The one innovation trap that can kill your business

Product and service innovation is a key accelerator of business growth at any stage of business from startup to maturity. Although we most often associate product innovation with startup companies, and the tech industry in particular, continuous innovation should be part of every business owner’s growth strategy.

Consider an established business with strong growth, a large customer base and a sought-after product or service offering. That business is secure and comfortable. A great place to be! Except it never stays that way. Markets, customers and competitors change. It can happen gradually over time or suddenly in a snap. Now the business is threatened by outside forces it may not have seen coming.

The business owner has fallen into complacency. Complacency is death to any business. Complacency can fool you. You might think it looks like this.

When in fact, for most business owners – it looks more like this.

Busy, plenty of jobs and orders. The phone is ringing. Until it’s not.

To avoid the complacency trap and continue to innovate to stay ahead of market, competitor and customer curves, try this simple step.

Take a couple of hours alone or with your management team –the very start of the day is best – before it gets hectic and address these three questions:

  1. What do you do better than others?
  2. What changes could you make to your product or service that would make it more attractive or more useful for current customers?
  3. What could you add to your product or service that would bring in more volume or different kinds of customer?

This is equally useful for products and services. Start from the features and benefits you have today and imagine the future: from your own internal ideas to suggestions customers have made, to actions you see your competitors taking.

Use this time as a brainstorming session. Accept all ideas no matter how impractical or expensive. Then prioritize them. Here’s a handy chart to help.

Idea – List your ideasResources – do you have the people, money, tools and time to do this? Note them hereBusiness Impact – What impact positive (customer, market, competition) or negative (disruption) will this have on the business?Priority – Rank these ideas based on your answers to resources and business impact.
New Features
New Complimentary Service
New Product Line

Then choose one idea – assign it to someone with a due date to present an action plan to you and your team.

Set the presentation date for no longer than 30 days out and get back to business.

That way you’ve got at least one product or service innovation in process at all times. You’ve avoided the complacency trap and you’re keep your product and service at the front of market and customer changes.

Want more business growth ideas? Download our Octain Growth Plans here.

 

Your Customers are Leaving – Why?

Losing customers, especially a big customer, is the nightmare of every business owner. Customers leave for a variety of reasons. Sometimes despite your best efforts. And the number one reason is: something has changed. But what?

In today’s economic environment, everything is always in flux. When customers leave it is often due to one or more of these five factors.

Needs Change. The customer’s needs have changed. A startup business needs to build its inventory, systems and foundation. It requires many new services. A new office, IT support, accounting services. As the business matures, the need may change from accounting to a CPA, from an office suite to buying a commercial building. Needs change through the growth cycle.

Markets change. When the market changes, your product or service which might have been innovative becomes more of a commodity. Price advantages disappear with a new discount plan by a competitor. Or a new product offering raises the feature/benefit bar and your product no longer solves the customer’s problem as well as it once did.

Your product or service changes (or doesn’t change fast enough). In attempt to increase margins you change suppliers creating a product difference that customers don’t like so they look for a new supplier. Or your product doesn’t innovative fast enough to meet customer demand.

Your company has changed. The culture shifts. You and your team start doing things differently. Maybe it’s not so much fun anymore. Maybe you are doing it by the book instead with passion. In a service business this can have a real impact when customers who thought they had a relationship with your company now feel they are simply a transaction.

Poor service experience. This is number one reason customers leave. More than price or product quality or competitive offers. Customers leave because they don’t enjoy doing business with you now. You take too long to respond. They feel unheard, unloved, most of all unwanted.

Keep Them Happy

Keeping your customers and clients with you means keeping them happy. Here are three ways to keep a smile on their face and their dollars in your account.

Manage your internal growing pains. Notice how three of these five factors are linked to your company’s internal operations rather than your customers behavior. How you handle common growing plans like development, delivery and customer service response as you grow are critical to customer retention.

Your systems must not only handle today’s customer needs, they must be robust enough to manage the next wave of growth. Don’t wait until your delivery, production or account services team is maxed out before you add capacity or people. If you are forecasting growth, start adding when you are at 80%.

Anticipate customer shifts. Know what is going on and more importantly, what’s happening next. Staying on top of changes in your market, industry, competitive space is as important as making that next sale if you want to be prepared to serve your customers’ changing needs and wants. Without that outward focus, you risk being blindsided by a key impact change that you did not see coming.

Beyond just knowing what is happening, learn to anticipate change so you can predict what your best customers are likely to do next.

Start with your own sales records. Review these monthly or more if you are in a fast-growing industry. Consider: volume changes; order intervals, buying pattern changes, and more that lets you take a pulse of your customers’ behavior.

Know the Competition. The fastest and easiest way to get blindsided in the market is to miss what the competition is doing. Your competition is not just your direct business competitors, it is anyone or anything that your customers compare you to.

A quick start way to keep an eye on the competition is to list the other options customers and clients have. Include companies and other market options. Then set up Google Alerts to track them. Go beyond tracking company mentions and track specific product names or product/market categories. I recommend setting up a separate @gmail address for these alerts so you can check them as desired and avoid needless distractions.

Want help with any of these strategies? Contact clare@octaingrowth.com.

 

 

Photo by rawpixel.com from Pexels

Six Growth Maximizers for Scaling Your Business

Gaining traction. Scaling up. Maximizing business value. Whatever your definition of business growth is, investing in these six proven business accelerators is bound to make a difference.

We call them Market Fuel Strategies because they are designed to bring new energy to your business operations and increased profit to your bottom-line.

In hundreds of client engagements across the past 15 years, I have found that these six factors, when planned for, can have a dramatic impact on company, product and customer success.

As you consider these six accelerators, ask yourself:
1) How well are we doing today in this area?
2) Where do we want to be this time next year?
3) What is it going to take to get us there?

There’s a lot to unpack here so let’s look at each in detail. Today, we take a deep dive into product/service fuel. Over the next few weeks we will examine the rest of these six business accelerators and offer ideas on how to make them work better for your business.

Product Fuel

Your product fuel is driven by these three attributes:
• Product Strength: the marketability of your product/service based on the benefits and features that you offer to your customers.
• Competitive Strength: capabilities which enable you to take advantage of new market potential in competitive situations.
• Customer Strength: the match between your product results and your customer’s needs and wants. This drives market penetration.

Think of these as the lens from which to evaluate your product/service success.

Here’s a tool to help you determine the competitive and market strengths of your products and services. The key question is listed across the top. Examples are product strength features to consider. Add your own!

First, list the product or service’s top three strengths. You can determine that by answering a simple question: Why do customers choose your product over the alternative? The top three reasons are, from a market perspective, your top strengths.

Second, consider your competitive strength from two angles: 1) List your competitive advantages (product features, service practices, pricing, delivery, etc.); 2) consider your market opportunity: how many customers who could buy this product or service are actually buying it?

State as a percentage from 1% to 100%. The difference between your number and 100% is your market penetration opportunity.

Third, consider your customer strength by your ability to sell more of your product or service to additional customers (upsell) and new customer or market types you might be able to reach.

Once you have completed this snapshot, you should have a pretty good answer to the first and second accelerator questions: How well are we doing today in this area? Where do we want to be this time next year?

The third question – what is going to take to get us there? That’s all about resources: time, money, tool and talent. What resources do you have in your company to address the challenge and what do you need to get?

What’s the next step? Consider these:

• Where you are strong but not well known in the market, the accelerator step is most likely a new marketing or sales program.

• Where you are weak, especially competitively, the accelerator step is most likely product improvements or new product development.

Are You Too Busy To Grow?

Your business is moving full speed ahead and there aren’t enough hours in the day to meet all your customer, product and sales obligations. You’re slammed, so of course your business or practice is growing! How could it not be? We are serving customers, moving product, increasing sales.

Well, not so fast. Your business can be sprinting along but not necessarily growing. What’s the difference?

Speed is rapidly moving, traveling, speeding or performing. Speed is an activity.

Growth is a business, industry or equity that is expected to increase in value over a period of time. Growth is a process and an outcome.

Growth can be fast. If so, it brings the noted advantages of success and recognition as well as the disadvantages of over extension and profit killing curve balls. Growth can also be slow, measured, intentional and sustainable.

Ask yourself these five questions to see if your speed is truly yielding the long-term sustainable growth your business needs to thrive.

1. Are you so focused on getting things done today that you may be setting yourself up for a dry spell tomorrow? We all know the adage, working in your business instead of working on your business. It creates the kind of boom-bust cycle that too many business owners fall into.

2. What about fulfillment? Are you so busy booking orders that you fall behind in providing exceptional customer service? Are you stretching or missing production deadlines? Your booking speed is breaking your production capability and maybe your people as well.

3. How well are you nurturing long term relationships? Is the customer to come more enticing than the one who has been with you for months or years? Speed to growth often comes at the expense of loyal customers. That reduces your customer life time value, a key sustainable growth metric.

4. How about speed versus productivity? Does the push to do more, more, more create the opportunity for error? If so, do-overs to correct mistakes cost time, money and (see #3) customer and employee relationships.
5. Income versus profit? Speed can produce dramatic revenue increases but if the structures, processes, people and production are not there to support those sales, the speedy rise can forecast a speedy fall.

If any of these sound like you, your team or your day to day business operations, it’s time for a change. Here are two key steps you can take to move your mindset and business practices from speed to growth.

1. Take stock. Take a long look at each of the five areas outlined above. The Key Question: In each area, are my current activities and practices improving my long-term business viability and value or undermining it?

2. List the areas that need improvement from most needed to least needed. The Key Question: If you could only change one thing, what change would have the most positive and long-lasting change on your business growth?

Focus on changing that one thing first. Experience the difference one growth step can make.

What are your thoughts? Let’s talk about it, reach out. Contact clare@octaingrowth.com or 530-363-2043.