What is organic growth?
Organic growth is a powerful marketing tactic that allows organizations to leverage their current resources and scale their business. But what does it actually mean? Well, organic growth is the practice of growing your business from within. It’s where teams inside an organization focus on expanding the existing business, growing revenue, and winning more customers. In this article, we’ll explore different types of organic growth, how to prepare our teams, and what strategies work best when unlocking growth.
Examples of different growth initiatives and how to measure them
To help us understand, here are some clear examples of simple, yet effective, growth strategies.
- A small web design company decides to start providing SEO services in addition to its existing offering. Previously, they used to develop websites for their clients, who’d then use a separate agency to help rank their website in search engines. By diversifying its offering, the company can increase revenue by upselling customers to higher-value services.
- A graphic design company sells bundles of pre-made templates for social media posts. Up until now they’ve been selling these packs through their website, but have just started to sell them directly through Instagram and Facebook. They’re now reaching a wider audience, which has led to an increase in sales. This is an example of revenue growth through the opening of new sales channels.
- A digital marketing agency hires two business development managers to source new clients. Their marketing strategy includes searching LinkedIn for prospects and nurturing the current customer base.
- An online software company is offering its customers the chance to win a $1000 prize by entering them into a draw if they complete a feedback form. They want to understand what their customers like and dislike about the service, to then allow them to make the necessary improvements. With an improved customer experience, the business can expect to gain more repeat and referral business.
- A business coach wants to drive growth by bringing more traffic to their website. Most visitors to their page currently arrive through social media, and not search engines. So, they decide to work on SEO to capture more new customers through the likes of Google and Bing.
All these simple ideas are solid examples of effective organic growth strategies. To measure success, metrics focus on like-for-like comparisons and are often quantified as a % increase. For example, the graphic design company sees 20% revenue growth thanks to its new sales channel on Facebook and Instagram. And the digital marketing agency sees a 15% increase in new customers thanks to the BDMs’ efforts. This is what we call the growth rate.
Mergers, acquisitions and the opening of new locations are considered inorganic growth tactics. While it has its advantages, inorganic growth is costlier and more disruptive to a business than organic methods.
Why is organic growth important?
- Customer retention. Organic growth starts from within, and in practice, that means team members nurture their existing clients to build relationships and create brand loyalty.
- Investor confidence. By successfully following a growth plan and increasing market share, an organization can prove it’s a safe investment to potential stakeholders. With more investors, a business has more capital to develop new products and enter new markets.
- Easier to manage. Traditional inorganic growth strategies like takeovers involve merging different companies, which is disruptive and risky for a business. As organic growth is internal, there’s no change in the c-suite team and therefore more business continuity.
- Ownership and morale boost. Team members are responsible for organic growth, and seeing their efforts yield results is highly rewarding. It also looks great on their resume and provides them with invaluable experience.
Building high-performing growth teams
As we’ve already established, organic growth comes from within an organization. And so we need to get our teams to develop and implement growth strategies. But how do we build growth teams? And what tools and direction do they need to sustainably drive growth? Here are some steps to help you prime your people for growth.
Decide what you want to grow, define how you’ll measure it and set a timeframe
This may sound like an obvious point, but you’d be surprised at the number of businesses that set out just to “grow” without specifically deciding what. If you want your team to achieve their goals, it’s essential to define exactly what you want to grow and how you’ll quantify your results. For example, a digital marketing agency might decide it wants to grow its client base by 10% by the end of the next quarter. In the marketing industry, this is often referred to as the “north star metric”. By defining exactly what to grow, the metrics and the timeframe, you’re providing your team with a clear direction of what they need to achieve.
Organize your growth team structure
So now you’ve defined your north star metric, it’s time to organize your teams and assign a structure. To do this, we need to think about all the possible departments that could feed into our goal. So, let’s keep with the example of the digital marketing agency and their mission to expand their client list by 10%. Its senior leaders would need to decide which teams would have the biggest role in achieving this target. They’d certainly need their marketers working on it, and also their sales and business development teams. Depending on the size of the organization, they may choose to set up one team to achieve this goal and bring together employees from the respective departments. Or, in the case of bigger businesses, they may set up a designated growth team within each area involved.
Define the skills required and staff your team(s) accordingly
After we’ve decided on the team structure, we need to figure out what skills we need, and then find them in our talent pool. For example, our digital marketing agency starts by defining what skills they need to reach 10% client base growth. They’ll need an experienced leader to coordinate team members and a strong number cruncher to help analyze the data. They’ll also need an effective marketer to generate leads and a top-performing salesperson to convert them. By defining what variety of skills we need, we provide our growth team with the best possible resources to achieve our north star metric.
Use data to decide your growth strategy and set KPIs
So with our goal defined and our all-star team assembled, it’s time to design a growth plan. To help us create our strategy, we need to use data to see where our growth opportunities lie. Going back to our digital marketing agency, let’s say they currently have 100 clients in their database. To achieve a 10% growth rate over the following quarter, they’ll need to gain an extra 10 clients within the next 3 months. So our marketers look at the data to help them decide where to focus their efforts. They see that conversion rates are much higher from clients within a 5-mile radius of their head office, and so they decide to target only the local area. This is what we call a data-driven growth strategy.
Conversion rates are currently at 2%. So, taking that trend in the data, our team work out that, to get 10 new clients, they’ll need to market to around 500 people over 3 months (2% of 500 is 10). And so here we have our KPIs.
By using existing figures, we can devise a data-driven growth strategy and set accurate KPIs to help our growth team hit their goals.
Ensure open communication and reward success
So our high-performing team has looked at the data, designed a strategy and set the KPIs. And so, having done everything right, they’re of course seeing results. As organic growth is a slow process, we need to ensure a sustained period of solid efforts to achieve our goals. That means keeping our team members on track, engaged and motivated. There are several different ways to do this, such as regular meetings to communicate progress, as well as competitions and incentives to reward performance. For example, our digital marketing agency decides to pay a $100 bonus to our team members for each new client. Through open communication and incentives, we help keep our team engaged throughout the organic growth process.
Strategies and ideas to unlock high-growth
So now we know what organic growth is and how to build an effective growth team, let’s look at some useful strategies to unlock growth within your organization.
Define your target audience and ideal buyer persona
The number 1 rule in marketing also applies to organic growth. Marketers need to figure out who their customers are and research their consumer habits, such as their favorite social media platform. For example, a recruitment company’s clients are HR professionals, who would mainly use LinkedIn. So their marketing team focuses its campaigns there rather than on other platforms.
Identify and expand top-performing products and services
When looking to gain market share or grow into new markets, businesses need to know exactly what’s performing well. For example, an online marketing agency wants to grow its revenue by 10% over the next 6 months. The team analyzes the past 12 month’s sales data and sees SEO as their top-performing service. So they decide to start their growth efforts by adding services that directly relate to search engine rankings, such as SEO content writing. They also reach out to their previous SEO customers to ask them what they loved about the service, and what else they may need in the future. By knowing what sells best and why we can grow by refining and expanding our top-performing services.
Diversify your sales channels
With ever-changing digital and consumer trends, businesses need to ensure they’re “always open” and available wherever their customers are. This means continually looking for new sales channels. At the start of this article, I used the example of a graphic design company. Traditionally, their only sales channel was directly through their website, but now they sell their templates through Facebook and Instagram as well. This allows them to reach a new audience, which means more customers and more revenue.
Improve your search engine rankings
When we need to look up information or find the answer to a question, where do we go? Most likely to Google, or other major search engines. And so growth marketers need to research what words people use to search for things related to their brand and optimize their content accordingly. SEO is an essential part of any growth initiative, as by figuring out what questions people ask, we can look to answer them in our content. This will increase our rankings, which will drive traffic and lead to new business.
Set up a rewards and referral program
As we’ve already established, organic growth starts internally with what we already have. Our existing customer base is an excellent source of growth opportunities. These people already know, trust and like our brand, and so unlocking growth with them is much easier than sourcing new business. By introducing a rewards and referral program, we incentivize our customers to keep buying and recommending our services. A rewards scheme is especially important in competitive markets – just look at the airline industry as the perfect example. Carriers have to offer attractive points schemes to create brand loyalty otherwise they risk losing market share to their competitors. Referral programs are especially effective for businesses looking to gain new clients. As all marketers know, no matter how strong our message may be, nothing beats word of mouth and personal recommendations.
Attend industry events and get social
One of the biggest changes in marketing in recent years has been the rise of the personal brand. While a new trend, the basis and theory behind it have always been the same: people buy from people. So to drive growth, marketers need to embrace this theory and personify their brands. One of the best ways to do this is to go to industry events and network. Take the marketing industry, there are dozens of award ceremonies for agencies across the world. These award shows are perfect opportunities for marketers and creatives to build contacts and score new clients. And it doesn’t stop with events, a strong content strategy is the perfect way to network and gain new business through social media.
Re-invest in growth
As organic growth is internal, a business can implement strategies and see results with relatively little upfront investment. Then, with the right plan in place and after a short time, the business will inevitably see an uplift in revenue. This new profit should then be re-invested into sustaining the growth. Let’s go back to our graphic design company. Thanks to their new sales channel on social media, they’ve seen 20% revenue growth. And so they decided to invest these additional earnings on Facebook ads to attract new customers. This investment will allow them to break through the growth ceiling and continue with their expansion.
No matter the business model, organic growth is the perfect way to scale your business given its relatively low cost and ease of implementation. As we’ve discovered in the article, to grow organically, businesses need to decide how they want to grow and put the strategies in place to achieve that. As organic growth is internal to an organization, it’s our people that drive the initiatives. As such, leaders need to create high-performing growth teams and equip them with the necessary tools and data to achieve results.