Every, well, almost every, let’s just say most great CEOs are always thinking about growing sales. recently Chris Tully, of Sales Xceleration spoke about growing sales to My CEO ThinkTank Peer Group. One of his slides got me thinking (two things about that, #1) yes, sometimes I think and #2) Chris dropped much more than just one thought-provoking concept). The concept that resonated the most was Chris’s, Growing Sales as represented in the image below.
If you’re the CEO of a small startup, and your product does not dominate your territory (geography) and niche, then growth strategy is easy. Concentrate on building a more differentiated and better product. Left out of this slide is the other possible path, build a better sales and marketing organization. Easily said… strategy is easy, executing strategy… not so much. Early stage companies can usually stay in the green box of the above graphic.
But what if you have achieved significant market penetration in your initial target market. At this point, it becomes more expensive to gain that next percent of market share than it is worth. That’s when it’s time to, as they say at Taco Bell, “think outside the bun”… if your bun was a green box. It’s time to think outside the green box. It’s time to think about how do I expand my market. You now have two simple options (the orange boxes). Expand your product or expand your markets. Or you could go for broke (the red box). Let’s look at the choices.
- Move from the green box to the orange box on the right – Add adjacent products or services. For instance, if you currently sell dishwasher soap, you can move into laundry detergent. In this case you’re selling a similar product to the same customer who already knows… and hopefully trusts you. By the way or as you texting geeks say, BTW, if your customers don’t trust you? You should probably stay in the green box and improve your product until they do. You will have more success growing your revenue by delivering a better product than by trying to sell your crappy product in new markets.
- Move from the green box to the orange box above – As an example, imagine you are a manufacturer of dishwashing detergent selling to the US consumer market. You have the option to grow geographically by expanding to Mexico and Canada or you can expand from selling exclusively to consumers and packaging and selling the product to commercial institutions.
- Move diagonally up and to the right from the green box to the red box – This is a difficult and risky jump. This is where you go when you’ve reached maximum penetration in all possible global markets to all types of possible kitchen users. Now you have to move to a new type of customer, a new type of product. It’s like starting a totally new company.
Using the four boxes to examine your growth options provides a logical construct to make rational growth decisions. Try it.
In my ThinkTank CEO Peer Group, we discuss sales issues all the time. We work on many issues to improve our businesses, our leadership capability and ultimately company growth. Want to know what it feels like to work with a group of Peer CEOs dedicated to growth? Want to know what it’s like to have a professional executive coaching session? Try a complimentary, one-hour, online coaching session and we can discuss this and other issues. Schedule your session now.