As we enter 2015, it’s important for business leaders to do more than just make resolutions to do things better. Instead, they need to take a strategic, purposeful approach to growth in the new year.
Here are three key ways you can increase sales and profitability in 2015.
1. Know your markets.
How well do you really know your markets? What’s the potential for a new product in your existing markets? Are there customers you may be missing that consume categories you sell? Before you can tackle a new growth initiative, it’s important to understand the market you’re in and any that you may be jumping into. That means collecting data and insight on your target markets and challenging the assumptions you hold about where growth may lie.
The good news is there is a wealth of data and information out there from a multiple sources. Thanks to technology, it’s becoming easier to take that data, set it alongside your internal transaction data and crunch it for a stronger understanding of your business and the markets it serves.
Doing so helps you understand your share of the market, whether you’re maximizing your sales effort and whether there are industries you’re overlooking.
2. Segment your customer base.
There are multiple ways to segment your customer base. No matter how long you’ve been in business, customer segmentation is an invaluable exercise.
As Jonathan Bein wrote in Modern Distribution Management (IMI’s sister company), assumptions businesses make without data are usually “incorrect or at best partially correct.” When you look closely, it’s clear that “some market segments are overrated, some underrated, and others are ignored or undetected altogether.”
Bein says businesses need a “scorecard” – the only way to know who the best players are.
Segmentation can be done by customer size, end-market, profitability, geography and more. Take care not to segment by just one factor, however, and think beyond the traditional segments; as with any project that involves data and analysis, it’s important to take a 360-degree view to get the full picture.
3. Align your resources to the markets with the most potential.
As we outline in this whitepaper (written by Indian River Consulting Group), to get the best bang for your sales and profitability buck in 2015, it’s critical to align your sales and marketing resources with the right markets. This means that you should start serving customers through new and, in some cases, lower-cost channels, such as e-commerce and inside sales, where appropriate.
It also means you should stop over-serving customers. Don’t provide services to customers that don’t value them; shift those customers to more cost-effective sales channels that serve both their and your needs.
One way to align resources is by sales channel. Another is to reevaluate which markets your sales team targets. This can be challenging. As we’ve said on this blog before, many companies don’t try to estimate an addressable market size; they are afraid of getting it wrong. But it is possible to build models that will point you to the markets with the most promise so that your sales team and other resources can focus on the accounts and segments with the highest potential return.
Give IMI a call to get started on understanding your markets and building a path for growth in 2015 and beyond. We look forward to serving you in the new year!