Growth is important for any business, whether you’re a startup or an established company. Without growth, businesses stagnate and eventually die. Startups need to grow quickly to survive, and established companies need to grow to stay ahead of the competition.
Thus, growth by itself is not the issue. The question is: how do you grow?
Too much growth in too short of a time frame can be just as dangerous as no growth at all. Uncontrolled growth can lead to cash flow problems, poor decision-making, and a host of other issues.
That’s why it’s important to have a growth strategy. A growth strategy is a plan for how you will sustainably grow your business.
There are two main types of growth strategies: horizontal growth and vertical growth. These two types of growth are often confused, especially regarding SEO, so let’s take a closer look at each one.
Horizontal growth is also sometimes called market expansion. This type of growth strategy involves expanding your business into new markets.
For example, let’s say you have a business that sells sneakers. You could expand horizontally into other types of footwear, such as sandals, boots, and dress shoes. Or, let’s say you have a business that sells home decor. You could expand horizontally into other types of home goods, such as furniture, appliances, and dishes.
The key to horizontal growth is that you are selling the same types of products or services to new markets. You’re not changing what you’re selling; you’re just selling to new people.
The potential downside of horizontal growth is that it can be difficult to find new markets willing to buy what you’re selling. It can be hard to stand out if the market is already saturated with similar products or services.
Another potential downside is that you may have to change your marketing and sales strategies to appeal to new markets. This can be costly and time-consuming.
How Does It Work?
Horizontal growth usually starts with market research. You need to identify new markets that might be interested in your products or services. Once you’ve identified a few potential markets, you need to create a marketing and sales strategy that will appeal to those markets.
This usually involves creating new marketing materials, such as a website or social media accounts, and hiring salespeople knowledgeable about the new markets. It can also involve opening new physical locations if you sell products in brick-and-mortar stores.
The goal is to make it easy for potential customers in the new markets to find you and buy from you.
Here are a few tips to help you successfully expand into new markets:
1. Take the Right Measures Before Expanding Into New Markets
Don’t just jump into expanding your business without doing your research first. You need to ensure there is a demand for what you’re selling in the new markets. Otherwise, you could end up wasting a lot of time and money.
Start by doing some market research. See if you can identify any potential new markets for your products or services. Ask questions like:
- Who is currently buying what you’re selling?
- Are there any groups of people who are not currently buying what you’re selling but could be interested?
- What needs are not being met in the current market?
- How easy would it be to reach potential new customers?
Remember, demand always exists for a product or service, but you also need to ensure there’s a way to reach the demand. There’s no point in expanding into a new market if you can’t actually sell to people in that market.
Use historical data to help you make decisions about expanding into new markets. Look at things like your current customer base, average order value, conversion rate, and lifetime value. Metrics like site data, browsing habits, length of stay, and product page visits can also be helpful. You can also check your business listings for reviews or maybe go through your social media to understand what people are saying.
One important thing to consider is that whatever online business growth you are trying to achieve doesn’t affect the ongoing growth of your business. Growth strategy is always a good idea to be mindful of what growth will do to your existing business.
2. Understand Your Target Market
Once you’ve done your market research and identified some potential markets, it’s time to start thinking about who your ideal customer is in each market.
Creating buyer personas can be helpful here. A buyer persona is a semi-fictional character that represents your ideal customer. You can use buyer personas to help you understand what motivates your customers and what their needs are.
When you’re creating a buyer persona, you should include things like:
- Demographics: Age, gender, location.
- Psychographics: Interests, hobbies, values.
- Behaviors: How they shop, what they buy.
Once you understand your target market, you can start thinking about how to reach them.
3. Have the Infrastructure In Place Before You Expand
Before you start selling to new markets, you must ensure you have the right infrastructure in place. This includes things like:
- A website that can reach new markets: If you’re selling online, you need to make sure your website can be found by people in the new markets you’re targeting. This means optimizing your site for things like international SEO and local SEO.
- Payment methods: You need to ensure you have the right payment methods in place for the new markets you’re targeting. This includes things like localization (so prices are shown in the local currency) and offering multiple payment methods.
- Shipping options: If you’re selling physical products, you need to ensure you have the right shipping options for the new markets you’re targeting. This includes things like finding a local shipping partner and offering multiple shipping methods.
- Customer support: You need to ensure you have the right customer support in place for the new markets you’re targeting. This includes things like offering support in the local language and having customer support available during local business hours.
It may sound simple, but it doesn’t always work that way. Take, for example, one of your favorite social media apps, Instagram. They have added a number of features over the years, all revolving around the original point of the app- being social and posting photos and videos while connecting with followers.
Now imagine if they had decided to add a feature where you could send email through Instagram. If that sounds odd to you, it’s because it would be. The purpose and function of Instagram is about being social and posting photos and videos, not sending an email. Adding email would have been less than pointless.
That’s what we mean when we talk about logical vertical growth.
Logical vertical growth is adding new products or features that make sense given the existing products or features. It’s taking what you have and expanding upon it in a way that makes sense for your customers and your business.
1. Don’t Go Blind
Testing is important, but so is research. Just because something works for one business doesn’t mean it will work for yours. Study your growth strategy ideas and ensure they are feasible before taking the plunge.
For instance, if you’re adding new features to your website, it is important to run some A/B tests first. This involves showing half of your website visitors the new feature and the other half the old feature to see which performs better. Once you have the data from your A/B test, you can make an informed decision about whether or not to implement the new feature.
2. Account for Possible Demands & Problems
When implementing a vertical growth strategy, it is important to account for possible demands and problems. This means having a plan in place for things like increased customer support needs or website maintenance.
For instance, if you’re adding a new product to your website, you will need to ensure you have enough customer support staff to handle any questions or problems. You will also need to ensure your website can handle the increased traffic and that all your new product pages are optimized for SEO.
Crash testing and good QA are important for any website, but they are especially important when implementing a vertical growth strategy. This is because you will be adding new products or features that could potentially cause problems on your website. You can avoid any major issues arising from your vertical growth strategy by crash testing your website and doing extensive quality assurance.
Vertical Growth vs. Horizontal Growth: Which Growth Strategy Is Right for You?
The debate between vertical growth and horizontal growth has been around for years. There is no right or wrong answer. It all depends on your business and what growth strategy will work best for you.
Vertical growth is about expanding your existing products and services to new markets or customer segments. This can be done by adding new features or products that make sense for your business.
Horizontal growth is about diversifying your product offering to appeal to new markets or customer segments. This can be done by adding completely new products or services unrelated to your existing offerings.
Pros and Cons of Vertical Growth
There are both pros and cons to vertical growth.
Pros: It is usually easier and less risky to expand into your existing market than to create a new one. This is because you already have a customer base that is interested in your products or services.
You can also capture more market share by expanding into new markets with your existing products or services.
If you have a strong brand, expanding into new markets can also help you to grow brand awareness and create new loyal customers.
Cons: If you’re not careful, vertical growth can lead to stagnation. This is because you are only expanding your existing products and services rather than diversifying your offering.
You may also find it difficult to break into new markets if you’re only expanding your existing products or services.
Pros and Cons of Horizontal Growth
Horizontal growth has both pros and cons as well.
Pros: It allows you to reach new markets and customer segments you may not have had access to.
It also allows you to diversify your product offering, which can help to protect your business from seasonal fluctuations or economic downturns.
Cons: It can be riskier than vertical growth as you’re essentially starting from scratch in a new market.
You will also need to invest more time and resources into market research to ensure you’re offering your new target market the right products or services.
How Can SEO Help You Implement the Right Strategy?
SEO can help you to implement the right growth strategy for your business by helping you to reach new markets and customer segments.
If you’re looking to expand your existing products or services to new markets, SEO can help you to research and target the right keywords for your new market. If you’re looking to diversify your product offering, SEO can help you to research and target the right keywords for your new products or services.
SEO can also help you to grow brand awareness in new markets and create loyalty among new customers.
How Can SEO Vendor Help?
SEO Vendor is an award-winning white label SEO company with over 15 years of experience helping businesses to grow their online visibility. Our team has worked with hundreds and thousands of businesses of all sizes to implement successful growth strategies.
Our team of SEO experts can help you to implement the right growth strategy for your business, whether it’s vertical growth or horizontal growth. We can help you to research and target the right keywords for your new markets or customer segments. We can also help you to grow brand awareness and create loyalty among new customers.
For more information about our growth strategy services, contact us today. We would be happy to discuss your growth goals and help you develop a custom growth strategy tailored to your specific needs.