Opinions expressed by Entrepreneur contributors are their own.
Almost every entrepreneur is seeking ways to grow their business. Successfully scaling a business requires attention to fundamentals, patience and stamina to stick with it. Growth can come through several approaches; an excellent place to start is to determine the best strategy for your business. Here are some ways to identify opportunities for sustainable, long-term growth:
Use a sales funnel
To develop your own funnels, track the ways customers move through the journey. Identify potential opportunities to automate the process. For example, if customers put items in their digital carts but don’t purchase them, consider if free shipping or a discount might help.
Manually tracking customer information and generating leads is difficult and takes time away from other tasks. Yet, these tasks are critical to identifying growth opportunities. Look for ways to automate these tasks. For example, CRM software tracks data that you can use for upwelling or determining interest in a new product. Software can also scrape the internet to find potential leads or conduct social or mobile research, which also helps with product development. Software can also automate emails and other customer contact tools.
Focus on gaining long-term value customers
As you grow, you want to acquire high lifetime-value customers to boost your profits and sales. Predictive modeling is a statistical technique that helps predict future behavior and enables you to market effectively to customers who will be loyal for years.
Several companies offer predictive modeling software. You can also encourage loyalty among all customers through loyalty programs.
Once you’ve invested in software that provides customer analytics, you’ll also want to research what your competitors are doing. Check out both their marketing strategies and product development strategies through internet research. Software such as Adbeat and Similar Web can help with identifying marketing strategies.
Consider qualitative customer research, such as focus groups, to fully understand your target demographics, their needs and their customer journeys.
Once you’ve done customer and competitive research, you may discover specific ways in which innovation will drive growth.
Companies that let the marketing department drive innovations rather than the technology department are more likely to create new products, product features or experiences that customers want. An excellent way to spark creativity is to use an ideas springboard matrix.
First, the marketing and research team discovers the latest thinking and recent innovations that might spark ideas. For example, what has recently happened in the visual arts, the Internet of Things, or apps development that might impact your products, customer experience, distribution or other aspects of your brand?
Another way to innovate is to consider how you could make your product or service stand out more clearly in the marketplace. What will make it unique? Toilet Duck, a brand of toilet cleaner, differentiated itself by having a bottle with a handle shaped like a duck that made squirting it under the toilet lid easier. The feature helped the brand gain market share quickly, even though the product was essentially the same as any other toilet cleaner.
Licensing, partnering, franchising
Growth can come through working with others. One way is by licensing the product to a larger company. In a licensing agreement, you give another company the right to manufacture your product in exchange for a fee or share of the revenues.
Another way is through forming strategic partnerships. The best collaborations are when each business receives something attractive over the long term. They also are with companies whose products and services complement yours but involve the same high-value potential customers.
Franchising is another growth opportunity. With franchising, you sell the rights to everything about your brand to someone who opens up a second branch under your brand’s name. Generally speaking, licensing works best for product-based companies, while franchising works best for services.
Before undertaking any collaboration, be sure you understand customer needs and how the collaboration will enable you to meet these needs uniquely.
Consider an acquisition
Sometimes the best way to grow is to acquire a competitor or a complementary business. For example, suppose you want to expand your business into a different region of the country or abroad. Sometimes licensing is the best way to grow, but at other times, acquiring an already ongoing business in the region is a way to jumpstart expansion.
For an acquisition to succeed, you’ll need to know exactly what you hope to achieve going in, and do your research to be sure you can meet the goal. You’ll also generally need to raise capital to complete the transaction.
Another way to grow is through diversifying your product or service offerings. Think about what kinds of complementary products, services or information you can offer. Use your research to discover customers’ pain points, and create products within your niche that can alleviate these pain points. Are there any other ways you can add value within your niche?
Successful business growth is possible for companies that research, innovate and focus on retaining high-value loyal clients.