How Effective Growth Leaders Avoid Common Sizing Pitfalls to Guide Growth
July 22, 2013.- How many times have you wondered how we made it anywhere, let alone, on time, without a GPS? How did we fight traffic? How did we find the fastest route? How did we know what complications laid ahead? Fathers preferred to rely on the position of the sun, which was difficult on cloudy days, or a Boy Scout’s compass, rather than being reduced to ask for directions from strangers. We could just blindly entrust our fate on the driver’s ‘gut’ sense of direction even if it meant knowing we were lost. Fortunately, now we wouldn’t leave home without at least one smart GPS app.
Likewise in business, there are methods that vastly improve “growth routes” for key segments, products and services, and yet, many players still overlook them. Instead they navigate the way they’ve done it for years, setting their annual business course with “guesstimates,” faulty data, or gut-feel. Opportunity right-sizing analysis is one tool regularly utilized by effective growth leaders and often overlooked by their competitors. This “best practices” methodology employs fact-based quantitative and qualitative assessments and analytics, applied to multiple internal and external business factors and competitive realities. The result is a detailed and accurate map for current and future growth.
Growth leaders regularly apply this proven methodology across business units and growth plans. What’s more, it is fundamental to lower risks and increase your fair share of high growth segments, such as the Hispanic, Multicultural and Millennial markets. Many companies find these segments hard to strategize for, with their unique purchase habits, post-recession reset behaviors, connectors vs. cultural nuances, fragmented media consumption across multiple screens, multi-channel habits and high influencer impact.
Most often, companies under-commit resources and staffing to key growth segments, and as a result, their business planning becomes limited to syndicated data analysis, without primary, operational, and market specific research. It’s natural though. If you don’t know how far your destination is and how long it might take you, you wouldn’t know how much money for fuel you should plan on. Instead, effective growth leaders know how much potential there is for their brand and the commensurate investment to maintain healthy growth rates, sources of demand, margins and ROI.
In our consulting work across consumer categories, we have seen ten common pitfalls that can occur when setting a business plan without opportunity right-sizing. Here are four easy to avoid pitfalls:
- Overinflating or Underestimating the Opportunity – Overinflating can result in unrealistic, unattainable goals that when not met can result in companies discounting the opportunity initiative as ineffective or useless. Underestimating can result in shortchanging the resources, staffing and prioritization needed to actualize market growth. Either super-sizing or low-balling the Hispanic or any market opportunity can kill the opportunity altogether.
- Confining the potential to the existing user profile – A “business as usual” strategy, narrowed to current buyers, not only foregoes the full opportunity of growing and changing segments, but also limits brands’ expansion and growth potential, which can eventually lead to extinction.
- Using “uneven quality” data – While syndicated data is positive for its readiness and easy accessibility, some studies come with “blind spots” or insufficient sampling within certain sub-segments and classes of trade, such as independent supermarkets (bodegas), e-commerce (from Amazon to Craig’s list), infomercials, or even multi-level-marketers. Incorporating opportunity sizing analysis for at least some of those factors, depending on the category, makes the sizing more thorough. For example, our CPG right-sizing approach for Hispanic often identifies ‘miss factors’ in the range of 25 to 50% of the ‘full’ potential when incorporating a thorough volumetric analysis.
- Utilizing numerical data without operational capabilities– Most perceive opportunity sizing as a numbers driven model, but true right-sizing methodology considers a more comprehensive picture that factors in operational intelligence, from readiness and segment know-how to alignment across functional areas and ability to take-on the needed organizational culture change.
Effective growth leaders avoid these pitfalls in key segment planning by employing opportunity right-sizing analytics to secure insights that optimize their real potential. Their analytics take into account macro and micro issues, from geographic to psychographics, as well as competitor and market specific nuances. It provides a cohesive body of reliable data, internal and external assessments, historical and forward-looking analysis, competitive considerations, and multicultural business acumen – all of which are critical to creating sound strategies, tactics, measurable goals, and business investments plans. With this solid foundation, S-M-A-R-T business growth is assured, growth that is Sustainable, Methodical, Aligned, Responsible and Timely.
For every business segment, Opportunity Right-Sizing Analysis can become your “business GPS” – an accurate guidance system that can illuminate the most targeted, effective, and profitable “road map” for your enterprise growth opportunities.
Is the lack of a growth GPS impacting your growth potential? Now is the time to reset your S-M-A-R-T “growth route” for 2014-2017. It will insure you “arrive” before your competitors.
SSG is a strategy consultancy driven by management P&L experience and predictive analytics. We develop fact-based business models, growth roadmaps, insights and segmentations for the Total Market and the evolving Hispanics, Multicultural & Millennial segments. We help clients focus their limited resources where the highest market opportunities exist, and which strategies advance maximum, efficient Total Market growth.