While the key to unprecedented business growth is sometimes hidden, you can find it if you know where to look: consumer data.

Gatorade Finds the Key to Unlocking Business Growth

Once a leader of the $6BN sports hydration category, in 2006 Gatorade faced a double-digit volume decline. The brand needed a growth strategy that would allow them to reignite consumers’ relationship with the brand, reach new consumers and ultimately drive revenue.

To accomplish this, Gatorade partnered with Prophet on an extensive consumer research project to understand where the opportunities for growth existed. This research uncovered two extremely valuable insights:

1. Gatorade’s Brand Positioning was Losing Relevance

The brand transitioned its marketplace position away from its former status as a “science of hydration” brand toward a lifestyle brand. While this shift was intentional, it turned off key audience groups like competitive athletes and teen athletes – who no longer perceived the brand to offer significant performance benefits beyond thirst quench. Direct competitors like Powerade and Powerade Zero, and other low calories “lifestyle waters,” such as Vitamin Water and SoBe life water were encroaching the market share and relevance within targeted segments of consumers.

2. A Glaring Gap in the Market Existed

The former insight led to the realization that no brand satisfied the whole spectrum of athletes’ nutritional needs. Athletes sought a product that provided benefits from hydration to energy to recovery – and Gatorade presented highly stretchable brand equity into the adjacent sports nutrition category, pre-, during, post-acute sports events and surrounding more foundational athletic occasions.

Building a New Growth Strategy for Gatorade

These insights lead to the development of a two-pronged strategy to drive growth. The approach included:

Prong 1: Reclaim Hydration Leadership

The master brand, Gatorade, needed to be re-positioned back to its foundation in hydration. To reclaim its leadership of the hydration space, it needed to move beyond “thirst-quenching” to “performance hydration.”  As part of its bid to reclaim leadership in hydration among competitive athletes, Gatorade launched G-Series – Prime, Perform and Recover. This transformed the brand from a generic all-athletic-occasion drink that came in different flavors to a packaged solution covering specific athletic occasions with tailored nutrition ingredients, thus opening the doors to the sports fuel market.

Prong 2: Elevate the Brand from Hydration to Sports Fuel

Anchored on the occasion-specific benefits desired by athletes, the brand was poised to elevate itself beyond the $6BN sports hydration category and into the $72BN sports fuel space; moving from “science and soul of hydration” to “fuel to help athletes win from within”. This was actualized through creating a lineup of products targeting both the hydration and nutrition needs surrounding intensive athletic occasions, across the moments before, during, and after these occasions.

We developed a brand portfolio and architecture to align with other target athlete segments; with clear value propositions for each sub-brand. This led to the launch of G Series Pro – an intense sports fuel targeting endurance athletes. In 2010, it also launched G Series Fit, targeting low-calorie consumption occasions for passionate exercisers.

The Impact of Gatorade’s New Growth Strategy

Due to this strategy, the double-digit declines the brand had been experiencing were reversed to 15 percent growth in just one year. Since its inception, Gatorade has seen over $2 billion dollars in franchise revenue increases and is now the fastest-growing brand in the PepsiCo portfolio (and its only double-digit growth brand for over five years).

Growing a business is easier said than done. Companies of every size face challenges that suppress their growth. A company might have a great product or service but no business growth strategy to help it define, articulate and communicate where it is going.

A growth strategy is different from an annual plan and can be difficult to develop if you’re unfamiliar with what it is, why you need it and how to create it. Below we examine how to develop a business growth strategy that is dynamic and effective.

What is a Business Growth Strategy & Why is it Important?

Instead, a growth strategy addresses how your company is going to evolve to meet the challenges of today and in the future. A growth strategy gives your company purpose, and it answers questions about your long-term plans.

Growth strategies usually starts by identifying and accessing opportunities within your market. They go beyond your business and marketing plans, which detail how you’re going to meet specific business targets. Growth strategies are important because they keep your company working towards goals that go beyond what’s happening in the market today. They keep both leaders and employees focused and aligned, and they compel you to think long-term. Bad decisions often happen when you make decisions based on today, instead of an emerging tomorrow.

Components for Developing a Successful Business Growth Strategy

Developing a growth strategy demands coordination among a cross-functional group of stakeholders; it can’t be just a few people in a room with a whiteboard. Everyone involved should understand what they’re working towards and why, as well as what they’re expected to bring to the process.

To be successful in your strategy, you need to consider what will significantly impact business growth. Let’s take a look at a few:

1. Value Propositions and Business Growth Steps

For a company to expand, it needs to increase its reach with existing target customers and acquire new ones. To do this, the company must design a value proposition that clearly states what it does and why customers need it. Then it must create a growth strategy that provides the steps (i.e. growth moves) the company is going to make to take new things to market.

When T-Mobile U.S. came to us because there was dissatisfaction among its customers, we knew they needed a powerful new value proposition and go-to-market strategy. Through extensive market research, we identified a the opportunity for a wireless carrier who didn’t act like one – the “Un-carrier.”

2. Brand Relevance and Customer Experience

Even the most recognized brands in the world started from scratch at some point. So how did they become some of the biggest names in the market? By building relevance with customers and delivering a distinctive and integrated customer experience. Building a brand is much more than a logo and a color palette (although those things are important for brand recognition). Your brand should be recognized by its values and by how customers experience you – both of which should be highlighted in your growth strategy.

Olive Garden was already an industry leader when they came to us looking for a new way to achieve relevance with both their current customers and new ones. What was the key? Breadsticks and family.

The development of Breadstick Nation saw the brand’s success surge as it launched new breadstick products and experiences. And with a strategic focus on family, a new customer experience for children was created both in the restaurant and online.

3. Thinking Long Term Business Growth

Being focused solely on the present and making snap decisions about the future is never a good idea. Your organization needs to invest time and energy in thinking about where the world is going and what it means for your customers, partners, employees, etc. Your growth strategy will help you make good decisions for the future of your business, even though it might seem uncomfortable to place bets when even the present seems uncertain.

4. Expanding into the New – Markets, Categories, Customer Segments…

Your company’s core business needs to be solid before you make big expansion moves. However, outlining longer-term goals will help you to determine the steps you need to take and measure your progress along the way. Think of it like a road map. Quick wins and small successes can be mile markers guiding you toward the long-term goal of expanding into other markets, categories and/or segments.

Furrion is a brand that was a leader in the manufacture of audiovisual equipment, appliances and power solutions for specialty vehicles, luxury RVs, yachts and consumer industries.

With this strength behind them, they were focused on entering the home appliance market. Prophet worked with Furrion to identify the brand purpose principles that would capture growth in this new market, including a new visual identity, which was unveiled with great success.

5. Growing at a Pace You Can Handle

We’ve all seen it before, and we’ll see it again – companies that grow too fast and then fail because they can’t keep up. A growth strategy will help you develop at the right pace for organization. The last thing you want to do is overextend yourself to secure short-term gains that will eventually put too much strain on your business and your people. It can be hard to make trade-offs, sometimes sacrificing the exciting for the sensible, but it is sometimes necessary for the overall health of your company. This doesn’t mean you shouldn’t take risks, but the risks you do take need to make sense in context of the big picture.

How to Overcome the Challenges of Developing a Business Growth Strategy

Developing a growth strategy is demanding and time-consuming because it is a bespoke process. That said, some of the most common challenges in developing a growth strategy are:

• Opportunity and impact
  • Defining your target customer segment(s), their needs and their pain points
  • Evaluating the projected impact of the strategic growth moves you want to make
  • Understanding the feasibility of the business growth moves (i.e. time, capabilities, resources)
• Alignment and prioritization
  • Aligning leadership around a narrow set of well-defined goals
  • Involving the right people and managing stakeholder expectations
  • Setting priorities and sequencing growth moves in a timeframe that makes sense
  • Not approaching it as a one-time task, instead of a continuous journey
• And most importantly…
  • Not thinking big enough about what business you want to be in

Before you embark on creating your business growth strategy you should consider how you’re going to tackle these challenges.

We’ve previously explored how to drive growth in a pragmatic way through the development of a strong customer value proposition. Now we’re looking at how to develop the actionable initiatives needed to bring that value proposition to market.

We call these initiatives and steps “growth moves” and their goal is to push a company’s thinking forward and create new ideas that can disrupt the category or challenge a competitor’s strategy.

The Secret to Successful Business Growth

The secret to creating these moves is a combination of art and science. On the one hand, they need to answer a business need that has been identified in the value proposition and make sense financially. (We recommend creating a business plan per growth move.) On the other hand, they must be a creative solution that resonates with the target customer and reflects their attitudes, behaviors and needs.

3 Actionable Steps for Achievable Business Growth

We’ve outlined a few examples below to help you get a better understanding of growth moves that have proven successful in the past. Some of these could likely be applied to your own growth initiatives.

1. Access A New Industry Type

In the previous article, we talked about our insurance client in Latin America for which we developed a channel strategy that would allow them to penetrate a new industry type – employers. In order to bring this growth strategy to life, we generated specific growth moves.

Some mid-size companies needed support in managing their employee base, so we put together an ambitious plan to educate and provide tools for employee management in small to medium-sized companies to build the notion of a partnership with the insurer, and provide access to their employee base.

“We call these initiatives and steps “growth moves” and their goal is to push a company’s thinking forward.”

2. Supporting Value Proposition

When we launched the T- Mobile “Un-carrier” strategy we helped them develop a set of moves that would support the new value proposition during the first month, including growth moves like no contracts, or the device-updating approach “JUMP” which had a massive commercial impact and made the value proposition real to customers.

3. Reignite Promotion

But growth moves don’t have to be complex. A great example is the “Breadstick Nation” concept we developed with Olive Garden, Darden Restaurant’s largest brand, which found itself in a highly competitive environment.

The restaurant chain needed to reignite its promotion strategy in a way that would increase guest reconsideration, particularly during weekday lunches. We had to develop “quick hit” promotions that could be launched almost immediately. Breadstick Nation launched to wild success, with Darden Restaurants’ stock surging 15% and hitting a new all-time high in the weeks following the #breadsticknation launch.

Personalization is becoming increasingly prevalent in categories from shoes to cars to phones. But while appealing, this inundation of choice can overwhelm consumers rather than satisfy their needs.

How can a brand provide the variety of options consumers crave and fulfill the desire for a simple customer experience? The answer lies, in part, in naming. The most successful companies drive relevance and growth in their portfolios by naming – organizing and communicating offerings in a way that prioritizes what customers want and need in each purchase decision.

When done right, naming at the product, version or feature level can simplify and guide prospective shoppers to the relevant offerings for their needs. But when done poorly, it can frustrate customers—and even inhibit them from making a purchase at all.

The 3 Commandments of Brand Naming

1. Consider the customer journey: Brands need to think about the entire customer journey, how (and when) a customer makes decisions, and how to nurture customer loyalty.

2. Ask what requires a name: Not every product, service or feature needs a name. Be selective about what truly requires a name.

3. Keep the DNA of the brand front and center: The personality of a brand should be reflected in each brand name. Use it to gut-check and filter naming decisions. And then name accordingly.

3 Brand Naming Strategies Driving Growth

Looking across categories, we’ve identified three successful brand name strategies to help customers better understand your products and support business growth.

1. Consider the Customer Journey: Jawbone Focuses on What’s Important

One of the most confusing and challenging naming conventions is tiering, or differentiating similar offerings within a portfolio by their power, capabilities, etc. The challenges companies face with tiering are many. Three of the most difficult are clearly differentiating between offerings, creating a tiering convention that allows the product line to expand into the future and avoiding making the lowest tier sound undesirable.

A strong tiering example comes from the consumer tech and wearables company, Jawbone. They’ve extended the simplicity of their product design to their naming convention and product architecture, choosing to quietly discontinue their line of Bluetooth speakers to focus more fully on fitness trackers.

Jawbone has four models on the market: Upmove (which is, after all, the essence of fitness – getting up and moving), UP2, UP3 and UP4. Each successive model builds on the functionality of the previous one, making the tiers a simple incline in value, rather than random sets of features customers need to understand.

With such simple product tiering and feature names, Jawbone has the freedom to be creative with color and material naming (which are paired together within the product tiers), providing customers with exciting choices like Ruby Cross and Black Gold Twist. In doing so, Jawbone simplifies the most important functional decisions (what to buy, what you need) and lets customers have fun with the more playful—and secondary—decisions.

2. Ask What Truly Requires a Name: Tesla Builds Meaning Into Naming Conventions

Many technological advancements have opaque names with little explanation as to what they mean (i.e. Star Wars’ C-3PO). Sometimes they’re SKU numbers, sometimes they’re abbreviations and sometimes they stand for the developer’s children’s initials. Whatever they are, they’re rarely understood and have a high likelihood of creating confusion for customers navigating between nuances. (“What’s the difference between the X1300A and the X1301B?”).

“When done right, naming at the product, version or feature level can simplify and guide prospective shoppers to the relevant offerings for their needs.”

In contrast, Tesla’s naming conventions are incredibly simple. Known for its commitment to innovation, Tesla consistently defies expectations, even going so far as to publish a high-level roadmap in the form of its “Master Plan.” Tesla’s Model S P90D has all the bells and whistles, including an impressive and seemingly opaque acronym. But each component has a clear meaning: P denotes that it’s a performance model, 90 is the battery capacity in kilowatt hours and D means that the car has a dual motor. This is complemented with highly descriptive feature naming: Cabin Overheat Protection, Autopark and the famous Autopilot, and each is named for exactly what it does. Of course, this approach is supported by an extremely focused product portfolio. Tesla sells three automobile models, while many of its peers’ offerings are in the dozens.

3. Keep the DNA of the Brand: IKEA Aligns Product Names to Scandinavian Roots

Unlike Tesla, IKEA has a vast portfolio; the company sells roughly 9,500 products and introduces 2,500 new items per year. Its stores, despite their homey vibe and intuitive layouts, can be overwhelming even to the best-prepared shoppers.

To help IKEA put a strategy in place to guide the creation of all names, which started with its founder, Ingvar Kamprad. Kamprad is dyslexic, making it much more difficult to use the traditional method of long SKU numbers. Instead, IKEA assigned a type of name for each of its product types. True to the company’s heritage, the system is Scandinavia-centric: beds, wardrobes and hallway furniture are named for places in Norway, dining tables and chairs are places in Finland, and upholstered furniture and coffee tables are places in Sweden. Because each type of name can apply to multiple items (for example, Nellie’s apartment features a Hemnes bed, dresser and hall bench), IKEA creates clear signposts that help customers shop the store more comprehensively and connect the dots across their pieces.

While this strategy is less intuitive for non-Scandinavian shoppers, it is inarguably memorable, and makes customers loyal not only to IKEA, but to Malm, Kivik, and of course, Hemnes.

Harness the power of data integration to provide more powerful B2B solutions

For B2B suppliers, finding ways to strengthen and increase the value of the solutions they provide is a proven and effective way to accelerate growth. Over time, solutions-driven companies have moved beyond the predictable precepts of “solution selling” and product bundling to solve important customer problems by linking products, services and advice in ways that deliver significant customer value. Hewlett-Packard’s move to link systems integration and networking support to its hardware offering is a classic example of the effectiveness of moving from products to solutions.

Our client work has highlighted the opportunity to move to higher, more integrated and more comprehensive levels of solution delivery by integrating the power of exploding digital data sources, predictive analytics and digital information interchange with customers. These solutions do not merely use big data to target customers or improve how companies promote existing products or services. Instead, they integrate data into the actual solution so the solution adapts and becomes more valuable as a customer uses it.

Data-integrating solutions are emerging because data has reached a tipping point, with 90 percent of it generated within only the last two years. The power of integrated solutions is all around us. Caradigm, a joint venture of GE Healthcare IT and Microsoft has begun providing data integrated solutions to help hospitals better coordinate patient care and fill in treatment gaps. Logistics companies such as UPS are incorporating traffic congestion data into route planning to improve package delivery times. Facility managers have begun using smart heating and cooling systems that adapt the use of resources to the environment, energy prices and demand.

Monsanto is an example of a company at the forefront of unleashing these new, data-integrating solutions. Over the course of less than a decade, it has moved from leadership in producing seed with improved yield characteristics to becoming a greater partner with farmers in improving field productivity. And at the same time, it has outperformed its industry peers by nearly five-fold. The shift from seed-product producer to field-solution provider has involved several steps, including the introduction of an agronomist force that helps farmers make better choices.

Recently, Monsanto has accelerated the solution shift by purchasing Climate Corp., a data source for weather and climate information and is integrating its information with soil and crop data, creating powerful new solutions that improve farm performance. Importantly, these solutions are not static. They learn and become more meaningful as weather and soil conditions change and as farmers experiment.

Data-integrating solutions are emerging because data has reached a tipping point, with 90 percent of it generated within only the last two years. Yet few companies have a plan to use these new sources of information and customer value effectively. To achieve gains that are truly transformative, B2B companies must learn to harness this data to build integrated solutions that elevate them above the role of the vendor. It requires harvesting the most relevant customer information available and offering insights that make them genuine business partners.

Pitfalls in the search for solutions

The rare B2B company is able to prosper through a steady flow of extremely innovative products and services, offerings that are so unique and protectable that competition cannot keep up. But most must use every tool possible to avoid becoming commoditized, to stay relevant as customer requirements change and to differentiate in more global and competitive markets.

And adding related products and services and providing expertise for broader solutions has certainly been effective in avoiding being treated as an ordinary supplier and more like a strategic partner, enabling interactions with higher-level decision-makers. These stronger, more solid relationships—at least theoretically—also decrease the risk of losing business to a competitor.

But creating a tangible and measurable return on the added investment continues to be a challenge. Many B2B companies find it difficult to charge for the extra investments or generate a premium through their core pricing. Customers begin to see such innovations as a “favor” for giving a supplier all the business, value-added service with benefits that are hard to rely on or quantify. When solutions don’t yield margin or a platform for meaningful growth, they don’t remain sustainable and wither without additional support. Companies may start a pilot project here or there, but the risk tolerance is low. If they can’t figure out a way to make it profitable rapidly, they shut it down.

The power of data-integrating solutions to create customer intimacy

Digital technologies are enabling B2B companies to get close to end customers quickly and cheaply, and these insights are providing tools that jump-start growth. Dunn & Bradstreet has joined forces with Salesforce Analytics Cloud to build a more valuable prospecting solution by making financial and firmographic data available to millions of salespeople, even via mobile device. Avery Dennison has found new ways to combine high-technology labels with data to improve end customer package line speeds. The label, packaging, data solution increases overall packaging productivity without giving up on-shelf impact.

At Prophet, we’ve become adept at finding new ways to help our clients leverage data integration to achieve growth. Here are four data-driven strategies that show plenty of promise. With this new data and fresh insights, the odds of success are better, and the stakes for failing to do so are higher:

Combine product, expert service with data Cisco has shifted its primary business away from just communications and networking/switching components to include systems integration, software, network design advice and monitoring. It’s enabled them to build and maintain powerful collaboration communities around key issues, such as productivity or call-center management. Landis + Gyr has moved beyond the sale of electrical meters to smart meters and provides data collection and analytics. It’s now working to improve the energy efficiency of the entire electrical grid, making it more resilient and robust.

Enhance your product with powerful data Halyard Health, formerly the Kimberly Clark Healthcare division, makes the gowns, masks and gloves that help control infections in hospital settings, a process that has come under intense scrutiny with the rise of such illnesses as MRSA and Ebola. In providing data on best practices, hygiene, and ER and OR efficiency, Halyard launched a service called AiRISTA, installing a simple tag at hand-washing facilities that tracks when and how frequently providers wash their hands. It helps ER personnel become more compliant with washing their hands, which in turn reduces infections and lowers hospitals’ re-admittance rates. In doing so, Halyard has moved from selling gloves and gowns to selling data powerful enough to significantly improve patient health and ultimately lower operating costs.

“The rare B2B company is able to prosper through a steady flow of extremely innovative products and services, offerings that are so unique and protectable that competition cannot keep up.”

Leverage data to go direct B2B companies can no longer sit on the sidelines and let others disintermediate their distributor relationships by appealing to their end customers. Channel conflict is an age-old issue, which expanding data access is rapidly making more complicated and more difficult to manage. Airlines such as United are no longer sitting and watching intermediaries (data collectors like Kayak) take control of the travel planning of large corporations with heavy travel needs. Others with historically restricted access to end customers, such as pharmaceutical companies, are providing data to build direct (if not actually transactional) relationships with physicians and sufferers around ways to improve overall patient health while keeping within regulatory restrictions.

Harness the power of data companies such as Citibank don’t just issue credit cards or use big data to improve campaign targeting. They are also organizing and finding insights based on their billions of transactions to use as a separate business to support their B2B clients. They are helping their B2B clients improve forecasting demand for products, adjust merchandising plans and modify staffing assignments based on improved access to high-quality data.

Make this search for solutions better than the last
Often, our clients tell us they’re not sure where to begin the search for the best ideas for integrated solutions. We’ve found three guidelines keep B2B companies on track:

• Get closer to your customers: Putting the customer—and your customer’s customers–at the center of your decision-making has never been more important. Understand deep needs and behaviors, and study what they do on the web. Push beyond traditional market research methods to collect and mine actual behavioral data on your customers.  Augment everything you do with collecting data on web traffic.  The best solutions come from a more nuanced understanding of customer behaviors based on data and traditional insights gathered from market research.
• Build, buy or partner: In many cases, the data and insight landscape is changing too fast for you to become an expert. You can choose to build, but it will require a multi-year investment with low NPVs in the short term. Explore partnerships and potential acquisitions. You can accelerate your knowledge more quickly by leveraging what others already know about how to effectively use data.
• Stay committed: Integrated solutions take time to get right. Be ready to fail fast, but don’t back down. Failures are to be expected, and even encouraged, because in regrouping, you’ll improve your organization’s agility.

B2B growth leaders such as Avery Dennison, GE Healthcare and Pentair share a few common essentials that are the key to their success. They prioritize meaningful innovation. They target customers who appreciate value and are willing to pay more for it. They create and deliver solutions that are hard to duplicate.

Accomplishing this takes hard work, a belief in profitable growth and an unrelenting focus on the underlying needs of customers. Put simply, these companies think through where to play and how to win one application, one industry segment at a time.

We’ve worked with B2B companies with a strong track record of sustained, profitable revenue building and have since identified five growth essentials for success:

Focus On Your Customers

You have to focus on the customers who are the key decision-makers in the value chain. A manufacturer of labels has to think about the CPG company that determines how packages are labeled, not just the distributor. Commercial insurers need to add value to the companies seeking risk management who ultimately buy their products, as well as the brokers who sell them. Finding the right decision-makers and building relationships with end customers is crucial. Their insights will ultimately drive new product and service innovation at your company.

“Finding the right decision-makers and building relationships with end customers is crucial.”

Avery Dennison put its core label business back on a sustainable growth trajectory by supplementing its distributor-focused sales effort by identifying, understanding and addressing the needs of the end customer – packaging engineers who were the drivers of packaging decorating innovation. Segment teams learned where packaging engineers played and who advised them in different industries. The Avery Dennison segment teams determined how to tailor innovation and product information to meet their requirements. By making innovation and marketing more relevant, they boosted sales.