Any commercial company seeks to earn as much as possible – to increase sales, accelerate growth, find and retain new customers, that is, to increase the efficiency of its activities. There are many theoretical materials on this topic. In practice, however, this is not always possible and not for all companies. It can be difficult for stable operating organizations in their niche to look at their business from a different angle and find new growth points. How to understand that your company has room to grow and choose growth points? In this article, we will tell you what will help your business grow and develop.
About Business Growth Points
What are growth points? These are specific ways to increase the company’s profits and improve its operations in general. As we said earlier, they are quite difficult to find, but even more difficult to determine which ones are the most effective.
You need to start with the fact that business growth can be of various kinds and take different paths – extensive (expanding in breadth), or it can be intensive (expanding in depth). Let’s take a closer look at each of the options.
Extensive Growth
Let us first consider extensive growth. This is growth due to an increase in the volume of resources, that is, a kind of scaling.
Extensive growth is opening of a new branch, introduction to the range of any product group, hiring a new employee (for example, a sales manager).
That is, each time these are some changes that require resources. And it often happens that a change has occurred, but the desired result is not.
Why is this happening? Because every change is, in fact, someone’s managerial decision, which must be based on clear prerequisites, research and hypotheses. It is important that this decision be digitized and recorded in the implementation plan, which should contain all the necessary resources for changes.
And then, direct implementation with clear control and the necessary interventions and influences in the right places. And if we talk about such extensive changes, in practice they may not be entirely correct. So, for example, there are times we hire a new employee just because we liked him “for his beautiful eyes”, or we open a branch in some region because we like to relax there in the summer. Alas, as a rule, luck rarely works here, and such decisions bring unsatisfactory results. However, when you play roulette online, luck may become your best friend.
Intensive growth
Now let’s focus on another direction of development – intensive. Intensive growth is a kind of improvement of current activities. This means that the company does not make significant investments, does not launch new product lines, does not enter new regions. What happens then? Imagine that you have a current flow of customers, a current flow of budget, a current assortment – and you need to increase the level of work with them. This is the intense path.
However, in order to plan any changes, you first need to analyze where you are and fix your strengths / weaknesses. For example, in the case of clients, this may be segmentation – it is necessary to evaluate and identify those segments that have the greatest potential, and only then allocate the budget to these segments. In the case of an assortment, it is necessary to understand which articles bring more profit and prevent them from being out of stock by, for example, increasing the safety stock. Through such activities it is possible to find the potential for intensive growth.
Thus, it becomes clear that no matter what development path you choose, in order to determine growth points, you first need to analyze the company’s activities in several areas, and then make an effective management decision. The question arises:
What Can Increase the Likelihood of Making an Effective Decision?
Our answer is obviously that this is research, working with data, analytics. Analytics allows you to initially assess whether a decision is justified by weighing various options, collecting numbers, analyzing how sustainable these numbers are and what is really behind them. All this can be achieved with the help of analytics.
Many companies have specialized divisions that purposefully collect data, put it in order, assess the likelihood of opening new stores or the need to hire an employee, etc. However, specialized services and tools have already appeared on the market that allow all this time-consuming and complex analytical work to be done automatically. And at the same time involve much more data in the decision-making process. For example, when opening a new point of sale, use the data of telecom operators or various city services.
How Analytics Helps Grow a Business
Analytics, both with extensive and intensive growth, are needed by the company in order to reduce the likely fallacy of the decision and speed up the process of its adoption (especially if it is automated).
As a rule, for such tasks related to business growth, classical (the simplest, basic) analytics is not entirely suitable. Why? Because it gives some aggregated ideas about what happened in the past: summary indicators do not provide answers to all the necessary questions, you have to manually process large amounts of information and sometimes “think out” something.
If a company starts using more sophisticated analytics (such as diagnostics), then with proper skill and dexterity, you can very soon see a lot of interesting things – for example, what patterns exist, in which cases the company earns more and in which cases less, etc. It is important that such analytics help to identify anomalies.
Which Analytics to Choose?
Advanced or predictive analytics (Advanced Analytics) is a set of data analysis methods and ways to interpret them, allowing you to make successful decisions in the future based on the results of past events.
In other words, this analytics allows you to assess the future prospects of your business relative to its current state (if you did not make changes). In order to cope with the implementation of analytical work of this order, the specialist should identify a set of important, significant parameters, each of which really leads to a particular outcome.
As an example, let’s take a real case of a BlaBlaCar marketing campaign. The company was the first to use radio as a promotional marketing channel. So there was no clear understanding of the relationship between certain parameters and the number of customers/orders. That is, the team of experts needed to understand whether the campaign was effective or not.
Here, the prediction is about what the performance would have been during the campaign if nothing had happened. Then, the comparison with the real results and the realization that the actual result is significantly higher than the forecast that was made. Even after adjusting for the error. This gave reason to believe that this result was achieved thanks to the advertising campaign on the radio.
Thus, advanced analytics helped to confirm the effectiveness of the marketing campaign and helped BlaBlaCar launch, after the analysis, a successful federal radio campaign.
The company’s growth path is different. But you need to understand that any development is a trinity of indicators – people, processes, technologies.
That is, there is a need to develop people, we need to change business processes, we need to introduce technological solutions.
The vision is that by using the expertise of consultants who are good at doing both the first, second, and third, it is possible to significantly reduce the time, money and other resources of the company and achieve the desired results.