As managers think long-term about how to continue growing their business, we often recommend that they start by evaluating their current and potential product offerings and markets. Each of these quadrants is comprised of different strategic activities that help businesses overcome growth challenges.
Increasing Product Sales within Current Markets
Companies can encourage growth in sales by increasing product usage within current customer markets. One way to do this is to show consumers new uses for their products. Scanning social media sites like Pinterest and Facebook, you can start to see some examples of this in full force. For example, “51 new uses for baking soda,” or “20 Miraculous Way to Use Vinegar around Your House.” Other companies, like A-1 Steak Sauce are trying to break the stigma that you can only use the product on steak. If you haven’t seen their video, it’s pretty cute, check it out:
Another option to grow sales is to encourage current customers to use more of a product or service or to replace it faster. We achieve this by encouraging more frequent use of products or encouraging customer loyalty. I can’t help but think of how prominent expiration dates are on anything and everything I buy nowadays. (I’m not saying they shouldn’t be there) but they do remind us that sometimes we need to replace what we have and go buy more! All of these tactics help companies increase market penetration with current customers.
Keeping Golf Courses Well Maintained
One of Risdall’s clients sells golf course accessories to golf course superintendents. One of the strategies we used was to help superintendents understand when it was time to refurbish or replace their products by showing old, worn-out products on the course and talking about the poor impression that it get give to golfers. Showing before and after shots can inspire people to replace things faster and again, to BUY MORE!
Selling New Products to Current Customers
Businesses can find success increasing sales by creating new products or services that are targeted toward existing customers. Since companies have an established reputation with loyal customers, it is easier to persuade customers to purchase a new product or service under that existing brand name.
Take Arm & Hammer for example. Arm & Hammer had a solid reputation for selling baking soda as an effective deodorizer. The company extended its baking soda product line with laundry detergent, carpet cleaner, toothpaste and more. Arm & Hammer increased sales by developing new products that were marketed to current customers under its existing brand name. A company’s reputation is invaluable to customer loyalty, which is why customers often trust new products by well-known brands.
Creating a Splash for Turck’s New Technology
Turck developed its field logic controllers and ARGEE technology to give customers a more flexible and cost-effective way to control automated environments. To build momentum for this new solution, Turck partnered with Risdall to create an ad campaign and comprehensive PR launch around this revolutionary product. Driven by smart content and Turck’s expertise, the campaign connected the company with major industry trades, resulting in widespread coverage of this new technology.
Introducing Current Products to New Markets
Companies typically have the greatest potential for growth when they choose to introduce their existing products or services to new markets. Oftentimes this requires a direct marketing campaign to a new audience that is most likely to use this product or service. Targeted communication in marketing campaigns can help potential customers see products in a different light if they are not typical users of a company’s product or service.
Companies can also choose to introduce their products or services to new geographic markets. This is another area in which direct marketing campaigns can generate sales. Marketing campaigns use strategic communications to help bring awareness to products and services that nontraditional users are unaware of. We see this a lot – especially in any type of Business-to-Business (B2B) sales – where a company has a great product that would be ideal for a specific industry, but it hasn’t yet sold to that industry. A few years ago, I worked on a campaign for Harley Davidson – trying to sell more apparel to women, versus men.
How Risdall Helped VISION EASE Sell to a New Market Segment
VISION EASE manufactures high quality lenses for eyeglasses. In 2015, VISION EASE chose to partner with the apparel company, O’Neill, to create a dual-branded sunglasses package with O’Neill frames and VISION EASE’s Coppertone Polarized Lenses. Partnering with a company like O’Neill opened up a new opportunity to target lenses to a new audience – consumers who fit the unique O’Neill lifestyle brand. Also, since VISION EASE and O’Neill are two well-known companies, fans of these brands place more trust in the products they create. You can see more (and maybe even spec out some cool new frames here.)
Creating New Products for New Markets
One of the riskiest business strategies to grow sales is creating a completely new product or service, and offering it to a new market. The reason this is risky is because companies often experience a learning curve when dealing with new operations and unfamiliar customer groups.
Although it is risky, it can be highly profitable when it is successful. Typically we see two types of product and market expansions: related diversification and unrelated diversification.
Related diversification is when companies expand internal processes or acquire businesses that are different from current products and customers. Although they are not the same product or customer base, related diversification happens when the expanded product or service shares commonalities with current products or services. For example, the two companies could share R&D know-how, marketing and distribution skills, production facilities or brand names. Since the companies have similar business experience, this type of business strategy is less risky than unrelated diversification.
Unrelated diversification happens when two businesses join, even though they have no commonalities in products, services, customers or areas of expertise. This is generally seen as the riskiest business strategy for financial outcomes because of a lack of knowledge with the new business. Unrelated diversification can be profitable when executed successfully. Oftentimes outside experts need to be included to ensure companies experience a profitable business strategy.
How Risdall Helped GoGirl Introduce a Completely New Product to a New Market
GoGirl originated as a medical supply company to help women with health issues like hip replacement surgery use the bathroom while standing up. Seeking to expand to a consumer market, GoGirl worked with Risdall to conduct thorough research on its target audience – active, adventurous females. The first step was creating a new name and logo that women could relate to. The GoGirl brand was created with the tagline “Don’t Take Life Sitting Down.” Through an integrated campaign, including public relations, social media, online advertising, website development, trade show support, advertising and more, GoGirl sold out in less than three months after its launch date.
When companies continually see a gap between expected and actual sales, it does not necessarily mean the end is near. Strategic growth experts have developed these four types of business strategies to help companies overcome their sales challenges. If your company is considering a new business strategy, it is important to evaluate which type of strategy will resonate with customers. Risdall’s strategic marketing experts can help your company every step of the way to ensure successful outcomes for your business strategy.
- Photo 1: Stockmonkeys.com