Leverage Inbound Marketing To Climb HBR's 5 Stages Of Business Growth
is the Head of Marketing at Lean Labs. His experience ranges from higher education to SMBs and tech startups. When not doing digital marketing, he's sure to be enjoying some kind of nerdy pastime.
We humans classify growth in stages.
Classification helps us analyze, understand, and maybe even hack growth to advance faster or stay in a high-production phase longer.
What farmer doesn't want to get his crop to yield quicker? What boy doesn't want to put hair on his chest faster? What aging man doesn't want to keep hair on his head longer?
The same goes for business growth. We want to grow rapidly so that we can reap the benefits quickly and keep them flowing for as long as possible. Business analysts have classified business growth stages to help us do just that.
What are the stages of business growth? How do we get to the next stage as quickly/efficiently/smoothly as possible?
We'll answer the first question briefly and then dig a little deeper on the second with a specific focus on how Inbound Marketing can help propel you to the next stage.
What Are The Stages Of Business Growth?
You're going to find several answers to this question as you browse the interwebs, but there are a lot of similarities between them. We'll use the Harvard Business Review's (HBR) The Five Stages Of Small Business Growth (currently the #1 result in Google) as our guide as we explore the topic.
- Existence: Companies in the Existence stage are attempting to validate that their product or service can expand beyond a pilot or single key customer. The owner is the business. He or she does everything. "In this stage the main problems of the business are obtaining customers and delivering the product or service contracted for."
- Survival: Stage 2 companies are able to satisfy customers enough to keep them. In the Survival stage, owners are now trying to find a path to profitability. "In reaching this stage, the business has demonstrated that it is a workable business entity."
- Success: Success stage businesses have attained true economic health. The company begins to gain an identity apart from the owner as managers handle the day-to-day activities. "The decision facing owners at this stage is whether to exploit the company’s accomplishments and expand or keep the company stable and profitable, providing a base for alternative owner activities."
- Take-Off: This is a rapid-growth stage. The company has reinvested its profits and taken risks to reach a new level. The company will either grow into Resource Maturity or fall back into the Success stage. "In this stage the key problems are how to grow rapidly and how to finance that growth."
- Resource Maturity: Stage 5 businesses have seen significant dividends from the Take-Off risk stage and are now stabilizing resources by eliminating inefficiencies and developing successful long-term strategies. "The greatest concerns of a company entering this stage are, first, to consolidate and control the financial gains brought on by rapid growth and, second, to retain the advantages of small size, including flexibility of response and the entrepreneurial spirit."
How Do We Get To The Next Stage As Quickly/Smoothly/Efficiently As Possible?
There are other resources available which answer this question from a managerial perspective, but we'll offer strategies for an often overlooked component of successful business growth. We're going to answer that question by showing you how smart inbound marketing can provide the all-important fuel to propel you forward.
One distinction we'll cover here is that Inbound Marketing is an accumulating or compounding approach. The blog post you publish today will still bring in traffic two years from now.Inbound Marketing is like planting seed. You will not see dividends overnight, but if you keep planting and watering every day, you will see abundant fruit month over month, quarter over quarter, year over year.
Paid advertising, conversely, is depreciating. Once you spend it, it's gone.
The importance of that distinction in this discussion is that when you grow resources through Inbound Marketing in Stage 1, you reap the benefits of those assets even after you leave Stage 1. You don't have to reinvest in them as you would with paid ads.
That's crucial as you grow your business. Once you build your foundation, you don't want to have to continue burning resources on it. You want to start adding new elements on top of it.
So let's start building.
From Existence to Survival - Build Traffic
According to HBR, a key problem to solve in Stage 1 is "obtaining customers." That means you have to get in front of prospects who have never heard of you before. This is the time to "get your name out there" and build awareness for your brand.
From an Inbound Marketing perspective, this means you're going to start developing content around topics that your prospects are interested in. A lot of this content will go on your blog, but might also include establishing a YouTube channel with a bank of informational videos or being a guest on an industry podcast.
The point here is to develop valuable content that helps the prospect solve their problems. By providing that content, you build trust and earn the right to have sales conversations. This lowers barriers and makes doing business with you feel less risky than with your competitors.
From Survival To Success - Build Conversion Content
Now that you have stable traffic coming in, you can start work on converting those eyeballs into actual leads. In the Survival Stage, prospects are getting to your website and maybe filling out a general contact form. A Success Stage company has a pipeline of leads coming in who are getting warmed up before they make a final decision to become a customer.
This is the time to write more in-depth eBooks and Whitepapers; develop Cost of Ownership calculators or diagnostics tools; begin an email newsletter, podcast, or webinar series; or secure testimonial videos and case studies from those customers you're now satisfying.
You're going to ask website visitors for some information in exchange for access to these valuable materials. And then you'll start nurturing them with campaigns developed to lead them further down the funnel toward becoming a customer.
From Success To Take-Off - Test, Learn, Iterate, Repeat
Companies in the Success Stage are starting to figure out that they've outgrown their websites. They're going to need a CMS/CRM combination and enterprise-level marketing automation tools (like HubSpot). The Take-Off stage is rapid-growth and risky, so you need to nail the conversion funnel before you get there.
The thing you don't want to do here is dump a crap-ton of money into a website redesign which is going to take eons to launch and leave you with no ability to assess ROMI. There's a better way, and it's called Growth Driven Design.
Instead of a monstrous upfront capital outlay for that website overhaul, you're going to very quickly launch an attractive "launch pad" website and then work on it as you go. You start getting returns quicker and can see the value of each new landing page and split test you run. You will tackle these in monthly sprints. All the while, you're doing something even more valuable than raking in cash. You're learning how your prospect thinks. Now you're doing marketing science - hypothesizing, running tests, analyzing the resulting data, and setting up the next test based on your results.
That knowledge will be crucial as you head into the high-stakes game of the Take-Off stage. You're going to go into it knowing precisely which pain points motivate your prospect to buy, whether they respond better to whitepapers or instructional videos, or even which color makes them click on the "Buy Now" button more.
From Take-Off To Resource Maturity - Build The Second Funnel
Up to this point, you've been building the primary marketing funnel - from awareness to decision. Now we're moving to graduate-level Inbound Marketing. We're going to build the second funnel which is turning customers into promoters.
Businesses in the Resource Maturity stage are hitting marketing nirvana, the virtuous cycle when their raving fans are doing the work for them. Think Apple, Starbucks, Air-Jordan. But this kind of thing doesn't happen without some work.
Using the same type of strategies you used to get to the Take-Off stage, you'll apply them to customers after the sale. You'll develop content, drip campaigns, and events to thrill customers and make it super easy for them to share your brand with their sphere of influence.
We love helping SMBs move through the growth stages with Inbound Marketing. On average our clients experience a quarterly 22% increase in organic traffic, leads, and opportunities. That means you're going to see a 10x return over a more extended period.
We've talked in general terms about Inbound Marketing in this post, but you'll need to be well-informed before committing to this path to marketing success. A smart next step would be to read through our eBook Conquering The Inbound Marketing Mountain.
Featured image at top: Tom Frost [CC BY-SA 3.0 (https://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons