How To Increase Organic Growth (With Benefits and Examples)
Updated February 3, 2023
Companies can use an array of strategies, including organic growth, to develop or scale their business. With organic growth, organizations can boost their output, attract new customers, create new products or services and increase their investors' confidence. Understanding organic growth can help the organization where you work reach its revenue and performance targets without external help.
In this article, we discuss what organic growth is, why it's important and how to increase organic growth to accomplish business objectives.
Organic growth relies on increased sales and revenue through internal efforts that progress naturally rather than by external expansion in the marketplace.
Implementing organic growth involves effectively using available resources and capital and developing an in-depth understanding of the target customer base.
Strategies that companies can use to achieve organic growth include honing their brand, optimizing their performance metrics and continually looking for improvement opportunities.
What is organic growth?
Organic growth is a business strategy that seeks to increase growth from the internal efforts of a company. It's a vital performance metric that proves an organization can increase its earnings, revenue, customer base and market share through efficient management and industry best practices. Organic growth requires the efficient use of in-house expertise, capabilities, skills, experience and brand visibility. It depends on an organization's ability to expand its business with existing customers and add new clients. Organic growth reflects the quality of leadership and a firm's commitment to long-term development goals.
Organic growth differs from inorganic growth, which depends on mergers and acquisitions, takeovers and other strategies that increase a company's assets, liquidity and liabilities. For organic growth to occur, the expansion must come from within the firm's existing businesses. Successful companies pursue organic growth with multiple strategies and have extensive capabilities to achieve strategic objectives.
Why is organic growth important?
Organic growth can translate into a broad range of benefits, including:
Increased output: Since organic growth entails using available resources to grow a business, firms that use this strategy increase output to meet the varied demands of their customers. To increase output, organizations typically identify target markets willing to pay for their products and services.
Expanded customer base: Organizations that pursue organic growth can increase their business with existing customers. They usually also create improved promotional and marketing tactics to reach more leads and convert them to buying clients.
New product and service development: An expanding customer base means more agile product and service development to better serve the unique needs of specific market segments. Organic growth objectives help organizations improve their research and development efforts, understand their customers' needs and create products and services that solve the market's problems.
Improved investor confidence: Sustained organic growth can increase investor confidence in a company's ability to deliver growth and meet shareholder expectations. Organizations that can use resources to meet business goals often attract investors and enjoy higher stock market values.
How to increase organic growth
Generating organic growth requires the efficient use of available productive resources and capital, sound management and an in-depth understanding of your customers and industry. Here are eight strategies that can increase a company's organic growth:
1. Know your customers
An important strategy for increasing organic growth is to research and understand your ideal client. Having a clear understanding of your market makes it easier to make informed decisions during product and service development. Your marketing efforts may also be more effective because you can focus your campaigns on the preferences and needs of the target customers.
The information you generate from client research can help you craft relatable brand messaging and improve the company's market position. It may also allow you to create powerful sales plans that address the major concerns of a willing market.
2. Define your target market
Increasing growth organically requires identifying target markets and focusing on niches that are most likely to buy the business for which you work. Rather than trying to sell to every market, businesses that use organic growth strategically focus marketing efforts on target segments of the market where they have a record of or expect to find the most success.
Directing marketing efforts at niche markets can help you create distinct products and services that may best serve different customer preferences. You may also be able to design more specific marketing campaigns and engage each buyer segment on the right platform. This can improve communication and provide you with actionable feedback to optimize customer satisfaction.
3. Create a unique brand image
A great way to increase organic growth is to differentiate the voice and brand of your company from its competitors. A unique brand can distinguish a business from its competitors through distinct products, services, features or benefits. This also allows a company to develop a distinct brand voice that highlights the value clients can get only from that organization, which can increase market share and boost revenue.
For a brand differentiator to deliver increased organic growth, make sure it's factual, provable and relevant to the target market. A company's messaging can provide verifiable evidence of the value customers may get from its products or services. It might also demonstrate how the company's expertise solves clients' problems and other features that make its products or services the best solution for their challenges.
Read more: 4 Steps to Building a Brand
4. Invest in existing high-growth activities
One of the best paths to increased organic growth is to reallocate resources from different aspects of a business to existing activities that deliver higher returns. This can involve investing in a bigger factory to improve the quality and quantity of a product.
A company may also redirect resources from traditional marketing to digital advertising to better target its customers on their preferred social media networks. For this strategy to yield positive results, the organization typically analyzes its operations and identifies those that might deliver better results with increased investment.
5. Create new offers
Another effective strategy to improve organic growth is to create new products, services or business models. The data from client research can help identify the various market segments that use the company's products and gaps in customer expectations. You can use these inputs to design and develop improved products and services that address the unique needs of specific customer segments, gaining more buyers and increasing revenue.
Organic growth can also come from new business models. Improvements in technology and consumer behavior provide more ways to serve the market. Try to identify or create new business models and gain a significant market share.
6. Improve performance
If you've identified a customer base and developed products and services that meet their needs and expectations, improving internal performance can also result in organic growth. For instance, a company might revise its sales strategy to increase repeat business or increase its market share in new regions. You might also look for ways to reduce organizational waste, such as by optimizing the efficiency of staff members or internal technologies.
7. Track key performance indicators
Measuring performance metrics allows you to identify both successful and underperforming campaigns, products, services and business models. You can scale high-performing offers and stop or adjust others to improve results.
A key function of performance metrics is data analysis. Organizations that use organic growth usually learn how to collect data from multiple sources to assess the health of their businesses. These organizations also can create actionable insights based on this data related to long-term strategies or goals.
8. Identify the company's core strength
A company can use a single path or multiple strategies to achieve organic growth. Others may only choose one method to boost organic growth. To create sustainable growth from within, identify the top strengths of the company you work for and create data-driven plans to bolster or promote those strengths.
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