7 Business Growth W.O.W.® Tactics for Increased Market Share
Most businesses approach growth with a product-market fit perspective, looking at their market and strategy before launching a product or service. In other words, they focus on the business long before getting the customer. This can lead to things like ineffective marketing strategies, products that fail over time, and missed opportunities for profits. In this article we will introduce seven tactics that organizations can use to focus on their customers when growing their business through marketing and building products. We call these tactics Business Growth WOW® Tactics because these are accessible for any company regardless of size or industry as long as they have a goal of increasing market share by greater than 50%.
These tactics are not new. They are still used by established businesses as well as startups. It is for this reason that there will be no new information in the article, it is based on the concepts and findings of data from hundreds of companies that have applied these tactics with great success. For example in the case study at the end of the article, DCI's growth during 2009-2010 was 18x larger than their previous year; this growth was almost entirely because they applied these tactics to their business model rather than waiting to build a product or engaging in already proven marketing methods.
The Business Growth WOW® Tactics are:
7. The Customer Relationship Management (CRM) Burst tactic is a customer retention strategy and can be used by any business once they have entered the buy cycle with a customer. The customer enters the buy cycle when they are ready to purchase the product or service by completing a transaction, but are not yet an advocate.
In DCI's case study, we can see this tactic in action when they decreased churn from an annual rate of 22% to 3%. We can also observe the Customer Relationship Management (CRM) Burst as a tactic in the case of companies like Zipcar or Hotmail. These companies decreased churn rate by 37% and 67%, respectively, which is largely why they increased their customer base by 18x in one year. It is important to note that decreasing churn rate is not necessarily synonymous with increasing sales, as Hotmails' revenues decreased in 2009 despite the fact that their customers were spending more time on average at an increased frequency. This brings us to the second Business Growth WOW® Tactic:
"8. The Increase Recency & Frequency tactic is a customer activity strategy and can be used by any business once they have entered the buy cycle with a customer. The customer enters the buy cycle when they are ready to purchase the product or service by completing a transaction, but are not yet an advocate.
The Increase Recency & Frequency tactic is akin to increasing customer retention because it has the power to increase both customer recency and customer frequency. Companies like American Express and Zipcar have used this tactic to increase customer activity, driving their business revenue in both number of transactions as well as revenue per transaction. In 2011 alone, American Express saw $5B of new revenue from existing customers. It is important to note that since this tactic can be used on customers at any time during the relationship, it is possible for you to acquire new customers through increased activity with your existing clients.
The last tactical we will discuss is
9. The Launch & Launch Again tactic is an advertising strategy and can be used by any business once they have entered the buy cycle with a customer. The customer enters the buy cycle when they are ready to purchase the product or service by completing a transaction, but are not yet an advocate.
In DCI's case study, we can see this tactic in action again when they lowered costs of marketing their service while their customers were using it more frequently and expanding the services offered to fit changing customers' needs. They saw a 341% increase in revenue during the period that follows their launch, demonstrating the importance of continually upgrading the marketing efforts to fit the type of customer that you are acquiring.
The Business Growth WOW® Tactics are not all about increasing revenues, it is important to realize that these tactics can be used for all kinds of tactical purposes, like filtering out your most lucrative customers and using targeted marketing to reach new customers correctly.
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It is essential when applying the Business Growth WOW® Tactic because it requires changing your company's attitude and business practices when dealing with existing customers. Why is this necessary? The answer is simple: your business model already exists when you have a customer for a product or service. Customers already have a need and your business is already capable of satisfying that need. The problem is, you probably have trouble leveraging this advantage because the company makes decisions based on its own wants and needs rather than the needs of the customer. This results in a misalignment between how customers want to be treated by you and how you treat them, which decreases customer satisfaction and can cause churn. The Business Growth WOW® Tactic helps improve this situation by making it easier for your business to deliver on what customers want (more value), which increases their satisfaction and may even turn them into advocates for your product.
"10. Focusing on customers before building a product or service will help you achieve greater than 50% market share growth faster. In our case study, DCI achieved an additional 18x growth in sales, yet the company released a product that was only supported by a select group of customers. The launch of the Zebra product is a perfect example of focusing on customers' needs before building a product. This approach achieves greater than 50% market share growth faster and with less capital commitment than traditional approaches."
Since beginning this article, DCI has continued to grow at an incredible rate; its revenues tripled from $100K to $300K in 2010, and quickly became one of their most profitable divisions because it is their only profitable business unit. In 2011, revenue for DCI rose to over $2M with a profit margin higher than 40%. Furthermore, DCI has continued to expand and now offers multiple products and services to its customers. For example, DCI has released two more products that they seek to add in the future: "DCI Insight" is a self-service product that gives their customers the ability to interact with their business data in a more meaningful way; "DCI Reporting" is an automated tax preparation product.
DCI's growth and success illustrates the Business Growth WOW® Tactic of focusing on customers before building a product, which will help you achieve greater than 50% market share growth faster than traditional competitors while saving your company money by not investing in infrastructure or developing separate products before your audience (your customer) is ready.
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