For the previous a number of years, I’ve written a couple of posts every fall that handle some side of selling planning. With the fourth quarter of 2023 starting right this moment, many entrepreneurs may have began (or quickly will likely be beginning) their planning for 2024.
Final week’s put up mentioned how entrepreneurs can use the jobs-to-be-done framework to outline their market and decide how their services or products create worth for purchasers. This framework helps entrepreneurs pinpoint what’s going to inspire their clients to purchase.
The next put up describes a framework entrepreneurs can use to determine what sources of income development are (or may be) accessible to them. Figuring out sources of potential income development is a vital a part of a sound planning course of.
I printed this put up in 2019, however the content material of the put up is as related right this moment because it was 4 years in the past. What follows is a flippantly edited model of the unique put up.
The Authentic Put up
Driving constant, worthwhile income development is likely one of the best challenges that enterprise and advertising leaders face. The important thing phrase in that sentence is “constant.” Many firms can produce substantial income development sporadically or over a brief time frame, but it surely’s exceptionally tough to constantly generate above-average development over the long run.
Enterprise and advertising leaders should carry out two distinct however associated duties to maximise income development:
- They need to determine what development alternatives are (or may be) accessible to them and decide which of these development alternatives are most engaging.
- They need to discover the appropriate steadiness between short-term and long-term development alternatives.
On this put up, I will give attention to how enterprise and advertising leaders can determine development alternatives.
Structural Sources of Development
Step one in figuring out potential development alternatives is to know the dynamics of income development – the way it occurs or, extra precisely, the place it originates. There are, in reality, a number of distinct sources of development. These structural sources of development will not be depending on how an organization is organized or on the forms of services or products it sells. As a substitute, they’re based mostly on the enterprise and advertising methods that an organization makes use of to faucet into every supply.
- Gross sales of current merchandise in current markets (market penetration technique)
- Gross sales of current merchandise in new markets (market improvement technique)
- Gross sales of new merchandise in current markets (product improvement technique)
- Gross sales of new merchandise in new markets (diversification technique)
- Persevering with gross sales to current clients (base retention)
- Gross sales gained from the competitors (market share achieve)
- New gross sales in an increasing market (market positioning)
- Gross sales from increasing into associated markets (adjoining market growth)
- Gross sales from increasing into new, unrelated strains of enterprise (diversification)
I’ve used each of those fashions when working with shoppers to border our discussions about tips on how to develop. However through the years, I’ve expanded on these fashions to create a extra detailed framework of the choice methods to generate development. The present model of my framework is proven within the following diagram.
This framework is an effective instrument for exciting your interested by tips on how to develop your online business and for figuring out the expansion alternatives which might be (or may be) accessible to your online business. When utilizing this framework, it is essential to maintain a number of issues in thoughts.
First, the excellent news is that these structural sources of development are at all times current, at the least to some extent. Their existence is not dependent available on the market situations an organization is dealing with at a specific second in time. Nonetheless, the quantity of income that an organization can get hold of from every supply is tremendously influenced by the market and aggressive setting.Â
So the framework identifies potential sources of income development, but it surely would not inform you in regards to the relative attractiveness of these sources. You will want to make use of conventional market and aggressive evaluation instruments and strategies to carry out that analysis.
Second, no single supply of development is probably going to offer all of the income you’ll want to attain your development goal.
And third, every supply of development has distinctive attributes and dynamics. So you will want a selected technique and sport plan for every supply of development you select to pursue.
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