As business owners, we all look forward to the stage when we are no longer the newbie chasing every sale, always scrounging, and wearing 10 hats. However, this doesn't mean we're out of the woods; it just brings a new stage of challenges.
Being in the growth stage often feels like we are the middle child, not an established large business yet, but no longer the new kid on the block, bringing some new challenges.
1. Intensified Competition
Growth often propels businesses into markets with many more established competitors, making differentiation a crucial aspect to stand out and get recognized. To manage this area, companies may:
Leverage Behavioural Economics: Utilize psychology proven to encourage action, such as scarcity and urgency principles. This may appear as limited-time offers or exclusive products that prompt immediate customer action.
Design for Impact: Develop a distinctive brand identity with cohesive visuals and messaging that resonate emotionally with the target audience.
Be consistent: Be brand, resist the urge to jump into/onto trends that don't align with your brand or identity. Stay consistent in your messaging and presence in the community. It seems easy but one of the hardest things business owners face is consistency when things get busy.
Trouble maintaining demand: If you are a middle child, you will relate to this. Everyone knows the big brands, and people love the fresh new darling but you are now neither. This is the stage of business that has increased competition and you become the in-between. You don't carry the credibility of the larger, established brands but you are not as novel as the new business. This is when you need to embark on a focused marketing strategy to gain, and retain customers. (see my blog on customer retention for more ideas).
2. Budget
Allocating resources efficiently is vital and marketing budgets don't always scale proportionally with business growth. Strategies include:
Performance and Brand Marketing Integration: Balancing short-term performance campaigns with long-term brand-building efforts can maximize return on investment (ROI). Studies suggest that businesses allocating 40-60% of the marketing budget to brand-building activities can see a 25-100% increase in ROI. Customers will stay loyal to a brand even as products vary, change or evolve so ensuring you allocate some of your budget to brand building is important. Ref: The Australian
Tracking: As you grow, throwing spaghetti at the wall is no longer an effective marketing plan. As budgets no longer always align, it becomes even more important to target your strategy and focus on the most effective ROI
Cost-Effective Digital Channels: Utilizing social media and content marketing can engage customers without significant expenditure.
3. Evolving Consumer Expectations
As businesses grow, so does their customer base. More customers, more diversity and varied expectations lead to diverse preferences. To meet the evolving needs of your customers as you grow, consider:
Personalization: It's proven that we resonate when we see our name or feel something is designed specifically for us. Consider collecting data and using data analytics to tailor marketing messages and product recommendations.
Omnichannel Presence: Ensure a seamless customer experience across various online and offline platforms. Social media can be an exceptional listening and communication tool.
4. People problems
Businesses run on the success of their products and services and the team. As you grow, your people grow, and more people, more problems.
Staffing: It can be hard to maintain the levels of service if you are short-staffed staffed and often at this stage of business, there are such dramatic ebbs and flows that maintaining accurate staffing can be a challenge, not to mention attracting the right team.
Inverted people focus: Depending on how your business is structured you may end of with added distance or layers between management, investors and the customer. Not only does this make it challenging to maintain a competitive edge by listening to your customers directly, but it also can make this business feel very top-heavy. Instead of satisfying the customer, we focus on making managers and investors happy.
Conclusion
Growth-stage businesses face many challenges in marketing and customer satisfaction. Companies can effectively navigate these complexities by integrating behavioral economics, thoughtful design, and strategic marketing. Recognizing the challenges at this stage and recognizing them can be the start to designing solutions to grow through them.
Julie Boake
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