We discuss the most popular methods to accelerate your growth. The strategies we cover today will be for businesses that have a product or service with product market fit, and that customers love.
One of the most dangerous things a business can do is to pour excess amounts of resources into growth accelerating strategies, only to churn and burn customers as fast as they can acquire them, eventually leading the company into bankruptcy.
Paid acquisition is one of the most popular ways a business can accelerate their growth. Marketing channels such as paid ads on Facebook and Google dominate the landscape, but there are many other platforms that businesses can pay their way into getting their brand in front of customers.
The reason why paid customer acquisition is so popular is simply because it works and once marketers lock on to a campaign that generates a positive ROI, they can easily turn up the adspend and have that ad run in any country and seen by as many people as they wish to target.
Facebook ads are one of the easiest ways a business can target potential customers, especially if your product or service is customer focused. Whilst it is a push strategy, where you are pushing your product onto customers, and it’s a cold lead, Facebook’s advanced demographic targeting allows you to pinpoint the exact types of customers you want to reach.
Google ads is another popular channel for businesses to use to get their brand in front of the right customers. In fact, businesses can choose the exact search keywords to have their ads show, so they only appear when their customers look for their product or service. Due to the warm nature of the leads generated, Google ads are normally more expensive to run, but similar to Facebook, marketers also love Google, as they can scale a campaign almost infinitely once they have a positive ROI generating campaign.
Building in Viral Loops
Don’t want to spend your way into growing your business? Consider building a viral loop into your product or even your marketing, to take advantage of the benefits of word of mouth. Viral loops is a mechanism that drives continuous referrals and growth.
Product Based Viral Loops
Many fast growing startups have adapted growth strategies built into their core product, so their users can help spread the word of mouth and grow the business through organic referrals.
Dropbox – Dropbox was one of the first cloud storage companies to build a viral loop into their product, giving users extra storage space for inviting their friends to sign up.
Uber – Uber also has a viral loop in the form of a referral program, giving users free rides for inviting their friends.
Robinhood – Robinhood is a trading platform, famously known for not charging traders a transaction fee, and powering the famous AMC and GameStop short squeeze frenzy. Robinhood’s viral loop was also in the form of a referral program, giving away a stock to those who invited their friends to sign up for the platform. This was quite significant, as they gave away exactly what people wanted to buy on the platform anyways, bringing in over 1 million users to sign up before they even launched.
Marketing Viral Loops
Marketing viral loops, as you can guess, is when your ads resonate with your audience to the point where they share your ad with their friends, skyrocketing the reach of your campaign. Viral marketing strategies are nothing new, from controversial newspaper ads to TV ads that generate hype, the fundamentals have always remained the same.
These days, you will most likely run a campaign on Facebook, where users can engage, comment, or share your ads if you want to hit that viral loop. Ads that go viral are usually not by accident but are well-crafted campaigns that are designed to draw out a specific emotion from the viewer.
Robert Plutchik’s “wheel of emotions” illustrates some of these emotional spectrums.
If you want your ad to be viral, then you need to hit one of the emotions in the inner circle. Once you have an idea on the emotion you want to trigger, then you can create an ad creative (usually in the form of a video) to run on Facebook.
Affiliate partnerships are when you pay someone for referring a customer to you. One of the best ways to align the motives of your brand ambassadors and influencer accounts that you bring on board is to reward them on a performance basis, for every new customer they bring on board.
Reward programs have been around for years now, with the classic referral code that you add to the checkout, but more recently, affiliate programs are able to track end to end, using an “affiliate link”. Your brand ambassadors can give out this tracking link to their followers and as they click through using the link and end up buying a product from your website (within a set time period, usually 30 to 60 days), your ambassadors will get a share of the sale.
This is becoming the preferred way to run an affiliate program nowadays, as influencers and brand ambassadors are able to get recognition for directly converting their followers to your customer.
As you start growing, and when you feel like you’ve exhausted your paid acquisition strategies and partnership strategies, the next way to grow is through acquisitions. This is when you can buy out another business to strategically acquire its assets. This could be in the form of talent or assets, such as distribution channels, media outlets, or IP.
Here are the most common reasons for acquiring another business:
· Up and coming competitor on track to eating into your market share
· Faster expansion into another field
· For their talent
· For their IP
· For their customer base
Before you acquire another business, you must ensure that your vision moving forward is clear, and you know exactly how the asset you acquire will fit into your vision. You never want to be in a position where you spend an exuberant amount of resources to bring another business onboard, only to have it fail. Microsoft acquiring Nokia, Google acquiring Motorola, eBay acquiring Skype, are all big-name examples of failed acquisitions of the past.
Once you know how the business to be acquired will fit in, you need to ensure that the talent from your company can manage the additional workload of suddenly bringing on another business to manage.
There are many ways to approach acquiring another business, from looking at marketplaces such as Micro Acquire or Empire Flippers, which mainly specialise in trading online businesses, to your local business sales directory if you’re looking to buy out a small business, to directly outreaching to the CEO or owner of the business you have in mind and making an offer directly.
Once you have a business you want to acquire, you need to know how much to pay for it. There are many methods of valuing a business, but the most common way is Net Present Value = All future cash flow at a specific discount rate.
Screenshot of CFI’s Corporate Finance 101 Course.
Other methods to value a company is by looking at the Annual Recurring Profit and putting a multiple on it. Different businesses in different industries attract different multiples, from a simple 1 to 2x multiple if the business does not have any outstanding assets to a 10-20x multiple if the asset is in demand or a market leader in its space.
Building a Sales Team
Building a sales team is another effective way to grow your business, especially if you want your product or service to be talent up by a larger business, then you will need to develop an outbound sales team.
Running the Numbers
However, before you go out and start hiring a sales team, make sure you run the numbers, and determine factors such as the average size of a sale, expected sales cycle, priority products, commission rates or services you want your team to push. Once you have an answer, you will get a clearer sense of the team you need to build.
Can you deliver
The next step is to ensure your operations team can handle the size of customers your sales team can bring in and ensure that you can deliver what was promised. The mark of death of a company is to be driving sales through over promising, only to under deliver and burning your relationship with the customer.
Just like any other position, if you’re bringing onboard a sales team but neglect training them, then you will not see the results anytime soon. Sales staff need to train up on your product or service, so they can answer customer questions on the spot. The reason why sales teams have a bad reputation in some industries is due to their lack of training, only for sophisticated customers to realize that the person selling knows nothing. You never want this type of staff representing your company, and it’s up to you to have processes in place to onboard them properly.
If you can’t measure, you can’t improve. From the number of calls made to the number of meetings created to the final conversion rate, you need to track everything if you want to be able to optimise your funnel and get it as productive as possible. This is where KPIs are important as your staff will have goals to hit and if achieved, they can reap in the fruits of their labour alongside the company.
To wrap things up, accelerating growth can be achieved through many methods. You don’t need to implement all these strategies at once just to get growth, in fact, I recommend you to choose one, and focus on it for 12 months.