Growth hacking sounds great in theory for a small business. But what does it actually mean and how can it help you scale efficiently?
An infographic (below) from OnDeck provides a guide to getting started with growth hacking.
It starts by looking at what the term means and its history.
Next, the infographic explores seven growth-hacking strategies that have been proven to work for small businesses.
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Traditional products or services are delivered through online channels only, thus removing costs associated with running a physical branch infrastructure. Customers benefit from higher availability and convenience, while the company is able to integrate its sales and distribution with other internal processes.
Below, the top industries for the pattern "E-commerce" are displayed, in order to get insights into how this pattern is applied across different industries. We've collected data from 5 firms using this pattern.
Innovation has been called the “lifeblood of successful organisations”. On a strategic level, it is considered an important catalyst for business growth, because new products and services can lead to differentiation and a competitive advantage. On a more practical level however, developing or improving these can be challenging for many companies. A newly released product might sometimes fail due to a series of external factors, such as a highly competitive business environment or rapidly changing technologies. Other times, the product simply fails to meet the real needs and expectations of end users.
In recent years, leading global companies have understood the necessity to drive innovation from inside out and think about new products from the customer perspective. This concept is known as design thinking and occurs in the early stages of product development.
Tim Brown, President of IDEO, a design and consulting firm, defines design thinking as “a human-centered approach to innovation that draws from the designer’s toolkit to integrate the needs of people, the possibilities of technology, and the requirements for business success.”
According to Hasso Plattner Institute, the design thinking process comprises five distinct stages. It starts with empathising with product users, followed by a process of clearly defining the design challenge, ideating possible solutions, prototyping and testing. Every design thinking project benefits from in-person workshops which bring together members of different departments. Workshops enable multi-disciplinary teams to communicate and shape the product development process in an active and creative way (“innovate collaboratively” approach). The sequence that design thinking teams proceed through these five stages is iterative – new variations of the product are proposed, refined or rejected. Each stage is accompanied by a specific set of methods and tools, as described below.
Empathise – In this initial stage, one must recognise and understand the customers’ pain points and identify their needs. This can be achieved through a mix of primary and secondary research techniques, such as ethnographic research , focus groups, in-depth interviews, document or Big Data analysis (e.g. web analytics).
Define – Next, “design thinkers” summarise the findings into a clear and concise statement. Projective techniques such as sentence completion or the development of fictional customer profiles (i.e. buyer personas) have proved to be useful techniques for synthesising research findings and defining the design challenge.
Ideate – The goal is to generate a wide range of ideas in order to develop solutions. Lateral thinking techniques through which workshop participants are encouraged to think of worst possible ideas or come up with 100 ideas in 10 minutes are particularly appropriate in this phase.
Prototype – Next, the design thinking teams build real, tactile representations of the most promising ideas. Paper-pencil sketches or 3D prints are frequently used at this stage.
Test – Finally, the prototypes undergo a live test by the target groups. Online communities, ethnographic research or a variety of usability techniques such as thinking aloud or cognitive walkthrough are appropriate tools to get rapid insights on how real users interact with the product. At the end of this stage, results are re-discussed within the team and the product concept is revised accordingly.
Although design thinking has been first used to create or improve physical objects, its principles are transferable into the business context. The five-stage framework can be applied successfully to almost any challenging and complex issue a company might face in the innovation process: from developing new services, to enriching the customer experience, optimising customer journeys or defining value propositions.
Designers put human needs at the centre of their approach to problem solving. Market researchers also strive to understand consumers by closely investigating their behaviours and underlying motivations. Market research can therefore support design thinking at all stages and ensure the process runs efficiently. For example, it can significantly improve the quality of interviews, surveys, observations and data collection. Experienced market researchers can also advise “design thinkers” in selecting the right methods needed to solve the challenges and identifying suitable target groups.
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ABC analysis is one of the options for analyzing the internal environment of the company. With the help of ABC analysis, you can divide a large amount of data into three groups based on their significance. This will help you clearly see which positions are key for you, as well as identify the strengths and weaknesses of your company. Thanks to its universality, you can apply the ABC analysis method to almost any field of activity.
The purpose of the analysis is what your research is aimed at. At this stage, you choose what you should come to as a result of the analysis. You set goals by each company according to their needs, for example: profit growth, inventory optimization, cost reduction, increasing customer loyalty, etc.
At this stage, we determine what exactly we will analyze, that is, we choose the type of ABC analysis, and depending on the selected type of ABC analysis, we make a list of objects, for example:
Usually, such lists you can generate from internal automated systems of companies.
Here we define the indicator by which the object will be analyzed. Depending on the type of ABC analysis, this can be: the amount of sales, margin profit, turnover of the product group, the average inventory, the cost of purchased raw materials, the average settlement period, the average debt, etc.
Now we need to sort our list according to the selected parameter in descending order. For example, for ABC analysis of sales with the sales amount parameter, we sort the list from the customers with the highest volume of purchases to the lowest. Then we calculate the total amount for the selected parameter, in our case, the sales amount, and calculate the share of each list item in the total amount. After that, we calculate the share of the sales amount from the total sales amount with a cumulative total. The share with the cumulative total is calculated by adding the parameter to the sum of the previous parameters. For the last item in the list, the cumulative share will be 100%.
After we have done the ranking of our list, we need to divide it into groups. The definition of groups is based on the Pareto Principle: 20% of the effort provides 80% of the result. In accordance with this, groups in ABC analyses are divided into three types:
A: 80% of sales are provided by 20% of customers. The upper limit of group A is the first position of the list. The lower limit is the percentage of the selected parameter closer to 80% (cumulative total).
B: 15% of sales is provided by 30% of customers. The next position after the lower limit of group A will be the upper limit of group B. And the lower limit of group B will be the position with a cumulative total closer to 95%.
C: 5% of sales provide 50% of customers. The positions of group C, respectively, are all the remaining positions after the lower limit of group B.
You can replace the sales and customers metrics with the ones that are right for you. It is worth noting that the boundaries of the 80% -15% -5% groups can be changed and can be set individually by each company.
Once we have divided the list into groups, we can analyze the data and make a decision about each group. The decision will also depend on the purpose of the analysis.
Group A is important. This type of resource should be controlled and monitored, as it is the main source of profit for the company. You should allocate maximum investments for this group. The success of group A is to be analyzed and transferred to other categories.
Group B is necessary. This type of resources is also important for the company, as it brings a stable profit, which allows the company to exist. Investments in this type of company’s resources are not significant and are only necessary to maintain the existing level.
The group C is unimportant. This type of resource usually does not bring much income. Analyzing this group, it is necessary to understand the reason for the low return from this category. If the cause can be eliminated and it is possible to transfer the resource to a higher category, then it is worth trying to do so. If this resource bears only losses, then it is better to get rid of it.
Despite the simplicity of the ABC analysis, it is important to observe certain conditions when compiling it, otherwise the data obtained may not correctly reflect the current state of affairs.
To make it easier for you I’ve prepared the ABC Analysis template which you can download in the Resources section of the website. Now you can run ABC analysis in no time using Apple Numbers template or Microsoft Excel template. You just need to fill in your data instead of what I used.
To find more marketing analysis tips go to Marketing Analysis section of the website.
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Much of what we do at CROSS-SILO Management Consultants is focused on getting departments to collaborate more effectively to improve customer performance. To that effect, we utilize the ROUNDMAP™ Customer 360 Mapping System and Integrated Methodology as our guide. Our mission is to focus on achieving goals from a horizontal business strategy.
However, we don’t confine ourselves to improving cross-functional collaboration per business unit: horizontal collaboration between business units or divisions is already known to provide a concern with added competitive advantage, as suggested by several sources:
Porter et al suggested that ‘interrelationships’ between business units/divisions are a precondition for obtaining competitive advantage from a ‘horizontal strategy’. However, it is important to note that he actually means ‘horizontal corporate strategy’. According to Porter, a business strategy is to achieve unit goals, while a corporate strategy focuses on portfolio management, restructuring, transferring skills, and sharing activities across the enterprise. We won’t dive in any deeper. There is ample documentation on these subjects on the internet.
However, be aware, while horizontal corporate strategy (interrelationships) is part of the curriculum of most business schools, horizontal business strategy (interdisciplinary relationships) is hardly ever. In our opinion it makes no sense to look for synergy on concern-level while ignoring similar leverages on the business-unit level.
As such, we’re convinced that it is critical for any business (unit) to improve customer performance by streamlining interdisciplinary collaboration – as suggested by the layout of the ROUNDMAP – in a similar matter to how a horizontal corporate strategy means to improve corporate performance.
In a scheme it looks like this:
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To understand the level of sophistication of the ROUNDMAP™, we have created a strategic playbook, explaining some of the most noticeable traits of each of the four Primary Business Models.
Whether you aim to profit from economies of scale (product-centric) or from planning for capacity (resource-centric), or something else, is entirely up to you. However, each business model has concurring dynamics that are hard to ignore.
For instance, a product-centric business model demands campaign-based marketing, while a network-centric business models benefit mostly from word-of-mouth. A resource-centric business should emphasize the service chain, while a product-centric one could do with nothing less than an excellent supply chain.
This led to the creation of the ROUNDMAP™ Strategic Playbook. See the image below. If you want to learn more, subscribe to our newsletter or apply for an Inner Circle Membership to access exclusive content and to attend the ROUNDMAP™ Introduction Course.
Choosing the right business model and deployment model is critical to success. Airbnb’s market valuation ($38 billion in 2018) is higher than Hilton and Hyatt combined, yet it has no hotels. The new AS-A-SERVICE business models have proven to be extremely scalable. We should expect many others to follow the lead of disruptors like Airbnb, Facebook, Uber, Netflix, Amazon, and Alibaba.
"I know firsthand the complexities of leading an enterprise through business and technology transformation. It takes intense focus, a strong drive, and a clearly communicated vision to inspire and take an organization from where they are, to where they need to be or where they want to go."
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