Which of these are one of the four growth strategies that firms use to grow their business?

Growing a business is no simple task. Approximately 65% of businesses fail during the first ten years of opening, and only 0.1% of companies will ever reach $250 million in annual revenue. Lack of product demand, mismanaged marketing, or unstable finances can lead to a lacklustre turnover or even closure – but a solid growth strategy will help mitigate these failures.

Analysing metrics, minimising costs and focusing on new B2B marketing efforts is critical in helping businesses to thrive, not just survive. This article will define growth strategy and explore why having one is so essential, uncover the core components of building a sound growth strategy, and discuss four marketing methods from the Ansoff Matrix that could help businesses grow.

What is a growth strategy?

A growth strategy is a plan to increase a business’s size and value. It’s holistically defining how you will win a race against your competition and identifying the most efficient way of reaching that result. What’s more, it’s applied to almost any area within marketing, and even in other departments such as sales or product-led growth.

A good strategy contains three elements: a diagnosis of the challenge, a guiding policy, and coherent action. Diagnosis considers the entire process, studying your competition, and understanding your benchmarks and metrics. This includes marketing analysis of customers and understanding how to drive engagement within each audience. A well-built guiding policy defines, articulates and communicates the process and the ideal destination – what actions are required to meet each milestone. Finally, the coherent action gets into the finer details like tactics, operations, and governance. A good growth strategy will consider all three elements and their components.

The four growth strategies

Today, growth strategies look a little different and follow an evolved outlook, like the Ansoff Matrix – one of many that we use. If you’ve studied growth before, you may know of the popular Four Ps. These are Product, Placement, Promotion and Price. Where the Four Ps focus on audiences, channels & pricing, the Ansoff Matrix is more effective for a broader view of markets and uses the older Four P framework within each of the 4 Ansoff quadrants.

Over time, the technological developments of SaaS and e-commerce altered how we plan strategies due to the impact on creative formats, the availability of new channels, new audience penetrations and new tools, all resulting in new skills. But, while the tactics and definitions have changed, the ultimate goal of creating sustainable growth remains the same.

The Ansoff Matrix is used to identify potential organisational or brand strategies. The matrix is built in a way that helps business owners understand their current system better and helps them analyse the risks associated with adopting a new plan. Each time you move into a new approach with varying tactics to achieve growth, risk increases.

Ansoff’s Matrix has two axes: one focuses on the product, and the other on the market. Sales, development and marketing teams work similarly, with one department investigating which products to offer in the future, while the other considering whom they want to serve. The goal is to use marketing as the foundation of your strategy but harness data, design, and product to work as a single interactive unit for long-term success.

Market Penetration

Market penetration is considered a low-risk strategy. A company using market penetration will attempt to expand the sales volume of their current products in their already established markets to increase their total market share.

Often confused with market development, market penetration encourages brand loyalty and customer retention by using marketing material to engage customers using existing products or services. You can do this through price reductions or bundles, for example, that lure customers away from competitors or create higher-quality creative content that generates more quality leads. Or, you can explore ways to target existing customers and audiences through new products and services.

Market Development

Market development is a high-risk strategy that can yield significant returns. You should only consider this strategy when you already possess enough capital and resources to do so. Unlike market penetration, market development is about expanding or retargeting. This could mean taking an existing product to a new audience or market, or even altering your product into something new and shifting your focus to new customers all together.

To create a market development strategy, you should conduct extensive market research to identify market segments – small batches of people in a larger population grouped by labels. You can build these segments around identifiers like location, age, income, or industry. Once you’ve selected your ideal market segment, you need to create a marketing and branding strategy that advertises your existing product or service to attract a new type of customer. Try attracting new customers and markets by finding further uses for a current product or adding new features and benefits. Within SaaS, market development has become a collaborative effort between product and marketing teams. Internal alignment is essential for this strategy to work, as every new product or service needs to be on-brand and in line with messaging goals.

Product development

Product development is a strategic approach to growth that focuses on creating and commercialising new products. It’s not about expanding your customer base by targeting new markets. Instead, it’s improving your product line to attract more clients in your existing market segment.

Imagine a dessert restaurant that only serves ice cream. Expanding their menu to include waffles could increase existing customers’ buying rates from their business. To determine new products, you should undergo extensive consumer research focussing on demands and competitor analysis. Product development requires a solid cross-functional collaboration between teams to be successful.

Diversification

Diversification is the riskiest of the four growth options. This strategy involves introducing a new product into an entirely new market, in which you may have minimal experience. This could include deploying products in new geographic areas and translating the benefits of your products to the local population. Without support from growth marketing experts, failure is a distinct possibility, although the potential of a high payoff may be worth the risk.

Implementing a diversification strategy in an industry facing an extreme financial downturn or a company losing significant market share within a core part of their business may help prevent further damage or closure. When markets are challenging, and competition is fierce, many companies choose to protect their core business while simultaneously exploring new possibilities.

Connecting growth strategy to your growth marketing

Aligning your growth strategy with your marketing efforts can help you understand your next move. At Kurve, we’ve developed a process that we call Kurveology to guide us through the growth marketing strategies to help scale our clients’ businesses.

Strategy

Start by developing and defining the unique qualities that differentiate you from your competitors, emphasising the most relevant customer segments and how your product’s unique attributes best meet their needs.

Always begin with the essentials. Research and study your consumers to understand their pains, fears, and worries, and link that to your service and how your products can help solve their pinch points.

Then, consider your brand, where you want to go, whom you want to target, and how you appear. Understanding your customers is essential, but defining your company is vital.

You need to create a story that resonates with your audience. The SaaS market is saturated with an abundance of information and voices. To break through the noise, you need to use a sophisticated strategy that says the right things, to the right people, and at the most opportune time.

Things to consider while strategising:

• Target Audience
• Client Journey Mapping
• Funnel Mapping
• Messaging Framework
• Technology Stack

Landscape

Conducting research on the state of your industry and competitor analysis is the best way to determine if your desired growth is both necessary and feasible. Understanding your competitor set within the context of marketing allows you to differentiate your products and services in a similar customer segment, this includes:

• Their messaging – How do they speak about themselves?
• Their creative – Who are the brand colours, language and products connecting with?
• Their distribution –What marketing channels do they operate on?

The knowledge and facts you uncover in this step will shape the targets and KPIs for your marketing strategy evaluation to better understand the outcome.

Following competitor and industry analysis, develop a messaging framework based on your current brand positioning. This will include a map of common customer challenges, how they impact business, and then think about how your product might solve them.

Implementation

Executing your marketing strategy starts with identifying how and where you’re going to place your message that will be most effective for generating leads or driving sales. For SaaS businesses, some of the top distribution channels and methods include:

• Paid ads
• Affiliates
• Freemium pricing
• Community building
• Outbound / cold outreach
• Content marketing
• Value-added resellers
• Search Engine Optimisation
• App Store / app exchanges
• Lead magnets
• Email Marketing
• Podcasts
• Community PR

With all of your planning, resourcing, and goal-setting complete, you’re ready to execute your growth marketing strategy and deliver results for the business.

Ensure that your onboarding process is closely tied with the customer’s buying cycle, aligning internal teams like marketing and sales to ensure an efficient onboarding process. Continuously compare results to your forecasted growth goals to see if your projected outcomes are still achievable or if anything needs to be adjusted.

Evaluation

With your campaign complete and your strategy reaching the end of its cycle, it’s time to analyse your results against your original KPIs, individual channel performance KPIs, and growth goals. What went well? What didn’t go so well? What can you do better next time?

You can now revert to step one and develop a new, more informed strategy for your next growth marketing drive using your established metrics and numbers.

Different growth marketing strategies

There are several different growth marketing strategies that you could use to increase your market share. Some of these strategies include:

• Viral loops

A viral loop funnel requires just one satisfied user to share with others instead of needing as many leads as possible at the top of your sales funnel.

• Milestone referrals

Businesses that use milestone referrals offer rewards for hitting specific benchmarks. In many cases, “milestones” are metrics like the number of referred friends.

Some traditional strategies are rigid and follow a defined order and structure. Advanced marketing teams are now taking a slightly different approach, called growth hacking. Growth hacking is a method used to drive rapid growth. With this growth plan, you create strategies focused on speed and quick results.

We prefer to encourage collaboration between Product, Marketing, Engineering and Data to build plans based on concrete evidence, rather than anecdotal, with accurate data-based measurements, instead of buzz and perception.

Finding the right approach for you

Without a sound growth strategy built on data and expert industry knowledge, your business is in jeopardy. To ensure your company thrives, you need to create a unique growth plan that aligns with your ambitions, products, and brand position.

Using the Ansoff Matrix to guide the planning process can help identify new marketing opportunities while reminding you of the potential risks and dangers that new strategies can bring – especially when implemented poorly. Pay attention to your metrics, listen to your audience, and monitor your product. Learning is your first step in defining your next growth strategy.

Our performance-oriented approach constructs strategies on the core pillars of marketing and growth, but are nuanced and bespoke to your industry and goals.

Let us help you build an effective growth strategy

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