A successful small to medium size business often runs the risk of feeling “too comfortable." Even though revenue is coming in, your customers like you, and your sales force is calling on customers regularly, you aren’t seeing the growth you are looking for. This lack of desired growth may be a result of new competitors, new products or services in the market, or that the market itself is growing stagnant.
If any or all of these things are happening it should cause you to take a hard look at your business and consider going out of your comfort zone to continue to grow. It may be time to consider looking for new markets for your product. If you've grown comfortable selling to one or a few vertical markets, going beyond them may cause fundamental changes in your company. You may have to learn new industries, call on different kinds of buyers, and maybe have to recruit new sales people with knowledge of this new category.
Most of all, you will have to take a hard look at your business and decide what kinds of problems you can be solving for new and different companies. Really getting into the guts of your business and looking beyond the obvious answers can sometimes be a painful exercise. You may be required to change the culture of your company in order to accommodate this new market opportunity that you have uncovered. But, the growth that comes with it is definitely worth the effort.
A perfect example of a company that went through this process and came out the back end with a success is Sani Professional, www.wipeyourworldclean.com. They are the #1 worldwide brand for pre-moistened wipes. Their business was originally focused on manufacturing private label wipes for retailers such as Target, Wal-Mart, and Costco. They also private labeled for companies like Johnson & Johnson and Pfizer, who wanted to add sanitary wipes to their existing portfolio of products.
But, in order to accomplish real revenue growth, they knew they needed to expand into new uses, and new markets, for their mature business. They focused their expansion on two new market segments, retail supermarket chains, plus restaurants and other food servers.
They were successful in selling into supermarket chains by positioning their wipes as a means to clean off the shopping carts upon their customers entering the stores. With consumers more aware of the spread of germs than ever before, this effort by the stores showed a genuine concern for customer well being.
In addition, Sani Professional saw an opportunity in the food service business. Tables and counters are traditionally cleaned using a cloth towel that isn’t necessarily washed between each usage. With their sanitary wipes, restaurants can now use a wipe to clean off tables and counters that is clean every time and saves them the expense of laundering their towels.
These expansions into proprietary industries provided Sani Professional with more pricing flexibility. Their core business was regarded as more of a commodity which was sensitive to pricing. Of course, there needed to be an investment for the expansion, as the company was now entering new markets that fell under EPA and FDA regulations. New packaging and an increase in the size of the sales force were also required. The management determined that the market opportunity was well worth the investment. “Adding the Grocery and Food Service industries to our product offerings greatly changed our mix, and reduced our dependency on one category of business. The result has been a 10% increase in revenue for the company,” said Matt Schiering, General Manager.
Of course the other market expansion strategy for growth is to sell more products to your existing customers. For example, cable companies have been selling high speed internet connections to small to medium sized businesses for years. But their addition of telephone service accomplishes two objectives: It increases revenue, and it puts in place one more exit barrier.
Often it takes a fresh pair of eyes from outside the company to look at what you are doing, and make recommendations on new markets, or new products, that represent increased revenue opportunities for your business. Call us and let's set up one of our free consultations: a Chief Marketing Outsider may represent a new path to business growth and profitability.