It’s easy enough to “start” a business.
After all, even a kid with a lemonade stand technically has a business.
However, the difficult part is actually growing that business into something big and profitable. Sure, you might be happy with your little lemonade stand, but it won’t be paying the bills on its own.
The growth stage is where roughly two-thirds of entrepreneurs falter. They realize the amount of dedication you have to pour into growing a business and get scared off. They let theirs fizzle out within the first year or two.
So, why is this growth so difficult?
Well, dedication alone isn’t enough. You also have to have a business that is unique and know how to manage that in a way that encourages growth...
Your business has to have a niche, and it has to be both well and widely received.
You need a business that solves a problem or offers a better alternative to an existing solution.
You need a business that customers want to be a part of and will go out of their way to support.
One that gets its name out there to as many people as possible. That’s how you build upon a loyal customer base.
Of course, it’s one thing to know what you need, but another to actually figure out how to get what you need. Luckily for you, this post explains how to get those necessities to keep your company growing in a competitive, saturated market.
Finding Your Niche, And Comparing It
As previously mentioned, a business that doesn’t have a niche is going to flop. You’re either trying to enter into a dominated market or solve a problem that nobody thinks is a problem. This, of course, leads to a lack of customers and an inevitable failure due to a lack of profitability.
Also, once you’ve found that niche, you need to know how you compare to the competition. That way you can possibly pivot your niche in a way that differentiates your business from the competition.
Find That Niche!
Before you can do any kind of comparisons, you need a niche. A business that isn’t different than its competition or has no competition is very unlikely to succeed, so find out where you can innovate.
For example, let’s consider Walmart.
Walmart’s original niche was to be an all-in-one shopping center that could aggressively lower prices to get as many customers as possible while sacrificing its profit margins―a concept that wasn’t as popular at the time.
That same niche has served the business well to this day because, surprise, people love low prices, and will go out of their way to get products at those rates.
Because of its size, there’s only one true competitor currently: Amazon. They both occupy the same space, albeit Amazon is online-focused and Walmart is primarily physical. That being said, both have figured out that they needed a new niche to differentiate themselves from each other.
In Walmart’s case, they have expanded their online presence greatly, with features like delivery, car pickup, and purely digital purchases, in order to push their “aggressively low prices anytime and anywhere” model to the online space. In Amazon’s case, they doubled down on their online presence (although Amazon has created a few physical locations) by lowering their free shipping price limit and constantly investing in their customer service and delivery locations.
Walmart’s niche is just generally existing: wherever you are, you’ll probably be able to find a Walmart, and prices will match or be lower than surrounding businesses (which is really bad for local businesses, but that’s a whole different story).
If you need something right now you can go drive down the road to a Walmart and it’ll probably be there for you at a decent price. Perhaps even the best price available anywhere.
Amazon’s niche is their incredible online presence, having just about anything you want available for delivery in a few days and without any human interaction (apart from the mailman potentially). Both are direct competitors but have their own unique differences that can make you consider one or the other in different situations.
Scout Your Competitors
This both refers to what they’re doing, and what they aren’t doing. Your competitors are competitors for a reason, so if they have something unique―it’s worth looking into. After all, if you can match your competitors, then your business will look better to customers, won’t it?
Facebook does this a lot. It looks around to figure out what it could be doing and how to go about doing it, even if they aren’t necessarily competitors at the moment. For example:
Facebook modeled its Messenger after all the other big messenger apps like Skype, iMessage, etc. Although it doesn’t bring much that’s unique to the table, the sheer fact that it’s associated with Facebook catches the attention of many.
Facebook’s marketplace is, again, themed pretty heavily on the other big online marketplaces like eBay, Craigslist, and AliExpress. It focuses on local ads kind of like Craigslist but, again, manages to be popular mostly due to the existing presence of Facebook and the integration it has with it.
Facebook implemented its own streaming services in response to the growing popularity of streaming on social sites like Youtube and Twitch. Again, nothing is particularly unique apart from the Facebook integration and the ability to share your live status with friends.
The acquisition of Oculus was Facebook’s attempt to break into the VR industry (and it was successful). They seized this opportunity to make the first-time setup easier by logging in with Facebook accounts and then using those accounts to potentially advertise the product elsewhere (if the user streams).
The list could probably go on but there’s a clear idea here. Facebook scouted out all of the big players in various industries and looked at what they did. Then, they implemented their own solution that capitalized on their existing user-base while maintaining the original solution’s general idea.
On the other hand, figuring out what your competitors aren’t doing can be equally as effective. For example, let’s take a look at restaurants. In particular, let’s consider cultural cuisine restaurants, like Chinese or Mexican restaurants. These restaurants noticed a very blatant gap in the market: there are plenty of restaurants around, but none with our particular menu. So a Chinese restaurant in a town that has never had one will likely be a smash hit―even if the food isn’t anything to write home about.
Basically, Facebook got ahead by figuring out what other successful businesses were doing and taking inspiration from them, and restaurants can get ahead by filling in the industry gaps. The best thing you can do is to make a list of what your competitors are doing that is different from you, and consider if any of those differences are worth adopting for yourself.
Just don’t go too far with competitor scouting: it can induce an inferiority complex if you’re not careful and focus on their successes and your failures. By all means, take the hint and incorporate good ideas if they’ll work in your own business, but don’t let copying become the sole goal since that’s a good way to lose your passion for your job.
Turn “Half-Competitors” Or “Non-Competitors” Into Partners
Sometimes two businesses don’t directly compete with each other but have a common link somewhere. For example, a toothbrush business and a toothpaste business.
Silly example, but let’s go with it.
They don’t directly compete but likely share similar customers and goals. After all, they’re both teeth experts, right?
If you can find a case like that with your own business, it may be worth considering a partnership. A partnership should ideally benefit both parties, helping you leverage the user-base of both businesses with limited downsides.
For example, let’s take a look at the Starbucks and Spotify partnership. Sure, a coffee shop and a music-streaming service don’t sound like they would fit together, but there was a solution in this case.
The two businesses wanted to create a “music ecosystem”, and to do this, Starbucks employees were given access to a Spotify premium account and could create playlists that would play in the shop. Customers could then access those specific playlists through the Starbucks app and play it wherever they went, to give off an “extended coffeehouse” vibe by carrying the same music out of the coffeehouse to wherever they went next―usually work or class.
This partnership does absolutely nothing to harm either business, but there’s a mutual benefit from it. Starbucks and Spotify don’t directly compete, although they share some similar customers (people getting their coffee fix while streaming their favorite music, a very common demographic). Because of this, existing customers can very easily jump on board and join up with the other service to get the “full” experience. And even if customers aren’t interested in the partnership, it doesn’t hurt their experience.
Of course, there’s the possibility of undervaluing your own product when creating a partnership. Don’t do that! If a partner will actively makes your business look bad, stay out of it, and if your partner wants a significant degree of control in your business, carefully consider if it’ll work out for you.
Connect With Your Customers
Sure, you can be a faceless corporation that acts only as a figurehead, but a business that forms relationships with its customers will reap some significant benefits. Namely, customers will be more loyal, and more likely to refer others. So, how do you go about doing this? Well…
Listen To Your Customers
It’s true that many people don’t really know what they’re talking about, but you should always listen to your customers. Every once in a while, one of them will throw you a brilliant idea that you’ll definitely want to implement.
Also, if your customers are constantly complaining about a specific area, it’s probably worth looking into. The saying “the customer is always right” is false, but the premise behind that saying holds some water. Your customers are customers: if the business doesn’t work for them, they won’t invest in it. So if your customers are looking for something that you don’t have, give it to them so they don’t flock to someone else!
Try To Interact With Your Customers Closely
You could try and just grab as many new customers as possible and ignore retention efforts, but that won’t work very well. It’s better to slow your potential growth a bit and ensure that your customers will stay customers. And the best way to do this is to form a relationship with your customers.
A customer is going to have to think long and hard about leaving your business for another one if they think of you as a friend. Avoid using shady sales tactics, bend the rules a little, and communicate in a way to where customers are talking with a person rather than with a business.
Grab The Attention Of An Influencer
This is something that wouldn’t have mattered much in the past, but with how huge social media is, an influencer promoting your business can be better than any other marketing you could do.
For example, a Fortnite streamer that goes by the name of Ninja moved to Mixer from Twitch when Microsoft offered him a large cash incentive. Mixer has always been a clear runner-up to Twitch, but since Ninja was one of the largest streamers on Twitch, he brought most of his audience along with him and serves as a beacon for other users to potentially try Mixer.
For another, slightly more fun example, go to the Amazon page for the Boyfriend Pillow. Nothing seems particularly out of the ordinary, but go check out the most helpful review on the page:
“I bought this as a joke and now I am a true believer, and I blame each and every one of you for this. My comfort levels are off the charts.”
5,472 people found this helpful
A Youtuber by the name of JonTron posted this review for the product in one of his videos. And as shown by the number of people who marked his review as helpful, a huge number of people checked out the Amazon page that otherwise wouldn’t have. And of course, that likely means quite a few people invested in it themselves since he stated his approval of it.
Obviously it’s easier said than done to get the attention of an influencer. Bigger influencers get hundreds of requests and smaller ones won’t do much to help your business on their own. Fortunately, we’ve already made a guide entirely on how to grab the attention of influencers, and you can find it right here.
Prioritize Strong Customer Service
Customers love feeling like the business cares about them on an individual level, and that’s where strong customer service shines. So a business with great customer service will tend to have a much higher retention rate than other businesses.
The number one example of this is Amazon. It may or may not have the cheapest prices or the most consistent shipping, but they do have the best customer service.
Your package got damaged in shipping? Free replacement. You never got the package (or sometimes even lie about not getting the package)? Free replacement. You accidentally broke your product? Free replacement. You don’t like the product? Free refund.
The system can be gamed by people trying to abuse how lenient the customer service is, but the number of people it keeps around is well worth it. You can pretty much never waste your money buying off Amazon because you can get a refund no-questions-asked or a replacement if something goes wrong. And that sheer degree of security keeps many people around, even if they could be saving money or time elsewhere.
Because of this, it can be a good idea to bend the rules a little bit. Like your return policies might only allow for a month, but you can make special cases for customers and extend it to 45 days or so. Of course, this is a little sneaky, but it makes your customers feel like you care about them as an individual and are willing to “be their friend”.
Focus Heavily On Marketing And Especially Retention
This is important for any business, but a fledgling business needs to keep its customers around and keep growing at a steady rate. However we’re not going to talk about investing more in your marketing, since that’s obviously and frankly might not be a good idea if you’re investing too heavily. Rather, we’re going to talk about how you can change your current business cheaply and quickly to improve these metrics.
Give Customers Immediate Value
What does this mean? Well, a customer or potential customer is much more likely to continue being or become a customer if their investment is instantly worthwhile. If your onboarding process is long-winded, you’ll lose tons of potential customers halfway in the funnel due to frustration. If your marketing doesn’t advertise what your customers want to hear (benefits, not features), you’ll miss out on customers. If your customers don’t know where to go after they’re interested, you’ll lose customers due to frustration.
So what can you do to fix this cheaply?
In your onboarding process, research where the sticking points are and fix them
A smooth onboarding process makes it much easier for potential customers to start being customers
Perform a marketing audit to see if your marketing is effectively reaching your audience
Make sure you aren’t spouting jargon to your audience, and instead are giving them what they want to hear
Ensure that all of your marketing has clear call-to-actions
If you are missing CTAs, you won’t be able to convert interested customers.
Keep An Eye On Retention Numbers And Timing
Retention is key for any new business, so knowing your retention metrics is a great help. Notably, you need to research where you’re losing customers and see if you can slip in some assistance to keep them around.
Maybe you accomplish this through an exit survey, or simply assume based on their customer profile, but however you do it, make sure to use that info. Perhaps you find out that people are leaving after the first month of a subscription service, and decide to add pricing tiers and bundles that incentivize longer bulk subscriptions and continued subscription.
Advertise In Uncontested Areas
Uncontested areas are uncontested for a reason, but when your business is just starting out, a low-risk, low-investment, and low-reward marketing plan is probably better than using 90% of your funds to advertise somewhere more popular. You won’t see the benefits of this once your business gets bigger, so you may as well use it when you can.
For example, maybe you post an ad on a trading website or the newspaper. Or maybe you maintain a billboard or blog. All of these are relatively cheap and low-reach but can help you get your first customers that you so dearly need to keep growing in the future. Since the area is uncontested, you get “exclusive” control of it and get all or most of the attention of your few viewers. And some people specifically seek out fledgling businesses that interest them because of that sense of “friendship” we’ve talked about that comes from customer-business interactions at a local level.
The road to growing your business into a powerhouse is a very long and hard one. There’s a lot of places you can slip up and hinder your progress, and a lot of potential tactics you can employ that take time and money to think of and implement. But hopefully this guide gives you a good starting point on the road to success.
Of course, sometimes that road is simply too difficult to travel or would take too long to travel, and you need outside help. And there’s nothing wrong with that! A marketing consultant can help give you the head start you need to grow, and the benefit gained often far exceeds the investment.
Whatever you do, just keep in mind that success is guaranteed if you keep on growing and persevering through hardship. I mentioned that two-thirds of entrepreneurs give up after the first couple years, but that’s exactly what they did: they gave up. They could’ve kept going and kept growing, but they encountered an obstacle in the road and decided to ditch the path entirely.
You don’t have to do that.
Did we leave out any incredible advice that you guys have used in the past? Do you have any stories to tell about your experience growing your business?
Let me know in the comments below! I love to hear your comments and so does everyone else!