Unlocking Growth - Beyond the Standard Playbook
How today's commercial playbook limits growth in materials.
In this issue #102:
the first in a series on Unlocking Growth from existing markets and products in the materials industry, a topic likely on executive minds as sustainability investments disappoint.
Posts in the Series:
Post 1 - Beyond the Standard Playbook
Post 2 - Overused Growth Tactics
Post 3 - A New Approach
Post 4 - Changing Behavior
Post 5 - Business Impact
Beyond the Standard Growth Playbook
As materials executives find their sustainability growth investments yielding less than expected, they are likely to refocus on core markets to make up the difference. Having worked extensively in well-developed markets, efforts typically involve ensuring that all playbook “best practices” are being implemented with the belief that following the playbook maximizes growth potential in those markets.
So, what does the traditional B2B playbook advise?
Segment the market.
Choose the most attractive segment to target.
Develop advantaged products to meet clear customer needs.
Develop Value Proposition & Positioning for target segments.
Create market awareness of your value proposition.
Ensure your sales team aggressively sells based on that value proposition.
Follow the playbook, and you’re doing your best. That’s what most executives do when facing growth challenges: review past work and improve it if possible, based on known standards for what works.
While this advice isn’t bad, it’s over 20 years old and has a major blind spot. B2B tech companies have overcome this, but many industrial B2B sectors still struggle with it.
What if there were a way? A way to…
…get more?
…get more, consistently?
…get more, from established markets and products?
This is what Bob Lurie has dedicated his career to. Former VP of Strategy at Eastman, and former Partner at Monitor Group, a collaborator at Growth Arc Advisors, he has helped teams drive growth in established markets and products.
Here’s a clip from a recent discussion where he discussed his findings about how effective traditional methods are at generating growth.
The problem with the standard playbook.
The standard playbook effectively focuses commercial teams on understanding customer needs and developing valuable products. We have improved over time in identifying what customers need and how these products create value. However, the tactics derived from this analysis focus solely on:
WHAT the customer should buy.
If you've managed product lines, as we have, you know it's true. Segmentation, targeting, and positioning help us determine:
who is most likely to buy the product
what value the product creates
how to communicate the product's benefits
Our field tactics aim to ensure customers are aware of and understand our product and its value. We deploy marketers to promote it, and send sales teams to inform customers. In my experience managing product lines, this defined commercial excellence. It was considered best practice. And if results were disappointing, the causes were typically attributed to one one of two reasons:
It’s just the growth possible from this established market. OR
Poor team execution.
The Blind Spot
All the focus on what the customer should buy is based on a significant assumption:
the primary barrier to growth is awareness of the product or its value.
However, in practice, this isn't true.
First, it's likely that customers are already aware of your offerings. In today's digital world, information is easily accessible, even on the most niche topics. For instance, a quick Google search for "blocking additives for solvent-borne coatings" yields numerous supplier websites. The notion that buyers cannot quickly familiarize themselves with their options and their potential value is unfounded.
Secondly, purchases often fail for reasons unrelated to the product itself. I've witnessed many purchases stall despite apparent value. Customers frequently acknowledge the value but still don't proceed with the purchase, citing various reasons such as lack of support or low priority. We've all encountered these situations in our careers and often blame the customer for "not getting it." As organizations become more opaque due to the controlling actions of sourcing departments, understanding these lost opportunities has become increasingly difficult. Moreover, if purchases stall for non-product reasons after we are aware of them, many more likely stall for non-product reasons before a buyer even speaks to a representative.
The Hidden Growth Opportunity
These non-product losses can fuel added growth if corrected. However, the standard playbook overlooks them.
Would doubling your growth rate in existing markets be valuable?
The solution? An updated playbook emphasizing both what customers buy and how they buy.
Focus additionally on HOW customers buy.
Fortunately, such a playbook exists and has been proven to generate growth, even in competitive markets for existing products across various industries and regions.
Up to 2X base growth rates.
Bob’s documented the method in his book, The Organic Growth Playbook
Next time: what do companies do when they run out of options?
Growth Arc Advisors specializes in the implementation of the methods described in this series. We are former materials industry executives who understand the uniqueness of materials companies and have generated growth as industry operators.
If you would like to discuss your organizational needs, feel free to contact us or set up a complimentary consultation.