Last week's post discussed how marketers can use the jobs-to-be-done framework to define their market and determine how their products or services create value for customers. This framework helps marketers pinpoint what will motivate their customers to buy.
The following post describes a framework marketers can use to identify what sources of revenue growth are (or can be) available to them. Identifying sources of potential revenue growth is an essential part of a sound planning process.
I published this post in 2019, but the content of the post is as relevant today as it was four years ago. What follows is a lightly edited version of the original post.
The Original Post
Driving consistent, profitable revenue growth is one of the greatest challenges that business and marketing leaders face. The key word in that sentence is "consistent." Many companies can produce substantial revenue growth sporadically or over a short period of time, but it's exceptionally difficult to consistently generate above-average growth over the long term.
Business and marketing leaders must perform two distinct but related tasks to maximize revenue growth:
- They must identify what growth opportunities are (or can be) available to them and determine which of those growth opportunities are most attractive.
- They must find the right balance between short-term and long-term growth opportunities.
- Sales of existing products in existing markets (market penetration strategy)
- Sales of existing products in new markets (market development strategy)
- Sales of new products in existing markets (product development strategy)
- Sales of new products in new markets (diversification strategy)
- Continuing sales to existing customers (base retention)
- Sales won from the competition (market share gain)
- New sales in an expanding market (market positioning)
- Sales from expanding into related markets (adjacent market expansion)
- Sales from expanding into new, unrelated lines of business (diversification)