If you need to identify new strategies for business growth, you may have to break a few rules to do it.
The high-speed changes of the past two years have left many companies reminiscing on simpler times when traditional business strategy rules were predictable. But to stay on top of your A-game in today’s evolving environment, you need to be willing to embrace the new.
One thing’s for sure: these days, business as usual is consistently unusual. A global pandemic guides business decisions, operations, and consumer trends. So, if you don’t have old rules to fall back on–what strategies should you implement for business growth?
You make new rules.
Whether you like it or not, business strategies have changed (sorry, not sorry), and the traditional rules simply don’t work. If you want to stay ahead of the competition, you need to live dangerously. Here’s our list of five business strategy rules to shatter, and new rules to embrace to make an impact in 2022.
01—The Rule: In a down-market, you’re supposed to decrease prices, increase output, and bring in new customers.
The Rebel Rule: Downturns are a great time to recalibrate. Utilize the under-the-radar period to launch and scale your marketing strategies for business growth.
The retail industry was hit hard during the 2020 pandemic, resulting in many retailers filing for bankruptcy. (Including well-known, established brands). Many brands didn’t survive, and those that did had to adapt their marketing and business strategy to foster growth in a rapidly changing environment as customers flocked to online shopping. Survival was paramount. In a dog-eat-dog world, old rules would say, decrease your price and increase your output, so you don’t go under.
But, what do we do to old rules? That’s right, we break them. And that’s just what Lululemon did.
Lululemon’s business strategy
Lululemon, synonymous with women’s high-end yoga pants and leggings, refused to panic amid the uncertainty in 2020. While many retailers took a hit in 2020, the consumer trend for athleisure clothing was rising. Lululemon rode this demand and stayed the course for long-term growth. Despite store closures and lockdowns, Lululemon focused its marketing strategy on business growth and increased its net revenue by 11% in 2020. Was it luck, or was it ingenuity?
Growth beyond leggings
While retailers pivoted to survive an economic downturn with constantly changing norms, Lululemon invested in ambitious business growth. What should a successful women’s apparel brand do during challenging times? That’s right, increase production of men’s apparel and footwear. Makes perfect sense, right?
If it seems strange for a leader in women’s athletic apparel to change course to different products, it’s understandable. Old rules suggest Lululemon should buckle down on what they’re known for. But, we’ll say it again, old rules are meant to be broken.
Lululemon saw the pandemic as a time to grow and diversify. Instead of adopting a business growth strategy of increasing prices on their popular women’s apparel, they did something counterintuitive—they expanded their product line to reach new audiences. (And it worked.)
How is Lululemon expanding?
01—Men’s apparel. The company aims to double its menswear revenue to $1.4 billion in 2023.
02—Footwear. This means Lululemon can offer “head-to-toe” products for customers.
03—At-home fitness. Lululemon acquired Mirror, an at-home gym machine, to tap into the fitness subscription market.
It’s not only new products that are driving Lululemon’s success. Lululemon continues to attract customers with new services that their customers loved during the 2020 lockdown, like curbside pickup, virtual waitlists, and appointment shopping. Lululemon is listening to its customers and offering services and products that matter to them, and it’s paying off big time.
Breakin’ rules can lead to revenue gains
Sales are up and the future is looking bright for Lululemon. Even with a pandemic that limited stores’ ability to generate revenue, Lululemon experienced growth in 2020 and 2021 and is now a $1.45 billion company (and growing). Additionally, all signs point to Lululemon being on track to surpass its 2023 revenue target two years ahead of schedule.
So, how the heck did Lululemon race ahead of competitors during a retail meltdown?
The shift towards athleisure has certainly helped Lululemon gain traction over the past two years. But, most importantly, they did not idly ride the wave of consumer trends or panic in uncertainty. Instead, they worked their (yoga) pants off to break traditional business rules and took the opportunity to launch new products, invest in marketing strategies for business growth, and scale their brand.
02—The Rule: Customers only look for a good deal. You need to offer the lowest price to stay competitive
The Rebel Rule: You can’t skirt sh*tty service
Every brand wants to be known for providing excellent customer service. Five-star online reviews are the ultimate social proof that your brand is trustworthy and can lead to strong sales. In fact, 93% of customers are more likely to make a repeat purchase from a brand that offers good customer service experiences. On the flip side, the same platforms for positive feedback also provide a channel for dissatisfied customers. How can poor customer service backfire? In the worst way, it goes viral.
United breaks guitars (a literal smash hit)
A lesson for all companies: be kind to your customers (especially if they are famous musicians). United Airlines learned this the hard way in 2009 when a baggage handler destroyed a guitar as its owner painstakingly watched from the airplane.
The owner, musician Dave Carroll, made numerous attempts to get United to accept responsibility and compensate him for the damage. Nothing worked. So, after a year of trying to get a reimbursement, with little sympathy from United, he did what any musician would do–he wrote a song about it. The clever and catchy song, “United Breaks Guitars,” was released on YouTube and received over 20 million views. One analyst estimated that this one song did $180 million worth of damage to United.
Customer satisfaction isn’t just for show. It has real value. Once lost, it can have a very public domino effect if you’re not careful.
You can’t skirt sh*tty service.
Business strategies for growth in the age of the empowered consumer
The internet and social media have made it easy for customers to be vocal about brands they love (and those they don’t). One bad customer service experience can indefinitely damage a customer’s loyalty and have a ripple effect across the internet. So, how can you create a business strategy to prevent situations like United’s?
Invest in understanding your customers, your brand, and your company. The more you know the better set you are to deliver exceptional customer service.
03—The Rule: Move fast and break things
The Rebel Rule: Nope. Doesn’t save time and money in the long run; slow and intentional is best
“Move fast and break things” is well-known as the famous motto of Facebook founder and CEO Mark Zuckerburg. This mantra may have worked for a revolutionary company defining what we now call “social media” in 2004. Unfortunately, eighteen years later, “move fast and break things” isn't a marketing strategy for business growth—and just leads to a broken, expensive mess.
A startup breakthrough that broke down
Startups are under intense pressure to create tremendous growth in a short period of time. When millions of dollars from investors are on the line—you need to act quickly. However, all too often, there’s the pressure to do too much too fast. (It’s no wonder that about three-quarters of venture-backed startups fail.) Without a plan, you burn through cash and are on a collision course to failure.
An unfortunate example is Atrium, a legal services startup founded in 2017. Atrium failed in 2020 after a blaze of publicity after raising $75 million in funding. The original concept was a subscription model for corporate law firm services. But, the concept went belly up as Atrium pivoted its services without a marketing strategy aimed at business growth.
In, 2019 Atrium laid off most of its attorneys and paralegals and unveiled a whole new business strategy. Going forward, they would only offer tech tools for start-ups, no legal services. Rather than slow down, evaluate, and refine their business model, they went full speed ahead—and crashed.
Move fast, lose fast
The truth is, the “move fast” philosophy becomes a money drain quickly. When you fail to do your due diligence within the marketplace, you can’t scale your product to its next iteration. Ultimately, this costs you time and money retrofitting products with features that should have been there in the first place.
The race to success isn’t a sprint; it’s a marathon. To achieve the long-term success you need to take the time to understand your product, your brand, and your customers. If you move too quickly, you’re likely to burn out twice as fast.
04—The Rule: Cast a huge net – sell to everyone.
The Rebel Rule: No. We’re past the day and age where you can get away with using generalizations to reach your target. Specificity is the best way to differentiate. Deliver authenticity in a world of inauthentic experiences.
Authenticity matters to customers. Consumers want brands that are inspired and genuine. In fact, 86% of consumers say that authenticity is a key factor when deciding what brands they like or support. We always tell people to be themselves, but this applies to brands too.
While it’s important to market your product and services to a wide demographic (and constantly re-evaluate that group), it’s just as important to be intentional about who you sell to. So, who is successful in walking the walk of brand authenticity?
Patagonia: a purpose-driven business strategy
One brand that has seen tremendous growth by being itself is Patagonia. While many brands are constantly chasing the next big trend in an attempt to attract and retain customers, Patagonia succeeds by sticking to its core values.
Beloved by outdoor enthusiasts and environmentally conscious shoppers, Patagonia is a long-established apparel retailer known for its upscale outdoor clothing and environmental sustainability efforts. The Patagonia mission is to save our home planet (yes, that’s their mission statement). Instead of trying to sell to everyone, Patagonia is defined by its mission, which is a core part of its business strategy, and it has led to tremendous growth (14% annually) as a billion-dollar company.
Stay true to your brand purpose
Studies show that 62% of consumers want companies to stand up for issues they are passionate about. For Patagonia, they don’t just talk about sustainability to attract environmentally conscious customers. Nope, they donate 1% of their revenue to environmental causes and only use recycled and “Fair Trade” materials.
Communicating this as messaging in marketing materials has been positive for their business growth. The message and activities of Patagonia have resonated with its loyal customer base, and its business continues to thrive as a result. Patagonia demonstrates the powerful impact of a faithful brand purpose and why it’s critical for companies today to be authentic.
It’s easy to lose focus and get lost in trying to be everything to everyone. But, it’s best to be authentic to your brand, and success will follow. Simply be yourself.
05—The Rule: The end-user never sees the disconnects within your organization.
The Rebel Rule: You can’t ignore the dirty laundry. Internal disconnects—go external and affect end-user experience.
Missteps can happen within any company; no brand is entirely immune. The wrong product or social media message can lead to bad PR and angry customers. So, how do you get yourself out of hot water (or shield your brand from being there in the first place?). The answer lies in investing in solid brand market research and analysis, then pulling that through to your marketing strategies to drive business growth.
What is brand market research?
Brands are not solely defined by their products and services. Your brand is a complex mixture of your personality, mission statement, goals, and (even) humor. Brand market research is designed to generate the specific insights you need, so you can adapt to reach your goals. It helps you achieve a competitive advantage through objective and qualitative analysis. Basically, the more you know about your supporters, the better you can meet their needs and scale your business for growth.
Focus on your relevant audience
Brand market research isn’t just about what people are saying or thinking about your brand, but also which people are saying it. New customers will have a different opinion than old customers, and each view is relevant to help your brand stay on top of its game.
While you may not always like what is said –it’s essential to know who is saying what and why, so you can create lasting connections with your customers and ensure marketing strategies position you to fulfill your business growth goals.
Perception is reality
Consumer purchasing decisions are heavily influenced by perception. In fact, almost half of Americans don’t trust brands as much as they did twenty years ago. But, customer perception isn’t only about what is said about your brand. Perception is also a result of everything your brand does and creates. The more you know about how your brand is perceived, the better your position to cultivate a culture that will help you successfully weather any storm and be stronger than ever.
Dare to be a rulebreaker
Some rules were made to be broken, and we’re here to help.
At Rebel, we use data and analytics to provide insights into your organization and to help you chart new paths forward. Let’s work together to help your brand find truths in places you wouldn’t expect, to take you to places you never thought possible.