In the FourWeekMBA growth matrix, you can apply growth for existing customers by tackling the same problems (gain mode). Or by tackling existing problems, for new customers (expand mode). Or by tackling new problems for existing customers (extend mode). Or perhaps by tackling whole new problems for new customers (reinvent mode).
Gain: solve existing problems better to make existing customers happier
In the gain section, you can apply growth strategies focused on your current customer base.
By better defining their problems you can craft an even better value proposition within your product and service.
Thus expand the business by applying higher prices (as a consequence of a better offering) or by offering more for less.
Here you grow by moving within your established business model.
Growth via price increase or expanded offering
Improved product features
Refine the most used features your current customer base has been using more frequently.
New product features
Add essential features that your customers have been asking.
Better packaging
Offer bundles or expand the offering if your customers value it the most in a bundle (for instance, by providing more features, they will pay less, yet more than the basic package).
Or perhaps unbundle the offering if your customers want one feature or a set of features within your product (avoid the lock-in effect).
This way, you can grow by simplifying the product and making it more powerful for your existing customer base.
In this case, growth might come as a result of reduced complexity for both your organization and the customer’s understanding of your product.
The Value Proposition Canvas, part of the Business Model Canvas, is a tool used to ensure a product or service is positioned around customer values and needs.
In other words, you want to improve the product’s utility while also working on the perceived value for users/customers.
For instance, take the case of a digital product like an eBook.
Not only you might want to expand it with new content, but you might also want to make its formatting more compelling.
As another example, take an e-commerce company that not only increases the availability and variety of products.
But it also works on the UX to make it easier for users to find relevant things by adding high-quality product pictures, which, right on, make the same product perceived as higher quality.
Communication/product fit
Help your customers find a better use case for your product.
In short, help them understand how they can use it at best to reduce churn (develop case studies or perhaps training programs for them).
Personalization and customizations
Provide the ability to customize the product or service so your existing customers can add more on top of your product.
Change the revenue model, or expand it
You can experiment from a one-off transaction to subscription-based service.
Think of how you can make your product recurring. Or perhaps, from subscription-based, add a component of consumption.
A pricing strategy or model helps companies find the pricing formula in fit with their business models. Thus aligning the customer needs with the product type while trying to enable profitability for the company. A good pricing strategy aligns the customer with the company’s long term financial sustainability to build a solid business model.
Make it repeatable
Think of ways to add more options within your product with prompts or incentives (programs like Amazon Prime help Amazon incentivize repeat transactions on the platform, the same thing applies to Sam’s Club).
Subscription-based business models are built on a recurring customer base, where customers rather than own, usually have access to the product or service. The customer can have the upside of the service, without owning the good underlying it, which is maintained by the company running the subscription-based business.
Offer additional services
What recurring problems are your customers facing that they would rather use you to solve rather than solve those by themselves?
Those are all potential additional services that can be offered on top of your current offering.
Acquire
Acquire existing products that you can integrate into your offering to make your core offering more valuable to existing customers.
Acquisition Entrepreneurship (AE) starts by buying an existing business instead of starting one from scratch. Therefore, an acquisition entrepreneur masters the process of acquiring existing businesses to shorten the path to success. In short, the acquisition entrepreneur thinks like an investor in the process of buying an existing business and acts as a CEO once the deal has been closed, and he needs to run the company to bring it to the next level.
Expand: solve existing problems 2x better to gain new customers
In this case, you grow by developing 2x better solutions to problems for your existing customer base, yet also for a new customer base.
As a result, you will charge more to your existing customer base or gain new customers.
The strategies you can use here are similar to those above.
With the difference that in a 2x growth in the problem to be solved, you can be more proactive.
Here you cautiously explore beyond your business model‘s boundaries.
Growth via expanded customer base
Partnerships and joint ventures
With partnership marketing, two or more companies team up to create marketing campaigns that help them grow organically with a mutual agreement, thus making it possible to reach shared business goals. Partnership marketing leverages time and resources of partners that help them expand their market.
You can partner up with other companies in the same space which do not overlap with your product or service and come together to expand your market (see Shopify-Pinterest partnership).
Develop a new product for an end-to-end experience
You can also invest in R&D to develop a new product on top of your existing product.
As you know, that might make your core product more valuable to existing customers yet open up opportunities in adjacent markets to acquire new customers.
Acquire
Buy a company offering a product in an adjacent space where your customers will be extremely interested in the future, or that will help you make a successful transition toward future market developments (see acquisitions like Google for Android and YouTube, or Facebook acquiring products like WhatsApp or Instagram).
Extend: solve new, more valuable problems to make existing customers more loyal
In this scenario, you can tackle problems that might be valued more by your existing customers.
In this case, growth happens as a side effect of having a better understanding of your customer journey, thus forcing your company to be able to cover more space in the same niche.
Here you strengthen your core business model by better understanding your customer base and keeping an eye on future market developments.
Growth via extended customer journey
Design an end-to-end experience
Tesla is vertically integrated. Therefore, the company runs and operates the Tesla’s plants where cars are manufactured and the Gigafactory which produces the battery packs and stationary storage systems for its electric vehicles, which are sold via direct channels like the Tesla online store and the Tesla physical stores.
In this case, if you dominate ready your market niche, you can start developing an end-to-end experience.
Redefine value
You can help your existing customer base solve and tackle a set of new problems they are experiencing as part of the evolution of the market.
Reinvent: solve new problems for new customers
The company will try to grow in this growth profile by exploring a whole new space.
This is the riskiest of the growth profiles. An unsuccessful growth strategy might result in the corrosion of your core business model.
Growth by market reinvention
Be ready to cannibalize your core product
The market expansion consists in providing a product or service to a broader portion of an existing market or perhaps expanding that market. Or yet, market expansions can be about creating a whole new market. At each step, as a result, a company scales together with the market covered.
Be ready to come up with a solution that has the potential to cannibalize your core offering in the short term but also to expand your market exponentially, opening the space for way more customers.
Redefine value in a whole new way
Start by analyzing problems from first principles to come up with something that is a breakthrough that might open up a blue ocean.
Key Highlights
FourWeekMBA Growth Matrix Overview:
The FourWeekMBA growth matrix outlines four different growth strategies: Gain, Expand, Extend, and Reinvent.
These strategies help businesses decide how to grow by targeting existing or new customers and problems.
Gain Strategy – Improve for Existing Customers:
Focuses on improving existing products or services to make existing customers happier.
Enhance value proposition, improve product features, add new features, better packaging, and refine communication/product fit.
Explore personalization, pricing strategies, and additional services.
Make the product more repeatable and offer extra services to solve customer problems.
Expand Strategy – Solve Existing Problems Better for New Customers:
Develop solutions that are 2x better for existing and new customers.
Apply strategies similar to Gain mode but with more proactive problem-solving.
Consider partnerships, joint ventures, and end-to-end experiences to reach a wider customer base.
Extend Strategy – Solve More Valuable Problems for Existing Customers:
Tackle problems valued more by existing customers to enhance loyalty.
Design an end-to-end customer experience, redefine value, and understand the customer journey better.
Reinvent Strategy – Solve New Problems for New Customers:
Venture into a completely new space with innovative solutions.
Embrace risk by exploring new markets and reinventing the value proposition.
Be prepared to cannibalize core offerings and redefine value in a breakthrough way.
Examples of Growth Strategies:
Gain: Improve current products’ features, communication, and offerings.
Expand: Partner with non-overlapping companies, develop new products, or acquire adjacent businesses.
Extend: Redefine value for existing customers by solving new problems.
Reinvent: Be ready to cannibalize core offerings to explore entirely new markets.
Alignment with Customer Needs:
The Value Proposition Canvas ensures products or services cater to customer values and needs.
Combining frameworks like jobs to be done with demand generation enhances product utility and perceived value.
Risk and Exploration in Growth:
Different growth strategies entail varying levels of risk and potential market expansion.
The Reinvent strategy is the riskiest, involving the exploration of entirely new spaces and solutions.
Growth Strategy
Description
When to Apply
Advantages of Following It
Drawbacks of Not Following It
Gain Strategy
Focuses on improving existing products or services to make existing customers happier.
When aiming to enhance satisfaction for existing customers.
1. Enhanced customer satisfaction and loyalty. 2. Increased product value and competitiveness.
1. Risk of stagnation and losing customers due to unmet needs. 2. Potential for competitors to outperform.
Expand Strategy
Develop solutions that are significantly better for existing and new customers.
When targeting both existing and new customer segments.
1. Potential for capturing a broader market share. 2. Competitive edge with superior solutions.
1. Missed opportunities to cater to diverse customer needs. 2. Risk of underperforming compared to competitors.
Extend Strategy
Focuses on solving problems that are highly valued by existing customers, enhancing loyalty.
When looking to deepen relationships with existing customers.
1. Increased customer loyalty and retention. 2. Enhanced customer understanding and satisfaction.
1. Potential for losing customers to competitors who address valued problems. 2. Limited growth potential.
Reinvent Strategy
Ventures into entirely new markets with innovative solutions, embracing risk and redefining value propositions.
When seeking breakthrough innovation and entering new markets.
1. Potential for pioneering new markets and capturing early adopters. 2. Innovation-driven competitiveness.
1. Risk of cannibalizing core offerings and market entry challenges. 2. Uncertainty and high-risk nature of innovation.
Business development comprises a set of strategies and actions to grow a business via a mixture of sales, marketing, and distribution. While marketing usually relies on automation to reach a wider audience, and sales typically leverage a one-to-one approach. The business development’s role is that of generating distribution.
Market development is a growth-centric strategy that businesses use to identify or develop new market segments for existing products. Companies utilize the market development strategy to discover new potential buyers of their products or services.
Growth engineering is a systematic, technical approach to the improvement of conversion and the user experience. Combined with business engineering it helps business people build valuable companies from scratch.
Growth marketing is a process of rapid experimentation, which in a way has to be “scientific” by keeping in mind that it is used by startups to grow, quickly. Thus, the “scientific” here is not meant in the academic sense. Growth marketing is expected to unlock growth, quickly and with an often limited budget.
fixed mindset believes their intelligence and talents are fixed traits that cannot be developed. The two mindsets were developed by American psychologist Carol Dweck while studying human motivation.
Both mindsets are comprised of conscious and subconscious thought patterns established at a very young age. In adult life, they have profound implications for personal and professional success.
Individuals with a growth mindset devote more time and effort to achieving difficult goals and by extension, are less concerned with the opinions or abilities of others. Individuals with a fixed mindset are sensitive to criticism and may be preoccupied with proving their talents to others.
The more you move from consumers to enterprise clients, the more you’ll need a sales force able to manage complex sales. As a rule of thumb, a more expensive product, in B2B or Enterprise, will require an organizational structure around sales. An inexpensive product to be offered to consumers will leverage on marketing.
STP marketing simplifies the market segmentation process and is one of the most commonly used approaches in modern marketing. The core focus of STP marketing is commercial effectiveness. Marketers use the approach to select the most valuable segments from a target audience and develop a product positioning strategy and marketing mix for each.
The sales funnel is a model used in marketing to represent an ideal, potential journey that potential customers go through before becoming actual customers. As a representation, it is also often an approximation, that helps marketing and sales teams structure their processes at scale, thus building repeatable sales and marketing tactics to convert customers.
Venture capitalist, Dave McClure, coined the acronym AARRR which is a simplified model that enables to understand what metrics and channels to look at, at each stage for the users’ path toward becoming customers and referrers of a brand.
The general concept of Bootstrapping connects to “a self-starting process that is supposed to proceed without external input.” In business, Bootstrapping means financing the growth of the company from the available cash flows produced by a viable business model. Bootstrapping requires the mastery of the key customers driving growth.
A sales cycle is the process that your company takes to sell your services and products. In simple words, it’s a series of steps that your sales reps need to go through with prospects that lead up to a closed sale.
Distribution represents the set of tactics, deals, and strategies that enable a company to make a product and service easily reachable and reached by its potential customers. It also serves as the bridge between product and marketing to create a controlled journey of how potential customers perceive a product before buying it.
Zero to One is a book by Peter Thiel. But it also represents a business mindset, more typical of tech, where building something wholly new is the default mode, rather than building something incrementally better. The core premise of Zero to One then is that it’s much more valuable to create a whole new market/product rather than starting from existing markets.
A digital channel is a marketing channel, part of a distributionstrategy, helping an organization to reach its potential customers via electronic means. There are several digital marketing channels, usually divided into organic and paid channels. Some organic channels are SEO, SMO, email marketing. And some paid channels comprise SEM, SMM, and display advertising.
RevOps – short for Revenue Operations – is a framework that aims to maximize the revenue potential of an organization. RevOps seeks to align these departments by giving them access to the same data and tools. With shared information, each then understands their role in the sales funnel and can work collaboratively to increase revenue.
In a logrolling negotiation, one party offers a concession on one issue to gain ground on another issue. In logrolling, there is no desire by either party to advertise the extent of their power, rights, or entitlements. This makes it a particularly effective strategy in complex negotiations where partial or complete impasses exist.
Win-win negotiations first rose to prominence during the 1980s, thanks in part to books like Roger Fisher, William Ury, and Bruce Patton’s bestseller Getting to Yes: Negotiating Agreement Without Giving In. Having said that, there was also a shifting mindset at the time as negotiators saw win-win negotiations as preferable to the then-dominant win-lose approach. A win-win negotiation is a negotiation outcome resulting in a mutually acceptable and beneficial deal for all involved parties.
In negotiation theory, BATNA stands for “Best Alternative To a Negotiated Agreement,” and it’s one of the key tenets of negotiation theory. Indeed, it describes the best course of action a party can take if negotiations fail to reach an agreement. This simple strategy can help improve the negotiation as each party is (in theory) willing to take the best course of action, as otherwise, an agreement won’t be reached.
In negotiation, WATNA stands for “worst alternative to a negotiated agreement,” representing one of several alternative options if a resolution cannot be reached. This is a useful technique to help understand what might be a negotiation outcome, that even if negative is still better than a WATNA, making the deal still feasible.
The ZOPA (zone of possible agreement) describes an area in which two negotiation parties may find common ground. Indeed, ZOPA is critical to explore the deals where the parties get a mutually beneficial outcome to prevent the risk of a win-lose, or lose-win scenario. And therefore get to the point of a win-win negotiation outcome.
Revenue modeling is a process of incorporating a sustainable financial model for revenue generation within a business model design. Revenue modeling can help to understand what options make more sense in creating a digital business from scratch; alternatively, it can help in analyzing existing digital businesses and reverse engineer them.
Customer experience maps are visual representations of every encounter a customer has with a brand. On a customer experience map, interactions called touchpoints visually denote each interaction that a business has with its consumers. Typically, these include every interaction from the first contact to marketing, branding, sales, and customer support.
AIDA stands for attention, interest, desire, and action. That is a model that is used in marketing to describe the potential journey a customer might go through before purchasing a product or service. The AIDA model helps organizations focus their efforts when optimizing their marketing activities based on the customers’ journeys.
Social selling is a process of developing trust, rapport, and a relationship with a prospect to enhance the sales cycle. It usually happens through tech platforms (like LinkedIn, Twitter, Facebook, and more), which enable salespeople to engage with potential prospects before closing the sale, thus becoming more effective.
The CHAMP methodology is an iteration of the BANT sales process for modern B2B applications. While budget, authority, need, and timing are important aspects of qualifying sales leads, the CHAMP methodology was developed after sales reps questioned the order in which the BANT process is followed.
The BANT process was conceived at IBM in the 1950s as a way to quickly identify prospects most likely to make a purchase. Despite its introduction around 70 years ago, the BANT process remains relevant today and was formally adopted into IBM’s Business Agility Solution Identification Guide.
The MEDDIC sales process was developed in 1996 by Dick Dunkel at software company Parametric Technology Corporation (PTC). The MEDDIC sales process is a framework used by B2B sales teams to foster predictable and efficient growth.
The virtuous cycle is a positive loop or a set of positive loops that trigger a non-linear growth. Indeed, in the context of digital platforms, virtuous cycles – also defined as flywheel models – help companies capture more market shares by accelerating growth. The classic example is Amazon’s lower prices driving more consumers, driving more sellers, thus improving variety and convenience, thus accelerating growth.
Business storytelling is a critical part of developing a business model. Indeed, the way you frame the story of your organization will influence its brand in the long-term. That’s because your brand story is tied to your brand identity, and it enables people to identify with a company.
Enterprise sales describes the procurement of large contracts that tend to be characterized by multiple decision-makers, complicated implementation, higher risk levels, or longer sales cycles.
Outside sales occur when a salesperson meets with prospects or customers in the field. This sort of sales function is critical to acquire larger accounts, like enterprise customers, for which the acquisition process is usually longer, more complex and it requires the understanding of the target organization. Thus the outside sales will cut through the noise to acquire a large enterprise account for the organization.
A freeterprise is a combination of free and enterprise where free professional accounts are driven into the funnel through the free product. As the opportunity is identified the company assigns the free account to a salesperson within the organization (inside sales or fields sales) to convert that into a B2B/enterprise account.
Palantir is a software company offering intelligence services from governments and institutions to large commercial organizations. The company’s two main platforms Gotham and Foundry, are integrated at enterprise-level. Its business model follows three phases: Acquire, Expand, and Scale. The company bears the pilot costs in the acquire and expand phases, and it runs at a loss. Where in the scale phase, the customers’ contribution margins become positive.
Consultative selling is a sales approach favoring relationship building and open dialogue to adequately meet the needs of a prospective customer. By building trust quickly a consultative selling approach can help the customer better meet her/his expectations and the salesperson hit her/his targets more effectively.
A unique selling proposition (USP) enables a business to differentiate itself from its competitors. Importantly, a USP enables a business to stand for something that they, in turn, become known among consumers. A strong and recognizable USP is crucial to operating successfully in competitive markets.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
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