11 Dec Do All Businesses Need to Grow?
How important is top line growth for your business? Some business owners and executives would say it is essential. They see:
- Unmet needs of their current customers, and/or
- Opportunities to serve new customers, and/or
- A competitor’s weakness that can be exploited to gain share.
Unfortunately, not every company that sees these opportunities is able to seize them. Why not? Often the opportunity is so “obvious” that we rush to take it without really understanding. For example, if we’ve concluded that a large competitor’s service image is slipping, we can immediately launch a targeted sales and marketing campaign. But what if the slippage is only in one region? Or what if our service image isn’t so hot? What if some of customers don’t care as long as the price is low?
The solution: careful vetting of the opportunity and possible responses. In most cases, this means some kind of market research to verify the opportunity and test alternative ways to respond. Not necessarily expensive or time consuming research: but information must be gathered. Skip this test at your peril.
Does this mean every business needs top line growth? Clearly not. Some business owners focus on steady profits and cash flow to assure their income. They may see growth initiatives as adding undue risk. This mindset has proven successful for many small and some mid-size businesses. But it does beg one important question.
What if your competitor(s) see one or more of the growth opportunities listed above with your customers?
Obviously, this could mean a big impact on the steady profits and cash flow. What if you lost your largest customer? What if the margins on your biggest product or service were squeezed? You get the picture.
The solution: think about growth opportunities before the other guys do. Especially:
- Unmet needs of your best customers, particularly ones adjacent to your products and services
- Your biggest competitive vulnerabilities, remembering that Jeff Bezos says, “Your margin is my (growth) opportunity!”
By proactively thinking about, then acting on these opportunities and risks, every business will improve its long-term viability and potentially find important new sources of revenue. A classic example is a manufacturer who adds implementation or other support services to complement their products, generating additional revenue and making it harder for competitors to replace their product.
One practical way to discover possible needs and vulnerabilities is spending a day (or more) “in the shoes” of your customer. But not in a typical “let’s go to lunch” mode. Instead, let’s follow the user(s) of your product/service through the part of their work day where they use the product. Get out of the way and observe (the people best at this are corporate anthropologists but anyone willing to park their ego and watch carefully can be successful). This type of careful study, with a few customers, almost always generates ideas and suggestions.
Bottom line: whether your business aspires to grow or “just” wants to remain successful, you need a growth mindset.