If you are in business long enough, you will inevitably face a period when growth stalls and you struggle to figure out what comes next. Following are three simple questions you can ask to find new opportunities and jump-start growth.
Are you solving a problem that’s too small?
While growth sometimes stalls due to increased competition, it often stalls simply because you’ve saturated the market for your existing products or services. Signs that this may be the case include decreasing order sizes, decreases in initial orders and increases in follow on services, or longer sales cycles. If you suffer from any of these conditions, you may want to “zoom-out” and look at your customer or market from a different perspective. For example, one of our clients built a business providing commercial printing services to the pharmaceutical industry. If management had stopped there, the business may have quickly hit a wall. However, they zoomed out and realized that printing was just a small portion of the overall problem their pharmaceutical customers were trying to address. Printed materials were often part of a larger overall marketing effort, which included mail list management, postal services, data management, and analytics. By adding these capabilities, management developed complementary revenue streams, built long-lasting customer relationships, and created formidable barriers to entry.
Do you really know your customers?
It’s not uncommon for businesses to get stuck in a rut when trying to identify potential new offerings. To identify new opportunities companies often result to polling employees or customers. The former often fails because of orientation—employees view the world from the company’s perspective rather than that of the customer, increasing the risk of failure. Polling customers instead of employees may appear to solve that orientation problem; however, customer responses will typically focus on improving existing aspects of your product or service rather than uncovering significant new opportunities.In Disrupt, author Luke Williams notes that every industry has its own clichés, “the widespread, hackneyed beliefs that govern the way people think about and do business in a particular space.” Great new products and services succeed because they address the pain points that customers blindly accept. Unfortunately, because these pain points are blindly accepted, they are rarely identified by interviewing or polling customers. The best—and perhaps only—way to identify them is get out and observe customers in action in their own environment.
Is your value chain stale?
Every good or service has a value chain—activities or processes that add value to its product or service. In the case of traditional razors, Gillette adds value by performing research and development to identify new products, designing products, purchasing those products from third-party manufacturers, entering into distribution agreements with retailers, and marketing products to consumers. However, Harry’s upended the market by changing two aspects of that value chain: purchasing its own manufacturing facility and marketing directly to consumers. Both of these changes dramatically decreased costs for the company and its customers, and helped the company build a steady stream of recurring revenue.
Finally, keep in mind that some of the biggest opportunities are often identified by outsiders, so try to approach each issue with a beginner’s mind. Doing so may help you unearth new opportunities to generate long-term, sustainable growth in your business.
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