30 second summary:
Driving growth is a common goal for many businesses. We look at where opportunity for growth lies for most organisations and cover 3 reasons why it’s effective to start with existing customers when aiming to expand into new markets.
Clients asked through this COVID period: Help us grow our business – to existing and new clients.
Our answer: Take a fresh look at your markets, products and services to identify where there is most opportunity for growth.
For three reasons it pays to start with your existing markets and customers:
- There is often a lot of untapped growth potential in current markets and customers.
- Your existing customer base is a rich source for referrals and recommendations with which to win new customers in your existing market and enter new markets.
- Existing markets and customers are best placed to tell you how good, relative to the competition, your products/services are. They are also perfectly placed to suggest new products/services that you could offer to complement the value you already give them.
By starting with where we are – our products/service to our existing markets and customers – we discover four tried and tested routes to business growth:
- Growing our business in existing markets through existing products/services. Market Penetration
- Growing our business in existing markets through new products/services. Product/Service Development
- Growing our business in new markets through existing products/services. Market Development
- Growing our business in new markets through new products/services. Diversification
Explore this through Ansoff’s Matrix to get a handle on how to drive growth via new and existing markets, new and existing products and services.
1. Market penetration: Selling more of the same to existing customers – winning larger share of purse. Winning new customers in the market – growing market share.
3. Market development: Finding customers in a new market (sector or geography) for existing product/service portfolio.
2. Product/Service development: Expanding product/service portfolio to offer more of a one-stop-shop to existing or similar customers.
4. Diversification: Taking expanded products/service portfolio to customers in new markets (sectors or geographies).
Growing into new markets whilst expanding and retaining existing ones inspires a culture of innovation. Businesses that start by expanding their presence in existing markets discover opportunities for new services, for growing recurring income, and for increasing cross selling. They also find avenues for going naturally into new markets. By growing into new markets and/or developing new products and services, teams broaden their thinking and begin to do things they never thought possible before – fuelling innovation in other areas of the business.
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