Whether a tech company a fresh startup or well-established, a strong customer base is essential. Many companies want to grow and expand their customer base, but the problem is they’re unsure of how to go about it.
There are many different pathways to success, but which one is best for their company? This depends on a variety of factors, which can be narrowed down with growth strategies.
There are four major growth strategies in business: market development, market penetration, product development, and diversification.
1. MARKET PENETRATION
Market Penetration is when a company is attempting to hold the largest share of customers among its immediate competition. This is usually accomplished through more creative and inclusive advertising and luring customers away from competitors.
This approach is best in a newer industry where the customer base isn’t set on which company they want to give their loyalty to yet. Think of the smartphone market.
Most people already own smartphones and are quite loyal to their particular brands; they aren’t willing to switch easily even if they have to pay a little more to stay loyal to a brand.
The most common way to go about a market penetration strategy is to offer the lowest prices/subscription rates, the best bundling deals, or discounts for loyalty.
When people are just trying out a new product or service and their experience is similar, they’re much more likely to switch for better prices. It comes down to whether your company can streamline and cut down on expenses to offer better deals as well.
Your company could also try to offer more creative and inclusive advertising to lure away customers. Providing customers a more personalized experience can also inspire customer loyalty.
Companies can do this by creating content (such as blogs, commercials, and social media posts) that cater to the concerns and personalities of niche customers within the overall customer base.
This will make them feel more welcomed and drawn to your business because someone is finally looking out for them.
2. MARKET DEVELOPMENT
Market Development is when a company tries to market their existing products or services to a new market. This new market is usually found in a variety of ways which include: new geographic areas and new distribution channels.
This is usually an audience that is largely untapped by your industry with people who have never used its products or services, but has great potential for new customers.
New geographic areas are parts of the world where your industry is just beginning to penetrate. First, do research to ensure that these areas are receptive to your technology and services.
These new locations may be especially useful if they lower your supplier costs, place you near top talent, or put your company closer to where it can harvest the resources that are used in your tech.
New distribution channels are especially important in the tech industry as more and more traditional products and services are becoming digitized. Think of how eBooks transformed the book industry.
Streaming has also developed as a profitable distribution channel for music, films, and video games and has become so popular that many traditional companies are being forced to meet demands and offer streaming options and services.
Plus, the more you can securely digitize your products and services, the more potential you have to reach customers worldwide.
Researching that these new markets would turn a profit is always essential, but especially so when taking physical stores, plants, and operations to a new country. This requires a lot of investment.
Opening pop-up shops, or temporary stores, and bringing over a limited quantity of product are a great way to do a test run and generate buzz for your company.
3. PRODUCT DEVELOPMENT
Product development is developing new products for your current market. It can include adding new features, changing the presentation, combining it with another product, or creating a new product entirely.
The goal of these changes to provide better personalization, which will improve customer satisfaction, customer retention, and lure customers away from the competition.
Product Development is about using your customers’ unmet needs and wants as inspiration for new product or features. It’s often that if you observe your customers’ comments and complaints, or interview them, you will find your next great project.
Customers often communicate to you how your products or services can be improved for them through reviews or off the cuff social media messages.
Uber has implemented many features into their app due to customer demand, such as an option to request Spanish-speaking driver, an emergency 911 button, and requesting access to cars that are wheelchair accessible.
Customers can also have wildly different opinions, such as what ‘quality’ may be to them. For some people, quality is more about sleek and cool aesthetics, and for others, quality is more functionality and fast processing speeds, get the best results with Rever Safety Audit Software.
Product Development allows you to cater to any major differences in your customer base to keep everyone happy.
Diversification is creating new products for a new market. This can either be done in-house or through a partnership with another company.
Joint ventures, acquisitions, and mergers allow your company to team up with another and develop better quality products and services. The best way to do this is to seek a relationship where your partner’s strengths are your weaknesses and vice versa.
This will allow your companies to become a larger threat to your competitors and become a top player. This choice on which type of partnership to choose depends on how much control a company wants to give up.
Diversification differs from product development because any changes or new tech and services your company develops would cater to a new market. One of these product changes can be reducing features.
Currently, many smartphone companies and apps are being stripped down to ‘lite’ versions in order to cater to emerging markets where Internet connections are less reliable.
Culture and tradition also play a key part in the presentation of products to new markets. When companies want to expand to different people and different countries, the rollout of the technology may have changed as well to appeal to those people.
What is considered normal part of culture or everyday behavior in some countries may be considered brash and rude in others. It’s important to not only familiarize your sales and marketing team on these matters but to incorporate that in your products and services as well. You always want to put your company in the best light.