Growth strategies, beyond good ideas and the passion it takes to pursue them, are the most crucial element of a successful business plan. Entrepreneurs who are new to the idea of financing their businesses might not realize it at first, but planning out growth strategies from the very start is key to seeing their business succeed year after year. Without them, an unexpected recession or change in the market could spell doom for your young business. Effective growth strategies ensure a steady incline in your business’ profits, keeping it safe from bankruptcy. If you’re new to the idea of growth strategies but still want to implement them so your business can stay in it for the long hall, you’ve come to the right place. In this article, you will learn about different types of strategies for growth that you can use to keep your business on a path to steady growth.
What Are Growth Strategies?
Growth strategies are plans or goals to expand your business. They can include implementing new marketing strategies, opening new locations, offering different products, and more. If it’s part of your plan to expand your business and grow your profits, it’s a growth strategy.
Not all growth strategies work for all types of businesses. A restaurant would have a very different set of strategies than an e-commerce shop. It all depends on your industry and the direction in which you want to grow. Below are several examples of growth strategies that have worked for other entrepreneurs, and could be worth implementing for your business.
Growth Strategy Examples
Most growth strategies, regardless of industry or the size of your business, boil down to one of these main concepts: market penetration, product development, market expansion, and diversification. While corporate growth strategies could entail acquiring other businesses for large sums of money, a small business growth strategy could be as simple as enhancing social media presence. The key to successfully implementing growth strategies is to identify and try out the most effective ones for your business in particular. Once you scale your small business into a larger operation, you can start using even more ambitious growth strategies. No matter where you’re at in your business journey, you will find inspiration for business growth strategies from the entrepreneurs below.
1. Expand To International Markets Using Influencer Marketing
You’re probably familiar with the idea of influencer marketing. Put simply, you supply influencers, or accounts with a large following on social media, with complimentary products in exchange for your product to be featured on their accounts. Through this process, the influencers’ followers are introduced to your product, become more familiar with your brand, or have a more positive impression of your business.
The great thing about influencer marketing is that influencers around the world can introduce your product to their audiences. This is even more effective than buying targeted ads to reach international customers because the influencers can market your product in a way that better speaks to that audience.
In this Oberlo Success Story, two French entrepreneurs were able to market their dropshipping business to customers in the U.S. with the use of influencer marketing. Now, they have solidified a customer base in the U.S. market and effectively grown their business.
2. Add a Subscription Business Model
Some businesses are completely subscription-based, only offering their products to customers via subscriptions, but this isn’t the only way to utulize this model — you can also grow your business by offering subscriptions in addition to your original e-commerce sales methods.
Not only will adding a subscription business model to your shop bring in additional customers, but it will also ensure that they stay with you month after month. Subscription services could also be a great way for your e-commerce business to move stale inventory through “surprise box” subscriptions, which is an effective method for reducing profit margins.
A good example of how a subscription service could work for an e-commerce business is Awesome Dice, a company that sells gaming dice of various colors, materials, and styles. The website’s business grew significantly after creating the “Monthly Box of Awesome.”
“This service requires a lot of planning ahead, sometimes months in advance. However, it is more than worth it. Revenues have grown slowly but consistently over the 14 months since we've added it. It now accounts for about 6% of our monthly revenue. This is revenue that is automatic. It doesn't require us to spend money to acquire a new customer.”
-Brandon Shoupe, Owner, Awesome Dice
3. Try Out Content Marketing
Diversifying your growth strategies could prove effective for your business, but beware — some types of content are more expensive to produce than others. A promotional video that you can share on your website, through email, and on your social media channels could help potential customers get a better feel for your products and brand, but if hiring a video producer is out of your price range, it might be a good idea to start with some fresh product photography or a blog. Through exploring different types of content, you can cast a wider net and reach a bigger audience to grow your business.
Illuminate Labs is a company that sells nutritional supplements, and found that video content helped their customers engage with and learn more about their value proposition. The attention-grabbing and informative video lead to higher conversion rates for the company.
“We hired an animation studio in early 2020 to put together a company explainer video. The video was a huge hit, and makes our unique value proposition fun and engaging. We put the video on each product page as well as our homepage because it led to much higher conversion rates. This is an expensive approach, but it can pay off for businesses with the capital to invest. It will help your products stand out in a crowded marketplace, because many small businesses can't afford to contract a video production company.”
-Calloway Cook, President, Illuminate Labs
4. Diversify Your Income Streams
A common way to ensure that your business is failsafe is to diversify your income streams. This way, if the market for one of your businesses tanks, you’ll have at least one other business income stream to keep you afloat. This growth strategy ensures that you are able to keep growing, even if something unexpected happens to one of your businesses.
This is why some entrepreneurs set up multiple businesses. Successful business owners learn the ins and outs of selling products from their first company, and are able to translate those skills to another. If you have the capital, it’s best to start diversifying your income streams as soon as possible. You never know what kind of twists and turns are around the corner for your niche market, so get started on solidifying your place in another market now.
5. Grow Your Brand With a Nonprofit Partnership
At first, doing charity might not appear to be the most obvious growth strategy. However, you might be surprised how much visibility your brand will get from partnering with a charity. Additionally, your brand will be associated with community nonprofits, giving it a good reputation.
A good example of nonprofit partnerships is Huan, a company that sells smart tags for pets, that can help pet owners find their animal if it gets lost. Huan builds brand awareness through nonprofit partnerships, which nonprofits can join through a Google Form on their website.
“Partnering your e-commerce company with a non-profit is a powerful way to both generate growth and give back to the community. When you partner with a nonprofit you benefit from their reputation and brand recognition. By aligning yourself with a public cause, you demonstrate accountability and integrity, generating goodwill towards your brand.
As a company selling smart tags for pets, we partner with local pet rescues. We donate tags to them, collaborate with them on special promotions, and mention their work on our social media feeds. This partnership has made us more visible in our local pet owners' community and helped to grow our brand.”
-Gilad Rom, Founder, Huan
6. Start a Referral Program
A referral program might be the push you need to take your e-commerce business to new heights. A referral program rewards your customers for recommending your product to their friends and family. This means that you get new customers who already have a positive impression of your product. Make sure to include an incentive, like a percentage discount on a customers’ next purchase, or a dollar amount off based on how many new customers they refer to you.
If you haven’t tried something like this as a growth strategy for your business, it’s definitely worth a shot. You never know which customers might be itching to refer your product to other people who they think would enjoy it. For example, Designer Sheds, a company that sells customized outdoor sheds, found that their least-frequent customers were the most eager to make referrals on their behalf.
“Asking someone to refer your business to their friends, families, and colleagues is more than a technique for bigger sales — it shows you trust and value the person you're asking, as well as their network. Plus an incentive for the referrer never hurts! All in all, we're glad we made the push — you never know which of your quieter customers may have the right network to expand your business.”
-Chris Laan, Founder, Designer Sheds https://www.designersheds.com.au/
7. Create a New Plan for Your Business Finances
While new and exciting marketing tactics can make great growth strategies, it’s important not to ignore the financial side of things. If you aren’t seeing the growth you would like for your business, try rethinking how you reinvest your profits. Keeping costs down, especially in times when your business is doing well, can help you through tougher times in the future.
VintageDiamondRing.com, an e-commerce website that sells refurbished vintage jewelry, has stayed true to this strategy and is able to consistently grow as a result. They keep overhead costs low so they can invest more money in promoting their business when it is needed the most.
“My major strategy which helped my growth, and kept us in business during booms, recessions and near depressions is to always keep your overhead to a minimum. In my opinion, when the economy is thriving businesses should scale back, yet during economic hardship is when they should slowly begin to put more money into their business. Simple basic economics, yet most businesses do not follow this rule!”
-Suzanne Sachs, VintageDiamondRing.com
8. Customize Your Order Confirmation Page
Sometimes the key to getting customers to engage with your marketing promotions is to put them in a place where they can’t be missed. Almost every customer will look at their order confirmation page to make sure their order has been processed, so it’s a great place to leave an incentive for them to make another purchase from your shop. Stilyo Apps is a company that sells apps to customize e-commerce websites. They have found that adding additional offers to their thank you pages are a cost-effective growth strategy.
“By adding an upsell to our thank you page (also called the order confirmation page), we boosted our average order value. This gave us more wiggle room to work with when it came to top and mid-funnel spending and created an upward growth cycle.
You'll often hear emails get a lot of credit for post-purchase upselling, but in my experience, offering upsells on the thank-you page is the easiest way to get serious bang for your buck. The reason? The open rate is basically 100%! I think it's an area where many e-commerce entrepreneurs are leaving a lot of revenue on the table, especially when it's super easy to set up."
-Ruth Evan Haim, Co-Founder, Stilyo Apps
Growth strategies are absolutely essential to a successful business, but beginner e-commerce entrepreneurs might not be sure which route they should take. It’s a good idea to start small, with a low-cost growth strategy like engaging with social media followers or adding a subscription business to their website. After your business grows from that, you can focus on bigger and better growth strategies, like partnerships or paid marketing. Whatever you do, just make sure you always have a plan to expand.