For the previous a number of years, I’ve written just a few posts every fall that deal with some side of selling planning. With the fourth quarter of 2023 starting as we speak, many entrepreneurs may have began (or quickly might be beginning) their planning for 2024.
Final week’s publish 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 purchasers. This framework helps entrepreneurs pinpoint what is going to encourage their prospects to purchase.
The next publish describes a framework entrepreneurs can use to determine what sources of income development are (or will be) obtainable to them. Figuring out sources of potential income development is an important a part of a sound planning course of.
I printed this publish in 2019, however the content material of the publish is as related as we speak because it was 4 years in the past. What follows is a evenly edited model of the unique publish.
The Authentic Submit
Driving constant, worthwhile income development is among the biggest challenges that enterprise and advertising leaders face. The important thing phrase in that sentence is “constant.” Many corporations can produce substantial income development sporadically or over a brief time frame, however it’s exceptionally troublesome to persistently generate above-average development over the long run.
Enterprise and advertising leaders should carry out two distinct however associated duties to maximise income development:
- They have to determine what development alternatives are (or will be) obtainable to them and decide which of these development alternatives are most tasty.
- They have to discover the correct steadiness between short-term and long-term development alternatives.
On this publish, I will give attention to how enterprise and advertising leaders can determine development alternatives.
Structural Sources of Development
Step one in figuring out potential development alternatives is to grasp the dynamics of income development – the way it occurs or, extra precisely, the place it originates. There are, in truth, a number of distinct sources of development. These structural sources of development are usually not depending on how an organization is organized or on the varieties of services or products it sells. As a substitute, they’re based mostly on the enterprise and advertising 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 growth technique)
- Gross sales of new merchandise in current markets (product growth technique)
- Gross sales of new merchandise in new markets (diversification technique)
- Persevering with gross sales to current prospects (base retention)
- Gross sales received from the competitors (market share achieve)
- New gross sales in an increasing market (market positioning)
- Gross sales from increasing into associated markets (adjoining market growth)
- Gross sales from increasing into new, unrelated strains of enterprise (diversification)
I’ve used each of those fashions when working with shoppers to border our discussions about the best way to develop. However over time, I’ve expanded on these fashions to create a extra detailed framework of the choice methods to generate development. The present model of my framework is proven within the following diagram.
This framework is an efficient device for exciting your serious about the best way to develop your enterprise and for figuring out the expansion alternatives which might be (or will 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 development are at all times current, at the least to some extent. Their existence is not dependent in the marketplace situations an organization is dealing with at a specific second in time. Nevertheless, the quantity of income that an organization can acquire from every supply is vastly influenced by the market and aggressive setting.
So the framework identifies potential sources of income development, however it does not inform you concerning 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 development is probably going to supply all of the income it’s good to attain your development goal.
And third, every supply of development has distinctive attributes and dynamics. So you may want a selected technique and sport plan for every supply of development you select to pursue.
*****
