When to Look for Incremental Growth

PhotoMIX-Company / Pixabay
There are boom times for business, and there are slow times. This goes for entire industries as well as individual companies.
The typical business lifecycle looks like this:

Startup

Growth

Maturity

Renewal or Decline

This same lifecycle can also apply to individual product lines.
In the startup phase, everything is new and the company is still trying to match a solution to a problem in the marketplace. When a company is able to offer a solution at a price that consumers are willing to pay for, they move into the next phase.
In the growth phase, the company or product captures increasing market share. Sales and revenue are accelerating as the market expands and new customers are brought in.
Growth only sustains for so long, and when it slows a company will enter the maturity stage. In the maturity stage, growth is no longer so easy to come by. The market is fully saturated. Sales are somewhat more constant and still sustainable.
During the maturity stage, the decisions that a company makes will set up the next stage. Either the company will find a way to start the cycle all over again – with a new product, new features, new markets, or a new revenue stream – or they will start to experience a decline as competitors disrupt their industry and start to claw back market share.
What is Incremental Growth?
Incremental growth refers to those small gains that a business can make through pricing and payment terms, improvements in conversion rate or acquisition costs, add-ons or upselling, etc.
These are not the massive growth schemes that define a company to investors or to the marketplace at large. They are the small levers that people inside the company pull to help improve the bottom line and sustain competitive advantage.
When to Look for Incremental Growth?
There are people in every company who are there to make incremental growth happen. They are the marketers and sales people who are constantly experimenting and looking for ways to improve the conversion rate. They are the advertisers looking to increase brand awareness in the marketplace. They are the operations and financial professionals looking to save money and improve the internal processes that drive the company.
But incremental growth is never more important than during the maturity stage of a business’s lifecycle. At this stage, the real dynamic growth has slowed or stalled. There is danger of complacency because this company and its leaders have gotten used to year over year growth and might not immediately know where to turn to in order to renew that growth into the future.
And that’s what makes incremental growth so appealing. In the short term, while a new long term strategy is in the works, it becomes critical to maximize value within the existing business.
Productivity growth, conversion rate optimization, more favorable pricing terms, and improved return on investment in marketing are all ways to sustain some level of growth even while the larger growth curve for the business flattens out.
Those who can pull the levers to drive incremental growth at a mature company are the unsung heroes that keep things moving in the right direction.

PhotoMIX-Company / Pixabay

There are boom times for business, and there are slow times. This goes for entire industries as well as individual companies.

The typical business lifecycle looks like this:

  1. Startup

  2. Growth

  3. Maturity

  4. Renewal or Decline

This same lifecycle can also apply to individual product lines.

In the startup phase, everything is new and the company is still trying to match a solution to a problem in the marketplace. When a company is able to offer a solution at a price that consumers are willing to pay for, they move into the next phase.

In the growth phase, the company or product captures increasing market share. Sales and revenue are accelerating as the market expands and new customers are brought in.

Growth only sustains for so long, and when it slows a company will enter the maturity stage. In the maturity stage, growth is no longer so easy to come by. The market is fully saturated. Sales are somewhat more constant and still sustainable.

During the maturity stage, the decisions that a company makes will set up the next stage. Either the company will find a way to start the cycle all over again – with a new product, new features, new markets, or a new revenue stream – or they will start to experience a decline as competitors disrupt their industry and start to claw back market share.

What is Incremental Growth?

Incremental growth refers to those small gains that a business can make through pricing and payment terms, improvements in conversion rate or acquisition costs, add-ons or upselling, etc.

These are not the massive growth schemes that define a company to investors or to the marketplace at large. They are the small levers that people inside the company pull to help improve the bottom line and sustain competitive advantage.

When to Look for Incremental Growth?

There are people in every company who are there to make incremental growth happen. They are the marketers and sales people who are constantly experimenting and looking for ways to improve the conversion rate. They are the advertisers looking to increase brand awareness in the marketplace. They are the operations and financial professionals looking to save money and improve the internal processes that drive the company.

But incremental growth is never more important than during the maturity stage of a business’s lifecycle. At this stage, the real dynamic growth has slowed or stalled. There is danger of complacency because this company and its leaders have gotten used to year over year growth and might not immediately know where to turn to in order to renew that growth into the future.

And that’s what makes incremental growth so appealing. In the short term, while a new long term strategy is in the works, it becomes critical to maximize value within the existing business.

Productivity growth, conversion rate optimization, more favorable pricing terms, and improved return on investment in marketing are all ways to sustain some level of growth even while the larger growth curve for the business flattens out.

Those who can pull the levers to drive incremental growth at a mature company are the unsung heroes that keep things moving in the right direction.

Read more on Business 2 Community 

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