How to grow the Company is one of the main concerns of every entrepreneur, and the main objective is creating a business model that favours the consolidation of one’s commercial activities, adapting to changes to grow one’s business. In this article, you’ll see a variety of tactics, patterns, and actions you can implement to stimulate growth in your business. Sometimes we put so much effort into repeating habitual actions hoping to get different results, which doesn’t happen.
To carry out this survey, we have analyzed 7 practices (Best Practices) used by companies such as Uber, Netflix or Apple, which you could take as a model to apply to your business.
1 – Bait & Hook (Hook And Bait Model)
If you want to grow the Company, you must ask yourself a simple question: How easy is it for your customers to change your product for another competitor?
You may have never thought about this, but so many companies apply the Bait & Hook business model. This model divides an offer into 2 elements: A basic product sold at an affordable price and a complementary product that helps increase sales regularly. Although the model is often attributed to Gillette, with disposable razors, the Bait & Hook model idea was pioneered by its competitors.
Today many companies in various sectors use this business model: For example, printers and cartridges, or mobile phones and additional accessories … A case in recent years is Nespresso, which on the one hand, sells the technology (protected by patents ) and which customers then use with consumables to buy, in this case, the coffee capsules designed for that machine.
Once you have bought a printer, passed from one operator to another, or bought a coffee machine, you are “forced” to stay with them and eventually, if you are satisfied, become a loyal customer, an ambassador of that brand.
2 – Lifetime Value (Ltv)
Growing the Company without talking about the lifecycle value of your customers is practically impossible. Have you ever wondered what a customer’s total value is from the first purchase to the last?
Let’s take a practical example: A bar where a customer takes his coffee every morning, a priori would not seem to be a very good customer: he spends only €1.50 to have his coffee. But if he does it every morning, it’s €10.50 a week or €45 a month. What if he always had coffee every morning for 10 years? He would spend €5,400. In this case, would that customer be a great customer or not?
Business owners should consider every customer’s exact value when considering LTV. For example, you may be interested in applying a recurring payment service to your business model. Do you remember going to Blockbuster to rent movies or buy DVDs for your collection? Maybe there were months, especially in the winter, when you spent much time watching movies, but… in the summer? Blockbuster didn’t make that much during July or August.
Now you surely have Netflix, and you will have noticed that its business model has introduced a recurring payment system. In other words, you pay a monthly fee to access the service. This model is attractive for its ability to build long-term customer loyalty by extending the LTV of each satisfied customer.
Are you tracking LTV to generate long-term loyal customers for your service?
In addition, we have created a Free Checklist for you to verify in less than a minute how Scalable your Business is and how much it can grow based on the simple answers you provide during the check.
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3 – Management Cost Control
A business model based on an agile management cost structure can become a competitive advantage for your Company. As an entrepreneur, one of the most important tasks is to minimize management costs; succeeding is one of the most important factors in growing any type of Company.
New business models base their scalability on the ability to keep the cost of ownership down, and they’re revolutionizing several industries. For example, the world’s largest taxi company, Uber, owns no cars; the world’s most popular media company, Facebook, does not create content. The world’s largest retailer, Alibaba, has no inventory; and the largest supplier of accommodations in the world, Airbnb, owns no real estate.
Let’s compare Uber with the traditional taxi industry. The main difference is the completely innovative User Centric experience: Uber created the technology to help people solve their mobility needs. What’s more interesting, though, is that Uber doesn’t have cars; its drivers use their own cars to provide the service, which means great agility when extending its business model anywhere on the planet.
Is your business model based on an agile management cost structure?
4 – Customers Who Generate Value For The Company
Another way to grow your business is to get your customers to generate value for your business. Now more than ever, customers can help you grow your business. Social networks provide an opportunity for consumers to talk about their experience with your product or service.
With the creation of the App Store, some companies like Apple have gone further, creating a business model in which the customers themselves generate value for the Company. With the Open Source platform, millions of programmers and Apple customers could start generating apps and games with the iOs operating system of the brand founded by Steve Jobs.
If you can get your customers to help you create value for your business, it will grow exponentially. Are you doing this?
5 – Differentiation
Differentiation is one of the most important factors in consolidating and growing a company. We live in a market economy with many competitors, and it is necessary to find a positioning that allows us to reach our customers with a competitive advantage.
For this, it is essential to create a unique experience, i.e. not just sell a product but create an experience that our customers can and want to share with their friends, family and acquaintances.
A very interesting example of differentiation is Ikea, which has changed the furniture sector with its business model. Buying a wardrobe from Ikea is different from a traditional furniture store in terms of the product and, above all, in terms of the shopping experience.
Great, now you know 7 ways to improve your Company’s scalability ratio with these best practices we’ve reviewed.
If you want to accelerate the process of growing your business even more, we at Funnel Company can guide you, click on this link, and one of our consultants will help you with a personalized session.