What is Business Growth?
Defining business growth is challenging with many professionals disagreeing on an official description. One commonly utilized definition of business growth is as the bottom line profitability and market share presence increase a company experiences.
An alternative definition of business growth is the expansion of a company occurring in one or multiple ways. From a marketing strategy to business model updates there are virtually endless opportunities for a business to grow.
A crucial consideration for whether something occurring in a business can be defined as business growth is if that occurrence can be measured. If something can not be measured, it is difficult, if not impossible, to determine that it is growing.
Growing business sales and success is a primary motivator of many people that start a company. However, while the large majority do, not every company considers sales and business success as their top priority.
Some businesses want to make sure that their employees or customers stay their top priority. For these companies, growth strategies might focus more on both the overall customer and employee experience.
To encourage growth business strategies, plans, and objectives should be in alignment and complementary to one another. In fact, a business growth strategy should be considered throughout everything ranging from the initial business plan development to product line improvements.
Growth vs Growth-Driven Business
Identifying the source of business growth or measuring growth strategy effectiveness can be challenging. For many professionals, it is helpful to analyze the differences between growth-driven businesses and growing businesses.
While a growing business is primarily focused on fast results, a growth-driven business is focused on long term, sustainable business growth. 5 crucial considerations for better understanding the difference between growth vs growth-driven businesses include-
1. Marketing and Sales Relationship
The relationship between sales and marketing departments can be tense and full of misunderstandings, this incompatibility between departments may result in major growth issues for the entire organization. A growth business makes a concrete effort to challenge any misconceptions that these departments may hold towards each other.
A common misconception that marketing department personnel hold regarding the sales department is that sales representatives do not understand the persuasive power of marketing materials. On the other hand, 80% of full time sales professionals express that marketing professionals do not understand real world sales strategies.
Compatibility between marketing strategy and sales strategy is essential for developing and maintaining business growth strategies long term. Companies should make sure that the two departments have growth goals to work towards accomplishing together.
2. Customer Journey
Every business understands that an established customer base is crucial for long term business success and profitability. There is a significant difference between a growing business and a growth-driven business in regards to customer base priorities.
A growing business is primarily focused on obtaining new clients and new markets rapidly. Alternatively, a growth-driven business is focused on long term customer base retention.
The growth goals based focus of a growth-driven business leads to the retention of new customers long term. Alternatively, a growing business may boast high numbers of new customers temporarily but then fail to retain those new customers long term.
Growth-driven companies are purposeful in every step of the customer journey, from initial awareness to the brand ambassador stage. These growth-driven companies understand that business success is highly dependent on long term customer retention.
3. Brand Development
For both small businesses and large corporations, a clear indicator of a growth-driven business is the compatibility between the brand and customer experience. The established brand and business reputation should always be reflected in a company’s customer service capacities.
Defining a brand requires a comprehensive understanding of both the business model and growth goals that the company holds. In fact, a company’s unique brand should be considered in everything from its customer service interactions to its social media presence.
4. Market Focus
A growing business and growth-driven business have different focuses when it comes to new customers and new markets. A growing business may appear unrelenting in its drive to acquire new customers, the focus and motivation of these efforts are for profit generation, not for customer experience.
A growth-driven company is passionate about customer service for both new customers and long term clients. Growth driven corporations make sure to understand any new market before entry, even anticipating market changes before they occur.
For a growth-driven company, business success often looks like making sure that customers are provided with not only a product line that is great but universally excellent customer service every step of the way.
5. Technological Investments
A growth-driven company has an exceptional business strategy and long term business planning in place in regards to technological advancements. Instead of waiting for a crisis to make changes, growth-driven companies are well prepared for any changes that the future may bring.
A growing business may not accomplish this same proactive technological investment due to a lack of capital or pursuit of a growth goal that is skewed. For instance, hyperfocus on a sales or marketing strategy by a growing small business or new business could result in insufficient capital available to address an oncoming market crisis.
Conclusion
Business growth is crucial for bottom line profitability and business success.
There are important differences between business growth and growth-driven businesses that every business should be aware of.