The past few years have been challenging for most small businesses. The economy continues to sputter, government continues to pile costly regulation on small businesses and selfish, cowardly politicians refuse to deal with existential budgetary issues. Despite those challenges, we still need to grow our small businesses. As we approach the new year, it's time to evaluate current strategies and develop new ones that that reflect marketplace realities. Here are some tips to consider as you develop your growth strategy for the coming year.
What's Working Now?
An obvious starting point for developing your growth strategy is to evaluate how you've done in the current period. Ask yourself:
- Which lead generation channels have been successful and which haven't?
- For each lead generation channel, what percentage of leads convert to customers?
- Are you getting enough leads to meet your growth goals?
- What challenges are you facing in growing your company?
One of the prerequisites to being able to answer these questions is having the right tools in place to give you data-driven analysis of your strategies. Are you using marketing automation and CRM software? Those are essential tools for growing your business in the 21st century. If you have those tools, are you measuring the right things? For every lead generation channel, you should be able to gauge how effective they are in generating leads. You should also be able to determine the quality of leads produced by each channel - in other words, are the leads converting to sales?
As you go through this process, keep in mind that what worked last year will not necessarily work next year. What worked five years ago will almost certainly not work next year.
Is Your Strategy Adaptive?
In his book, The Lean Startup, Erich Ries advocates for an environment of constant experimentation in managing a business. He came to this conclusion the hard way. His first business failed because he created a product without doing the experimentation to determine whether there was a need for it in the marketplace. He then launched a company (IMVU) that provides a 3-D avatar chat service that has over 3 million likes on Facebook and is successful financially. The product that he eventually launched is much different than the one he originally envisioned. He conducted a series of experiments and solicited user feedback on each one. He was able to use the feedback to adapt his strategy to be successful.
Small businesses need to constantly validate and adapt their strategies by means of marketplace feedback. Seek out your customers and prospects and listen (not talk!) to what they need. Take that feedback and change your strategy accordingly. Many managers blame the failure of a strategy on poor execution when the real culprit was actually an unrealistic strategy.
In the case of your growth strategy, success can be measured fairly easily if you have the tools mentioned previously. The question to ask is: how many leads did the tactic produce and how many of those leads converted to sales?
In many ways, small businesses are better suited than large enterprises to deal with the uncertain business environment we face. It's much easier for a small business to adapt their strategies based on experimentation than large enterprises who are committed to their strategies regardless of the needs of the marketplace.
Are You Using Inbound Marketing as a Lead Generation Channel?
Every small business should be using inbound marketing in their lead generation efforts. Inbound marketing (using social media and your website to generate leads and customers) matches your selling process with the way buyers make decisions. I've seen several studies that conclude that 70% to 90% of purchases originate with research on the internet. The DAC Group concluded that 71% of enterprise purchase decisions originate with a search engine query. If you're not optimizing your website and social media channels to sell, you can bet that you're competitors are. And guess what - they're taking your leads.
Inbound marketing is not an on/off proposition. To develop the web traffic and leads needed to move your growth needle, you need to devote 6-12 months to optimizing your website and providing educational content by blogging and social media sharing. The longer you wait to start the farther behind you fall relative to your competition. I highly recommend inbound marketing to any small business that wants to grow next year.
I'm hopefully confident that the economy will improve in the coming years - we're likely coming out of a very deep trough and will start to trend upwards. It's important to realize that the game has changed - what worked in the past won't necessarily work in the future. Take a realistic, critical look at your current strategy and do more of what's working and jettison tactics that don't. Create an adaptive strategy that is constantly being tested against marketplace realities - change in midstream if the market tells you to. Use inbound marketing to match your customers' buying processes - it's a proven tactic.