Most businesses do not become stagnant overnight, and in many cases, this stagnation can last for years, and in some cases decades.
Often, business leaders (CEOs, Entrepreneurs, and Business Owners) are in denial because they only associate stagnation with businesses that return the same revenue numbers year after year. However, they fail to acknowledge that a company is also stagnant if it's in the endless cycle of "expanding and shrinking", without any long-term growth.
For example, we often see businesses which go through waves of hiring and firing, so on the surface you get the impression that the company is growing (during hiring), but if you step back, you'd realize that the business is the same size as it was 10 years ago.
As a business leader, acknowledging stagnation is an essential step in addressing the problem and kick-starting growth again. In this post, we will go over some high-level strategies and tactics we use to help our clients get out of stagnation and put them onto a path of sustainable and long-term growth.
Unique Selling Proposition (USP)
In most cases, this is where our client journey begins - trying to understand why someone should buy from our client's business over the competition? In other words, what is their unique selling proposition?
Hoping your product or service will attract customers without having any unique benefits is a sure recipe for failure. Most people are reluctant to change, so you'd better have a great reason why a potential customer should switch to your product or service.
"Excellent customer service", "Attention to detail", "Personal touch", or "We go the extra mile" are all great values, but they are not unique.
You don't necessarily have to be the best, cheapest, quickest, safest, or the highest quality offering - this is not what unique selling proposition is about, it is about being unique.
For example, TOMS slogan is "With every pair you purchase, TOMS will give a pair of new shoes to a child in need. One for one". This is also TOMS unique selling proposition; every time you purchase shoes, they will give a new pair to a child in need. By not competing on price, quality, or comfort, they steered clear of competition and gave a customer a unique reason to buy — a reason that no other shoemakers can match.
Most Businesses Have To Specialize
In a world full of options, it's almost impossible to stand out as a small company or a startup in a larger/broad category.
Appealing to fewer customers to increase sales may sound counterintuitive, but is typically the underlying foundation for growth.
Finding a small market category/segment that you can ultimately dominate will accelerate your sales because most buyers purchase from category leaders.
Is Your Product Or Service Valuable?
Value is pretty straightforward; the customer has to see the value, and the value has to be greater than the cost. Otherwise, your product/service will not be perceived as having value.
A lower-cost product/service doesn't automatically equate to a higher value offering to a buyer. For example, many buyers value time more than money; hence targeting these type of buyers with low-cost offerings, discounts, promotions, and special offers is ill-advised.
Know your customers, and what they value the most!
Make Your Product Or Service Friction-Free (Easy To Buy)
Converting a lead into a customer is difficult in itself, so having a friction-free product/service (product or service that is easy to buy, consume, and switch to) is of vital importance.
What makes a product or service friction-free?
- Value (or ROI) Is Clear
- There is A Low or No-Cost Alternative
- Can Demonstrate Value Quickly
- Minimizes Disruption Fears
Sell Experiences (Not Things)
If you sell "things," you can only win on price or specs. However, if you sell a great experience you can command a higher price, and customers will be happy to pay for it because people are willing to spend more on experiences; so remember to sell experiences, not things.
For example, Patagonia sells outdoor clothing, but if you look at their marketing efforts (e.g., Website or Instagram), you will notice that most of their photos are of people enjoying outdoors - with no product shots in sight.
Patagonia understands that they are selling experiences and not things!
Cannibalize Your Product Or Service Offering
Declining businesses often use costs cutting to compensate for the lost revenue; however, cost-cutting is usually a band-aid (temporary) solution that doesn't address or resolve the underlying problem.
Introducing a new product or service that directly competes with your current product/service lineup is sometimes the best way to make your product/service competitive again.
The bottom line is if your sales are declining and continuously losing market share, then cannibalizing your existing products/services should be considered.
Offer A Free Trial (If Possible)
There is no question that a conversion funnel with a "free-trial" will convert more leads into paying customers than the one without it. Why is this the case? The free-trial dramatically reduces this risk (in the buyer's eyes) and allows you to demonstrate why your product is better - when compared to your competition.
The bottom line is, free-trials are effective because the longer someone uses a product, the more likely they are to keep it (purchase it).
Related: The Power Of A “Free-trial”
Paid advertising often gets a bad rap, but ineffective advertising campaigns are often due to poor planning and execution, and not because the advertising channel is ineffective.
A marketing strategy without paid advertising is unwise in most cases because paid advertising is the closest things to a "shortcut" in marketing. If you are looking for immediate results, then advertising or other forms of paid marketing have to be in your growth strategy and marketing mix.
Most businesses don't have the time, resources and know-how to grow exclusively by organic (non-paid) mean, hence why some level of paid advertising is necessary.
Avoid "Price-Wars" At All Costs
Your ability to win a price war is directly linked to your ability to operate on razor-thin profit margin. Unsurprisingly, big brands and large companies often win price wars, so it can be a sound strategy for them. For everyone else, entering into a price war should be the last resort.
Build Your Social Currency
How people connect with a brand or buy a product/service has radically changed with social media, resulting in an increased focus on "social currency" - the extent to which consumers share the brand with others as part of their everyday social lives.
Six dimensions of social currency:
- Affiliation - creating a sense of community between customers, consumers, and users of a brand
- Conversation - joining the customer conversation around the brand and adding to it
- Utility - building service for customers, and helping them increase their social relevance
- Advocacy - creating a strong attachment to a brand where customers actively recommend, and in some instances, defend the brand
- Information - providing valuable information and knowledge which customers can share with others
- Identity - when customers develop their own identity within the respective peer group
Having a strong social currency will not only bring you more customers but will also make your brand sticky - less likely for customers to switch to another brand.
Kick-starting a stagnant business into growth mode is never as simple as a website redesign, increasing social media presence, or raising a marketing budget.
A sound investment in growth (strategy, marketing, advertising, product development, etc.) is crucial to successful long-term growth.
Related: White Paper - Lead Generation