at the same time. Slow-growth and no-growth markets are brutally competitive. To win sales in either case, you often have to slash prices, ruining your profit margins. That’s why smart marketers make a strategic point of focusing on growth markets and pay close attention to growth rates in all their markets so they stay alert to slowdowns that may indicate a need to move on.
Figuring out how to reinvent yourself before you have to is critical to staying profitable and alive. Never assume that you can glide on your successes. There is no rest for the successful business executive or enterprise that seeks sustainable growth.
Grow revenue by adding services to support your products. Look for services that appeal to all or specific segments. The goal is to add valuable new revenue streams in case your customer acquisition stagnates. Consider these examples:
- Utility companies now offer ancillary services such as home delivery of air filters for furnaces and air conditioners, surge protection for appliances and electronics in case of lightning strikes, and more. These subscription-based services increase customer lifetime value and current revenue.
- Software companies engage in licensing, or SaaS (software as a service) models, which ensures revenue flow every month instead of one-time big chunks of income by selling their systems for a high price one transaction at a time. In the long term, this typically adds up to much more than they could have charged outright.
In addition, look at the geographic areas you target most to assess their economic health and strength. If your current market isn’t growing, look for nearby markets with stronger population growth and economic projections. Look also at a market’s workforce to ensure that it has the skills you need at affordable salaries. In recent years, Utah has become a hotbed for high-tech and software companies because the workforce is highly educated and the cost of living still relatively low. As a result, companies can operate at lower costs than Silicon Valley and make more profits without compromising quality of operations or human capital.
Finding Your Best Growth Strategies
Market growth and expansion are clearly the most common strategies in marketing and the foundations of sustainable brands. The ideas, respectively, are to get your product to customers as efficiently as possible and to start selling to new groups of prospective customers, in terms of demographics and geography, to grow and sustain profitability.
Clearly, your marketing strategies will differ if you’re new to an established market, are an existing brand looking for growth, or are launching new products within an established brand to grow new revenue streams. The following sections cover some tactics for achieving success in these and other scenarios.
Go to market
A go-to-market (GTM) strategy is your blueprint for getting your product to the end customer and achieving a high level of sales and awareness at the same time. Pricing, distribution, and publicity are key to GTM strategies. Following are some innovative ways to take a product to market that get you noticed and help you build your base.
Build a presence
Large companies with much to invest in new product launches may start out with their own retail stores to ensure that they reach their target customers and have total control over the product demo and buying experience. Apple carefully created the shopping experience and built a brand persona at its own retail stores before allowing its products to be sold elsewhere, like Amazon and Best Buy. If you have the money, this is a great way to build a strong platform on which a new brand can grow.
Crowdfunding
Even though campaigns on Kickstarter and other crowdfunding sites are designed to raise funds over selling products, they can help create a strong base of champions to help spread the word. If you create a strong campaign with product demos and great videos and gets lots of media talking about your campaign, awareness will skyrocket without having to pay for most of it. Additionally, if your campaign can create enough emotional enthusiasm to succeed, you’ll likely have a lot of excited backers who want you to succeed and thus are willing to tell your story and promote your products and brand to their networks. And if each of those people has a network of 500 people on just Facebook, Twitter, and LinkedIn, that’s a lot of valuable publicity via the most credible channel ever — consumer-to-consumer communications.
Beta testing
Beta testing can work really well. For example, one particular new business got off the ground recently, and one of the ways it did so was through a beta program. Instead of offering introductory or discounted pricing to get off the ground, because it’s hard to raise it even after a launch price, people were invited to apply to be part of the beta test whereby they received reduced pricing if they allowed their success stories in the business’s marketing materials. It worked brilliantly.
People often want to be part of a test to find a new way to do something better, but they shy away from “introductions” because they don’t want to be the first to buy an unproven product. And deeply discounted products can send a signal that it’s not worth much anyway, and you’re just full of hype.
If you invite consumers to participate in a test, offer to share some information about your category or a how-to guide that is related to the product being tested so that the value of participation is more than price-oriented.
After your pilot stage is completed, send participants a report and insights about next steps. Consider offering them a small discount on their next purchase or to renew a subscription to your services as a way to get them to remain an active customer.
Different experiences
Marketing today isn’t about the price, special offer, or even the promise and function of a product as much as it is the experience. An experience is what creates the feelings that make people want to come back for more. The experience can come from using the product, trying the service, or from appreciating the service and kinship that follows after the sale. To spark a new feeling of excitement for a new product, guerilla marketing can play a big role.
Grow what you have for higher profitability
Two powerful ways to expand your market position and sales involve introducing more products into the market and using a bestseller to draw more customers to your brand and expanded product line. The sections that follow highlight how you can go about accomplishing both.
Offering more products
Introducing new products is a strong way to expand your share of a particular market — eventually. If you sold only 10 products last year and you offer 20 this year, you just may find that your sales double. Of course, there’s a good chance your new products won’t sell as well as your old ones at first, but if you persist, you should be able to ramp up their sales over the course of a few years.
When looking to offer more products, you have two options:
- Add new products simply by reselling or distributing products that complement your current line and meet some need of your current customer base.
- Innovate to create one or more new products that nobody else sells.
Either way, you have the twofold challenge of informing customers that you have something new to offer and convincing them to take a look — and then getting them to buy it before a bigger competitor gets wind of your idea and decides to offer its own version of a similar product, too. If this happens, the competitor is likely to undercut you on price and overwhelm you on distribution due to greater resources.
These reasons alone illustrate why being especially visible and persistent in the first few months of a new product launch or market expansion is so critical. A concentrated blast of marketing communications (see Chapter 5 of Book 5) is the key to opening a new market successfully. With all the content management systems available today, doing this is getting more and more efficient.
Create visibility by showing people your brand or product often and in a consistent, professional manner. You can do this through publicity efforts to get visibility on blogs, news channels, and so on, advertising, direct mail, email blasts, search engine marketing, signage (such as billboards and transit ads), sales calls, or presence at conferences and trade shows.
Another great way to introduce a new product for both an existing brand or a new one is to sell it at kiosks, which are less expensive and often more visible than retail stores in shopping malls. Anson Calder, a luxury travel accessories brand, launched by opening a kiosk in a busy New York City building, which let people see its products firsthand. By doing this, it was able to introduce its style and quality and drive sales to the website, which is its primary commerce channel.
If your product is different, set up a demo station and offer coffee or snacks to keep people lingering longer and staying for the whole demo. Free food and drink have stopping power at malls or even stores like Costco. Collect email and other usable information before giving away that free coffee so you can build your database at the same time.
Risks and costs increase when you experiment with new products — anything you’re not accustomed to making and marketing. Consequently, you should discount your first year’s sales projections for a new market by some factor to reflect the degree of risk. A good general rule is to cut back the sales projections by 20 to 50 percent, depending on your judgment of how new and risky the product is to you and your team. It may also cost you double the time and money to make each sale when entering a new market, because your new prospects won’t be familiar with your brand, and you likely won’t have a well-defined marketing formula at the start. Budget accordingly.
Riding a bestseller to the top
If you have a bestseller — a product that substantially outsells your other products — it may make sense to put a lot of your resources toward maximizing sales for this product and using the profits to grow other areas of your business. Some marketing experts look for bestsellers to achieve sales that are at least ten times the norm; outstanding bestsellers can achieve a hundred or more times the normal level of sales for a product in their category. If you have just one bestseller in your line, growing your revenues and profits is fairly easy as long as it remains popular.
You can expand demand for a top-selling product by creating new experiences around it or partnering with others to help package or bundle your products with their products. Partnering or bundling works well with software and in retail. If you sell comfy throw blankets, for example, partner with a company that makes fuzzy slippers or single-serve coffee machines to help round out the cozy-at-home experience.
How do you create a bestselling product? First, look for one. Don’t be content with products that sell moderately well. Keep looking for something that has more excitement and potential. Test many alternatives. When you find one that seems to have momentum (you’ll know it has momentum when early sales figures surprise you by their rapid growth), quickly refocus your marketing efforts on that product. Make it the heart of sales calls and ads, feature it at the top of your website’s home page, talk to the media about it, and offer specials for new customers who try it. Bestsellers are found and made by marketers who believe in them. Be a believer!
When you have a product with bestseller potential, your marketing strategy should be to ride it as hard and as far as you can. Write a marketing plan that puts the majority of your budget and efforts behind the bestseller and gives the rest of your product line as minimal a budget as you think you can get away with. The bestseller will tend to lift all sales by attracting customers to your brand, which will likely have a strong reputation for quality and service due to your bestseller, so you won’t have to worry as much about the rest of your products.
After you have a bestseller, you should see your profits grow. Use some of these profits to look for the next bestseller because, like all good things, your current bestseller will eventually lose its momentum. Always be looking for your next top product so you can have it ready and waiting in the wings. Test ideas and options, and be patient. If you can’t find another bestseller, switch to another marketing strategy. You don’t have to have a bestseller to succeed, but it sure is nice if you can find a product that fits this strategy.
While your products are selling and your customer satisfaction is high, referral marketing and reward programs are critical to maximize your sales and profit potential. Reward your customers who continue to buy your products by giving them discounts for repeat purchases. Also consider giving referring customers a financial reward and see what that alone can do for profits. System Pavers pays $500 for each customer referred who completes a qualifying project. It puts no limit on how much one customer can make in referrals. This act of reciprocity not only makes current customers happy, but also keeps the brand and new products on their minds. And it has helped grow profits very successfully as well.
So if, for example, a company paid out just $1 million in referral rewards, that is 2,000 projects. If a company’s average sale is $10,000, that adds up to $20 million! With no advertising costs involved, that’s a pretty amazing return.
Making a hot product even hotter
Another strategy is to influence the supply and demand for a product that’s showing signs of being another one of your top sellers. You can influence sales and pricing by how you choose to distribute your product after it has established a stronghold in your market. One way to do this is to release a limited amount of product to specialty stores so that people have to seek out your product. If you distribute through the mass retailers, you lose the chance to build a competitive edge with exclusivity or scarcity. You also have the freedom to change your price as demand increases, which you often give away when you contract with Walmart or another mass retailer that demands fixed prices.
Beanie Babies are a great example of this strategy. Creator Ty Warner released his Beanie Babies for short periods of time and then retired them, making them collector items that made people want them even more. And for some of his creations, he produced only a couple of hundred bears, making them instant and rare collector items. The value of some of his bears at the peak of the Beanie Baby frenzy reached upwards of $3,000.
Take a look at your distribution strategies for your top products. Can you produce less and make them more valuable? Can you change your access points to make them seem more exclusive? Or do you just want to keep selling a product until it doesn’t sell anymore and pocket the profits while you can?
There are many considerations for how to maximize the profitability of your top-selling products. Just remember, what’s hot now may not be hot in a matter of weeks. In the case of Beanie Babies, they were one of the biggest frenzies and crashes of the 1990s, as described by Zac Bissonnette, who wrote The Great Beanie Baby Bubble: Mass Delusion and the Dark Side of Cute. When the company announced that it would stop producing the toys that had become collectors’ obsessions — leading to a murder and a custody battle in court over a divorcing couple splitting their “babies” — the frenzy almost dried up as quickly as it had heated up. Those big-priced little Beanie Babies on eBay lost value quickly, and the fad faded to where today many consumers don’t really know what a Beanie Baby is or was.
Whatever your plan for maximizing the growth of your current top-selling products, have an exit strategy in mind, too. Be prepared to answer the following questions:
- At what point will you cease production before you end up producing more than you can sell if trends and fads change?
- At what point are you willing to let your product become a commodity, selling at a fixed price?
- At what point will you replace this product with a new one that is likely to have the same appeal to the same consumers so that you have an opportunity to create another highly profitable product and cycle?
Growing a Market Segmentation Strategy
To succeed, a market segmentation strategy needs to be more than just sorting customers into like groups so you can build marketing around specific personas that appeal to each group with relevance. It involves messaging on psychological influences and producing relevant content for each segment, often simultaneously, to keep sales moving in large quantities rather than periodic spurts.
You can create segments along numerous lines. The key is to sort them in ways that make sense for how people process decisions to buy, past transactions, attitudes, and so on, and how you’re set up to reach each segment efficiently. Digital asset management platforms that enable you to create new versions and release content for all channels simultaneously are key to enabling you to communicate to all segments at the same time with high efficiencies.
Step one in a segmentation strategy is to have a strong content marketing system that can automatically adapt your digital and print marketing material for each segment and enable you to put all versions in market at the same time instead of staggering sales promotions that can delay your sales and overall success.
The advantage of a segmentation strategy is that it allows you to tailor your product and your entire marketing effort to a clearly defined group with uniform, specific characteristics. If you find that one segment strongly outperforms all others consistently over time, you may want to consider a niche strategy whereby you drop your focus on all other segments and channel all your resources on the one segment. In a world that’s looking for more customization and personalized service, niche marketing might just make the most sense. It helps you better compete with larger businesses because you can specialize and personalize in ways they can’t.
Customer segments
One of the most proven and common segmentation strategies is based on RFM — recency, frequency, and monetary value of customers. When you sort customers accordingly, you identify those customers with the highest propensity for repeat sales and profitability for your business and establish groups with like values to which you can communicate with “mass personalization.” RFM is one of the basic fundamentals of a strong data-driven marketing strategy.
You may build customer segments on the following:
- RFM
- Products purchased
- Transaction value
- Frequency of purchase
- Generational attitudes
- Trust equity in brand and/or category
- Emotional selling proposition (ESP) profiles
- Conversion channel (did they come in via social, web, retail, referral, or other?)
- Purchasing and browsing patterns
- Demographics (education, gender, income)
- Geography
- Relationship with brand (warm lead, cold call, or established customer)
With a strong database program and analytics tools, you can find out about your current customers and how you can build segments to capture growth trends or better nurture future leads. For example, if a subset of your customers is growing faster than the rest, consider specializing in those types of customers to gain more of their business or purchasing more lists that replicate that customer set. You can also adjust your product, pricing, promotion, or distribution plans for each segment. If you do this, you need to adapt your marketing content for each group.
If your customer base is shrinking or your current segments aren’t responding as desired, consider adding a new segment. For example, a consulting firm specializing in coaching healthcare executives can decide to start offering a similar service to nonprofits, expanding its market base without having to change its core competencies or budget for expensive new product development.
Niche marketing
Specializing in a specific market segment can give you the momentum you need to power past your competition, but it may not always be the right approach for your operation. The niche strategy may work well for you if
- You think your business can be more profitable by specializing in a more narrowly defined segment than you do now.
- You face too many competitors in your broader market and can’t seem to carve out a stable, profitable customer base of your own.
- It takes better advantage of things you’re good at.
- You’re too small to be one of the leaders in your overall market or industry. Maybe you can be the leader in a specific segment of your market.
Developing a Market Share Strategy
Scaling your business is obviously the best way to improve your ability to compete with larger, more established brands and increase your market share. Market share is, very simply, your sales as a percentage of total sales for your product category in your market (or in your market segment if you use a segmentation strategy). If you sell $2 million worth of widgets and the world market totals $20 million per year, then your share of market is 10 percent. It’s that simple. Or is it?
Following are some insights on market share and how you can implement one effectively.
Define your metrics
Before you can completely determine your market share, determine the metrics that matter most to you. Is it better to determine market share by dollars earned, containers shipped, or units sold? Pick whatever seems to make sense for your product and the information you have access to.
Establish a benchmark
To effectively increase your market share, you must have an accurate picture of where you stand currently. Here’s a simple method for estimating market size and share.
Estimate the number of customers in your market.
For instance, guess how many people in your country are likely to buy toothpaste or how many businesses in your city buy consulting services. With companies like Statista (
www.statista.com), a consumer statistics portal, and D&B Hoovers (www.hoovers.com), a commercial database of businesses and executives, you can get fairly precise insights on the size, sales, and market leaders for any industry.Estimate how much each customer buys a year, on average.
Does each customer buy six tubes of toothpaste? Fifteen hours of consulting services? You can check your sales records for specific data for your brand or turn to industry research for specific information and year-over-year growth data.
- Multiply the two figures together to get the total size of the annual market and then divide your unit sales into it to get your share.
You can also look at information compiled by the U.S. Census Data (www.census.gov) to get information about population and economic trends to help you with forecasting and growth plans.
Alternatively, you may estimate, for example, that three-quarters of the wholesalers handle low-cost, inexpensive teas and therefore don’t compete directly with your specialty tea business. In that case, you can calculate your market share of the quarter of total sales that are similar specialty teas as 0.525 ÷ (0.25 × 3.886), which gives you 54 percent. That’s a much larger share based on a narrower definition of the market. Estimating your market share helps you determine which market share numbers are correct.
To create a market share strategy, you need to clearly identify and define your product and where it fits into your market. In other words, you need to know your product category — the general grouping of competitive products to which your product belongs (be it merchandise or a service). Knowing your product category is extremely important. If you don’t know where your product fits into the market, you can’t begin to develop a strategy to build on and increase your existing market share. For example, if you’re a boutique business selling specialty teas from physical retail locations, you need to determine the following:
- Are you competing with mass-market brands?
- How do you compete with other specialty tea shops with physical locations that offer a gathering place rather than just a product?
- Are you losing market share to online sellers?
- Are there better opportunities for growth by selling as a wholesaler instead of a retailer?
You can learn about consumptions patterns and project consumer behavior by studying reports from trade associations, Statista data, and other sources that can guide you on what’s happening and what to expect in your industry.
Do the math
If your goals are to increase market share by a certain percentage or dollar value, you need to do some calculations to determine what those figures really are. For example: If you own a tea store in Shanghai, you could have a goal of increasing share of tea sales by 1.5 percentage points. If each point of share is worth roughly $40,000 in annual sales (1 percent of the total sales in the market), then you’ll likely need a plan that involves spending, say, an extra $25,000 to win that 1.5 percent share gain. If it works, you can gain an extra $60,000. But will it work?
To be cautious, you, as the marketer, may want to discount this projection of $60,000 in additional sales by a risk factor of, say, 25 percent, which cuts your projected gain back to $45,000. If you exceed it, you can enjoy the reward. If not, you avoid setting your business up for missed sales projections, which can affect profitability and your own credibility.
Be realistic about the time it takes to reach market share goals. A sales projection starting at the current level of sales in the first month and ramping up to the projected increase by, say, the sixth month, may be reasonable. Dividing $45,000 by 12 to find the monthly value of the risk-discounted 1.5 share point increase gives you $3,750 in extra monthly sales for the sixth month and beyond. Lower increases apply to earlier months when the program is just starting to kick in. But the marketing expenses tend to be concentrated in the early months, reflecting the need to invest in advance to grow your market share.
Market share gives you a simple way of comparing your progress to your competitors’ from period to period. If your share drops, you’re losing; if your share grows, you’re winning. It’s that simple. Base your goals on realistic, actionable items that you can measure. For example, if your goal is to increase share from 5 to 7 percent with a product upgrade and trial-stimulating special offers, be sure you can attribute market share growth to those actions so you know what’s working and what isn’t.
Designing a Positioning Strategy
A positioning strategy reflects the emotional fulfillment and psychological relevance of building ESPs (emotional selling propositions) over USPs (unique value propositions) because “unique” isn’t a sustainable strategy. It’s too easy for a competitor with more resources or a quicker time-to-market process to duplicate and take away a “unique” advantage. A successful positioning strategy focuses on getting customers or prospects to see your product by the emotional and functional values it offers, to trust your claims about quality and service, and to try your products before considering competitors’ offerings.
Your positioning strategy needs to reflect your ESP strategy. As you plan for growth, identify new markets where your ESP and positioning will stand out and be appealing to consumers. Do you need to adapt your ESP or how you position it and your other promises for various cultures or demographics that you’re trying to penetrate or dominate? The more you know about each market you operate in, the more effective you’ll be.
Envisioning your position: An exercise in observation and creativity
Good positioning means your product has mind share among consumers, which will in turn help you gain market share. Your positioning statement should be believable and actionable. It should reflect the core values of what you offer and make a statement about how you differ from competitors’ or even functional alternatives.
As you do your competitive analysis, compare your positioning strategy against competitors to see whether you’re saying the same thing in different words or whether your promise and emotional value really stand out. Just as important, do your product, sales, and service processes fulfill the promise you make in your positioning statements, sales promises, and other marketing materials?
Aligning your positioning strategy with growth initiatives
After you’ve defined the emotional value you offer in addition to the product value or competitive difference that sets you apart, you can start building growth plans accordingly. For example, if you produce and sell organic healthy snack foods for children that replace the abundance of junk food marketed to kids daily, your positioning could reflect the health benefits and emotional relief parents gain by knowing that they’re not jeopardizing their child’s growth by giving into demands for food that isn’t healthy. As a result of having a healthier but tasty snack food for children, you can expand to niche and specialty markets that are showing big growth opportunity. Sometimes these may be geographical markets. Health food and fitness services are big in Boulder, Colorado, but may not be so big in some parts of the south where less healthy types of food are consumed regularly.
For a product such as this, you can target influencers who are directly related to parents who are highly concerned about the physical and mental impact of poor nutrition. Influencers whom you can target for resellers may include, for example, allergists, pediatricians, youth sports clubs, and associations and government bodies focused on nutritional research and education.
For any given industry, you can find a long list of organizations with whom you can build alliances for reselling your products, referring others, or introducing you to consumers who are right for what you offer, which leads to another critical strategy in today’s world of many options and confusing alternatives: growth hacking (see the next section).
Growth Hacking to Build Leads and Market Share
Although the term growth hacking may be relatively new to this generation of marketing, the concept isn’t. It’s just a highly concentrated process for reaching out to your networks to build direct leads and increase your visibility and position in a marketplace by linking to others’ social and digital assets and creating collaborative opportunities.
It’s also about gaining mind share by taking advantage of the social and digital tools that enable people to find your brand ahead of others. The following sections offer some tips about growth-hacking strategies that cost little to execute but can pay off in a big way.
Search
Know what and who is getting the most attention in your market. Through tools as simple as Google’s Search console, you can discover what websites are getting the most impressions and highest click-through rates and what keywords in your industry are getting the same. Pay attention to how the brands getting the most impressions are marketing themselves and what keywords are most popular for consumer searches in your industry. Make sure you include these in your positioning and marketing messages. And make sure you build your own search engine optimization (SEO) and search engine marketing (SEM) strategies around the keywords and products most searched by your core consumers. These will change and change frequently, so keeping current on these trends is critical.
Build links
There’s a reason LinkedIn is growing in size and value to marketers in all industries and of businesses of all sizes. Take stock of your own network (if you’re not on LinkedIn, get on it now; see Chapter 6 of Book 5 for details). How big is your network? Do you have 1,000 or more connections? How many of those can you name? And for how many of those do you have personal or work email addresses? Probably “not a lot” is your answer to both of those final questions.
In today’s world of digital networks, if you’re not mining your network connections, you’re likely walking away from a gold mine. You need to create templates for communicating with members in ways that get them to respond. Try emailing connections on LinkedIn and asking whether they’d be interested in a free white paper or participating in a brief survey. For either of these, they need to share their email address with you, which you can then add to your database for content marketing. You’ve just gained a critical email address and sparked a direct relationship that you or your sales team can nurture.
Fish for emails
Although phishing most often refers to unethical scams designed to get personal contact information to exploit consumers, fishing — the kind that uses bait to hook people on your brand — is still good and pays off. Fishing for emails is as simple as offering something of value to consumers in exchange for their email address. You don’t need click bait to get people to participate if you offer something real and of real value.
For example, if you’re a marketing consultant and you design a banner ad or email that says, “Need help calculating your customer lifetime value?” you can require people to click on a form in your marketing template that sends their email address directly to you. Bam! You’ve got another email for your growth marketing campaigns and a lead with whom you’ve just started a new relationship.
Try tripwires
Tripwire is yet another new term, relatively speaking, for marketing tactics but not a new concept or strategy. Tripwire marketing is simply the act of offering something people can’t refuse. It’s one of those “big blowout sales” used car lots have been using for years. You see these all the time in infomercials on TV and now through digital channels all over the web. You sell someone on the benefit it offers and then offer it for a limited time as a free trial (“get now, pay later if you keep it” approach) or for such a low price that no one can say no. The trick according to Neil Patel, a growth marketing guru, is to keep your price pretty low (less than $50) and to offer a more expensive, better value product at checkout. According to Patel, at least 30 percent of your shoppers should end up buying the higher-end product or better value, which you can position as your “best value.”
Hire a growth hacker
So how do you go about integrating these tactics into your growth strategy given that many are time-consuming? Simple. Hire a growth hacker who can dedicate her days to sending out templates for invitations to connects, offers for white papers, and other messages for you. If you have a well-connected sales or executive team, open their networks for your growth hacker. Your goal should be to establish a connection with about 20 percent of those to whom you reach out. Again, if you have a network of 3,000 people on your social sites, 20 percent is 600. Now multiply that number by five executives on your team and you’ll have a new database of 3,000 highly qualified leads to nurture and grow.
To read more about growth hacking, follow Neil Patel’s blog at www.neilpatel.com.
Selling Innovative Products
Every product category has a limited life. At least in theory — and usually in all-too-real reality — some new type of product comes along to displace the old one. The result is called the product life cycle, a never-ending cycle of birth, growth, and decline, fueled by the endless inventiveness of competing businesses. Product categories arise, spread through the marketplace, and ultimately decline as replacements arise and begin their own life cycles. If you’re marketing an innovative product that’s just beginning to catch on (in what marketers call the growth phase of the life cycle), you can expect rapid growth in sales and profits.
Your growth strategy and actions will be only as good as your product. If you don’t keep up with changing technology, consumer needs, and demands, no plan for growth will pay off. Imagine trying to sell a typewriter when personal computers were taking off and coming down in price. No amount of imagination, linking, connecting, and lead generation can overcome an out-of-date product that has no value in the current world. Your strategic imagination is the only limitation to your growth.