Ignite Growth in your Business

IGNITE GROWTH

(http://www.streethockeymillionaire.com/IgniteGrowth.pdf)

How Businesses Can Grow Profitably

JAMES ALLAN
President, SHM Consulting
TABLE OF CONTENTS

1.0 Introduction 3
1.1 Objectives 3
1.2 Action Plan 3
2.0 Growth Strategy 5
3.0 Growth Tactics 7
3.1 Product Improvements 7
3.1.1 Upgrades to Current Products 7
3.1.2 New Product Development 7
3.2 Service Improvements 8
3.2.1 Tweaks, Upgrades 8
3.2.2 New Delivery Methods 8
3.3 Relationship Improvements 9
3.3.1 More frequent Communications 10
3.3.2 More Value for Clientele 10
3.4 Attract/Retain More Clients 11
3.4.1 Public Relations 11
3.4.2 Advertising 12
3.4.3 Word of Mouth 12
3.4.4 Networking Events 13
3.4.5 Referrals 14
3.4.6 Website Upgrades 14
3.7 Increase Web Traffic 15
3.4.8 Electronic Newsletter 16
3.4.9 Sampling 17
3.4.10 Succession of Yeses 17
3.4.11 Bundling 18
3.4.12 Joint Ventures 18
APPENDIX 20
Action Plan to Ignite Growth 21

1.0 Introduction

The first decade of the Twenty-First Century gave the business community many ups and downs. The decade began with a dot com bust, and a consolidation of the technology industry. Then, there was massive growth for the next six or seven years, until the Global Financial Crisis in late 2008 forced many governments to inject money into their economies, in an effort to avoid collapse.

While the financial crisis allowed businesses to cut back in 2009, it looks like 2010 should be the beginning of another few years of growth.

While experts are predicting growth in the economy, business leaders are looking for ways to have their business cash in on the up-tick in the cycle.

Businesses who are looking to grow in the current climate should select a growth strategy, and then execute the corresponding tactics. Methods to select a strategy, and several growth tactics, are described below.

1.1 Objectives

Before looking at strategy and tactics, determine your objectives for the year. Consider where you want to be at this time next year. This will help guide you through the rest of the information.

1.2 Action Plan

An action plan is placed in the Appendix. This action plan will allow you to chart your objectives, strategy and tactics so that you can plan to grow profitably this year.

To use the plan, begin by writing your objectives at the top. Then fill out the Strategy Grid by using a checkmark to indicate where your strategy is. Use one checkmark (? ) per line for products, services and relationships. (details on what each of the terms means can be found in Section 2)

Finally, examine the tactics possible to grow your business. (see Section 3 for more details on each tactic) Determine which quarterly period you intend to begin or upgrade the tactics you are using. Use a checkmark (? ) or write in details for the quarters you intend to use the given tactic.

2.0 Growth Strategy

Developing a strategy for growth for most companies includes some level of differentiation. Being the same as your competitors in all regards does not give consumers much of a reason to choose you over the competition.

A good tool to visualize and select a differentiation point is the Strategy Grid . The grid allows a company’s executive team to visually and simply select a strategy which allows them to differentiate themselves in the client’s mind. This differentiation will allow them to grow their business. The grid looks like:

Company X’s Growth Strategy Competitive Superior Breakthrough

Products

Services

Relationships

The grid shows a number of areas each company is involved with, and it shows different levels the company can achieve. Products refer to the specific items a client will purchase. Services are the operations component required to get the product to the client, and relationships are the relationship between the company and the client from the time the client or prospect is introduced to the company until the client indicates they no longer wish to be involved with the company.

The levels the company can achieve are labeled as Competitive, Superior and Breakthrough. They increase in value and differentiation from left to right. As time passes, there is attrition from right to left. For example, anti-lock brakes were a breakthrough idea at the time. A few years later, they were standard equipment, so were relegated to the Competitive category.

When filling out the grid, it is a good idea to show where your major competition lays. This may help to determine where openings are, and where your opportunity for differentiation exists.

How can this help you?

Once the executive team decides on a strategy, tactics can then be examined. The tactics to be used should align with the strategy selected. The strategies and objectives of the company should be communicated to all employees so that personal goals can align with business goals.

3.0 Growth Tactics

There are several proven tactics to grow a business. These tactics are organized in four main areas, as follows: Product Improvements, Service Improvements, Relationship Improvements and Methods to Attract/Retain More Clients.

3.1 Product Improvements

Some businesses need to improve their products just to keep up with the competition. Other businesses wish to stick out from the field by having a breakthrough product which attracts customers. Whatever your intent is, there are two paths to follow: upgrades to current products and brand new products.

3.1.1 Upgrades to Current Products

If you’re keeping a close eye on the competition, you should know how close your products compare. If you’re keeping a close eye on your market, you should know what clients are looking for.

When you put these two components together (where you stand with the competition, and what the market is looking for), you should have a clear view of what upgrades will be the most beneficial in growing your company.

3.1.2 New Product Development

New product development can be quite exciting, as some customers are always looking for the latest and the greatest. The down side is that the time, labor and materials required to create new products can be quite costly. Since the products are new, there may be no proven market for them.

Due diligence should be done before engaging in new products.
3.2 Service Improvements

Service improvements can be anything from a change in the method of delivery to speed of delivery. Technology has enabled many examples, including the way that customers bank and the speed with which customers can buy music.

Service improvements are often a result of the desire to increase customer satisfaction. Many companies, however, have worked hard to differentiate themselves from the competition by improving their service levels. This is especially true when products are seen as commodities. In Canada, for example, the big five banks have taken steps to improve customer service in order to stay ahead of their no-fee competitors.

3.2.1 Tweaks, Upgrades

Service improvements can be made by examining the current model, and tweaking it to maximize customer satisfaction. When people are involved, this can be a matter of being more friendly and empathetic towards the client. When electronic means are involved, this can be a matter of tweaking the customer interface so it is more user-friendly.

The customers are usually the best judge of how well the service is meeting their needs. It’s a good idea to survey customers, where possible, on how they judge the service. Asking them for suggestions can also steer a company in the right direction. A family entertainment center that I worked with a few years ago didn’t know why business was declining. They assumed it was the increase in prices or the state of the economy. When customers were surveyed, though, a surprisingly high number of people mentioned how cleanliness was an issue.

3.2.2 New Delivery Methods

Sometimes a tweak is just not enough. To grow your business this year, you may need an overhaul on how you deliver your service.

It’s important at this point to clarify between form and function. Function is the purpose or work involved to complete a task, while form is the methodology used to complete the task. An example would be evident in banking. The function of having a central repository to store your money, withdraw when necessary and pay for goods, has not changed in the last thirty years. However, the form has changed dramatically. Thirty years ago, a person would have to go to the bank during normal bank hours. Then, she would have to fill out forms to withdraw money, verifying ownership of the account. With money in hand, she would go to the store and use the cash to pay for the items.

Nowadays, much of the banking is done electronically. The function remains the same, but the form has changed dramatically. Money can be deposited in a machine any time of day or night, and no cash is necessarily needed to buy items at a store. The money can be withdrawn electronically from the bank directly to the store.

When considering possible new delivery methods this year, you should look at the functions that must be performed. Then, determine if these functions can be performed using more efficient forms that meet or exceed current customer satisfaction levels.

3.3 Relationship Improvements

Because information is so easy to find nowadays, this is one of the most obvious ways for a company to stick out. Product and service innovation can be discovered fairly quickly through websites and sales brochures. However, the relationships that exist between a client and a business are becoming sacrosanct.

In terms of customers, there are two main kinds: transactional and relationship. Transactional buyers will look at all the options each time they need to purchase a product, and normally choose the lowest-cost product which meets their needs. They are not your best long-term customers since price usually tends to drive their buying decision.

Meanwhile, relationship buyers will choose a company to buy from, and then stick with them until a key driver steers them away from that company. They are excellent long-term customers since they tend to stay loyal longer, and can then become company evangelists.

To engage buyers, relationships can be started and enhanced through several methods. Two methods which have been proven effective, (and simplified with technology) are more frequent communications and more value for clientele.

3.3.1 More frequent Communications

By communicating more frequently with prospects and clients, there is a shorter lead time to introduce new products and services. With more frequent communications, as long as it is value-laden, the customer will be more likely to read and listen to your messages.

Some things which can be communicated periodically are industry news, methods to enhance usage of your product and news of what your company is doing to help the community. Hotels and airlines have started sending emails to clients to advise them of their current reward status. As long as the item being communicated is of value to the client, the client will be appreciative and continue to want to receive the news.

Electronic newsletters have become quite popular due to their ease and reduced costs. If electronic newsletters are used, the newsletter should reflect the quality of the company sending it.

3.3.2 More Value for Clientele

A relationship can be nurtured between a company and its client if the company is adding more value to the client’s life. Many of your competitors are trying to steal your customers, so it only makes sense for you to continually show why you should remain their preferred vendor.

Methods to add more value vary widely, depending on the industry. Often, there are rewards for being long-term and/or frequent customers. These rewards also serve to lock-out competition, by encouraging clients to continue to buy from you.

3.4 Attract/Retain More Clients

A company can grow its clientele by having more prospects being aware of the company. The converse is also true: they can’t buy from you if they don’t know you exist.

While there are several methods to raise visibility of your company and its benefits, twelve of the most popular proven techniques are outlined below.

3.4.1 Public Relations

Public relations involve making your clients and prospects aware of the progress you are making. The effort and possible expenses spent on this tactic should be optimized by directing the efforts towards the most likely places where your clients and prospects gather. What magazines, trade journals and newspapers do they read? Are there popular blogs and websites which they are attracted to?

Putting out general press releases may seem like the simplest thing to do, but targeted attacks are always better.

The journalists who turn the press releases into articles are people, just like the rest of us. To increase your chance of having a press release picked up by the appropriate media, it’s a good idea to develop a relationship with reporters and editors in designated media. Drop them an e-mail to let them know what you think of their article. Invite them out to lunch. Ask them provocative questions regarding their opinions.

Another aspect of public relations is getting involved with the community. Festivals and charity events are often looking for sponsors and volunteers. When I consulted to Cisco Systems, the company was sponsoring a popular event in Ottawa called the Cisco Bluesfest, and Cisco employees were often helping out at the local food bank.

In the business community, there are often business networking groups looking for sponsors in return for allowing the sponsor to get in front of its members.

3.4.2 Advertising

Advertising continues to be a popular method of attracting new customers. Just ask Google. As mentioned above, the advertising will get its most bang for the buck if directed at your target market. Print advertising has the most staying power since the articles do not have time periods of visibility. Internet advertising is very cheap compared to other media, but the attention span of an internet surfer is usually much less than that of traditional media.

A capital outlay of money is needed for any advertising, so return on investment should be monitored closely. Also, advertising costs are one of the most negotiable prices you’ll ever find. So, always attempt to negotiate.

3.4.3 Word of Mouth

Nothing can convince a prospect to investigate your company more than a glowing satisfied customer. While most businesses want and expect satisfied customers to tell others, there are several ways to encourage word of mouth referrals.

Several technology companies have started User Groups and Forums to connect users. This allows your customers to get together to optimize their experience with your product.

Social media has allowed people to connect quickly with their peers and friends. Several companies are using social media methods to turn the sales funnel into a sales hourglass, where your best customers are then engaging their friends and family to get interested in your company.

Other ways of encouraging word of mouth is by using easy to remember product names and URLs. It’s easier to tell a friend about the Genesis router than the Router model 952PRQ, for example. URLs which are easier to spell, as well as easy to remember, will get more clicks from curious friends.

A step further would be to give referrers status and recognition on your company website. Let them have their own landing page on your website, where they can show their recommendations for product purchases and usages. It’s fairly easy technologically, and it’s always easy to remember and spell your own name!

3.4.4 Networking Events

Companies don’t buy products and services. People at companies buy products and services. The quicker you can connect with the people who buy your products and services, the quicker you will realize what tactics will work the best to grow your business. The most proven methods are networking and referrals.

There are networking events which attract all types of potential buyers. Examine trade journals, local newspapers and the internet to determine which networking events are most likely to attract what you would deem as your ideal customer. Then, go to the events and see how correct your hunches were. Meet people and give them value.

If a certain networking event is particularly suited to your ideal customer, make efforts to get on the executive. Often, there is an executive position regarding membership. Being in charge of membership will allow you to speak with current and new members to determine what their current challenges are.

Meeting people at networking events realizes two objectives: gathering information and starting relationships. A good “next step” after an event is to send a note to the person you’ve met, preferably with a white paper or article that you can further discuss at a later date.

3.4.5 Referrals

Another method to expand your network is to ask for referrals. Speak with satisfied clients to see if they can recommend one of their peers. It is usually better, when asking for referrals, to be specific in your request. Don’t ask general questions like: “Do you know anyone else who might benefit from our services?”. Rather, try asking a more targeted question like, “Do you know a marketing executive at a local technology company who might benefit from our services?”

While the referred party is more likely to take your call when recommended by a friend, a new relationship needs to be developed before business will usually take place.

3.4.6 Website Upgrades

The internet has become a popular method for customers to research and buy products and services of every kind. A website is no longer a luxury for most companies, but is becoming a necessity as well as a 24-hour sales tool.

Having a website does not guarantee anyone is ever going to find it. If you deal with corporate customers, your client will probably check the website as part of their due diligence to ensure the sanctity of your business. The website should reflect the quality and identity you wish to purvey to your prospects and clients.

The website should, at a minimum, include information on how customers will benefit by dealing with your company. As with all marketing collateral, there should be both a call to action, and information detailing how the visitor can contact you both online and offline.

Advanced websites have lots of content which will give value to the visitor. Multimedia content, such as audio and video, are becoming increasingly popular as bandwidths become larger and internet service providers switch more of their clients to higher download speeds.

3.7 Increase Web Traffic

While a retail store can see people enter and leave, websites typically have very little information on who is visiting. Your business can greatly reduce the lead time to finding new customers by having visitors to your web site tell you who they are and how to contact them.

The most popular method of having visitors identify themselves is by offering them a special report, white paper or a subscription to your company newsletter if they sign up when they visit your website. The subscription gives the most mileage because it allows you to touch the customer periodically, and thus build a relationship over time so that trust can be developed.

Once you have a system in place to allow visitors to identify themselves, you should take the necessary steps to increase traffic to the site. The internet offers a myriad of methods to increase traffic. One of the most potent methods is to rank extremely high on google (and the other search engines) when web surfers are searching for your products and/or their benefits.

Search Engine Optimization (SEO) has become a science on its own, and there exist hundreds of companies whose sole purpose is to optimize your company’s website for the search engines. As a minimum, you should identify the phrases that you would expect your ideal customer to use to find you. If you run a dance studio in Memphis, check how high you rank with “dance studios Memphis”. If there is room to grow, ensure the title of the pages in your website include the phrase you want to monopolize.

Then, you should add plenty of content on your pages that use the phrase – “dance studios Memphis” for the above example. Adding blogs, articles and videos which discuss the search phrase will also increase your company’s ranking on Google, especially if the blogs, articles and videos are posted on different websites with pointers to your website.

In addition to SEO, you can increase your traffic by working with other website owners who are after similar markets to you, but offer different products. Tire companies, for example, could work with transmission shops to mention each other in their newsletters, thus driving targeted traffic to each other’s website.

There is also plenty of opportunity to pay for advertising on the internet. Typically, you will post an ad in a location where you think your buyers will be visiting, and they will have the opportunity to click on your ad. Google ads are strategically placed, and will direct your ads to the most likely place your prospects will be visiting. You will usually be paying per click (PPC), so you won’t pay anything if no one is interested in your ad. There is also a limit, usually, to prevent your advertising budget from expanding exponentially if the ad is popular.

3.4.8 Electronic Newsletter

As mentioned in the last section, a subscription to an electronic newsletter is an excellent method to allow website visitors to identify themselves and to give you a method to contact them. It opens a relationship, and the relationship will continue as long as you send value-laden information in periodic newsletters. Telling the subscribers when the newsletter will be delivered, and then continually delivering the newsletter at that time, will let trust grow and the relationship develop. For example, sending a newsletter every second Tuesday, or the 15th of the month, will allow your subscribers to learn to trust you.

People’s appetite for information usually appears sporadically: normally when a deadline looms, or the need for specific information suddenly appears. So other methods to deliver information have become popular. Web logs (blogs) and tweets on Twitter have become popular methods to give your customers more value in a time-variant method.

3.4.9 Sampling

One of the intents of giving customers value through the internet is to build trust. It lets prospects sample what you are all about, and gives them an idea of how well your company will fit into their needs.

Sampling allows your company to exhibit their wares, without giving away the store, so to speak. Fitness centers, for example, know that a lot of the prospect’s fears will go away once they’re on the equipment. Since joining a studio can be a substantial buying decision, centers will allow prospects to come in and try the equipment for free for a short time before committing.

Another example is test driving a car. Few people will spend tens of thousands of dollars without at least sitting in the car they wish to buy. Sampling is used in many industries, and is another small step to develop trust between the company and its client.

3.4.10 Succession of Yeses

According to Doug Hall of the Eureka Institute, the average person is faced with 3000 sales and marketing messages a day. No one has enough money to buy everything we see, and many of us will say No to everything.

So when you enter a conversation with a new prospect, the likelihood of them saying No to buying your product is very, very high. A good method to lower your prospect’s resistance is to get them to answer Yes a few times. Train them to say Yes by starting with a lot lower commitment. Perhaps start with “Can I send you some information to help your business?” Then follow up with a phone call, and ask them if they got the information. Then ask if you can buy them a coffee, or meet them for lunch. Each time that they agree with your request, get a little more information on how you can help them.

A succession of yeses will take longer than the direct approach, but will allow you to set up a relationship and help you determine if you want to continue to work with this customer. If you do want to continue, you will have a much deeper base to work from, and the follow on work should be much easier to acquire.

3.4.11 Bundling

A great way of increasing your top line is to sell more products to the same customer. While you are in the sales process, it is a great opportunity to offer your prospect a few options. This alters the buyer’s perception from “Yes or No” to “Which option is best for me?”. This can be quite powerful.

These options would typically be:
a) original interest
b) original interest plus logical add-on
c) original interest plus logical add-on plus everything you deem useful for this prospect

Many companies have sales objectives and incentives for bundling of products and services. It’s up to the executive to determine if the bundled products should be offered at a discount or not, but there is usually some financial incentive to act now. Since you are dramatically reducing the sales cycle for the add-on products, the argument can be made that you are not actually losing profits by reducing the costs of the bundled products.

3.4.12 Joint Ventures

Every business realizes that the cost of acquiring new customers is expensive. So, if you’re willing to share your customers with another company who is willing to share their customers, the sales cycle is dramatically reduced.

Joint ventures are typically done between companies who are going after the same customers, but have different products to sell. This way, it is a win-win-win situation for each of the companies and the customer.

These ventures are usually short term, since one of the partners typically does better from the arrangement. Finding a joint venture partner to work with involves a traditional sales cycle. Trust has to be established between you and your partner, and negotiations have to be made as to what each partner will contribute to the relationship.

When joint venture deals are successful, there is tremendous gain on each side.

APPENDIX

Action Plan to Ignite Growth

Action Plan to Ignite Growth
Created:
Growth Objectives for Year:
1.
2.
3.
4.
5.

Growth Strategy:

Growth Strategy Competitive
Superior Breakthrough
Products
Services
Relationships

Growth Tactics:

Q1 Q2 Q3 Q4
Product Improvements
-- upgrades, new releases
-- new products
Service Improvements
-- tweaks, upgrades
-- new delivery methods
Relationship Improvements
--more frequent communication
-- more value for clientele
Attract/Retain More Clients
-- Public Relations
-- Advertising
-- Word of Mouth
-- Networking Events
-- Referrals
-- Increase Traffic
-- Electronic Newsletter
-- Website Upgrades
-- Sampling
-- Succession of yeses
-- Bundling
-- Joint Venture