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Tactics to grow your business

TACTICS TO GROW YOUR BUSINESS

Accelerate your business with these expert tips on "Tactics to grow your business". Analyse and discover this TIP!

The Challenges of Startup Growth

Design growth strategies for your startup is not an easy task. It is common to look for a "silver bullet or a foolproof strategy that guarantees success. However, every startup is unique and requires a personalised approach to achieve growth. To address this challenge, we present four fundamental pillars that you must take into account.

The 4 Pillars of Growth

  1. Quality User Selection
    1. Why it matters: Before focusing on growth, it is crucial to understand who you are targeting. Find the right users who will benefit most from your product.
    2. How to do it:
      1. - User segmentation
      2. - Experimentation with different acquisition channels
      3. - Focusing advertising on places where your target audience is located
    3. Practical Example: If you have a product for triathletes, it is better to have 100 users who are triathletes than 1,000 who are only interested in sports in general.
  2. Improved Conversion Rate
    1. Why it matters: Optimising the conversion rate throughout your sales funnel is crucial to ensure that users not only reach your platform, but also convert into customers.
    2. How to do it:
      1. - Reducing friction in the purchasing process
      2. - A/B Testing
      3. - Monitoring and analysis tools
    3. Practical Example: If 96% of users abandon before completing a purchase, your goal should be to reduce that percentage.
  3. Scaling User Acquisition
    1. Why it matters:Once you have effective targeting and conversion, the next step is to scale user acquisition.
    2. How to do it:
      1. - Large-scale advertising
      2. - Collaborations and partnerships
      3. - Unconventional marketing techniques
    3. Practical Example: Look for platforms where triathlete communities already exist to scale your user acquisition effectively.
  4. Conversion Time Acceleration
    1. Why it matters: Reducing the time it takes for a user to become a customer can have a significant impact on your revenue.
    2. How to do it:
      1. - Loyalty programmes
      2. - Temporary offers and promotions
      3. - Personalised recommendations
    3. Practical Example: If you can reduce the average conversion time of a user from 3 months to 1.5 months, you could double your revenue.

The Growth Funnel: Your Map to Growth

It is crucial to understand your "Growth Funnel or growth funnel (SEE TIP)which is a graphical representation of the stages a user goes through from the moment they learn about your product until they become a customer.

  • Acquisition and Reference:  Increase the number of users who know about your product.
  • Activation:  Get users to take a meaningful action, such as trying your product.
  • Retention + Monetisation: Keep users interested and convert them into paying customers.
Conclusion

Understanding and applying these FOUR PILLARS will help you to create a sound and effective growth strategy. Remember that there are no shortcuts; the sustainable growth is based on a deep understanding of your business and your customers.

Of course, here are some practical examples of successful growth strategies implemented by well-known companies:
  1. Dropbox: Referral Program
    1. Growth Pillar: Selecting Quality Users and Scaling User Acquisition.
    2. Strategy: Dropbox offered additional free storage to both the referrer and the referred, which encouraged users to share the service.
    3. Result: This tactic led to a 60% increase in referrals, resulting in exponential user growth.
  2. Airbnb: Craigslist Integration
    1. Growth Pillar: Scaling User Acquisition
    2. Strategy: Airbnb allowed users to automatically post their listings on Craigslist, a platform with a large number of users interested in short-term rentals.
    3. Result: A significant increase in visibility and number of users, especially in the early days of Airbnb.
  3. Slack: Focus on User Activation
    1. Growth Pillar: Improving Conversion and Activation Rate
    2. Strategy: Slack focused on ease of use and quick integration with other work tools to ensure that users not only signed up but also became active users quickly.
    3. Result: Massive adoption by teams and organisations, making it one of the fastest business communication platforms to reach a billion dollar valuation.
  4. Amazon Prime: Retention Strategy
    1. Growth Pillar: Retention + Monetisation
    2. Strategy: Amazon introduced Prime, an annual subscription that offers free and fast shipping, among other benefits.
    3. Result: Prime members spend significantly more and shop more frequently compared to non-Prime customers, increasing retention and monetisation.
  5. Tesla: Creating a Market
    1. Growth Pillar: Quality User Selection
    2. Strategy: Tesla initially focused on a niche market of high-end electric vehicles, creating strong demand among a select group of consumers.
    3. Result: Tesla became a status symbol and a leader in the electric car industry, paving the way for more affordable models.

These examples show how different companies have used various tactics and strategies aligned with the growth pillars to achieve significant success.

CASE STUDY: EcoWear - Revolutionising Sustainable Fashion

Context: EcoWear is a startup that specialises in the production and sale of clothing made from recycled and sustainable materials. Although they had an excellent product and a well-defined target market, they struggled to scale their business.

Participation in the MentorDay Acceleration Programme: EcoWear was selected to participate in the MentorDay acceleration programme. During the intensive three-week programme and the subsequent year of mentoring, they worked hand in hand with expert mentors on growth, marketing and sustainability strategies.

Growth Strategies Identified:
  • Customer segmentation: Focus on environmentally conscious young people who value sustainability over price.
  • Conversion Improvement: Implementation of an optimised sales funnel on the website to guide visitors through the buying process.
  • Retention and Monetisation: Introduction of a loyalty programme to encourage repeat purchases.
  • Scaling Up Acquisition: Use of social platforms where the target audience spends their time, such as Instagram and Pinterest, for targeted advertising.
Actions Implemented:
  • Acquisition Phase: They launched a marketing campaign on Instagram with influencers who share the same sustainability values.
  • Activation Phase: They offered a free sustainable fashion guide in exchange for subscription to the newsletter.
  • Retention and Monetisation Phase: They created a loyalty programme that awards points for every purchase, recommendation and product review, which can be redeemed for discounts and free products.
Results:
  • Increase of 50% in the rate of website conversion.
  •  Augmentation of 75% in the customer retention.
  • They succeeded climb the user acquisition in a 200%maintaining a low acquisition cost.
  • The sales rose by 120% in the first quarter after implementing the new strategies.
Conclusion: 

The MentorDay acceleration programme was crucial for EcoWear will identify and implement effective growth strategies. that aligned with their business model and vision. Thanks to their participation in the programme and to the successful implementation of the strategies, EcoWear became a successful startup and a role model in the sustainable fashion industry.

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Picture of Jaime Cavero

Jaime Cavero

Presidente de la Aceleradora mentorDay. Inversor en startups e impulsor de nuevas empresas a través de Dyrecto, DreaperB1 y mentorDay.
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