Table of contents:
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Types
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How to Apply Them
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Aligning the Organisation
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Benefits
You've built a product, and now the time came to grow the business. It can be a struggle, but product growth strategies can be the answer to this. Additionally, these strategies can help you develop new products, market them, penetrate new markets and reduce business risk.
Here, we will take a look at four types of the product growth strategies, and learn how to apply them in different stages of the customer lifecycle.
Types
There are four basic types of growth strategies:
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Product Development Strategy - it deals with how you can develop new products to serve your customers and grow your market share;
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Market Development Strategy - it focuses on identifying new market segments and (or) new geographic markets that you can serve;
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Market Penetration Strategy - it is designed to increase sales and grow market share for a particular product or service;
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Diversification Strategy - it helps to reduce business risk by entering new markets and (or) developing new products.
Each company is unique and may require a different strategy. Examples? A new product should work towards solving a new problem, on the other hand if you want to expand your product user base or develop new customer segment, use Market Development Strategy. If you want to increase sales and achieve a larger share of the market than the competition, use Market Penetration Strategy.
How to Apply Them
Understanding the Customer Lifecycle is important when it comes to apply product growth strategies. It involves several stages: acquisition, activation, advocacy and retention. These stages help identify the customer's journey with the product, which then helps decide which specific plan of action to apply. For example, if a company wants to achieve market development, they can work towards increasing customer acquisition.
On the other hand, if a company wants to achieve a larger share in the market, Market Penetration Strategy would be suitable. You can apply any of the four product growth strategies depending on your end goal or requirements. If executed successfully, a product growth strategy can help develop a product that is more appealing to customers, increase market share, and generate more revenue.
So, here we come to the next step:
Aligning the Organisation
Aligning the entire organisation around your product growth strategy is key to meeting a common goal.
All teams must work together in a clearly defined manner to ensure success. Having a focused plan of action can help the company develop a product that is more appealing to customers, increase market share for a product, and generate more revenue. Being clear about the product growth strategies that you wish to use can help your teams work seamlessly.
Benefits
Increased appeal to customers, increased market share, and more revenue are the three core benefits of a successful product growth strategy.
When the goal is to develop a new product or expand the market share, a well-thought-out growth strategy can be helpful in achieving these goals. By gaining an understanding of the customer lifecycle, you can identify key stages and develop strategies to boost performance at each point. Through aligning the entire organisation around your growth strategy, you can ensure that everyone is working towards the same goal. In this way, you can maximise the appeal of your product to customers, consolidate your position in the market, and drive revenue growth.
