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One huge secret behind sales growth is offering a product or service that speaks to the customers – that fulfils an important customer need.
Selling may not be the issue. Rather, as a business coach, I often need to point out that the sales issue may be the value proposition for customers.
According to an indepth study of 39 US and UK firms, “the key driver of sales growth was the innovative product or service idea.” The key to business growth – critical stuff.
“Competitive strategies typically focused on product quality rather than price… ”
“For product based firms, competitive strategy focused on custom technologies, while for service based firms the emphasis was more often on a close understanding of clients’ needs and relationship building.”
The study was conducted by Kingston University, London and Babson College, Massachusetts for Her Majesty’s Treasury and the UK Department for Business Enterprise and Regulatory Reform.
In addition, high growth firms, often the high tech firms, were market creators. They needed to create the demand – to invest in upfront marketing with no guarantee of a return.
Interestingly, the data also showed that growth was not a smooth upward progression – growth is “episodic and irregular.” There were often dips in revenue between quarters or years. As a result, the authors warn of relying on simple growth models.
Finally, the dominant marketing strategy was word of mouth. So, businesses needed to consider other methods of promotion in order to continue the growth.
This is the reality of high growth firms.
For more resources, see the Library topic Business Development.
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Tove Rasmussen, of Partners Creating Wealth, offers business expertise worldwide to help organizations grow, and disadvantaged regions thrive.
Photo credit: thms.nl
