Having a growth strategy (in your head or on paper) is great, but does it cover all the essential components to make it successful? Why should a customer buy from you? Are your goals and tactics clear? Are they measurable? Have you addressed known risks? Is your growth strategy focused around your customers? These are all vital questions your growth strategy has to answer.
The good news is the fundamental components of all successful growth strategies are similar, irrespective of the industry, product, or service.
Yes - products and services may be very different, but the core elements of all growing businesses are very similar; hence, their growth strategies are similar as well. With that in mind, let's dive into the five essential components of every successful growth strategy.
1. Strong USP
A strong unique selling proposition (USP) removes grey areas from your growth strategy because a strong USP implies you are clear on why customers are buying from you, and how your service or product is different from your competition.
2. Uncomplicated Measurable Goals (With Clear Tactics)
When it comes to goals, clarity (not complexity) is of the utmost importance. Complex goals are often confusing, and for most people, difficult to comprehend. Therefore, growth-related goals should be easy to understand so that all employees are clear on how the organization is trying to grow.
Also, all growth-related goals must be measurable and time-bound. If they are not, they are almost impossible to monitor and analyze.
Without well-thought-out tactics, your goals will never get off the ground. And as is the case with most tactics, you don't have to get them all right from day one, because tactics will likely change over time. For example, if you miss revenue, acquisition, retention, or any other important growth targets, you will need to analyze your tactics or try a different approach.
3. Customer Focused
As organizations grow, they become more complex, and naturally, the distance between the leadership team and customers becomes greater. Therefore, keeping your finger on the "customer pulse" becomes more difficult.
If your business starts losing momentum, chances are your customers found a new, more valuable proposition; hence, your growth strategy has to be centered on your customers.
Don't fall into the trap of only focusing on internal goals (e.g., revenue increase). Instead, think about your customers and how you can make their experience better. For example, is there a new solution or an add-on that your customers will benefit from?
4. Addresses Known Risks
Every growth strategy should outline risks and have a mitigation strategy in place. Otherwise, you will likely deal with the risk in real-time - usually with tunnel vision. In other words, without full consideration of the big picture (e.g., growth strategy).
All known risks and the processes for dealing with them should be established upfront. Of course, not all risks can be identified at the beginning, but it is foolish to ignore known threats. For example, regulatory changes, shifting trends, product recall, or a new incumbent entering the market. These are all risks that should not be ignored.
5. Realistic Goals
Simply put, you have to be realistic with your growth strategy. If your annual growth rate is 8%, setting a short-term goal that triples your revenue is not realistic. Sure, there are exceptions, but continually missing goals is demoralizing and will lead to productivity issues. All strategies, including growth strategies, should be ambitious, but at the same time, achievable.
Let's recap two crucial points of this post: 1) a great growth strategy contains a strong USP, clear goals and tactics, is customer-focused, addresses known risks, and is also realistic. The second point, 2) a great growth strategy doesn't have to be complicated, as long as it addressed all the essential elements we discussed above.
Lastly, take the next step and create a one-page growth strategy (draft) with the following five sections: USP, Growth Goals, Tactics, Customer Benefits, and Known Risks.
Related: Growth Strategy (PDF Document)