Almost every conversation I’ve had with the market over the last 12 months has had one underlying theme, and that is profitable growth.
Perth has been in a deflationary environment for some time now. Flat consumer prices and falling rents – down more than 13% since the peak in December 14, according to recent figures from the Australian Bureau of Statistics – are symptomatic of an economy still struggling to find its feet in the brave new post mining construction boom world.
This environment is challenging for business, as uncertainty makes it harder to make decisions – the temptation is to sit back and wait for things to improve.
But that approach isn’t going to drive business growth or profitability – both of which are essential for long-term sustainability. Profit is required for basic financial survival while growth is key to long-term success.
What is profitable growth?
Profitable growth is all about increasing both top-line growth and bottom-line margin.
This type of growth can be elusive, as it requires a dual focus on maintaining the relevance and quality of the business’ core activities while seeking related opportunities – or adjacencies – for organic growth or acquisitions. Not only that, the business needs the supporting systems and processes to be able to explore and exploit those adjacencies effectively.
Focusing only on your business’ core activities might reap rewards in the short-term but without innovation, profitability and growth will eventually suffer.
At CoreData, we see our role as growth partners; helping clients to achieve profitable growth by better understanding their market, better understanding their customer, and creating evidence-based conversations with their marketplace.
So how can you do this?
Better understanding your market
There are many tools at your disposal to help you uncover rich insights about your marketplace. As an initial step, it’s important to recognise that not everyone is equal – and one size doesn’t fit all.
There will be certain segments of the market that are more inclined to be customers of your business, and for whom your product or service will have greater appeal, and your marketing efforts are best spent targeting those with a higher propensity to buy than wasting your time – and money – trying to appeal to the masses.
If you’re considering launching a new product or service – or merely launching an existing product or service in a new market – it would be a good idea to conduct a market sizing exercise to scope out the size of the potential opportunity.
While the opportunity might be large, it’s also important to contemplate how many competitors are playing in the space; researching who your competitors are and what they’re doing is essential to making sure you nail your unique selling proposition.
Further, some market testing will help you shape your offer in a way that increases the likelihood of appealing to your target customer. This can be done in an exploratory way, through focus groups or deep-dive interviews, or in a quantitative online survey. The right methodology will depend on the business objectives, research objectives, and nature of the offer.
Better understanding your customer
Once you have a good grasp on the macro environment in which you’re operating, it’s time to focus on the micro stuff; who is your customer and what do they want from you?
Given the breadth of information being collected in today’s digital environment, there’s a good chance you already have a lot of great information that you could use to paint an accurate picture of the different types of customers you’re servicing – but the challenge can be knowing how to turn that data into meaningful insight.
Adopting a holistic approach to understanding your marketplace, through a market segmentation solution that is tailored to your business objectives, will help you to not only identify the types of customers you have, but how they interact with you, what they want from you, what they think and what they are likely to do next (predictive analytics).
There are many important steps in the market segmentation process, but perhaps one of the most important is stakeholder consultation – carried out upfront – to assist in identifying the current needs of the business and stakeholders’ appetite for change.
CoreData’s market segmentation solution, Janus Analytics, breaks the process down into five simple stages, with an option to incorporate a sixth aspect – database enhancement – if there are gaps in your business intelligence that are critical to address prior to undertaking any primary research.
The initial journey mapping and analytics strategy stages provide insight into the methodology that will be used to develop the analytics solution, identifying the analytics needs of the business as well as propensity for the business to change internal systems and processes, and mapping out the process that needs to be taken to achieve the company’s business intelligence goals.
Once the primary research is completed, the segmentation modelling quantifies ideas about where the true separations between the customer base lies.
Finally, the implementation and maintenance stage brings the research to life, allowing clients to operationalise the insights.
Evidence-based conversations
So you’ve quantified the opportunity and identified your ideal customer, how can you use this information to your advantage?
“The frequency of the conversations you’re having with your customers multiplied by the value of those conversations is going to drive your business growth.”
Segmenting your customer base allows you to talk to your customers about the things that matter to them – to create a narrative that people can relate to.
If you’re talking to customers about the things they care about, they’re much more likely to engage with you.
Engagement is all about making meaningful connections; every positive interaction you have with a customer is like a deposit in the trust bank. The more positive interactions you have with a customer, the more likely they are to respect you, buy from you, recommend you to friends and family – hence driving your business growth.
Research-driven content and creative assets such as blogs, whitepapers, infographics and animations are a great way to amplify your brand on social while also demonstrating thought leadership and building authenticity in the minds of customers and prospects.
You can use these tools to start conversations about topics that resonate with your target market, subtly sending the message that you are a company that ‘gets’ them.
Business intelligence as a growth accelerator
Using business intelligence to drive strategy can create profitable growth and transformational change.
It’s about understanding what data you have at your disposal, and what you need to collect to fill the gaps, and making that data work harder and smarter for you. Data itself is meaningless, it’s how you turn that data into insight that matters.
The key to success is truly understanding how your offer is best positioned in the marketplace and what benefit you bring to the customer.
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Follow Kristen on LinkedIn: www.linkedin.com/in/kristenturnbullcoredata
