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 tacking 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). In 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 than the customer’s understanding of your product.
- 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 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.
- 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).
- Offer additional services: what recurring problems are your customers facing, that they would rather use you to solve, rather than solving 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 value to existing customers.
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 you can use above. With the difference that in a 2x growth in terms of 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: 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 valued 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 by keeping an eye on future market developments.
Growth via extended customer journey
- Design an end-to-end experience: in this case, if you dominated 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
In this growth profile, the company will try to grow 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: 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 breakthrough which might open up a blue ocean.