Are you wondering how to grow your business, diversify your products and services, or improve shareholder returns? Many organisations research markets, value chains, and competition to uncover sectors where they can preferentially compete and capture market share. But many leaders then come unstuck - how do you translate this theoretical opportunity into what your organisation should take to market and realise the potential market share growth.
It sounds blindingly obvious, but to grow your business, you need to take something to market that people will choose over the competing alternatives. However many organisations have historically relied on luck when it comes to developing their products and services. As controversial as it sounds, there is evidence to back up this claim.
When organisations develop new products or services, they will always try to make them ‘better’; faster, lighter, more powerful, smaller, cheaper, and so on, and they’re great at delivering the new features that were designed. The problem comes when the product or service gets launched. They’ve made the product ‘better’, but for some reason people aren’t buying it! Why? Because they have made the product better, but not in ways that drive customer choice - ways that cause a customer to pick product A over product B..
Most organisations don’t know what drives customer choice, it’s largely down to luck as to whether they’ve improved their product on a dimension that drives choice (or not). To understand what drives customer choice and uncover opportunities to create new value, you need to leverage the right growth strategies.
The best method for understanding the drivers of customer choice and uncovering opportunities to create new value was developed by Professor Clayton Christensen of Harvard University. He developed Jobs To Be Done - a methodology that is now used by all the world’s most innovative organisations. The outputs of this approach provide organisations with two critical insights:
With these insights, organisations can quickly translate a theoretical opportunity into specific growth opportunities that actually exist within target sectors. The challenge then is for them to come up with new solutions ensuring that the new products or services are better on the dimensions that drive customer choice, and beat what’s available in market.
At this point, organisations typically fall into a big trap - they fall in love with their first right idea - the first idea that appears to address the opportunity better than the competing alternatives. This is dangerous. The reason it's dangerous is that the first idea may not be the best idea and the only way to find the best idea is to check with customers to see which idea creates the most value. Which means the ideas need to be tested with customers to find out which one they’d choose.
Growing a business is hard, and there are many reasons why new a product or service initiatives could fail. At Purple Shirt, we specialise in helping businesses grow by implementing best practice methods for developing new products and services that will deliver predictable revenue growth. We’ve helped businesses implement these processes and embed them into the operating rhythm of their organisations.
Our growth strategy framework sets out a path to prove whether customers will choose you over the competition, before you’ve made any significant investments - you don’t want to be ‘betting the house’ on an unproven idea. If you’re interested in learning more about business expansion strategies, B2C or B2B growth strategies, or other growth strategies, then give us a call - we love to talk about all things strategy, growth and innovation.