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What you need to know about organic growth in business, social media, website building, and ecommerce. 5 ways to grow your company organically. Why it’s important to research your target audience. The role of digital marketing in organic growth
Whether you are a small startup or a large enterprise, you have to invest your time and money into acquiring new customers and reaching a wider audience. You can do it through mergers, acquisitions, and opening new storefronts (both online and offline) — or you can lean on the natural progression of your business.
In this article, we explain what organic growth is, how it occurs in ecommerce stores, and how to use digital marketing to grow your business.
What is organic business growth?
The term ‘organic growth’ has several meanings.
Organic growth in traditional business means that a company develops through reinvesting its profits into inner resources instead of expansion and/or structural changes (like mergers and acquisitions, new directions, new offices, and so on).
In social media, it means an increasing number of subscribers who follow a webpage thanks to its high-quality content and lively community. No paid marketing techniques (native ads, guest posting, etc.) are involved.
In website building, it’s a natural increase in the number of visitors who constantly return to check a web page, perform targeted actions, and convert (including micro-conversions).
Finally, there is organic growth in the industry of e-commerce sales**, and its meaning is somewhere in between. It’s the development strategy that relies on investing into business processes, product quality, and genuine satisfaction of consumers instead of paid marketing. These complex measures lead to a natural increase in traffic.
Difference between organic and inorganic growth
Organic growth stands in contrast to inorganic one. It’s another development strategy where a company invests its resources into growth opportunities that exist outside of its business processes.
Inorganic growth often requires raising external capital. It usually contributes to a more aggressive, high-speed expansion of the business, whereas organic growth uses a company’s inner resources. This process is slower, more natural, and not forced. It also tends to keep a company’s capital within the current business unit.
Overall, organic development happens naturally when your business is successful. Inorganic comes from buying new expansion possibilities or merging with another company.
Advantages and disadvantages of organic growth
Organic growth is the most common business development strategy. All companies use it in one way or another. If a company grows organically, it means that its growth rate exceeds the market average, and it begins to expand its market share.
Here is the list of key advantages of growing a business in an organic way.
- Organic growth does not require large financial investments.
- There’s no need to set up and maintain advertising campaigns.
- It has no negative consequences (i.e. sanctions by social networks for manipulating search results).
- It does not entail radical changes, such as restructuring of the enterprise.
- It brings more target customers, accumulating the warmest possible audience.
However, like any strategy, it has its downsides. For instance, developing a new business to the point of organic growth takes a long while. In a situation where resources are limited, you’ll have to constantly prioritize your fight for a positive cash flow, and the work on organic development will become an afterthought.
Q. How can competition disturb the organic growth of my business?
A. Competitors might derail your plans by changing market conditions and forcing you to adapt to new rules, which takes away your attention from growing the business organically. In this case, competitors who launched their business earlier than you or found smarter ways to develop are especially dangerous.
5 strategies to grow your business organically
So how can a business grow organically? To achieve that, it’s necessary to use existing resources and capital efficiently, ensure smart management, and have a deep understanding of customers and industry.
Here are 5 ways for increasing your company’s organic growth.
1. Focus on internal development
Business leaders often believe that in order to grow and prosper, they need to put all their energy into geographic expansions or M&As. However, one of the best ways to grow is to reallocate resources from inefficient business directions to existing activities that currently generate higher returns.
Research made by McKinsey Insights showed that among enterprises with high growth rates, 44% said that their companies primarily focus on identifying and reallocating existing resources.
To implement such a strategy, a business needs to
- identify what drives its growth and sets the agenda for the entire company,
- carry out a thorough assessment of profits,
- and, finally, make an investing decision.
For example, to expand your business opportunities, you can invest in a larger factory to boost the quality and quantity of a product that is already beloved by customers. A company can also redirect resources from traditional marketing to digital advertising to better target its customers on social media.
Also, McKinsey Insights points out that fast-growing enterprises are actively developing products and functions that enhance each other’s efficiency.
2. Create a unique brand image
A great way to increase organic growth is to figure out how a company’s voice and image can stand out from its competition. This way, an enterprise emphasizes what value consumers can only get from its products, highlighting features and functions that can’t be obtained anywhere else.
It’s not enough to just come up with a funky brand identity to accelerate organic growth. A brand image must rely on a proposition that is
- relevant to a company’s target market,
- backed with real evidence,
- expressed in facts and figures.
Hence, a business should provide some credible social proof of how much value customers get from its products or services.
Q. What type of social proof is needed to create a unique brand image?
A. For example, if you are developing a B2B SaaS application, your brand might build on the effect that your software has on your customers’ web sales. If your clients’ average revenue increases by 15% after they install your application, adding this information to your USP will perfectly demonstrate what makes you better than your competitors.
3. Communicate with your audience
Whether you run an online store or a physical one, your audience is your most valuable asset. So you must find ways to connect with customers and learn what they think of your products and services, which features they miss, and so on.
Make sure you are available on various social networks where your customers can connect and chat with you. Pay attention to SEO so that your target audience can easily find your website via search engines. Otherwise, they won’t be able to ask you the questions they have in mind. Unanswered questions lead to confusion, which eventually leads to mistrust. And mistrust is a slippery slope toward failure.
Essentially, how well you communicate with your buyers is exactly what makes the difference between a successful and failed business.
4. Optimize your sales team
Strengthening the sales department also increases organic business growth. For instance, a company may revise its selling strategy in order to encourage customers to return for more purchases. It can also develop a new pricing system that better recognizes consumers’ buying habits or financial situations.
Another way of accelerating organic growth is to reconfigure your sales team. Let’s say, a manager notices that revenue levels from some of a company’s directions have dropped. The gut feeling tells them to cut costs. However, the answer may be to hire new salespeople and allocate them to the fastest growing direction.
Q. Do I always need to hire new employees? What if I’m tight on a budget?
A. It might be well enough to simply redistribute human resources from less to more profitable channels. This way, a company begins to instantly boost its revenue, whereas the ROI from new hires only comes in 6+ months.
5. Generate exciting new offers
Changes in technology and consumer behavior open up more opportunities to serve the market. So another way to improve organic growth would be creating new products and services.
As businesses exist, operate, and compete in the market, they learn more about their target audience. The smart thing to do would be to channel this knowledge into making new offers that are even more fine-tuned to the unique needs of specific customer segments.
Using research and surveys, you can determine which customer expectations have remained unfulfilled. But it’s a lengthy process that requires a thorough analysis of the target audience’s needs, preferences, and interests. We’ll talk more on that in the next section.
Research your target clients
Taking your company to the next level is never an easy task. If you want to know how to grow your business organically, then it is extremely important to research and understand your target audience.
By talking to consumers, you will be able to
- have a deeper understanding of your market niche,
- exploit gaps in your competitors’ offers,
- make informed decisions about development of products/services,
- find out preferences and needs of your target customers,
- increase efficiency of your marketing efforts, and much more.
It’s especially true if you already have a loyal following. For example, you can ask your customers what they like about your goods, what they don’t like, what they want more. When people see that you truly care, they get more engaged and ready to share their vision.
The key to target audience research is setting strong goals. This applies to surveys, interviews, and any other method you choose. For example, if your company is a news aggregator app with personalized feed, your goal would be to learn how users feel about
- pricing of subscription plans,
- UX/UI and navigation,
- feed personalization accuracy,
- the number of ads in the feed, etc.
Based on the responses you get, you will compile a list of audience clusters. These clusters will help you better personalize your app by showing what segments of your target audience prefer which settings.
Here are some questions that you can use during research:
- What are your most common daily tasks?
- How would you describe our product to your grandmother?
- What is the main advantage of our product?
- What is the main problem with our website/app?
- What prevents you from subscribing to our mailing list?
- What content do you find useful and engaging?
- What content would you consider a waste of time? etc.
How digital marketing helps your business grow
If you are running an online business, you can only expect growth if you have a strong digital marketing strategy in place. It doesn’t matter if you’re selling the best product in the niche — without you promoting your goods on the web, people simply have no way of knowing about their existence.
That’s why you should make time in your schedule to plan out how to grow your ecommerce business with digital marketing. The strategy needs to connect your online store to a wider audience and expand its reach.
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For the sale of each partner-provided item, retailers receive commission fees. And here’s the nicest thing: you won’t be dealing with inventory, order delivery, and other technicalities. Basically, you just provide a platform to sell suppliers’ goods while Collabica does the rest!
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Organic growth occurs when retained earnings are reinvested in a company’s internal resources (product lines, distribution network, etc.), effectively developing it from within. Basically, it stems from a company’s product and market competence, not financial one. A business that wants to implement this strategy needs to have sufficient funds and capacities since organic growth does not involve borrowing money and/or loans.
Key principles of organic growth:
- Constant optimization of business activities
- Redistribution of funds depending on their effectiveness
- Development of new offers, goods, and services
To grow your business organically, you need to focus on internal development (instead of external one), create a unique selling proposition by explaining your product value, and back it up with real evidence. Communication with your audience is also important because this way, you will be able to tailor your new and existing products to your buyers’ needs.