For the previous a number of years, I’ve written just a few posts every fall that tackle some side of promoting planning. With the fourth quarter of 2023 starting at this time, many entrepreneurs could have began (or quickly will likely be beginning) their planning for 2024.
Final week’s put up mentioned how entrepreneurs can use the jobs-to-be-done framework to outline their market and decide how their services or products create worth for patrons. This framework helps entrepreneurs pinpoint what’s going to encourage their prospects to purchase.
The next put up describes a framework entrepreneurs can use to determine what sources of income progress are (or might be) obtainable to them. Figuring out sources of potential income progress is a vital a part of a sound planning course of.
I revealed this put up in 2019, however the content material of the put up is as related at this time because it was 4 years in the past. What follows is a frivolously edited model of the unique put up.
The Authentic Submit
Driving constant, worthwhile income progress is without doubt one of the biggest challenges that enterprise and advertising and marketing leaders face. The important thing phrase in that sentence is “constant.” Many corporations can produce substantial income progress sporadically or over a brief time frame, however it’s exceptionally troublesome to persistently generate above-average progress over the long run.
Enterprise and advertising and marketing leaders should carry out two distinct however associated duties to maximise income progress:
- They need to determine what progress alternatives are (or might be) obtainable to them and decide which of these progress alternatives are most tasty.
- They need to discover the precise stability between short-term and long-term progress alternatives.
On this put up, I am going to deal with how enterprise and advertising and marketing leaders can determine progress alternatives.
Structural Sources of Development
Step one in figuring out potential progress alternatives is to know the dynamics of income progress – the way it occurs or, extra precisely, the place it originates. There are, in actual fact, a number of distinct sources of progress. These structural sources of progress are usually not depending on how an organization is organized or on the varieties of services or products it sells. As an alternative, they’re primarily based on the enterprise and advertising and marketing methods that an organization makes use of to faucet into every supply.
- Gross sales of current merchandise in current markets (market penetration technique)
- Gross sales of current merchandise in new markets (market improvement technique)
- Gross sales of new merchandise in current markets (product improvement technique)
- Gross sales of new merchandise in new markets (diversification technique)
- Persevering with gross sales to current prospects (base retention)
- Gross sales gained from the competitors (market share achieve)
- New gross sales in an increasing market (market positioning)
- Gross sales from increasing into associated markets (adjoining market enlargement)
- Gross sales from increasing into new, unrelated traces of enterprise (diversification)
I’ve used each of those fashions when working with shoppers to border our discussions about how one can develop. However over time, I’ve expanded on these fashions to create a extra detailed framework of the choice methods to generate progress. The present model of my framework is proven within the following diagram.
This framework is an efficient software for exciting your occupied with how one can develop your enterprise and for figuring out the expansion alternatives which might be (or might be) obtainable to your enterprise. When utilizing this framework, it is vital to maintain a number of issues in thoughts.
First, the excellent news is that these structural sources of progress are at all times current, at the least to a point. Their existence is not dependent available on the market situations an organization is dealing with at a selected second in time. Nonetheless, the quantity of income that an organization can acquire from every supply is drastically influenced by the market and aggressive atmosphere.
So the framework identifies potential sources of income progress, however it does not let you know in regards to the relative attractiveness of these sources. You will want to make use of conventional market and aggressive evaluation instruments and strategies to carry out that analysis.
Second, no single supply of progress is probably going to supply all of the income you should attain your progress goal.
And third, every supply of progress has distinctive attributes and dynamics. So you will want a particular technique and recreation plan for every supply of progress you select to pursue.