Every business needs to expand to succeed and survive in a competitive environment. But while most organizations have no trouble growing, others fail tragically because of unreliable growth plans. Some growth strategies are based on false assumptions that can lead to wasted time, money, and resources.
In this post, we’ll explore five growth strategies that are most likely to fail because they’re based on false assumptions and provide tips on how to avoid them.
Strategy #1: Expanding Into New Markets Without Doing Your Research
One of the most common growth strategies is to expand into new markets, but it’s important to do your research before making this move. Just because you’re successful in one market doesn’t mean you’ll be successful in another.
False Assumption: All markets are the same.
Reality: Different markets have different needs, wants, and preferences. You must understand the unique dynamics of each market before expanding into it.
Strategy #2: Focusing On Customer Acquisition at the Expense of Customer Retention
While acquiring new customers is an expected growth strategy, customer retention is equally important, if not more so. Retained customers are more likely to make repeat purchases, stay loyal, refer others, and spend more money per purchase than new customers.
False Assumption: New customers are always better than existing customers.
Reality: It costs more to acquire a new customer than it does to retain an existing customer. Additionally, existing customers are more likely to make repeat purchases and refer your business to others.
Strategy #3: Launching New Products or Services Without Validating the Demand
Launching new products or services can be a great way to grow your business, but it’s crucial to validate demand first. If you don’t, you risk wasting all those resources on a product or service that no one wants.
False Assumption: If we build it, they will come.
Reality: Not all new products and services thrive. Validating demand can help you identify potential problems with your product or service before you launch it. This allows you to make necessary adjustments and increase your chances of success in the marketplace.
Strategy #4: Offering Discounts and Promotions to Attract New Customers
Discounts and promotions can be a great way to attract new customers, but it’s important to use them strategically. Overusing discounts and promotions can devalue your brand and make it difficult to turn a profit.
False Assumption: Customers will always choose the lowest price.
Reality: Customers are more likely to choose a product or service that offers them value, not just the lowest price. Value can be defined in many ways, such as quality, customer service, or convenience.
Strategy #5: Following the Latest Trends Without Understanding Your Customers
While it’s important to stay up-to-date on the latest trends in your industry, it’s even more important to understand your customers and what they want. Just because a trend is popular doesn’t mean it’s right for your business.
False Assumption: All trends are created equal.
Reality: Different trends will appeal to different customers. It’s important to understand your customers’ preferences before following any trend.
If you want your business to succeed, take the time to prepare for growth with the right resources. Don’t rush into expanding without weighing the pros and cons first. If you need professional assistance, we at Sales Focus Advisory can assess your plan and identify the growth strategy most likely to fail your business. Visit our website for more information.