How to deploy the three Ps of marketing
Every entrepreneur understands that growth is what creates value. The question is, how do you create the growth that creates value? The key, of course, is distribution. As distribution grows, so do your sales. Without distribution, your product or service doesn’t sell, and your business won’t grow. You may as well sit in a darkened room by yourself and shout at the walls.
Distribution is the growth game changer
Even if a product is not the best in the market, distribution changes everything. It can propel a product to number one, and from there the company follows (or vice versa). The concept is very simple:
- Greater distribution empowers greater leverage for other products and services (e.g. cross-selling and up-selling to existing customers), and to expand into other product and service areas.
- Once a customer buys a product or service and then repeat buys, it becomes a habit. This is hard for other companies to break. In addition, a big following begets a bigger following.
Once growth has been introduced into a company’s DNA, it creates capital within the company. This can then be used to fund further growth. As a company grows, it learns more about its customers, products and growth strategies. This knowledge can then be harnessed to iterate strategies and grow even faster.
This type of growth works in a similar way to using growth loops to boost the marketing success of your business: growth is compounded by success. It’s like a snowball rolled down a mountain; you start small, pick up speed, gather momentum, and grow exponentially as you roll.
So, what does a successful growth strategy look like?
Growth doesn’t just happen. You plan, and then you must execute that plan. To get an idea of how companies grow today, you need only look at organisations such as Facebook, LinkedIn, Uber and Airbnb.
Look at how Facebook created such explosive growth. In 2007, it had 50 million users. At the rate it was growing its userbase, it was on course to have 300 million users in 2012. Then it created a growth team.
The head of that team, Chamath Palihapitiya, decided to work on the product, using SEO and SEM tactics and applying some algorithms. Growth of Facebook’s userbase started to rise rapidly. By 2012, instead of the forecast 300 million users, Facebook had acquired one billion users. By 2016, this had grown to 1.75 billion. At the end of 2018, Facebook’s user numbers had grown to an astonishing 2.32 billion.
The basic design of Facebook’s growth system has been copied many times, because it works. It is based upon four fundamentals. The system is:
- Systematic – with a fixed plan
- Deterministic – there is no randomness
- Repeatable – can be repeated irrespective of product or service
- Sustainable – cam be maintained
When does a business grow?
Like success, growth doesn’t happen overnight. The lifecycle of a business is well defined. It is evident in every company – from small consultancies to global behemoths – that businesses develop along a journey of five stages:
1. Idea
The idea for a business is developed with a business plan, challenges and opportunities are examined, and the chances of success estimated. Key target areas are identified, the business plan is revised, and you will answer questions such as:
- Will the product/service be accepted by the market?
- What business structure can I establish to produce, market, sell and manage?
- Will it be profitable?
With the business plan fleshed out and key questions answered, the entrepreneur moves to the next stage.
2. Start-up
This is the first stage at which growth happens, and it is the riskiest stage of all. Capital is required to start up, and budgets are easily blown through. Challenges at this stage include:
- Funding
- Finding and hiring employees
- Managing sales expectations
- Money and cash flow management
- Reaching out to new customers and establishing relationships
- Managing customer relationships
For many reasons, this is perhaps the most stressful stage of the business lifecycle. Funding can be expensive, starting a new business is always risky, and breaking into an existing market can be virtually impossible. The best employees often shy away from working at a start-up, and cash flow is likely to be problematic.
However, with determination, good business management, and a systematic and disciplined approach, the business will move onto the next stage of its lifecycle.
3. Growth
Having overcome the intense challenges of starting up, the business is now ready to leap forward. It is generating revenue and the challenge now is to grow customer and sales numbers to generate the revenue that can spur growth. If the business is only covering costs, it will be hard to grow. Often, at this stage entrepreneurs and small business owners will take only a small salary to leave as much capital in the business as possible. Continuing like this is rarely rewarding.
However, using the profits generated to plough back into the business and fund the growth strategy is a systematic approach that must be considered deeply and planned remorselessly.
Growth at this stage and beyond cannot be achieved by one person. If you try to grow your business on your own, you will find its growth is limited by your lack of time and lack of expertise in key areas. You’ll need to build a reliable team to help you achieve your planned growth.
4. Expansion
With growth continuing to bubble through from the growth stage, there is a need to harness the power of distributions channels to grow market share and increase revenues and profit streams. The most rapid growth is possible here, provided the foundations have been laid in the previous stage.
Key challenges at this stage will include utilising expertise expertly, continuing to generate enough cash to fund growth, and prioritizing projects for investment, as well as continuing to systematize your approach to be able to scale up efficiently while not losing the drive to be innovative.
Companies at this stage have the potential to become the next Facebook or Amazon. Remember, all companies started small. For consultants, coaches and HR trainers, while becoming the next Amazon may not be quite within your reach (but never say never), this is the stage at which you might grow and dominate your niche – perhaps in your city, county, state or country.
The potential to expand is there because of the resources you are generating. How you use those resources is key to your ability to expand. You’ll need a plan, which may include further decentralization of tasks. This is where a small business really does become a big business: you need to act like one to grow.
5. Maturity
As a business matures, its room for growth reduces. For example, there are only so many users that Facebook can acquire. The danger here is that the business runs out of steam, ceases to produce new ideas and innovate, or fails to consolidate.
For entrepreneurs, this stage also brings with it the realization that they are no longer the business. There are many others involved, and a management team is likely to be in control.
While this is the final stage of the model, and some business owners may decide to sell and exit, there are still many exciting opportunities possible. For example, the company may decide to diversify into new services or product areas, expand geographically, or merge with another company. All opportunities come with potential for further growth, often resetting the company back to stage three.
If no further growth is envisaged, the challenge becomes one of stopping the evolution of systematization, and more careful management of finances and resources. Perhaps the biggest challenge as a mature company is staying ahead of the smaller, more nimble competition – the type of company you once were.
Focus areas for your growth strategy
When developing your growth strategy, you will need to focus on the vital parts that will make it work. We like to look at it like an auto engine:
- The fuel gives it the energy to move your vehicle – the product required for the vehicle to move.
- Of course, fuel alone is not enough. You must have an engine that works systematically, pumping the fuel in and converting it to movement. The engine of growth is the process employed to create growth.
- Finally, the product and process would be redundant if there were no driver to direct it all. And it can’t be just anyone. The driver must know how to drive – delivering appropriate acceleration, steering to avoid hazards, and altering course as needed to reach the chosen destination. In a small business just starting out, the driver is the owner. As the business grows larger, it is essential that the right people are employed to drive and direct the vehicle – without these, a business is likely to crash and burn.
What business owners and boards forget is that it is not enough to have the ideas to grow a business. You must have the other three components – the three Ps of growth:
How the 3 Ps fit into a growth strategy
Knowing what we know now – that growth is dependent on distribution – we then must learn how to use the three Ps in a growth strategy. Let’s break each one down to examine what they mean in a strategic sense.
Product
You probably consider that the product of your business is the widgets it makes or the service it sells. This is true, but when developing a strategy for distribution, the product or service that you provide customers is not the only product you need to power your growth engine.
There are many areas that will have an impact on the growth of your business. These include:
- Customer experiences
- Customer retention
- Geography
- Optimization of cash flows
- The technical infrastructure behind customer acquisition (e.g. email, content marketing, your website, etc.)
All these areas require a product to move forward meaningfully: you need data to understand them.
Fortunately, data is easier to discover today than ever before. Without data, companies like Facebook, Amazon and Google would never have achieved their massive and exponential growth.
If you think that growth will come from upgrading existing or developing new products or services, you are looking at your business the wrong way. You’ll have a nice suite of products and services sitting on the shelf with no buyers. You achieve growth by distribution – connecting increasing numbers of people to your product, not by connecting your product to increasing numbers of people.
So, use the data you accumulate to help you identify, capture, retain and grow your customers base.
Process
The process is how you solve problems. For example, how do you send email campaigns to the right people in a responsive way?
All the data you collect must be input into your process. This data can be used for personalization, machine learning, marketing, the design (and redesign) of your core products and services, and so on.
Steven Dupree (former VP at SoFi and LogMeln) explains the process of growth as a “scientific method applied to KPIs”, and identifies the steps as:
1. Hypothesize
Build a growth model to identify the areas that have the most impact on your ability to attract, engage, grow and retain customers.
2. Prioritize
Understand why these areas are most impactful, and prioritize them.
3. Experiment
Develop hypothesis-driven experiments based upon your growth model and understanding of your customers.
4. Analyse and apply
Apply what you have learned to your growth model to improve it over time.
You’ll notice that this process incorporates both data and creativity. It understands that the best growth is neither wholly reliant on either ideas and creativity nor data – the best growth transpires when both work hand in hand. However, it does identify what works best to drive growth – what you must know about the product or service you provide, the people who use it, and the channels through which you distribute.
People
The final P is people – the teams you build to help you grow. Often, business owners approach this piece of the puzzle by considering team structure and building the team around this thinking. Instead of this, you should first consider your priorities – those areas you have identified as having the greatest impact on growth. Once these are identified, you can work your way back to build your team.
The best teams are those that have a mix of skills, expertise and experience: for example, data collection and analysis, content creation and design, marketing, sales, etc. The exact mix will depend upon the problem you wish to solve.
To build the best team, stop thinking about what you can do with the skill sets at your disposal. Instead, start thinking about what you need to do to grow – what it is that will have the greatest impact on your growth. In brief:
- Identify your priorities
- Hire the best people (you may already have them internally)
- Dovetail these into your growth process
- Don’t expect quick wins – sustainable growth evolves and then explodes; it is not overnight success
Email marketing that drives business growth
You’ve started your consultancy business and have a few clients on board, but growth has proved slow.
After considering other options, you’ve identified email marketing as a priority to connect new customers with your service. You’ve read that email marketing is the ‘new’ big thing for consultants who are serious about growing their business. It can be automated and has a great ROI of an average of $38 for every $1 invested. With a smaller marketing budget, this kind of potential return is highly attractive.
There’s one problem: you don’t have the skill set to put this priority into action. You wouldn’t know where to begin. This step-by-step guide should help you.
Identify the people you need to put email marketing into action
There are many tasks to complete for successful email marketing. These include:
· Marketing strategist
You’ll need to create a strategy for your email marketing campaigns. Once one email has been sent, what happens next? The strategist will need in-depth knowledge of the email marketing business, but also be able to identify the short- and long-term strategic needs of your business. Responsibilities of this strategist will include ensuring that the email strategy aligns with other marketing strategies and managing the campaign diary.
· Content creative
You’ll need to create email content that resonates with your target audience. It must be interesting and informative. You’ll need to identify the action you wish the recipient to take – for example, click through to content on your website – and compose a message that encourages this action.
Unless your business is writing and formulating content, it’s unlikely that you will be the right person for this.
· Quality assurance
The content must be accurate and error free. If there is an error on your website content it can be changed; once an email is sent, it is in the inbox forever.
· Data analyst/developer
To create relevant email campaigns, you need the data to feed them and this data must be understood. A business analyst/developer will analyse data and segment your email list to ensure that your email campaigns target the right recipients. The importance of this process should not be underestimated: if you send the wrong emails to the wrong people, you’ll quickly find you suffer a mass exodus from your subscriber list.
The data analyst will also measure the success of your campaigns, identify trends, cleanse records, and collaborate with your strategist for further segmentation to drive ROI upwards.
· Project manager
Successful email marketing campaigns don’t just happen. They are projects that need to be managed within the overall structure of your marketing strategy. You may have long-term marketing campaigns that can be planned over a long lead-in, while others may be needed to take advantage of opportunities that arise with a narrow window. A project manager will pull all the roles together, keeping communication flowing and ensuring each task is completed successfully.
Identify the process to use
Unless you have a process, all the expertise in the world will not drive success of your email marketing strategy. It is this process that provides the framework for your team to fit in and for your strategy to be devised, delivered, tested and improved. You’ll need to consider:
- How strategy is devised
- How campaigns are planned
- The type of email that will be sent in each campaign
- The system and software to use to automate email campaigns
- How campaigns are approved
- The process to analyse data, measure results, and improve the strategy
Types of email that you could use in marketing campaigns
One of the major decisions you will need to make is the type of email to send. This will depend upon your objectives, but may include the following:
· Transactional emails
These are triggered by a user’s activity. Common examples that we receive and respond to every day include password resets, login details, flight and hotel confirmations, and shopping cart abandonment alerts.
Transactional emails that you may employ in your strategy include:
- Registration emails (e.g. welcome emails)
- Notification emails (e.g. notification that you have been tagged in a Facebook post)
- Confirmation emails (e.g. a hotel booking confirmation)
· Interactive emails
These engage the recipient in an action or response. For example:
- Feedback emails (e.g. customer survey or product survey)
- Abandonment emails (e.g. shopping cart abandonment or newsletter subscription abandonment)
These types of email can be triggered by a user action or may be sent without such a prompt (e.g. survey). They may include a video or infographics.
· Test campaign
A/B testing is a powerful tool. It compares two versions of an email campaign. They measure one variable at a time, examining what has the best result. This information is then used to adjust and optimize future campaigns to improve outcomes. Variables that might be tested include:
- Subject lines
- Messaging
- Call to action
- Personalization
- Landing page
- Target audience
- Sender name
- Design
- Images
· Drip campaigns
A drip campaign is a set of scheduled emails, each related and sent in a specific order. The idea is to convert prospects into leads into customers. These may be triggered by an action by a visitor or user. Examples include email training courses and information and research releases.
How are emails campaigns sent?
To run effective email campaigns, an email marketing system is essential. This allows you to administer your email list; for example, by segmenting it to enable better targeting. An email marketing system will enable automation of your campaigns and tracking of performance.
There are many email marketing systems available. Each has different advantages and disadvantages, and different subscription packages and costs. It is important that you select one that fits with your marketing processes and email marketing strategies.
Identify the products
The products you use to help define your growth strategy are the data inputs you use. These may include a variety of information, and this will be collected at all stages of the process. Examples include:
- The ways that visitors move around your website
- Other sites that are visited immediately after leaving your website
- The number of carts that are abandoned, and which products are most abandoned
- The percentages of emails opened by their recipients
- The click-through rate of calls to action
These products will help to define the design of email campaigns. For example, if many users visit a website to read an article about email marketing, you may decide to offer a drip campaign such as a mini training course delivered by email that shows the user how to develop an email marketing strategy.
Of course, this brings us to the realm of your actual product or product that you are selling. Here again, the response to email marketing can tell you much. It can help you evolve your product as the needs of your customers evolve or add new products to your portfolio (such as the drip training course mentioned a few sentences ago).
Where do you start with your growth strategy?
As your business prepares for growth, you will need help. We’ve highlighted above just what that help may be in the email marketing arena. Most growing businesses don’t have the resources in-house to create a team to run successful email marketing campaigns. This certainly doesn’t mean that you should give up before starting. We now live in a gig economy, in which the expertise you need is more readily available and more affordable than it has ever been.
Growing companies no longer need to incur the costs of employing a team full-time, because niche companies work across various functions, enabling smaller businesses to access the skills, expertise and experience that they could otherwise not afford. For example, in our business we source talent from around the world. This means that we can keep our costs low while offering the best in bespoke services to our clients – and our clients benefit from expertise at incredible value.
To find out more and discover how we help businesses grow by perfecting SEO, content marketing, email marketing, and building a social media presence, contact BlabberJax today.
You might also like to read some of our other articles, such as:
In the meantime, tell us what you have found to be your biggest obstacle to growth in the comments below. We’ll be happy to get in touch and help you find the solution.