The 7 Drivers Of New Sales Growth

Every company I work with has a sales growth target and a set of planned activities to reach the target. Far fewer, however, have a clear focus on what type of growth they are really trying to focus on. In reality, there are really only 7 key drivers of growth, as follows:

  1. Improve customer retention. Many studies have shown that it’s far more efficient and profitable to improve the retention of existing customers than it is to attract new customers to fill the hole by those who no longer buy from you (although why you need a study to prove this kind of common sense point, I’m not sure). At the top-end of the market, Singapore Airlines creates highly loyal customers through its customer service excellence. But you don’t have to offer expensive products to create loyalty. McDonalds dominates its market and retains customers by providing a mix of brand attractiveness, product quality, price and convenience that its competitors cannot match.
  2. Increase the usage rates of your products and services. A marketing star in Procter & Gamble once had the breakthrough idea of adding the words “rinse and repeat” to the instructions on their shampoo bottles, driving up usage overnight (or, at least, first thing in the morning). In a different market, Swatch turned watches from a product in which consumers had one or maybe two products, to an industry where customers have a collection to choose from.
  3. Attract and retain new customers. There are three ways in which companies can attract new customers: (i) Convert non-users. Many technology companies drive growth primarily by persuading non-users to buy their products; (ii) Find new uses and customer segments. The pharmaceutical industry has a history of re-assigning drugs for new treatments. Glaxo, for instance, first produced Zantac as a prescription-only medicine to treat peptic ulcers, but the company has also developed lower-strength products to aid the treatment of heartburn; and (iii) Take share from competitors. Enhancing the customer experience, creating communities and building stronger customer relationships can help drive loyalty and attract customers away from their current providers.
  4. Offer new products and services. There are offensive and defensive reasons for developing new products and services. Offensively, it can generate significant new revenues for your business and maintain or grow the gap between the value of your customer proposition and those of your competitors. But defensively, you have no choice. There are three valuable forms of product and service expansion: (i) Dramatically improving your current products. Gillette, for example, has created new ranges of razors that continue to keep it ahead of its competition for over a decade; (ii) Extending existing ranges. As Gillette’s razor technology improved it was able to develop a new range, Venus, designed specifically for women. Not only did this generate new revenues for the business, but improved the confidence of men across the world that their razor would be as sharp when they picked it up as it was when they last used it!; and (iii)Moving into new, adjacent markets. Starbucks, for instance, is succeeding with the development of its own instant coffee brands to use at home.
  5. Geographical expansion. The prize from geographical expansion can be huge as it allows you to replicate your existing for success. Up until its merger with Caremark, CVS, the US drug store chain, for example, had driven its growth primarily on the basis of adding new stores in new states across the USA. The company avoided international expansion as the growth provided by its domestic market has more than met shareholders’ growth expectations.
  6. Channel expansion. Channel expansion also offers major profit growth opportunities. Dell originally only sold its products directly, but you can now buy Dell PC’s in retail outlets. A key element of Apple’s recent success has been the growth of its own store chain, enabling the company to avoid sharing margins with other retailers and giving it greater control over customers’ shopping experience.
  7. Partnerships and acquisitions. Where you do not have the necessary assets or capabilities to deliver your growth ambitions, and you are unlikely to be able to develop them organically, acquisitions and alliances provide a fast-track route to growth. Studies have shown that in many industries, acquisitions can deliver 50% or more of successful companies’ profit growth. BAE Systems, the UK-based defence manufacturer, has driven significant growth through the acquisition of companies to drive greater scale and efficiency in existing markets, as well as helping it develop market-leading positions in adjacent markets.

Which of these seven steps are the right focus for your business, what steps are you taking to drive new growth within each of these areas of focus, and how confident are you that they will enable you to achieve your growth ambitions?

© Stuart Cross 2015. All rights reserved.

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Supporting The Next Generation of Team GB’s Sports Stars

I’m delighted to announce that Morgan Cross Consulting has partnered with SportsAid to provide support to the next generation of Team GB’s sports stars. You can find out more about the five young athletes we are supporting here – http://www.morgancross.co.uk/about/sportsaid/ – and find out more about SportsAid here – http://www.sportsaid.org.uk

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© Stuart Cross 2015. All rights reserved.

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Business Rocks – Needs, Wants and Jade

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This Week’s Focus: I’m reading a great book, A History Of The World In 100 Objects, by Neil MacGregor, the former boss of the British Museum. One of the objects that caught my eye was a 6,000-year old jade axe, which was found near Canterbury, England. There are no domestic reserves of jade in the UK and the item had been sourced from a remote Italian location and shipped over 1,000 miles to England around 4,000 BC. It may not have had an Armani label attached, but it was obviously an object to be admired rather than used.

Over the past 6,000 years little has changed. Your customers may talk about what they want and need, but what will really set you apart from your competitors is your ability to understand and deliver what they really desire, even if they can’t articulate it themselves. That’s why providing exclusivity, great design and an amazing customer experience, rather than simply a useful and reliable product or service, is at the heart of many of the world’s most successful companies brands.

A jade axe can’t do anything more than a stone axe, but it is hugely more desirable. Where are you providing stone when you could be offering jade?

Off The Record: Accidents Will Happen by Elvis Costello

And it’s the damage that we do

And never know

It’s the words that we don’t say

That scare me so

© Stuart Cross 2015. All rights reserved.

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Business Rocks: Stop!

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This week’s focus: I’ve been working in London this week and on Monday evening took a group to see Jose Feliciano play at the wonderful Ronnie Scott’s jazz club in Soho. Feliciano was great – his guitar playing was superb – and he sang a mixture of his own songs and covers, including his famous version of the The Doors’ Light My Fire.

During the first number in the set, however, there was intermittent feedback on the PA system. After this happened for the third time Feliciano simply shouted, “Stop! Let’s get this thing fixed – now!” He didn’t apportion blame, or have any kind of hissy fit; he was simply clear that he had certain standards for his shows and that he wouldn’t continue without the immediate and complete resolution of the problem. From that moment on, there were no further problems and everyone in the audience enjoyed the show.

Famously, Boeing had once had quality issues at its Seattle manufacturing site, which meant that many ‘fixes’ had to be made after its planes reached the end of the production line. It was only when a new manufacturing vice-president shouted “Stop!” and halted the entire production line – costing, on paper, many $ millions – that the various teams along the line took ownership for their own quality performance, and that the quality and profitability of their planes grew.

How often are you shouting “Stop!” so that your team take full ownership and address poor quality issues?

Off The Record: Light My Fire by The Doors

You know that it would be untrue
You know that I would be a liar
If I was to say to you
Girl, we couldn’t get much higher

© Stuart Cross 2015. All rights reserved.

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7 Lessons From High-Growth Businesses

A few weeks ago I spoke to the leadership team of one of my retail clients about what creates a high-growth business. Here, very briefly, are the 7 lessons I shared:

  1. Willing to be first. Most successful businesses are generally the first to successfully exploit new market opportunities. Requires entrepreneurialism and prudent risk-taking.
  2. Relentless focus on where you can win. High-growth businesses don’t try to be all things to all people. They make choices and trade-offs about where they can truly succeed.
  3. Less really is more. You should not have more than a handful of priorities at any one time. It’s far better to move three things a mile than 100 things an inch. You can always come back to your other ideas later.
  4. Fixed on the vision, flexible on the journey. This is a quote from Jeff Bezos, the founder of Amazon. It’s likely that you will need to constantly change your sails to harness the power of the fickle market winds, but you can only do this if you’re clear on your destination. Expect your initiatives and tactics to change, but be relentless in pursuing your key goals and priorities.
  5. Actions speak louder than plans. Success generally goes to businesses that learn – and apply those lessons – the quickest. Don’t wait till your offer is perfect, get it out in the market and refine and adapt as you learn. Fail fast, fail cheap and win big.
  6. Persistence and Discipline. Maintain commitment to your goals. Don’t give up if you don’t first succeed. This is the critical capability that enables you to deliver #4 above.
  7. Healthy paranoia. Nothing fails like success, so relying on your past successes is a great way to die. Focus on delivering constant innovation and evolution so that you can avoid having to try last-minute revolutions.

Which of these 7 lessons should you focus on to help accelerate your next stage of growth?

© Stuart Cross 2015. All rights reserved.

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Business Rocks – Finney’s New Pet Food

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Our dog, Finney, has been with us for a little over a year now, and has become a huge part of our family. My wife – who Finney mistakenly believes is the leader of our family pack! – has been looking to change his food. Her new solution is a tailor-made product designed specifically for Finney based on his breed, size, age, lifestyle and taste preferences, and which is even delivered straight to our door in a bag with Finney’s name on the side. Personalisation has come to dog food.

Many companies talk about the concept of personalisation, but few really innovate effectively in this area. Finney’s new food got me thinking about other possibilities for development. Staying in the food industry could you imagine, for instance, personalised baby and toddler food, breakfast cereals, tea and coffee blends, or diet and exercise related food products.

And what about your market? What are the opportunities for personalisation that you could be developing and offering your customers?

Off The Record: Hey Bulldog by The Beatles

Some kind of solitude

Is measured out in you

You think you know me

But you haven’t got a clue

© Stuart Cross 2015. All rights reserved.

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Business Lessons From The General Election

The UK’s unexpected election result immediately led to resignations, investigations and recriminations for the losing parties. This is particularly true for the Labour Party, which had hoped to install its former leader, Ed Milliband, as Prime Minister. There are already countless newspaper, TV and blog articles assessing and theorizing why Labour lost, and this exercise will continue for months, if not years.

Far less attention has been paid to why and how the Conservative Party won, and what the lessons are from its success – or, for that matter, the Scottish National Party’s revolutionary performance north of the border.

It’s the same in business. Failures are pored over to understand what went wrong, who’s to blame, how the weaknesses should have been spotted and corrected and what new approaches are required to improve the chances of success the next time around.

But successes deserve an equal amount of analysis and assessment. Some critical questions I would want the winning parties – and winning businesses – to ask themselves include:

  • What were the specific drivers of our success?
  • How can we replicate and extend these drivers of success in the future?
  • How can we leverage this success into other areas of our organization?
  • Were there any negative factors that reduced the size of our success, and how can we address them going forward?
  • What elements were missing from this success and how could we improve future performance by adding them into the mix?
  • How could we have achieved this success more quickly, and what do we need to do to accelerate the pace of future results?

How could you use these questions to more effectively review the secrets of your success so that you can further accelerate growth and identify ways to raise the bar still higher?

© Stuart Cross 2015. All rights reserved.

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The 3 Tasks Of Transformative Leaders

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Why are so many people focused on leadership style when they should be focused on leadership results?

A quick review of Amazon’s management book store, for example, highlights books on ‘human-centred leadership’ (What, as opposed to fish-centred leadership?), ‘conscious leadership’, ‘strengths-based leadership’, ‘uplifting leadership’, and even the top 100 ways to become a great leader (if you really want to confuse someone, then offering 100 best ways is probably a good way to go about it!). It’s little wonder that so many people are confused about what leadership is all about.

In reality, there is no one best way to become an effective leader: they come in all shapes and sizes. I’ve known some great business leaders who were natural communicators and those who would be reluctant to address a crowd of more than three people. I’ve known effective leaders who were brilliantly insightful strategists with an MBA from the best business schools, and others who eschewed the need for detailed strategy development. And I’ve known some truly impressive leaders who want to get close to their teams and others who couldn’t care less about team bonding and who are only interested in getting the job done.

That said, whichever style you choose to lead your organisation, there are three critical tasks you must deliver. How you achieve these tasks is up to you, and should reflect your own strengths, preferences and personality. But if you want to build a successful, thriving organisation, then you need to focus on the following:

  1. Establish a compelling future. Do you know where your business is going to, and how it will succeed in the future? Does that future have both a sound, rational basis for people to support it, as well as generating emotional excitement for your teams?
  2. Build genuine organisational commitment. Is everyone in your organisation focused on the same overall goals? Does everyone feel involved in the delivery of these results, so that they are willing to go the extra mile to deliver?
  3. Ensure effective delivery. Are delivery accountabilities clear and are your people up for – and up to – the job? Do you have effective ways of managing results, and have you found ways to deliver new ideas and innovations faster than your competitors?

Don’t look to develop a supposedly ideal leadership style, or to become the ‘perfect’ leader. Instead, look to deliver the best leadership results you possibly can. By focusing on these three critical tasks you may just find that you are finally able to deliver a real transformation of your organisation’s results.

© Stuart Cross 2015. All rights reserved.

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You Can’t Spray And Sprint

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As part of the research for the new book I’m writing, I recently met with Richard Baker, the former CEO of Boots the Chemists and now the Chairman of Whitbread plc and DFS Limited.

Richard talked about the importance of strategic focus – concentrating your efforts and resources on those core activities where you can win – and how management teams can easily become distracted chasing sales in markets where they’ll never be able to lead. He calls such distractions “spraying” and ended our meeting by saying “You can’t spray and sprint!” Effort spent trying to grow where you’re not advantaged simply slows you down and reduces the pace at which you can develop your core business.

In his time at Boots, Richard refocused the business on pharmacy, healthcare and beauty, calling time on non-strategic categories and services as diverse as homewares and in-store massages. Alongside operational improvements and sharper pricing, his approach returned the business to growth and led to the successful merger Alliance Unichem in 2006 and the new group’s £11 billion acquisition by private equity firm KKR a year later.

Where are you becoming distracted by non-core revenue growth and how can you stop “spraying” so that you can start “sprinting”?

© Stuart Cross 2015. All rights reserved.

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Business Rocks – In-Flight Maps

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This week’s riff: I’ve just returned from a quick trip to the US. The in-flight entertainment choices seemed almost limitless, covering all the latest movies, a wide choice of TV programmes, different musical genres and a selection of games. Yet, as I stretched my legs around the plane at least half the passengers weren’t watching the entertainment at all. Instead, they had switched channel to the in-flight map, showing where we were on our flight and how far we still had to go.

People want to know where they are and where they’re headed. That’s true for people’s work-life as much as it is for long-haul flights. How do you help your people understand the direction of your business and where you and they are on that journey?

Off The Record: Do You Know Where You’re Going To? By Diana Ross (written by Michael Masser and Gerald Goffin)

Do you know

Where you’re going to?

Do you like the things

That life is showing you?

Where are you going to?

Do you know?

© Stuart Cross 2015. All rights reserved.

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