The perils of cross-category expansion
Initially it may seem that the easiest way to grow is by adding new products or services to your range, but this may not always be the best growth strategy to adopt. You could end up wasting your time and money.
Just because you’re successful in one category doesn’t mean you’ll automatically be successful in others. It doesn’t follow that if you’re wildly successful at selling flavoured milk you’ll also make a fortune with flavoured yoghurt. Why? There’s already a market leader in the flavoured yoghurt category, and its going to cost a lot to attract their customers. You’re not currently seen as a yogurt supplier, so it will take a lot of time and money to educate and convince customers to switch.
If you decide to expand by moving across categories, go into the process with this in mind.
Gaining market share in your current category
When it comes to competing within your own, established category, if you’re not currently the market leader, you won’t get there by simply copying what they do. In marketing, it’s all about perception. In the minds of your customers, the market leader does the job the best.
To motivate customers to switch, you must focus on offering an alternative (and better) solution than that available from the category leader. Start by focusing on one benefit that the leader doesn’t offer or isn’t promoting.
Put yourself in your customers’ shoes and think “What’s in it for me?” If you’re a carpet cleaner, it may be as simple a message as “We turn up on time”. Focus on this benefit and give customers a valid, memorable reason to switch.
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Position yourself as a specialist
If you try to speak to everyone in the market, chances are, not everyone will hear you. If you’re speaking to people who don’t need or understand your message, then they won’t respond and you’ll be wasting your money.
To make your message more effective, identify your ideal customers and tailor your message to speak directly to them.
When customers are looking for a photographer, who will they choose? If they want a big image of their children on the lounge room wall, they’ll most likely go to a photographer who specialises in photographing children. How many brides do you know who go to photographers that are not wedding specialists? To a customer, a specialist presents a reduced risk. Specialists speak directly to target markets. Specialists help motivated potential customers to purchase. Become a specialist. It’s a relatively easy strategy to adopt.
Factor growth into your marketing plan
A simple marketing plan can help you grow with focus. If you’re not confident in this area, consider outsourcing the job to a professional – you may find it cheaper and more effective in the long run.
There’s no need for your plan to be extensive and intimidating. It only needs to be a few pages long. In fact, that way you’re more likely to refer to it and maintain focus on your marketing activities. Don’t forget to include a definition of your core customers so that you clearly understand who to speak to for best results. Refer back to your plan regularly, remain focused and prepare yourself for growth.
Got any more tips on growth strategies to help others avoid growing pains in business? Please share them below.