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A guest post by Gary Gebenlian of Future Simple.

There are endless marketing tactics, campaigns, and messages you can use to grow your business. However, there are only exactly three strategic sources of growth for any business---no matter the type of size of the business.

It's critical to understand the differences between these sources of growth and make a clear choice around which one (or two) your business will focus on. Let's take a look at what these three strategic sources of growth are.

1. Grow the market
The goal with this strategy is to attract new customers who don't use your product category to start using it (and hopefully start using your product). A good way to think about this is that you're expanding the market "pie." Now, this is one of the most expensive and difficult growth levers because you'll often need to teach customers an entirely new way of doing things. A good example here is Apple's iPad; most people who initially bought an iPad weren't using a tablet before but were probably using a laptop. Apple "paid the tuition" to attract people into the tablet category. Typically, businesses that focus on this lever of growth often have dominant market share in their category. (If you've got the biggest slice of the market pie, growing the pie benefits you more than it does your competitors because most new consumers will choose your product.)

Of the three levers of growth, this is rarely the right one for small businesses in a competitive category.

2. Grow volume with your existing customers
The goal here is to look within the four walls of your business and stimulate volume with your existing customers. There are 3 ways to do this:

  • Increase current usage: Get existing customers to use more of your product or use it more often. For example, a consumer mouthwash brand might stimulate customers to use the mouthwash twice per day instead of just once per day

  • Stimulate new uses: Get existing customers to use your product for new purposes. For example, Arm & Hammer promotes the use of baking soda in the kitchen, in laundry, and in deodorants.

  • Reduce customer churn: Prevent existing customers from canceling their service or leaving your company. For example, internet and cable providers have retention programs to intercept customers before they lapse and offer them enticing promotions to stick around.

3. Steal share
This one is the easiest to understand. If you're a small player in a competitive marketplace, you'll want to focus messaging and tactics towards stealing share from a competitor (or two). The larger competitors have already invested significant resources to educate the market about the category you're in. Now you have to define a clear positioning statement (what category you're in, why you're better, and why customers should believe you) and focus your efforts on stealing share.

Marketing is about making choices and placing disproportionate focus. Make sure you focus on a clear source of growth that makes the most sense for your business.

Gary Gebenlian is vice president of marketing at Future Simple---small business software.


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