Before we dive into the ‘how’, it’s always wise to stop and ask ‘why?’. Why do we need to grow? What actually drives it? Is growth just a bogeyman used by your boss to prod you to do more work?
The simple answer is no: the need to grow isn’t a made-up stick used to beat you with, it’s built into the very fabric of our economic system.
According to the Cambridge Journal of Economics: “A capitalist firm operating in a competitive market is subject to a growth imperative, because uncertainty about the profit rate under a no‐growth policy makes the firm’s prospects highly unattractive in finite time and bankruptcy practically certain in the long run.”
In other words, if you’re not growing your stock price will plummet (or you won’t raise your next round of venture capital financing), you’ll stop attracting top talent and you’ll quickly nose-drive towards a terminal decline.
In fact, a 32-year McKinsey study of over 3,000 businesses found: “If a software company grows at a rate of 20% a year [or less], it has a 92% chance of ceasing to exist within a few years.”
In short: if you’re treading water, you’re dead in the water. So, how do you solve the growth imperative, once and for all?
1. Look beyond customers
The first place to start is solving the ‘innovator’s dilemma’, a paradox identified by Harvard Business School professor Clayton Christensen in his seminal book of the same name.
The paradox goes like this: why do so many well-run businesses that listen to their customers ultimately lose market share and get overtaken by much smaller, less well-resourced competitors? When they seem to be doing everything right, why do things go wrong?
In simple terms, it’s because they focus too much on their existing customer base, while ignoring the wider market. Eventually this leads to them missing new opportunities and making poor investment decisions.
The answer then, lies in looking beyond your customers when defining your strategy, product roadmap and marketing communications. Be expansive in the feedback you canvas, and always keep your eye on the horizon.
While sending a survey to your existing database can seem cheap and easy, and like you’re ‘doing the right thing’, it could ultimately be paving the way toward irrelevance when not combined with wider consumer research.
2. Use the right data
The next step is to go out and find the right data on which to base your growth strategy. Much like putting petrol in a diesel car, you’ll quickly come to a sputtering stop if you’re using the wrong information on which to base decisions.
Let’s take a rapid-fire look at three common sources of data you should avoid, and three you should utilise.
Data to avoid
First-up, avoid basing your decisions on too much desktop research, mass-media industry coverage and out-of-date second-hand reports. Their motivations don’t align with yours. You need accurate data based on sound methodologies; they need page views or report sales (meaning publishers are incentivised to sensationalise findings, with no repercussions for being wrong), while the methodologies are opaque at best and entirely missing in most cases.
Next up, don’t follow investor money. Yes, investors are typically smart people with a vested interest in making the right calls. However, their business model allows for them to be wrong 90% of the time, with 10% of their investments being so on-the-money that they cancel out those that don’t work out. The question is, can you afford to get 90% of your decisions wrong?
Finally, you shouldn’t rely on social listening. It might be cheap and easy, but is that what you should really care about? Social media is rife with fake accounts, bought influence, inflated metrics and extreme points of view. Around 85% of ‘social’ traffic is now on ‘dark social’ networks too like Whatsapp, Slack and email, where you can’t listen in on the more authentic one-to-one conversations taking place. In short, social media is a hot mess of misinformation that must be treated with caution.
Data to utilise
Now we’ve covered off the data sources you’ll want to keep at arms length (or at least view with due skepticism), let’s look at valuable sources of data.
First up: search. In his book Everybody Lies: Big Data, New Data, and What the Internet Can Tell Us About Who We Really Are, Seth Stephens-Davidowitz explains just how telling our search habits can be.
And while Google has made it increasingly difficult for marketers to gather search data, there are still ways. Google Trends is one app that offers a nice timeline overview of searches rising and falling in popularity, while Google’s Search Console also holds a wealth of search data you can tap into.
Taken with search data from Google Analytics, you can start to get a great understanding for what consumers – not just your existing customers – are looking for, and start to build products or services that meet those untapped needs.
Next, we have behavioural data. Whether it’s from point of sale, internet of things devices or clickstream providers (who monitor online activity), this ‘hard’ data shows you what consumers are actually doing. It’s a great way to build up a realistic picture of their habits, which will help you determine how you’ll fit into their lives.
Last but not least, you have scalable intelligence, the contemporary and tech-enabled version of traditional market research. Using natural audiences wherever they’re found online (rather than single-source panels), you can send multiple tailored surveys to gather verifiably real consumer feedback, all displayed in real time on an interactive analytics dashboard.
By reducing a source of data that traditionally takes weeks to collect, undertaken annually, to something that takes hours and can be done weekly, you’re now able to tap into real consumers with the agility that modern businesses need.
3. Remove silos
Once you’ve gathered the right data (from beyond your customers), you also need to be in a position to act on it.
To do this, an organisation must learn to share this valuable data across teams and territories. It’s no good for your marketing team to be really tuned into the consumer zeitgeist if your product team are focused exclusively on existing user behaviour, unable to see the bigger picture, or vice versa.
That’s why, however you gather your data, it must be easy to share across the business; and transparent enough that others can prod and poke the data so they reach the same conclusions, without feeling they’re being shown one side of the story.
This is how you gain real buy-in across the organisation, which spurs real action.
The results of insight-driven growth are exciting. A recently updated Forrester report has found that insight-driven growth businesses “are growing at an average of more than 30% annually and are on track to earn $1.8tr by 2021”.
That 30% growth rate is comfortably above the 20% watermark needed to stay in business, previously established by McKinsey. It would also put your business in the upper echelons of performance and growth globally, comfortably outstripping the performance of stock markets and global GDP forecasts.
The extra cash flow can then be reinvested in employee wellbeing (to attract and retain top talent), research and development (to out-innovate competitors) and commercial budgets (to build a stronger brand and win more business). This creates a positive cycle that helps you get ahead, and stay ahead.
Mark Walker is marketing director at Attest.
If you’re interested in joining the top-tier of insight driven growth companies, Attest will be running an interactive workshop in December on how to implement the framework for 2019. Sign-up here.