Organic growth is a key objective for any business, and a business imperative in challenging economic times. It paves the way to expand your customer base, increase revenue, and gain a competitive advantage. As you might expect, the current economic climate has been at the heart of numerous One Good Idea conversations over the last few months, with one question being asked frequently, “What strategies can B2B companies employ to drive organic growth in tough economic times?”   

We compiled some of the advice we’ve offered to CXOs into this post with a focus on four proven strategies and included some B2B examples to illustrate the ideas.   

Strategy #1: The Power of Keeping Your Best Customers

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This first strategy focuses on customer retention. This is crucial for B2B companies in tough economic times. This strategy is about keeping business you have with customers you already have. The philosophy behind this strategy is that it’s less expensive to retain existing customers than to acquire new ones. Bain & Company found that increasing customer retention rates by just 5% can increase profits by 25% to 95%. Even so, not all customers are equal:

  • Some customers buy more than others. Do you know the share of wallet for each of your top customers? 
  • Some customers cost more than others to service. Do you know the average cost-to-serve for your customers and which ones are above and below this number?  
  • Some customers are better advocates. Do you know your customer referral rate?  

These are examples of measures that can help you decide which customers to keep and invest in.  

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Once you have this information, you can use it to focus on those customers who are essential to your business.  Review your processes to make sure you are, a) offering an exceptional customer experience from the moment of interest through consumption and beyond, b) building strong relationships with customers, and c) providing value-added services that meet their needs.  

Salesforce is an example of a company with exceptional customer onboarding, the customer relationship management software company. They offer a range of training programs and support services to ensure customers receive the most value from its software. 

When it comes to customer retention, relationships matter. This is especially true for B2B professional service firms like us. Whether you’re a boutique firm like VisionEdge Marketing or a large firm like McKinsey & Company, customer retention depends on building a reputation for delivering high-quality services and building long-term relationships with customers.  

Strategy#2: Grow Your Share of Your Customer’s Wallet  

Growing share of wallet is a step beyond retention. The premise is that your existing customers are more likely to buy more of what they are buying or better yet, buy other services and products that you offer. For many B2B companies this may translate into offering value-added services that go beyond your core products and services. These can include training programs, consulting services, and other support services that help customers get the most out of their investments with your company.

Adobe has a reputation for offering a range of training and certification programs to help customers get the most out of its creative software products. Success with this strategy requires your organization to understand what the customer currently buys and why, and what other products or services can help them achieve their goals. Motorola Semiconductor illustrates this idea well.  The company was able to secure business with one of General Motors’ divisions for engine control using its MC68HC11 microcontroller. Over time they secured more business for this microcontroller within that division for climate control, transmission control, and other applications.

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Growing share of wallet may require your company to develop new products and services to meet the evolving needs of your customers. 3M, a global manufacturing company, for example, has a dedicated team of researchers and developers who focus on creating new products that solve customer problems. By listening to customer feedback and staying ahead of industry trends, 3M has been able to drive organic growth and maintain a competitive edge. Developing new products and services is often a big investment.  According to a study by McKinsey & Company, companies that consistently innovate their product and service offerings achieve higher revenue growth than their peers. In fact, top innovators achieve revenue growth rates that are 2.5 times higher than the average company. 

Strategy #3: Expand Your Footprint for Bigger Deals 

Capturing more share of wallet with someone you’re already doing business is great. But what about those business units or geographics in your customer base that you’re not doing business with – yet.  Footprint expansion, or land and expand, is about earning more business and bigger deals across different departments, business functions, or geographies of an existing customer. Footprint expansion depends on stellar relationships with the parts of the organization you are currently serving.  

We can use the Motorola Semiconductor example here as well.  Success with the product and service in the Cadillac part of General Motorola enabled the company to expand into the other business units, such as Jeep. Siemens, a global energy, and technology company, has developed a range of renewable energy solutions such as wind turbines and solar panels to expand their footprint with energy customers. By focusing on sustainability and innovation, Siemens has been able to drive organic growth and stay ahead of competitors in the energy industry.

Strategy #4: Bring in New Customers

Ups and downs in the economy impact your customers.  It’s possible that some of your customers will be unable to weather the storm. Therefore, while retaining and growing the value of existing customers is important, a sign of long-term sustainable growth is your ability to acquire net new customers. strategy, strategies, customer retention, customer acquisitions, footprint expansion, share of wallet, lifetime value, customer journey, customer journey map, customer buying journey

Most B2B companies we’ve worked with don’t have unlimited marketing, sales, or R&D resources, which means targeting is critical.  That is having a good idea on where to aim. Good targeting is based on having a solid market and customer segmentation model. Segmentation models enable companies to decide which markets and/or customers to pursue.  This in turn helps guide R&D priorities, sales efforts, and marketing campaign development. The selection of a new customer or target market has implications for the best offers to meet needs and address opportunities or pain points of the prospects, how to position these, and the required messaging and content.  A new market or customer segment may buy differently than those you serve today.  Therefore, you may need to adjust your customer journey map, and touchpoints and channels accordingly. 

Considering several potential segment opportunities and not sure which one to pursue? One of the best ways to pursue new markets and segments is to use an adjacent market strategy. This strategy is based on selecting a segment fairly similar to one you already serve.  

Amazon is probably one of the best examples of a company that used an adjacent market strategy.  It racked up its first book sales in 1995.  From book sales they moved to the consumer electronic market and created the Amazon Marketplace in 2000. In 2001, that marketplace stocked inventory from Circuit City and by 2004 was selling more than $1 billion in electronics. 

Customer-Centricity is the Only Way to Achieve Sustainable, Profitable Growth

Each of these strategies emphasizes a customer-centric approach. This means putting the customer at the center of everything you do, from product development to customer service. When you focus on the customer, you create a brand that is known for its exceptional customer experience, which can lead to increased customer loyalty, advocacy, and referrals.  footprint expansion, share of wallet, lifetime value, journey map, buying journey

Hubspot is an example of a B2B company that is known for its customer-centric approach. The company offers a range of resources and tools to help businesses grow, and its customer service is consistently rated as one of the best in the industry.  

Speaking of HubSpot, technology is a critical enabler of customer-centricity.  Technology can help your company streamline processes, reduce costs, and improve customer experiences. For example, AI-powered chatbots can provide instant customer support, freeing up staff time to focus on higher-level tasks. IBM is an example of a B2B company that is leveraging technology to drive organic growth. The company has invested heavily in AI and cloud computing. 

In addition to technology, customer centric companies use data analytics to gain insights into customer behavior and preferences and use this information to improve their products and services. For example, UPS, a global logistics company, has invested heavily in technology and automation to improve its delivery operations. By using data analytics to optimize routes and delivery schedules, UPS has been able to reduce costs and improve customer satisfaction. 

Combine These Strategies for Long-Term Growth in a Challenging Economy

Take a Cutomer-Centric Approach to Accelerate Business GrowthCertain economic factors are beyond our control.  Focusing on our customers and customer-centric strategies ARE within our control. Each of these four strategies, along with technology and data-driven insights, enable you to drive organic growth in challenging economic times, weather economic ups and downs, and emerge stronger and more competitive. Avoid limiting your organization to one strategy. Consider combining these strategies to achieve success. Learn more about these and other strategies in Fast-Track Your Business: A Customer-Centric Approach to Accelerate Market Growth.

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