So you’re planning controlled growth over the next few years. I don’t blame you. As we emerge from the pandemic a bit of control would be great, wouldn’t it?
Clearly, there should be plenty going in your favour – markets opening up, consumers with cash to spend and business confidence growing. These conditions will lend themselves to general growth but you are after controlled growth and that isn’t necessarily the same thing.
The question is: Where do you want the growth to come from? Perhaps it is a new product or service. Maybe it could be a seasonal variation. It doesn’t really matter where it is coming from, you and your team all need to know what the priorities for the short to medium term are. A real-life example for us here at Fuel is we are targeting more growth from our immersive services this year. In one way we are fortunate that most of us have been ushered into a more virtual world therefore organisations are more open to things like virtual reality, augmented reality and 3D design. The problem is, most business leaders don’t know how this tech can help them build their brands. It is a real challenge to overcome if we want some controlled growth.
Firstly, you’ll need to get the right strategy in place. Targeting growth from a new product to the market (or immersive tech) is a completely different strategy than more seasonal stuff that people know they’ll need. On the first one, you are going to be investing in awareness and education, on the latter you can be more direct. Also, if you offer more than one thing, what areas are you going to turn the volume down on? How are you going to keep them ticking over?
Next up, set a budget. For controlled growth, I’d recommend 3-5% of your organisation’s anticipated revenue for this year. Clearly, the area(s) you are seeking to grow will need more investment than other areas. This is an important area where some businesses fall into the trap of smoothing everything over rather than putting time, money and energy into the area(s) earmarked for growth.
Lastly (and here’s the bit that’ll give you real control) put in place:
- Key performance indicators – what does winning look like?
- Measurement – are you winning or losing?
- Attribution models – where’s the winning coming from?
Attribution models are particularly prevalent in e-Commerce business where business owners know full well how much they are spending (cost per acquisition is something they’ll know off the top of their head) and whether they are winning or losing. However, those could be big numbers in both cases. Say for example the business turns over £1m a year, they could be spending £50k on marketing. Of that £50k, they might be spending £20k on pay per click advertising, £20k on search engine optimisation and £10k on affiliate marketing. The business owner recognises the need to do it all but how can they attribute and optimise all that spend? That is where attributions models come in. Much more on that in the e-Commerce world here from our Digital Director, Alem Al-Khamiri. But it needn’t be an exclusively digital thing, understanding the right mix of where your customers have come from is really important. It could be from a leaflet (yes, they still work in the 21st century), a radio ad, an online banner that followed them around the internet when they showed an interest in you. The reality is, they all work together to execute your strategy within your budget.
This content was written for Mark Holt & Co accountants as part of their Business Success campaign to help companies emerge from the pandemic.