By itself, data is worthless. Data is just numbers; It can only give you clues. What really drives growth is insight.
Insight is data with a story. In other words, it’s the human interpretation of the numbers that makes data powerful. Historically, we’ve pitted intuition and data against each other, with most people in the tech space championing the latter. But what truly innovative product was ever based on data alone? In fact, 61% of executives say human insight precedes data, according to a study conducted by Fortune.
This is especially the case with disruptive products or services, where there may be very little data to go off of. AirBnB didn’t grow to a $10 billion company because Brian Chesky and Joe Gebbia were looking at gaps in the travel market. They couldn’t afford San Francisco rent so they rented out three air mattresses on the floor of their apartment. And then they ran with the idea on little more than a hunch.
That’s not to say data plays an insignificant role in business decisions. A report by Seagate Technology states that by 2025, digital storage transference will reach 175 zettabyte. But that data is only as powerful as the interpretations around it.
If growth is a company’s north star, insight acts like the rudders of a ship, preventing a company from veering too far off course. Insight is the why behind the what. It’s insight, not numbers, that guides a savvy business move.
In our opinion, it’s best to be informed by data but powered by humans.
In this article we’re going to take a look at where insight comes from and five key areas where we use it to supercharge growth.
Insight is everywhere, if you know where to look! At Orogamis, our growth experts hone in on KPI-focused data, user data, and market data. Let’s look at each of these a little more closely.
Key Performance Indicators
You’re undoubtedly familiar with Key Performance Indicators (KPIs). KPIs are indicators of progress toward a goal. And they are key, because in the words of Pete Drucker, “what gets measured gets done.”
At Orogamis, we place special emphasis on the following KPIs:
There’s really only one secret to creating a winning product. Listen to the people who use it.
This may include tapping into channels like:
Competition is smarter than ever, and the digital world is evolving as quickly as ever. Listening to the market is a proactive way of keeping your own business one (or ten) step(s) ahead. This may include keeping an eye on:
By extracting the insight from quantitative and qualitative data, you have everything you need to supercharge your business’ growth.
When it comes to growth, there are five key areas we like to focus on. Four of these are inspired by the Ansoff Matrix, which looks like this:
Also called the Product Expansion Grid, this is a tool used to determine possible avenues for growth. As you can see in the illustration, some tactics are considered more or less risky, with market penetration considered the least risky and diversification considered the most risky.
We’re going to explore each of these points in depth below — as well as take a look at acquisition.
Market penetration is about making the most of what you already have. It’s the easiest and most common way of growing; and as with all risk-reward models, the reward for market penetration may not be as lucrative as the reward riskier growth strategies. Market penetration is typically a multi-pronged strategy, and may include tactics like:
Spotify’s “Goals” campaign is a masterful example of that last point. Using their huge bank of data, they made comical observations about listener’s habits and then posted them up on billboards all over the world (unconventional move for a digital company).
A 45% increase in subscribers in less than a year.
Using data to tell a story can be a highly effective way of increasing market penetration. As a strategy, market penetration tends to work especially well for newer businesses. It’s often only after a company has exhausted this avenue that they turn to the riskier growth strategies.
Product development is a strategy that involves offering new or rebranded products to an existing market. It covers everything from conceptualization, to design and prototyping, to marketing. When executed successfully, this strategy can increase a company’s market share by uncovering consumer needs and satisfying them.
Product development is…
Put another way, product development is about taking a deeper dive into the needs of your existing market.
Qualitative research is key when it comes to this strategy. And while there are a lot of models out there, at Orogamis we subscribe to the philosophy of aligning features with revenue-generating users. In other words, conduct qualitative research on your strategic accounts and highest value customers (quantitative data will tell you who those customers are). By pinpointing their needs, you can tailor a new product specifically for them.
While product development is still a lower-risk strategy, it typically requires a change in business operations. The heavy lifting for this has historically fallen to the Research and Development department of a company — but as smarketing and revenue operations (RevOps) gain steam, more and more companies are recognizing the importance of uniting every department behind a common goal.
Think of it this way: The end goal is to attain the most meaningful data on the target customer. It’s likely that your marketing, sales, and service departments have different insights. Each may hold a different piece of the puzzle.
So whereas you might leverage your marketers for questionnaires and user groups, your customer-facing sales and service teams can provide the kind of insight only gleaned on the frontlines. In fact, the negative feedback that customer service collects can be a goldmine when it comes to fully understanding customer needs.
The combined insight is then used to craft a product that customers will actually use (an MVP may be helpful, at this point).
Also known as market development, market expansion is a growth strategy in which an existing product is sold to a new market. In other words, how can we take what we already have and sell it to a greater number of people?
It’s a strategy that comes in handy when the current market is saturated and there’s no room for expansion, or when the competition in a given market has grown too stiff.
Market expansion can be done by entering into a new regional/domestic market or foreign/international market, or utilizing new distribution channels. (The second is especially important for tech companies as more and more products and services are becoming digitized; think of how eBooks revolutionized the book industry.)
This can be a risky endeavor. In fact, about 4 out of 5 attempts at market entry fail (teaming up with growth experts betters your chances of success). But when market expansion works, it pays off.
On the whole, this strategy tends to be “safer” for companies that:
That being said, the fact that so much of business is done online now has made market expansion less risky — you don’t physically have to be in a new space to test market fit.
In any case, it’s at this point that listening to the market becomes oh-so-important...because your choice in customer is your choice in strategy.
So, taking the time to really identify who you’re going to target and what content you’re going to target them with is critical. That’s why, at Orogamis, we listen for months.
To determine market expansion opportunities, we might ask questions like:
The final and most daring quadrant of the Ansoff Matrix is diversification. This involves selling a new product to a new market: It is brand new territory, and perhaps not dissimilar to starting a new company except for the fact that you have more resources (funding and manpower).
Not only is entering a new market with a new product a risk, but the dialectics of lead may apply. It costs time and money to develop a new product. And if you launch an MVP or early iteration that gains traction, there’s always the chance that a competitor can learn from your mistakes and bring something better to the market, faster.
Diversification isn’t a strategy for everyone but it certainly has benefits, including:
We can subdivide diversification even more, and break them down into three categories:
Acquisition can be collapsed under several of the previous four points, so we’ve decided to break it out and give it its own section.
For example, one tactic for product development might be acquiring a competitor product or merging products to create something that better meets a markets’ needs. Likewise, a company can penetrate more deeply into a market by acquiring competitors, a la Coca-Cola grabbing up business after business in the beverage industry.
As with diversification, we can subdivide acquisition into categories:
In any case, the goal of acquisition is always to increase market share. It’s important that acquisition is done to enhance the existing company. Before going for acquisition, a company should clearly define the objectives and purpose of acquiring other firms. That means having a thorough understanding of the others’:
And then we have to ask questions like “Can we acquire a given firm with efficiency and profit?” “In terms of culture, will there be synergy between the two firms?” “What potential pitfalls do we foresee?”
After identifying a prospective acquisition candidate, the process of acquisition begins. Typically, this starts with direct communication that establishes terms and conditions. A mediator may be required. Acquisition is a very detailed process, and perhaps the most challenging step is drawing up the deal. There’s a lot of moving parts that have to be taken into consideration like tax implications, antitrust laws, financing, market conditions, and more. If you haven’t been through the process before, we don’t recommend going it alone.
To summarize, a company can grow through:
Each of these can be a powerful growth strategy, but executing them properly is entirely contingent upon data-driven insight. Insight is the key to unlocking new markets and new products. That’s where Orogamis can help. Our unique method influences brand and product direction based on true datasets.
If your growth strategy would benefit from data-driven insight, hop on a 20-minute “clarity call” with us. We’d like to get to know you, discuss your goals, and ensure we’re a match made in heaven.
Curious how we could help grow your business?
Every engagement starts with a friendly chat.