5 Essential Strategies For Your Start-up To Survive A Slow-down
If you are a budding entrepreneur frowning over your growth curve and wondering which strategic doors to knock open, relax. Remember, some of the smartest entrepreneurs in the world never kicked it off in formal oxfords. They dribbled around in muddy sneakers before holding the ball in their court!
Business slow-down can be unnerving. But smart strategies to test the waters will help you find the next growth lever and ascend higher.
For start-ups and SMEs, growth saturation is a grave concern. The challenge isn’t about building the base and climbing up, but reaching a point of stagnancy and finding the next foothold.
Here we will deal with the essentials of a growth curve that will make your climb up the hill smoother, focused and rewarding.
For a successful market strategy that will catapult your business up and through every unfavourable terrain, you need a route map that engages the following inevitables:
GROWTH LOOPS: Sustaining a progressive cycle
A growth loop, as the name suggests is a business process where your start and end points are connected, creating an unhindered and repetitive cycle. That means your end result or output is processed and fed back into your system as input or fodder to generate more.
For example, you begin with ten active customers, engaging and sustaining them through vale add-ons. They, then, can be used to bring in another twenty who in turn become active customers. Such a loop system serves to widen the cycles and create bigger growth loops for the business.
When you hit a dead wall in your growth process, it is time to examine your core loops and get them to multiply. To make your growth loop efficient and productive, the fundamental principle is to ensure real value-add-ons for your customers. Hence the integral factor would be to identify what irresistible value you could offer them. Every element of your business growth model including the product, the pricing, the market and the channels have to sync with each other to make it effective. That makes every business growth loop unique and inimitable.
That your growth loops must reward, engage and delight your customers
That the loop must retain your customers through effective customer interactions and notifications
That you keep the loops smooth enough to slide through, eliminating any hiccups that would displease the customers. Test, focus, and re-work to improve your core loop.
PRODUCT DEVELOPMENT: Building happy customers
Launching a new product or adding new features at a saturation juncture can instigate higher customer engagement and retention. Always work it out with customer feedback and Organic Search key points. That must give you clarity on what you are missing out on and what the market is looking for.
Developing a new product or feature that serves the same target segment can expand your start-up without tapping into newer markets. Identify the needs and wants of your existing customers to develop newer features for your product or launch a new one.
But you must take caution against going overboard with new features that may result in feature bloat. A blind overload of new features could jeopardize the core value of your product, confusing the users and scattering your customer base.
INCREASING YOUR ARPU (Average Revenue Per User)
When it comes to increasing revenue, banking on existing customers is much more cost-efficient than trying to gain new ones.
One way of spiking your revenue up through current customers is up-selling or cross-selling. That would mean bringing your loyal customers to a higher price category with value add-ons or charging them for extra features. This is generally done through notifications or emails. Once you have a strong and faithful customer base, up-selling or cross-selling gets easier.
You can ensure consistent and better revenue through customer retention. Retention is when your loyal customers stay with you for long. More satisfied customers would mean more loyalty, retention and better referrals. This in turn ensues in better business stability.
MARKET EXPANSION: Old wine in new bottles
Another way to break out of stagnancy is to expand your market by selling your existing products to a different market. You need to explore new pockets or market segments untapped by competitors, where your products could get a good foothold. It can either be a single large segment or clusters of smaller ones. It can be a new location, city or state.
For instance, if you are a SaaS start-up that provides custom educational apps for schools, you could expand your prospects by developing the app for EduTechs that cater to the higher education market.
Market expansion would demand customised marketing material as well. You would need to mould your content, inventory, sales pitch and branding to fit into the newer market segments.
DIVERSIFICATION: Exploring greener pastures
Though diversification could sound similar to market expansion, the two can be different. Diversification is when you come up with a new product for a new market. It is one of the most reformist-model of business growth. Yet, it can be extremely tricky as you are not familiar with the new market and how it would respond to the new product.
Without careful planning and ample market research, diversification could bring a dent in your business.
But if done meticulously, diversification can bring in greater profitability. It gives you the opportunity to tap into potential markets and reap a good harvest. Diversifying also helps your brand make its presence felt by spreading wide. The brand name can be fortified through a brilliant diversification strategy.
Diversification also defends your brand from intense competition and can be a life-saver in times of harsh storms. A downturn in one industry could be balanced by a smoother sail in another.
To last more than 5 years in the industry as a start-up, you need more than a smart product. With the lack of a wise strategy and a clear route map, many start-ups fail to attain product-market fit and wither under stiff competition.
Your consistent evolution depends upon a combination of smart, evolving business strategies. It is essential for businesses to have a growth-map to scale up and expand.
Growth Surgeons is where experience meets strategic thinking. Years in the start-up industry helps us to understand your marketing pot-holes and address and rectify them effectively. Reach out for a committed and guaranteed revamping of your business.
We enjoy helping businesses grow.