Monthly Archive September 2014

Good Companies Grow, No Matter The Market Conditions

Introduction

Good companies grow and every single business demands growth and double-digit growth is the vision of every dedicated business owner, even when uninspiring results show up at the end of the quarter.

Most business owners need a funnel to navigate their way toward considerable, sustainable growth.  It can be done even in a slow economy as demonstrated by such companies as Harley Davidson, Starbucks, and WalMart.  Even smaller companies such as Paychex and Oshkosh Truck have been able to make gains in revenue, gross profits and net profits.

Here are 5 simple techniques that show how good companies grow:

1. Hold On To Your Customer Base:  Keep the growth that you have already earned by coaxing customers into complex relationships that make it a hassle for them to switch to your competitor.  Modify your products/services using data gathered from your customers giving you an advantage.  Proactively managing customer defections will help you predict and anticipate them. Bonding with customers wherever sentiment is tied to an interaction is another great way to retain them.

2. Gain Market Share At The Expense Of Your Rivals: Give customers a reason to abandon a competitor’s product/service for yours.  Do what it takes to lower the switching costs.  Pulling customers away from a competitor can be difficult, so you must devote many resources to raiding their customer base.  Offering higher value and quality are crucial to this end.  Buying a competitor is another way to do this, but costly in the short term.

3. Take Advantage Of Market Position:  Illustrate where growth is going to happen by spotting it early.  This can be done by watching the industry for shifts in buying criteria, product or service innovations, and population trends.  You must be able to spot positioning opportunities to make the most of them by continually using a systematic approach to the process.

4. Occupy Adjacent Markets: Before moving into a nearby market, decide whether it offers significant long-term growth and profitability.  Determine whether you have an advantage over a competitor, and ensure you can match its standards of quality and value.

5. Invest In New Lines of Business:  If you take this approach, never overpay for a new line.  You must find simple strategies instead of complex ones, and partner with the new business by assessing its leadership team and balance sheet.

Conclusion

For a business to have a successful growth portfolio, may not need all five of the disciplines mentioned above, but it must contain more than one for the company’s growth.  Only a balanced growth portfolio can keep an organization growing when the market shifts dramatically. This is how good companies grow.