In a perfect world, your sales numbers will always be going up when you look at your business finances. However, as is much more likely, your sales will ebb and flow. One year, your products or services can be selling like hotcakes and you can see continued revenue growth from quarter to quarter. And then, all of a sudden, things can change and you’re left wondering what happened. Your sales may not have tanked, per se, but that steady revenue growth you once enjoyed has definitely stalled. So, what do you do now?
Plateaus in revenue growth are normal in every business. From time to time, there will come a point where the current market share has been saturated, and a change in strategy is needed to reboot growth potential.
The problem for many business owners is deciding what exactly to do next, and they often wind up debating two options: expanding their product offerings (more products on the market could mean more revenue) or developing a better marketing strategy to get more exposure for their current products or services in a new way.
The answer to boosting revenue growth could be either one—or even a combination of both—depending on your circumstances.
Let’s take a look at some different scenarios as you consider the best plan of action to boost revenue growth for your company: new product or new marketing?
Increase Revenue Growth With a New Marketing Strategy
To start, let’s take a look at when developing a new marketing strategy, while keeping your products or services the same, could be the key to increasing your business’s revenue growth.
1. There Are Marketing Strategies You Haven’t Tried
If you’ve only ever marketed your product a certain way, you may be missing out on key opportunities to expand your market share and increase revenue growth. After all, there are all kinds of ways to market your products or services, from email marketing to word-of-mouth marketing, and many more. Have you considered adjusting your pricing strategy through a price change or a special discount? Or partnering with another company to cross-market with a product that would pair well with yours? Marketing through new channels you haven’t previously explored will help get your product in front of more people, increasing your opportunity for sales.
Perhaps you know there’s more you can do to market your current offering, but you just don’t know which way to turn. Consider hiring a marketing consultant to help you refine your options. This is a great first strategy before expanding your product line. After all, if your current marketing strategy is limiting the revenue growth potential of your current offering, that will still be true with your expanded product line.
2. You Can Repurpose an Existing Product
Do you have a current product that could be repackaged for a different purpose or audience? Could you package a few of your fan-favorite products as a gift set, for example? Packaging and remarketing are often a less costly investment than new product development, so there are certainly advantages to making use of what you already have in a new way to boost revenue growth.
Taking a look at your company’s sales and customer reports may shed light on an unexpected customer base who’s buying your products, who you can then focus your marketing efforts on.
3. Resources Are Tight
Developing a new product is tough. The process requires significant time and resources, and there’s always the chance that your new product won’t be as successful as your company’s current offerings. If your organization is currently experiencing particularly fierce financial insecurity due to decreased revenue growth, you may be better off concentrating on the bread and butter of your business before you invest in diversification. Wait until you really have the resources to put into making any new offerings truly great.
Increase Revenue Growth by Adding a New Product or Service
Of course, you may survey your company’s current placement only to find that you’ve already exhausted your market share. If that’s the case, here are a few scenarios in which launching a new product may be the solution to your revenue growth problems.
1. You Have a Loyal Fan Base
If you already have a great, loyal group of customers who love your current product lineup, they’re likely ready to keep coming back for more. Highly loyal customers are great for business, but with a limited product line, there’s only so much they can buy.
Do your best customers already own every product in your line? If so, you’ll need something new to keep that momentum going—both to increase revenue growth, and to keep your biggest fans talking to family and friends about your brand (word-of-mouth marketing can be a real game-changer). Coming up with a great new product could spark instant and guaranteed revenue growth from this fiercely loyal group.
In this scenario, you may even go directly to the source and ask your customers what products or services they’d like your company to offer in the future. That way, your customers will appreciate you even more for valuing their input, and you won’t have to guess at what new product will resonate most with them.
2. You’re in a Seasonal Market
From beach toys to snowsuits, there’s a wide range of products and services that are just not effectively marketable year-round. If your business tends to boom for three months of the year, but you can hear crickets in your office the rest of the time, consider expanding into a somewhat related market that can fill in the seasonal gap and help keep your revenue growth steady.
If you run a summer camp, for instance, your demand will virtually disappear once kids go back to school. During the months when schools are in session, then, you may consider running a daycare or tutoring business. Likewise, if your landscaping business stops receiving jobs once the colder months hit and lawns no longer need maintenance, a natural new service you may want to offer would be snow removal. Ensuring that your products or services are in demand year-round will help boost your revenue growth and prevent any cash flow issues.
Meredith McWatters, owner of Head Above Water Swim School, found that diversification was the key to year-round revenue growth for her seasonal business. By expanding her business to include tutoring services, Meredith found a way to maintain profits and payroll over the cold winter months.
3. You Can Expand to a New Audience
In some cases, a new product provides a perfect opportunity for companies to dip into a new target market. For example, a small business that currently offers a highly popular skincare line for women could see dramatic revenue growth by creating a product line for men. Is there a way that changing your current product offering just slightly could make it relevant to a whole new audience? If so, you might have the perfect recipe for revving up revenue growth.
Again, market research and talking to your customers can go a long way to identifying where your next opportunities lie.
Did any of these scenarios ring true for your company? Remember, there’s no one right answer to revenue growth. It may be that what your company needs is a little bit of both. After all, great products and an effective marketing strategy go hand-in-hand to boost sales and drive revenue growth. But if your finances are especially tight, it’s typically less expensive to take another look at your marketing strategy than to create, test, and launch a completely new product, the success of which is no guarantee. However, if a new product or service is a natural next step for your business, it can yield substantial revenue growth.
Do your research to determine how your company is faring against the competition, who your customers are, and where your potential lies—then trust your gut as you decide on the best strategy to move forward and boost your revenue growth.