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Ways To Build Growth For Start Ups

When we talk about growth, we are looking at ways of adding growth to our business in a sustainable way. Actions and events that continually provide growth for our business. If you are creating a start-up or fairly new in business, below are some examples that can attract continual growth, allowing your business to expand.

One off events that generate a surge in customers like, a well received advert, or a publicity stunt, or limited editions, are not included – due to the impact being short-term. Although these activities can provide a much needed injection of revenue by creating a, ‘Fear Of Missing Out’ (otherwise known as FOMO) effect, they are not considered as a continuous way of expanding.

Repeated similar style adverts, and publicity stunts, lose impact and the novelty soon wears off – they start to become the norm, people soon become desensitised. If creating ‘limited edition’ runs of products are done too often, they develop into regular products and will lose their appeal. If created too many times collectors, and fans of your business will soon lose faith in you and go else where.

The same applies to sales. If your store, or website has too many sales, these too will lose their impact. Sale banners will then become synonymous with your branding. This can have a detrimental impact on your brand turning your business into a ‘cheap store’. Have a think about the shops you see in your local town’s shopping centres, the ones that always seem to have a sale on. They are normally the shops selling cheap, low quality items with their windows covered in big, red, ‘Sale Must End Soon’ banners. Limit your sales, don’t use the price – especially a cheap one to drive sales. The key is to look for long-term impact.

Where Does Growth Come From?

Sustainable growth can often be characterised by one simple rule – New customers come from the actions of past customers.

The four primary ways past customers can drive sustainable growth:

  • Word Of Mouth

Embedded in most products is a natural level of growth that is caused by satisfied customer’s enthusiasm for the product. For example, when I was starting up as a DJ and hosting local events, the word of my nights would quickly spread by attendees informing their friends, creating a bigger audience for the next event. I believe that word of mouth is the best way to generate growth, it is the ultimate social proof. As the saying goes, ‘A crowd attracts a crowd.’

  • As a side effect of product usage

Fashion or status, drive awareness of themselves. When you see someone dressed in the latest must have trainers or driving the new Electric Vehicle, you may be influenced to buy the new Jordan’s or new Tesla.

  • Through funded advertising

Most businesses employ advertising to entice new customers to use their products. However, as previously mentioned, be careful of novelty style advertising or styles that will lose impact if done too often. For advertising to be a true source of sustainable growth, it must be paid for out of revenue, not one-time sources such as investment capital. As long as the cost of acquiring a new customer generates (the marginal revenue), the excess (the marginal profit) can be used to acquire more customers. The more marginal profit, the faster the growth.

  • Through repeat purchase or use

To me having a great product, along with good customer service is a remedy for repeat customers – which drive growth. Some products are designed to be purchased repeatedly either through a subscription plan (Sky TV) or via voluntary repurchases (groceries).

I think a combination of all four ways, are a must for any start up or new business to drive growth. However, it all starts with your product or service, it must be good. If after all, you’ve invested time, and money on getting people through the door to part with their hard earned money on your product or service and it turns out to be crap (side effect of product usage) – guess what? They won’t tell their friends to invest their money (word of mouth). It will then take you longer to ‘win’ back the trust of your customer and garner sustainable revenue (repeat purchase or use) from which you can invest money to let others know about your great product or service (funded advertising).

Therefore, you must practice your service, test your product, over and over again. When I was entering national DJ competitions I would spend at least 12 hours a day practising my routines. If I had a gig approaching I would practice my set over and over again until my flatmates and neighbours knew my set as well as I did. Remember, what your practice for in private, you will be rewarded for in public.

Excerpts adapted from ‘The Learn Startup’ – Eric Ries. Grab the book from my non affiliated link here

Close up of a customer handing over their card to a vendor pay for a service or product. A-Game Coach Business Success
Business Success - Growth and How To Get It For Your Start-Up or Business
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