Growth Strategies for Risk-Averse Organizations

I recently received this question from a blog reader: What are the most effective marketing and growth strategies for risk-averse organizations?

First, one must assess the source of the risk aversion. Often it is insularity. The organization doesn't know any markets other than the ones it is currently serving or it doesn't know how to produce any products other than the ones it is currently producing. It could be that the organization has too many fixed costs associated with a very specific production process and would find it prohibitive to reconfigure or set up a new production configuration. Sometimes, when a company is privately owned by a prominent member of the community, that person is more concerned about his or her reputation and is worried that a risky growth move might cause an embarrassing setback. Sometimes, the organization is just run by a risk-averse person or group of people. 

There are a few ways to identify risk aversion. One is the unwillingness to invest capital. Another is the percentage of revenues that come from new products or markets. A slow or declining growth rate may also be a symptom of risk aversion. And finally, some organizations perform an inordinate amount of marketing research to identify potential problems. A related tell-tale sign of risk aversion is how many decision-making steps are present in the new product development process of the organization (if they even have a new product development process).

So, what are some of the best ways to grow despite risk aversion? The easiest way is to expand distribution geographically or through new distribution channels. Another way is to hire additional salespeople or to create new sales channels. You can also make your brand more accessible by selling it online or by extending store hours. 

Risk adverse marketing approaches include (low cost) publicity, targeted online marketing, providing additional sales support and tracking the cost of generating sales leads and tracking which of those leads results in new business. Co-marketing with other non-competing brands stretches marketing dollars. Offering co-op marketing budgets to retailers if your product is sold through retailers is another option.  

While these are some of the approaches that may be easiest to to "sell" to risk-averse organizations, these are not necessarily the most risk-averse approaches. Often, the best way to assess the potential of new products, services, revenue streams and marketing approaches is to test them in some markets and, based on the results, modify and expand the approach/offering or pull the plug on it. But this is more the sign of an organization that is willing to take calculated risks. 

I found this to be an interesting question. I hope it has helped you think about the topic.

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It includes exploration of productization, scalability and network effects. It also identifies potential sources of industry disruption and paths to “category of one” branding.

If you want an intense “deep dive” in identifying high potential growth opportunities for your organization, this is a highly efficient way to do so. Applying all of the latest growth strategy tools and an objective outside perspective to your organization’s growth potential, it teaches you how to identify, explore and amplify that potential. And its modest investment promises a very high return.

Brad VanAuken, who concentrated in competitive strategy at Harvard Business School, leads all workshops. Brad was also the lead new business development strategist for Hallmark. For more information on how you can grow your business with this process, contact Brad VanAuken at vanauken@brandforward.com.

50 Growth Strategies

Most every organization intends to grow. In fact, if an organization doesn’t continue to grow it generally must do the opposite because costs continue to increase whether the organization grows or not and it is difficult to continually pass the cost increases on customers without eventually experiencing decreases in unit sales.    

The ways in which an organization can grow are almost unlimited. Here are just some of the ways in which an organization may be able to increase its revenues and grow:

1. Sell existing products or services through new channels of distribution, for instance online or specialty stores
2. Increase brand awareness through wider distribution, increased marketing and more focused, more efficient marketing
3. Sell existing products or services using new sales methods, for instance direct marketing or retail focused teams
4. Increase brand accessibility through extended hours or flexible payment options
5. Sell existing products or services in new geographies
6. Sell existing products or services to new customer groups or markets
7. Explore opportunities within different ethnic markets
8. Sell your products or services as an ingredient brand within another organization’s products or services
9. Go upstream or downstream in the product or service production process (and profit generation)
10. Acquire and perhaps brand your own channel of distribution
11. Identify and pursue economies of scale
12. Pursue network effects
13. Create additional product skus (or service offerings) targeted at different customers or customer need states
14. Go upscale – create more upscale versions of your products or services
15. Offer a less expensive version of your product or service (but be careful to do this is a way that does not alienate your current customers)
16. Offer a wider selection of related products or services
17. Offer a wider selection of product or service quantities, that is package your products or services in different quantities at different prices points
18. Create a more expensive sku to increase the reference price for your other products within the same category – this will encourage customers to “trade up”
19. Cross-promote your products with other related or unrelated brands that may appeal to the same customers
20. Develop and sell a wide variety of accessories for your products
21. Bundle and sell two or more products together
22. Generate licensing royalties by licensing your brand to other organizations’ products or services that deliver against your brand’s promise
23. Invest in R&D to create entirely new products and services
24. Invest in a proprietary technology that will lead to competitive advantages for your products
25. If appropriate, find ways to make your products collectable
26. Offer your products in a series
27. Use each product to sell another product
28. Create a system of integrated products so that the purchase of one product from your organization leads to the purchase of additional products from your organization
29. Transform your brand into an aspirational brand or a self-expression vehicle for its customers
30. Create new demand for your product by creating new uses for the product
31. Through research, become the expert in meeting a particular market segment’s needs, offering additional products and services to become increasingly indispensible to people in that market segment
32. Through market research, identify and develop products or services for new market segments
33. Increase the individual average transaction by suggesting add-on sales
34. Offer discounts for larger or increased orders
35. Offer paid services associated with your products, such as installation, consulting and technical support
36. Offer financing and extended warranties
37. Offer extended service contracts
38. Offer customization opportunities
39. Merge with or acquire complementary businesses
40. Discover the compromises your industry is making with its customers and reconfigure your offering to overcome those compromises
41. Increase overall revenues through price segmentation
42. Identify where there is price elasticity and raise prices accordingly
43. Create a more compelling design for your products
44. Create more compelling packaging for your products
45. Apply the “timeshare” idea to your business to generate alternative markets for its products and services
46. Create versions of your products that play off of current societal trends
47. Identify new product or service categories to which your internal capabilities are well suited
48. Create a new product development function
49. Establish an internal venture fund
50. Select for intrapreneurship skills and motivations when hiring employees

I hope this list has helped you to think more broadly about the ways in which you can grow your organization and its products and services. And I hope it has created some optimism about its prospects for growth Finally, I hope it has generated some specific ideas for growing your business.