Growth IQ Book Summary - Growth IQ Book explained in key points

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Growth IQ summary

Name: Growth IQ
Rating: 4.2 (98 reviews)
Author: Tiffani Bova

Tiffani Bova

Get Smarter About the Choices that Will Make or Break Your Business

4.2 (98 ratings)

25 mins

Topics

Small Businesses Growth Hacking

Table of Contents

Growth IQ
Summary of 10 key ideas

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Key idea 1 of 10

What’s in it for me? Grow your company, no matter its size.

Whether you’re trying to get a start-up off the ground or revive an established giant that’s run out of steam, there’s no way but up – you need to grow. Easier said than done, right? After all, with hundreds of different growth models out there, how do you choose the one that’s right for you and your business?

Luckily, there’s an expert on hand to help you navigate the murky waters of business strategy: Tiffani Bova, an internationally acclaimed expert who’s literally written the book on how companies can continue growing in the face of stiff competition and an endlessly changing marketplace.

Full of practical, no-nonsense advice and illuminating examples gleaned from today’s top international players, this growth guide cuts out the clutter and focuses on ten key strategies you can start implementing today.

In the following blinks, you’ll learn

how Marvel revived its flagging business by diversifying its product portfolio;
why McDonald’s returned to growth after listening to its customers; and
why minimizing customer turnover is just as important as winning clients.

Start growing your business by prioritizing customer experience today.

What makes a business competitive? The most common answer is price. But do you remember how much you spent last time you went shopping? Probably not. How about the last time you had a truly awful customer experience? Now that’s something you can’t forget!

So it’s not price but customer experience that’s key to gaining comparative advantage, especially in an era of instantly accessible online customer reviews. In fact, research shows that over 70 percent of customers use reviews to decide which service or product to buy.

Acting on that insight is the jet fuel that can get your company off the ground. Take it from Shake Shack, a business that started out in 2004 as a single hot dog cart in New York’s Madison Square Park. Today, it’s a global fast food chain with 136 locations across the world. Its meteoric rise hinged on one thing: a business model that prioritized customer service. Shake Shack, in addition to using high-quality, locally sourced meat, encouraged customers to provide feedback and hosted roundtable discussions. The result? A huge number of positive reviews and posts across the web, which basically means Shake Shack’s customers take care of its marketing!

Neglecting customer experience, by contrast, can quickly undermine a business. That’s something Starbucks learned the hard way. In 2007, after a series of expansions into new markets and the introduction of larger menus, the coffee chain’s growth suddenly stalled. When Starbucks asked its customers for feedback, the message came back loud and clear: the emphasis on growth and diversification had ended up undermining quality. CEO Howard Schultz reacted quickly, closing over 7,000 stores for three-and-a-half-hour training sessions and installing high-end Mastrena coffee machines in every outlet. The company also launched a scheme called “My Starbucks Idea,” which encouraged customers to share their ideas about how the company could improve its customer experience.

It was a savvy move. Within two years of the decision to reprioritize customer experience, Starbucks was back on track and growing steadily.

Get the most out of your existing customers by focusing on customer base penetration.

Growth is all about acquiring new customers, right? Well, not quite. In fact, the obsession with expansion often leads businesses to neglect their existing customers, causing all sorts of problems down the road. That means your best bet is to make sure you’re taking proper care of your customer base.

According to an article published in the Harvard Business Review in 2014, it’s certainly the most efficient approach. Winning new clients costs anywhere from five to twenty-five times more than retaining an existing customer. The key to getting the most out of your customer base is data. If you know what your customers like and need, it simply makes sense to focus on them and work toward enhancing their experience and expanding the range of products they buy from you. Repeat customers are both more likely to try out new products and forgive your company when it makes a mistake.

Market acceleration offers your business new growth opportunities.

Say you’ve cornered your niche market and your business is doing pretty well. What’s the next step? Well, it might be time to enter a new market and start selling your products to different people in different locations. That’s called market acceleration.

The key to pulling it off is careful planning. If you want to enter a new market, you’ll need to have a well-established brand that you can use as a launching pad. Take it from Under Armour, a sportswear business founded by Kevin Plank in 1995. The company’s aim was to provide an alternative to standard short and long-sleeved cotton sports t-shirts. Its first product, a synthetic shirt designed to keep athletes cool and dry, targeted a very specific market segment: American football players.

Expanding your product line is key to success in changing markets.

The needs of your customers are changing all the time. If you want your business to thrive, you’ll have to change with them and learn to anticipate and meet these new needs. The best way of doing that is to adopt a product expansion strategy. That goes for both young and established companies.

Take Kylie Jenner, a social media star who used her massive following to build the wildly successful cosmetics brand Kylie Cosmetics in 2015. The business focused on expanding its product line from the get-go and quickly became a household name. By adding new cosmetics categories like eye shadows and eyeliners as well as SnapChat tutorials and special thematic collections to its portfolio, Kylie Cosmetics built up a revenue base of $600 million within two years!

Customer and product diversification is risky and costly, but the potential benefits are often huge.

Product expansion and market acceleration strategies will help your business grow, but you can’t rely on them indefinitely. So what can you do once you’ve exhausted those avenues? One option is customer and product diversification. That basically means rethinking what it is you’re selling and to whom your selling it. The strategy isn’t without its risks, but the potential benefits are huge. It all comes down to market context.

Take Marvel, a comic book publisher founded in 1939. By 1993, it was struggling. People had lost interest in comic books and trading cards and the company’s managers couldn’t find an answer to their problems. In 1996, Marvel filed for bankruptcy. One year later, Marvel Enterprises Inc was created in its place. After a period of treading water, the company realized something important: what made the brand valuable wasn’t its traditional product – comic books – but the characters it had created.

Optimize sales to make it easy for customers to buy your products.

Knowing what to sell and to whom is the bread and butter of successful entrepreneurship, but it’s not enough on its own. You also need to know how to sell your product. That’s all about optimizing sales, a strategy geared toward making sure your customers have a positive experience when they interact with your company.

Convenience is king in the modern business context. If companies want to make the most of the opportunities associated with the internet, they need to understand how to make the technology work for their customers. That means making the buying experience as smooth and effortless as possible. Walmart took that lesson to heart when it expanded into e-commerce in 2016 after purchasing jet.com. It was a good move. Within a year Amazon announced its entry into the grocery market by buying Whole Foods. Had Walmart hesitated, it would’ve been entirely unprepared to meet this formidable challenge.

Winning new clients isn’t enough – minimizing customer turnover, or churn, is just as important.

As we’ve already seen, acquiring new customers is much more expensive than retaining your existing ones. That means the cheapest way of avoiding growth slumps is improving your customer-retention rates. Put differently, you need to minimize your churn.

That said, you can’t eliminate churn entirely. Some of it is simply part and parcel of running a business. Customers move on for all sorts of reasons. Things change and they no longer need your products or services. That’s obviously not something you can do anything about. What you can control is product quality and customer experience. Spotify provides a great example of how thinking carefully about these kinds of things can help a company retain customers. So how do they do it?

Hit your growth targets more quickly by embracing partnerships.

Expanding into new markets or diversifying your portfolio can be complicated and expensive. But you don’t have to go it alone. Partnerships are a great way of making your life a whole lot easier and minimizing your costs. Say you want to sell your product in a new market. Why not set up a deal with a retailer that’s already active in that market? It’s a win-win situation and, most importantly, it helps you avoid overstretching yourself.

Take GoPro, the manufacturer of action cameras designed for use in extreme conditions. Founded in 2004, the company quickly grew thanks to a series of well-chosen partnerships with big retailers like Best Buy. The deal benefited both partners. GoPro generates 17 percent of its total revenue through Best Buy outlets while the availability of GoPro cameras in its stores has helped Best Buy bring in new customers. GoPro established a similar deal with Red Bull in 2016, a partnership that’s helped both companies expand their customer bases as a result of cross-promotion campaigns.

“Coopetition” isn’t easy, but entering alliances with competitors might just pay off.

Business is usually depicted as a vicious, dog-eat-dog world of endless competition. But that’s not always the case. In certain situations it actually makes a lot of sense to bury the hatchet and cooperate with your competitors. Call it coopetition.

Take the car industry. Shaking up a whole industry is usually beyond the ability of a single company. Recognizing that, Fiat-Chrysler, BMW, Intel and Mobileye joined forces in 2017. Their aim? To revolutionize the industry by introducing self-driving vehicles. Initially, only BMW, Intel and Mobileye had been on board, but they quickly realized that bringing in a giant like Fiat-Chrysler would help them bring their product into the mass market for cars.

Boost your business by pursuing unconventional strategies and recognizing the right moment for new growth paths.

There are two types of companies – those that simply sell their products and those that want to do something bigger. There’s nothing wrong with the former, but they’re not nearly as exciting as businesses that try to change the world around them. That’s why you might want to consider adopting unconventional strategies. Few things are as likely to inspire your customers as pursuing a unique mission.

Take Toms Shoes, a company founded in 2006 with a unique selling point: for every pair of shoes sold, it donates another pair to children who can’t afford adequate footwear. Within six years, Toms had an annual turnover of $300 million, allowing it to ramp up its support of charitable causes. In total, the company has donated $70 million and provided 175,000 weeks of clean water to impoverished areas. That makes it incredibly attractive to consumers. Today, its model of “conscious capitalism” is becoming ever more popular.

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What is Growth IQ about?

Growth IQ (2018) answers the million-dollar question of how to make your business grow. Full of practical advice, tips and strategies gleaned from today’s top entrepreneurs and their firms, this is the ultimate guide to making smart decisions that’ll help early-stage firms get off the ground or rejuvenate stagnating giants.

Best quote from Growth IQ

The reputation of a thousand years may be undermined by the conduct of one hour. – Japanese proverb

—Tiffani Bova

Who should read Growth IQ?

Start-up owners
Business strategists
Aspiring entrepreneurs and entrepreneurs in a rut

About the Author

Tiffani Bova is a growth adviser specializing in global customer growth and innovation at Salesforce. She hosts What’s Next!, a podcast that provides a platform for conversations with business leaders about emerging trends, innovation and the latest growth strategies. Growth IQ is her first book.

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