Four Ways to Grow Your Business!

Want to grow your business but unsure how to go about it?

In the late fifties a gentleman called Igor Ansoff created his now well known matrix, which highlighted four specific ways in which a business could develop strategies for growth. Now that sounds nice and simple when put that way, but is it really as simple as that?

Ansoff’s matrix was first seen in the late fifties in the Harvard Business review and is regularly used today by marketers to provide a structured way of developing a range of strategic choices by which to grow a business. The matrix, offers four potential strategic directions for growth. The matrix takes into account the ability to grow a business by leveraging new or existing products via new or existing markets. Ansoff named these four strategic directions as follows;

  1. Market Penetration
  2. Product Development
  3. Market Development
  4. Diversification

ANSOFF MATRIX

Present Market/Present Products= Market Penetration

This is the most simple of the four strategies. In this situation there would be no change to product or the markets the organisations is targeting. Ansoff suggests that to grow under these circumstances would require a market penetration strategy.

This would mean increasing market share at the expense of your competitors. In a static market you would gain share at the expense of your competitors. This could result in a price war. Do you have the capability and commitment to defend such a situation? Typical ways of increasing market share would involve a mix of increased advertising, price discounting and using push (direct ) selling strategies into existing and clearly defined markets.

New Market/Present Products = Market Development

Here we are involved in marketing existing products to new markets. Typical new markets could be simply geographic expansion; exporting for instance. It could be a new use for an old product. For example water-soluble polymers (product) originally designed for rapid control of urine capture in babies nappies were marketed as an additive for potted plants that needed a constant source of water. This is an example of an existing product in a new market.

Present Market/New Products = Product Development

This is where we would market new products to existing markets. The motor industry is a classical example where product development is used to gain a competitive advantage in an existing market. Motor companies develop new products on regular basis to keep ahead of the market. Product development involves an amount of risk due to the time and effort spent on developing a new product and marketing before you create revenue. However the rewards are there if you get it right! It is also less risky in following a strategy of product development as opposed to market diversification.

Two great examples of product development include quartz watches and digital cameras. These products changed their markets dramatically. Kodak have since the evolution of digital cameras decided to stop making traditional film cameras.

New Markets/New Products = Market Diversification

This would be where we would market new products to new markets. This is termed Market Diversification.

There are two types of diversification; related and unrelated. For example the brewing industry and manufactures of crisps are different markets but can be considered related (food Industry). On the other hand should the brewing company decide to manufacture cars then this would be considered unrelated diversification.

Market Diversification is the highest risk area in developing marketing strategies for growth. Getting it wrong here can be expensive. However many companies have been successful in pursuing a market diversification strategy. As an example supermarket chains in the UK and overseas have diversified into non food related products such as insurance and banking with a degree of success.

To be successful in this strategic growth arena you must show a real commitment to the program or you will have an increased chance of failure. The supermarket chains who went on a market diversification strategy also had the advantage of a large and mainly loyal existing customer base who went on to buy products that were outside of the supermarkets normal scope of supply. Being able to easily access customers when following a market diversification strategy can significantly minimise the downside risk of failure.

How do you grow your business?

Well how you go about it is entirely up to you. You can choose to develop plans in all four strategic arenas or mix and match depending on your overall capability to manage a varied strategic growth plan. Think about how you are planning to grow your business through products and markets. Complete the Ansoff matrix and see if you have sufficient plans in place that will ensure your business continues to grow and proposer.

If you need any help in developing growth in your business then contact us and we will be pleased to help you think and develop growth!

Develop a Keep In Touch Strategy For Sales Growth

Research shows that approx 50% of all sales are made on or after four points of contact.

How do you keep in touch (KIT) with your clients? Do you have a KIT strategy?

Most clients  only buy when the sales person or selling organisation has established a degree of trust and empathy that instils sufficient confidence in the buyers mind to part with cash. Building trust and empathy with clients does not happen overnight. It takes time and effort. In some situations you will have to “touch” the client many times before you make a sale.

Developing and implementing an effective strategy to keep in touch with clients is therefore essential if you want to see your sales grow.

So how do we keep in touch? There are two principle means of keeping in touch with clients.

  1. Face to Face
  2. Indirect

Face to face encounters include meetings, exhibitions, association meetings, general networking etc.

Networking is a powerful part of a keep in touch strategy. Networking allows you to meet existing and potential clients in a friendly and non threatening atmosphere. Over several weeks clients will come to recognise you and begin to build trust in you as an individual. Trust and sales performance go hand in hand. Regular contact is an essential part of developing trust.

So where should I carry out my networking?

Most industries have a trade association which host networking events. Join at least one trade association and resolve to meet as many people as possible. Always follow up chance meetings with a phone call or at least a “Nice to meet you” e-mail.

Check out your local chamber of commerce. They hold regular network events where you can meet other business people and assess whether or not there may be potential to do business. The Institute of Directors in another member  association who hold regular networking and briefing meetings for directors.

Check out your local university and colleges who often hold network events for local businesses. Local newspapers post regular business briefings and also announce local business network meetings.

Sign up to relevant trade association newsletters. These often provide invaluable information on forthcoming events, industry statistics and often have a spotlight briefing on a successful business story. They can be a good source of leads too.

Social media is in fashion. Networking over the internet is becoming more acceptable. LinkedIn is a good example of a free social media service where you can connect with other industry professionals and decision makers.

Finding creative ways to keep in touch is a key skill for any professional sales person. The more points of contact you have with a prospect the more likely you are to develop a ongoing sales relationship.

What should I do when I meet someone at a networking or association event?

When meeting someone at a networking meeting or exhibition ensure you keep to the following guidelines;

• Show interest in the other party and their organisation by asking relevant open ended questions.

• Do not try to sell them something at the first point of contact.

• Moreover establish if it would be appropriate for you to meet them later to discuss exploring opportunities to work together.

• Exchange details if appropriate.

• Follow up with a telephone call or e-mail within a relatively short period.

Indirect Methods

A newsletter is an excellent way of keeping in touch with existing and prospective clients. Make sure that your newsletter contains a variety of topics that will keep your clients interested. Use it to demonstrate your level of expertise in your chosen field and not as a “buy from us today” communique. That way the client will look forward to receiving the newsletter and when they are next in need of your products,or expertise you will be at the forefront of their mind.

Set up a google alert so you can track what is happening in the clients world. Drop them a letter of congratulations when you hear of good news. Maybe they have just won a new contract or opened a new office. Whatever it is find a way to let them know you are still interested in them.

Subscribe to industry specific journals. This provides you with up to date information on your clients. You may even consider advertising in journals where they advertise.

If you are exhibiting at a conference why not invite prospects and existing clients to visit your stand to bring them up to date about your new products etc.

Invite them to a company open day.

There are lots of different ways to keep in touch. Be creative. You might just be pleased with the result.

Work at keeping in touch. In the end it will pay dividends!

Filling your sales pipeline

picture1Successful sales people are masters at generating opportunities. More so they understand the importance of developing a full and ongoing pipeline of sales opportunities. So how do we ensure that we have sufficient number of sales opportunities in our pipeline?

Here are some tips to help you search out those opportunities;

  • Email can be a great source of opportunities. When did you last check back through your mails? Use the follow up flagging system in Outlook to classify any mail that could be a prospect or needs follow up. Then from time to time search through the mails marked for follow up.
  • Previous clients. Look back in your records and those of your organisation. Check out clients that have been supplied in the past. If you haven’t been in touch for some time schedule a call. You might be pleasantly surprised at the response.
  • Trade magazines. All trade magazines have features and advertisers. These often provide information on companies that you were unaware of and the issues your industry is facing. The amount of leads gained from trade press alone should be worth the subscription.
  • Existing clients. These should be easier to move along your pipeline as you already have a business relationship. Make sure you are up to date on their activities and purchases. Use lots of open questions to find out as much as possible about their issues, problems, what keeps them awake at night. Solve those issues and you are on your way to making more sales.
  • Exhibitions. One does not have to be an exhibitor to take advantage of the opportunities that attendance can bring. Where else can one bump into many people in one place at a time and start up a conversation. It’s a lot easier than cold calling and you can meet literally hundreds of people in the day. Why not book yourself on to an exhibition? Set yourself a task to meet 20 people in the day. Remember to follow up.
  • Networking. Make it a behavioural trait to put as many people in contact with others who can help each other. Your investment will pay back in time with people referring opportunities to you.
  • Business cards/Contacts list. Review these regularly. We all forget how many people we have in our contact arena. Keep accurate records in a CRM database.
  • Newsletters. If like me you have a large number of contacts and it is impossible to maintain regular contact then newsletters and promotions can be a valuable way of maintaining contact and building a relationship.
  • Internet searches and directories. Unbelievable source of information.
  • Library (main local) has access to company lists and records. They also sell marketing lists with contact details.
  • Use a call centre. External companies will for a fee take over some or all of your outbound prospecting and cold calling. They should generate appointments for you to follow up and convert into customers.
  • PPC or pay per click. Google, Yahoo and MSN all have cost per click advertising. Great way to get to the top of the search listings. Useful when you have a niche product that can be sold on line.
  • Google Alerts. Set up a Google alert for things like “new restaurant <in your town>, Increases capacity in <your product types> etc and you will be prompted with automatic alerts on new opportunities.
  • Invest in a good CRM system (customer relationship management system).

The above list is not exhaustive and many other ways exist to generate leads to fill your sales pipeline.

Good luck with your prospecting!

Quick negotiating tip – Challenging an opening bid

One of the golden rules in negotiation is – always challenge an opening bid – even if it seems attractive at first glance.

Many negotiators fail to challenge an opening bid as they fear aggravating the other party. On the other hand some hard ball negotiators relish diving in headlong and challenging the bid.

That is expensive. You will have to do much better than that!

If you do not challenge the bid, you are simply storing up problems for later in the negotiation, as the other party believes you have psychologically accepted the proposal/price. However challenging an opening bid aggressively head on might set the tone for the rest of the negotiation making life more difficult than it needs to be.

The key here is to challenge the bid without being overly aggressive. One possible way to do this is to ask the other party to justify their offer.

Tell me………How did you come to that valuation – assessment – price etc?

Do this with a mildly curious sounding voice and you can subtly challenge the bid without causing offence. The other party now has to justify their initial pitch. Done well the negotiation should enter into a phase of dialogue based around value propositions rather than positional statements.

The reason why we think our offer represents good value is…………………………

This justification of their opening offer is likely to release previously unknown information into the open.  This information can often be used to glean where the real value lies in any negotiation and can set a positive tone for subsequent discussion.

Remember, a good negotiator will challenge opening bids. Be prepared to justify your offer. Having a well prepared response to a challenge  will not only make you look professional but increase your chances of securing a good deal for both parties based on shared value.

Small is the new big, trust is the new competitive advantage

I came across this interesting article written by Peter Bregman on the Harvard Business publishing website.

It suggests that the concept of being big as a source of competitive advantage is on the wane. As more and more large organisations are laying people off, some of the decision making processes are being questioned by middle management. The climate of trust both inside and outside the organisation are impacting negatively on employees and customers alike.

We simply don’t trust companies anymore. We trust people. And in big companies, it’s hard to even find a person to trust as we scream “operator” into our telephones only to get transferred to another menu whose options have changed.

It makes for interesting reading. It raises the questions about leadership and trust at a time when most people are feeling insecure about their futures. If Bergman is right then small and responsive companies who can build strong relationships with their staff and customers could be in for a period of sustained growth despite the current economic situation.

I believe he has a valid point.

Link to the article