The 5 Best Growth Strategies for Your Digital Business

The 5 Best Growth Strategies for Your Digital Business

The U.S. Bureau of Labor Statistics found that only 20% of businesses fail within the first two years, while a staggering 65% fail in the first ten years.

This means that achieving long-term growth is far more important to a business’s survival than getting off to a perfect start.

We’re going to examine five strategies to help you grow your business until it becomes one of the 25% of companies that surpass 15 years — or leads you to a profitable exit so you can move on to your next venture!

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1. Run a lean business

If you want to grow your business, prioritizing sustainability over raw speed is paramount. 

Running a lean business means maximizing value while minimizing waste. There are several ways to accomplish this.

First, you’ll want to ditch the stereotype that fast-growing companies need to constantly hire new people to keep up with demand.

In reality, focusing on getting the most out of each employee will be more beneficial than ramping up your recruitment efforts. Further, training your existing employees is faster, easier, and cheaper than spending a fortune on recruiting and onboarding additional team members.

If you need extra help, consider hiring contractors that don’t significantly increase your overheads in terms of office space, benefits or paid leave.

Another way to cut down on operating costs is to streamline your tool stack.

Statistics from Blissfully found that, on average, companies spend over $300,000 per year on SaaS (software as a service) subscriptions (across all company size segments).

To cut down on these costs without sacrificing functionality, look for solutions that unify multiple features on a single platform. You could use fewer tools to get the same amount of work done.

For instance, project management software Basecamp combines instant messaging, to-do lists, and file storage onto a single platform. 

Source: Basecamp

In comparison, paying monthly subscriptions to Slack, Asana, and Dropbox will cost twice as much for a team of five — and even more if your headcount increases.

IT spending on software is at an all-time high, growing to $4.4 trillion as of 2022

The percentage of revenue companies allocate to their marketing budgets also features highly in a company’s annual expenses. Deloitte puts the number at 10% to 13% of your overall budget. If you want to save money on marketing without risking your sales performance, you need to keep one word in mind: targeting.

When running paid ads, be specific with your audience settings. This helps you reach your target demographic while achieving a lower cost-per-click (CPC.) You should also compare your performance across all channels and double down on the campaigns that generate the most value.

If you follow the Pareto principle and identify the 20% of marketing efforts that drive 80% of sales, you can invest more heavily in the channels that produce the best results — and cut your underperforming campaigns.

Other lean business “hacks” include switching to paperless filing systems, working remotely instead of renting an office, and using freelancers to fill roles that don’t warrant a full-time hire. Ultimately, lean growth is about profitability rather than sheer size.

2. Increase customer lifetime value (CLV)

The second way to grow your business is to generate additional value from your existing customers.

There are several ways to increase customer lifetime value, but the two most popular approaches are upselling and cross-selling.

Upselling means encouraging customers to buy a higher-end version of the product they initially wanted to purchase.

Cross-selling recommends related or complementary products that may align with their original purchase.

You see these strategies applied by countless companies:

  • McDonald’s offers fries as an add-on or asks the customer if they want to upsize their drink.
  • Best Buy, Home Depot, and other retailers offer extended warranties on appliances
  • Amazon shows a list of “you might also be interested in” cross-sells every time you add an item to your cart
  • Cinemas bundle popcorn and soda with your tickets (incidentally, this is where they generate most of their profit)

It may seem like a hard sell to convince your existing customers to spend more money on your business, but the opposite is true. Research from BigCommerce showed that the top 10% most loyal customers spend 3x more per order.

This means that you have a significantly higher chance of making a sale to existing customers than to new prospects.

Since returning customers have better odds of producing fresh revenue for your business, you should also improve your retention efforts.

The longer you keep a customer, the higher their lifetime value becomes.

This improves your customer lifetime value to customer acquisition cost (CAC) ratio because retaining a customer is 5x to 25x cheaper than acquiring a new one.

The value of retention is a big incentive for you to keep your upselling tactics polite.

  • Don’t offer too many upsells. Two or three upsell pages is the absolute maximum to avoid annoying your customers.
  • Make it easy to say no. Never hide the opt-out button.  Customers don’t enjoy pushy tactics.
  • Be transparent. Buyer’s remorse is common among upsold purchasers. Be honest about your product instead of hyping it up (unless you want to deal with a flood of refunds).

3. Streamline business operations

If you want to grow your business, streamlining your operations is an absolute must — especially for service-based companies.

Choosing an easy-to-use project management software, automating or outsourcing repetitive tasks, and documenting processes are all key steps.

Choosing the right project management tool is especially important because migrating to a new platform in the future requires additional time and resource.

Ideally, look for a tool that’s easy enough for everyone on your team to use, while having enough features to adapt to your evolving needs.

After automating or outsourcing repetitive tasks, you can go a step further by documenting all your business processes.

This gives your team a chance to collectively optimize their workflows instead of making the same individual mistakes.

In addition to reducing employee training time, a set of standard operating procedures (SOPs) is crucial if you plan to sell your business. 

Achieving a profitable exit is often faster and smoother when the key processes are clearly laid out for a new owner.

Well-documented processes also streamline your interactions with prospects and customers. For example, many service-based businesses simply copy and paste a project template when they sign new clients.

The Pareto principle works here too. Assign your employees (and yourself) the 20% of tasks that generate the most value for your business. 

Finally, don’t forget to ask for feedback from your employees on how they’d streamline operations.

This gives you targeted insights from the people handling the workflows and ensures that you don’t miss out on ideas for improvement.

4. Improve lead generation

While hiring an outbound sales team or increasing your paid ad budget may show quicker results, building out lead generation through organic methods (like blogging) will reward you with lower acquisition costs in the long run.

Starting a company blog and publishing one 2,000-word article each week is a good starting point for lead generation that can bring in thousands of monthly views. But, ensure that your content includes unique and valuable insights that genuinely benefit your readers.

If you want to surpass your competitors in the search engine results pages (SERPs) then you’ll need to create content that’s longer, better, and uniquely different from what already exists online.

Once organic traffic begins to flow to your blog, you could start a newsletter and run email marketing campaigns to your list of subscribers.

A tool like ActiveCampaign might help you convert your newsletter followers into customers.

Another option is to place sponsored ads in newsletters or podcasts that align with your business. Newsletter and podcast ad placements vary in type, but they are an efficient and cost-effective means to reach your audience.

For instance, the return on ad spend (ROAS) for podcast sponsorship is $2.42 for every dollar spent.

Sponsorships, and other paid advertising methods, are economical alternatives to conventional pay-per-click (PPC) ads on Facebook or Google. 

Lastly, get active and grow your network through Twitter, LinkedIn, and in-person business events.

5. Increase customer loyalty

Before we discuss increasing loyalty, let’s talk about reducing churn.

Research from the 2022 Sprout Social Index found that 13% of US consumers expect brands to respond within the first hour of reaching out on social media, while 76% expect a response in the first 24 hours.

However, some brands don’t reply to social media comments and messages.

When you fail to meet your customers’ expectations, they feel unappreciated. This means they are more likely to switch to one of your competitors for their future needs.

Source: Sprout Social

If you want to avoid losing customers to your competitors, you need to master the art of meaningful and prompt engagement on social media.

A simple move like tasking someone in your business with responding to messages could greatly reduce customer churn.

Additionally, go the extra mile and provide value to your customers without immediately asking for something in return.

Whether that’s hosting webinars, posting data and insights on social media, starting a monthly newsletter, or publishing on your blog, consistent engagement is the name of the game.

The next time someone needs your product or service, you’ll be the first company that comes to mind.

Try giving those nurtured customers a nudge now and then by offering limited-time discounts through your newsletter or email communications.

This is a strong reason to segment your subscribers. If they’ve purchased before, you can send offers to the people most likely to convert.

But, avoid the trap of offering too many sales or discounts. Your customers are smart. They may wait for a special offer to arrive and never pay the full price for your product or service.

If you want to increase loyalty and engagement without risking that, you could run competitions instead.

Competitions are less likely to negatively impact your revenue since only a limited number of customers win a discount or prize.

They’re also an excellent way to boost your word-of-mouth traffic when you offer specific hashtags for people to post on social media.

One last way to increase customer loyalty is to set up a reward or referral program.  This method incentivizes your followers to promote your brand and refer their friends. 

All of the above tactics may be used to maximize customer loyalty and generate additional revenue in the process.

Wrapping up

As you’ve seen, you don’t need to hire droves of new employees or spend excessive amounts on paid advertising to grow your business.

The numbers don’t lie; it’s clear that retargeting existing customers, getting creative with lead generation, and nurturing customer loyalty go a long way toward maintaining growth in your business.

By running a leaner business, and continuously optimizing your day-to-day operations, you’re sure to stay ahead of the curve until you reach a profitable exit.

Find out more about Onfolio. We buy digital companies from independent entrepreneurs and grow them to their full potential. Get an offer or learn more today

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Jake Lizarraga

Jake Lizarraga is a content marketer who has worked with multiple high-profile SaaS companies including PandaDoc, Aura, Jotform, Chanty, Userpilot, and more. In the rare moments that he’s not in front of his keyboard, you’ll likely find Jake at the nearest chess club or movie theater.

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