Do you know what is the engine of growth of your company?
The three engines of sustainable growth
An engine of sustainable growth are those mechanisms that help your company grow steadily and allow you to realize what is important, where you need to focus your efforts and you have to watch.
That is, you can not leave something as important as growth in the hands of specific actions, you must create a mechanism that constantly feeds back the growth of your company, a predefined strategy that never stops regardless of specific actions.
There is talk of sustainable growth rather than growth to dry just to differentiate it from specific actions that can give you a great momentary growth but such action once finished just sales.
There are 3 large growth engines sticky, paid and viral. You can choose only one of them, you can work them all or two of them. If you go to work more than one enter them one at a time, until you have the first engine working well and you have monitored the important metrics do not enter another.
Sticky growth engine:
This model bases its growth on recurrence, makes the customer addict product and so makes good buy again and again in the case of selling products and services, well never stop consuming and even increase their consumption (upgrade) in the case of a subscription.
How to get
There are many forms but most have to do with as it is built your business model or product, some examples:
Creating a product so useful and easy to use that you can not stop, if Evernote that once you try it is hard to quit. Including exit barriers that prevent the customer to easily leave as the program management of Apple itunes devices, once you have all your playlists perfectly ordered there to see who is the brave mp3 another brand is bought and starts new!
Creating a strong community around that deter you go and do that consume time and again, this occurs with some blogs, and if you succeed in yours is a constant source of customers.
How to use it:
If you've managed to create a growth engine sticky to make the most of your sources of income should be: Subscription allows you to have a steady source of income and allows your addicts enjoy your features constantly. Sell ??many different products or services: this allows your customers to constantly come back for more.
What to watch for:
You have to watch that customers do not stop coming, ie churn rate or the value of customer life does not decrease.
If you do not have a CRM able metrics you can use you are:
Viral growth engine
It is based on your own users are those who become your sales force and attract new customers for your products and services.
How to get
Network effect: creating a service with unbeatable value proposition that to get the most need party that more people know also using it as with Whatssup.
On a smaller scale, creating a message or a value proposition so powerful that your customers become evangelists for your brand commercials, Apple example.
Also on a smaller scale, creating an aura of exclusivity or mystery that makes your current customers want to shout from the rooftops that they are already customers and that is wonderful as Spotify did when it was launched with the invitation system.
Well, as appropriate:
Network effect: making it easier to share and with a very easy and monetizing high at low prices going to volume (whatssup) or through a multilateral platform selling advertising (facebook)
Evangelists with better products and increasing margins.
What to watch for:
You have to watch the virality factor or factor k is greater than or equal to 1, ie, that each client at least bring another customer.Again, as measured metric homespun:
Growth engine of payment
It is always to attract new customers through constant investment in advertising or sales force. This is not to advertise from time to time, it is to have a well-oiled mechanism by which every customer who enters leaves cost more money than attract it.This is the case for 80% of US companies, unfortunately often wrong in their approach because for this model to work well and become an engine of constant growth does not have to focus on getting cheaper customers but on getting better customers , more faithful and more average expenditure.
To work well you need to have well structured several things:
- Having clearly defined your customer and what their most important needs.
- You have to know where those customers are
- You have to be able to measure how much it costs to capture a customer, not a subscriber, a customer, someone who buys you.
- You have to know how much a customer spends on average are you
- You have to differentiate yourself so that increasingly cheaper attract your customers or persuade them to stay.
- You have to automatic process that allows you to convert visitors into customers quickly and cheaply.
To get the most out of this you need systems:
There are many things to watch:
- The cost of collection does not exceed the average customer spending
- Your redemption indices do not fall, ie the number of visits the client not become lower.
- You are able to increasingly more active time keep your customers.
What to do when an engine of growth stops working
When we see a growth engine is shutting down, it's time for:
Improving our proposal to fix
Go introducing a second engine of growth to offset the decline of the other and watch both.