We all want our business to grow. To find more customers and more revenue. It is a necessity – like moving ahead in cycling. If you don’t move, you will fall off. But organic growth is not so simple, at least if you are not working in hyper-growth sectors like data centers or defence at the moment.
One thing is clear though: If you want to grow, you need to invest in marketing. You need to understand the potential new customers, you might need to develop your product and possibly have a new price strategy for a new segment. And, of course, reach out and win the new business through marketing communication and sales.
The critical aspect is to find what is going to become more business. If we only aim to extend our existing customers’ business, we will probably not grow in a high enough pace since the potential is limited. A manufacturer only invests in new equipment when the existing is worn out or he expands. A consultancy firm only buys new computers when the existing is written off. Etc.
So, to grow you need to expand your market. For me, it can be done in 2 ways in addition of expanding the business with your existing customers.
1. Expand your business with existing customers
For me the opportunities can be summarized in “More sales”, “Cross sales” and “Up sales”:
- More sales is about looking into who does not buy from you. Many customers have multiple suppliers. An opportunity to increase your share-of-wallet. Many companies have multiple departments, businesses and decision makers. Do you do business with all?
- Cross sales is about finding new products adding to your existing sales. Service contracts and consumables are typical examples.
- If you can convince your customer to change to a more high-value product in your range you will automatically increase your revenues.
2. Take market shares from your competitors
This classic battle is not easy to win. We are all averse against change since it poses a risk, so normally market positions are fairly stable. Winning customers from competitors demands that you are better, more visible, easier to remember and simpler to choose. And of course that you are available and simple to buy from. An established formula is if your SOV (Share-Of-Voice) is higher than your SOM (Share-Of-Market) you will take market shares, and vice versa.
3. Expand the playing field
Are there possibilities outside of the market you have defined today? Are there other segments where your product will make something better, easier, safer, faster, cheaper or less risky? Framo, a part of Alfa Laval, is a good example. In the 1960’s the company revolutionized the shipping industry by inventing the high-pressure, hydraulically driven submerged cargo pump. Since then the company has expanded into a range of markets in need of pumping huge volumes of water in a safe and reliable way. Offshore, aquaculture and data center cooling is only a few examples of “new thinking” that has contributed to Framo’s fantastic success story.
And if you want to discuss business opportunities, you are always welcome to contact ulf@sfinxagency.se
