Back in April Phil Morettini posted a really sensible piece on his PJM Consulting blog about managing the growth curve. I have spoken on this subject myself at conferences and seminars in the past, but, in recent times I’ve focussed on other subjects. Phil’s post made the rounds again this month and prompted me to revisit the subject.
While I like his approach, my take on the subject hinges on an additional observation. Critically, the shape of the growth curve has changed over time. As the introduction of new technology has accelerated, so too has the rate of change adding vastly to the potential agility of businesses. This all helps leaders get innovation to market quicker, which serves to steepen initial growth. However, it also enables followers to catch up even faster.
Think about what this means to you. With competitors breathing down your neck, the cost of all that research and new product development has to be recouped sooner than ever before. When competitive products arrive on the shelves things start to get tough, so the threat to your growth arrives sooner and you want to have your initial investment largely covered by then. When competition arrives sales will usually flatten and soon start to decline proportionate to the quality and number of the competitors.
What this highlights more than anything else is the need to maximise the efficiency of your organisation. An efficient organisation will have more great new ideas and get them to market quicker. It will also sell more in a shorter period of time and the key to efficiency is having a strong brand.
One of the most significant benefits of a strong brand is focus. A business with strong brands will have employees that fully understand the brand promise and the role they can play in its delivery. This means that innovations will be more appropriate with ideas that don’t accurately represent the brand being thrown out earlier. This in turn means time, human resource and investment are available to back the winners, quickening the pace of development of ideas and adding to the robustness of product concepts that go all the way. The last play in the product launch scenario though is getting it into the homes of consumers and anybody will recognise the role that a strong brand plays here.
One of the greatest assets of a strong brand is familiarity. People know its name and they understand the promise it makes. It won’t hold any bad surprises and consumers trust its consistency. It offers the reassurance that makes any new product that carries its logo more readily acceptable to existing customers, hence, fewer obstacles to the purchase.
The “knowing and trusting” aspect also manifests itself in the readiness of customers to recommend it. So all your existing customers banging your drum every aspect of your advertising at every stage of the path to purchase will be far more effective and bring a far greater return.
As a recent European survey revealed, the majority of shoppers around the world are not motivated primarily by price. This has come as a bit of a surprise to some people and a great many retailers in particular that I encounter fall into the trap of responding to competitive pressure by reducing prices. They get an immediate business up-lift of course, but it’s a fool’s paradise that ultimately introduces uncertainly into the relationship with customers and in the long term reduces both revenue and profit.
You should never forget that the keys to success are a) the consistency that fuels the feelings of knowing and trusting that drives both sales and recommendations. This also drives b) the efficiency that will enable you to get the right innovations to market quicker, at less cost, sell more in a shorter period of time whilst reducing reliance on expensive, traditional advertising. That’s how your brand influences the shape of your sales curve.
December 15, 2014