The Four Drivers of Business Success
Including word of mouth, there are four major drivers of business success with customers:
Customer Retention: Keeping your current customers.
Customer Upsell: Selling more to your existing customers.
Marketing-Driven Customer Acquisition: Acquiring new customers via various marketing and advertising efforts.
Word-of-Mouth-Driven Customer Acquisition: Acquiring new customers who are brought to your organization by the recommendations of others.
In today’s ultracompetitive business environment, what we’ve called Accelerated Darwinism, only the strong survive and success and failure can happen at an alarming rate. At a minimum, you need to excel at one of these drivers to have a chance at survival. If you are great at three or four of these drivers, you have a chance to do great things and be an industry leader. As companies mature, often their strengths shift among these revenue and growth drivers.
The strategies any company employs will vary, and to survive over the long run, a company has to evolve its strategy for which of these four attributes is going to contribute the most to its growth. Going from a good company to a great company and being able to stay there is no easy feat. The key is to continue to evolve. Standing still doesn’t work very well in the business world. When you are standing still, you are an easy target for upstart competitors.
Examples of how companies utilize these growth attributes to keep company momentum moving forward in different ways are endless. A good exercise is to look at successful companies and think about which of these growth drivers they used to achieve success and how their strategy has evolved. You can learn a lot from others’ successes and failures. Ask yourself how Nordstrom, Apple, Starbucks, Facebook, Amazon, and others achieved their growth. Then look at other companies that are struggling or have failed and figure out which attributes they lost and what they could have done to find other growth attributes to replace those lost. Think about companies such as Borders, CompUSA, Blockbuster, and others and examine how and when they could have seized opportunities to adjust their strategies.