When it comes to growing your business, the most successful CMOs think in portfolio terms to make the most of short- and long-term opportunities.

The Chief Marketing Officer (CMO) role is evolving, and CMOs must adapt their skill sets to stay ahead of the curve. As growth leaders in professional organizations, CMOs always look for new ways to improve their marketing strategy and get ahead. One way to do this is by taking a cue from venture capitalists and thinking about portfolios. By analyzing the business mix and balancing investments, CMOs can create a framework for making intelligent decisions about where to allocate business resources to maximize growth.

Why does your business need a marketing growth strategy?

The most successful venture capitalists and business owners are always looking for ways to grow. Brands can leverage a growth strategy to increase market share, revenue, and profitability. A growth marketing strategy can help organizations achieve their objectives by taking a portfolio approach to product and business development.

When it comes to expansion, a portfolio approach can help organizations make better decisions about where to invest in products, services, markets, and channels. It's essential to understand each of your portfolio assets in order to allocate resources to each of them properly. It means thinking about each product, service, market, and channel as assets for your department to manage to generate the best return.

Thinking about your growth strategy in portfolio terms

The idea of thinking in portfolio terms comes from business strategy. In the 1990s, Mehrdad Baghai and his colleagues from McKinsey & Company published The Alchemy of Growth. Their findings and observations introduced the concept of portfolio thinking to the business world.

In their formulation, Horizon 1 corresponds to managing the current fiscal-reporting period with all its short-term concerns. Horizon 2 relates to onboarding the next generation of high-growth opportunities in the pipeline. And Horizon 3 corresponds to incubating the germs of new businesses that will sustain the franchise far into the future.

The basic idea is that businesses, and marketing channels, are like portfolios. Products, services, markets, and channels represent business "assets" that grow at different rates and provide different levels of return. Just as a CFO must balance a financial portfolio to achieve optimal results, a CMO must manage a marketing portfolio.

What are the major objectives of adopting growth strategies?

Growth marketing strategies increase demand, market share, revenue, and profitability. Demand generation is creating awareness and interest for your brand, product, or service, while market expansion entails growing the size of your target market. On the other hand, market share growth involves capturing a more significant portion of an existing market for your organization. Revenue growth comes from pricing strategies or offering new products and services to existing customers. Cost reduction initiatives can increase profitability by growing the top line faster than expenses.

Growth strategies are essential for every business portfolio because they encourage companies to pursue goals beyond what is possible in the market today. Companies leverage growth strategies because companies desire to lead, outpace the competition, and improve the overall employee (EX) and customer experiences (CX). All these objectives ultimately improve top- and bottom-line performance for the business.

What makes growth marketing so effective?

Marketing teams are constantly thinking about how to create value for their customers and their organizations. A growth marketing strategy is an effective form of marketing because it helps businesses focus on expansion opportunities. When done correctly, growth marketing can improve a company’s overall performance by increasing market share, revenue, and profitability. Growth marketing can also help businesses enter new markets and product categories.

How do you develop a long-term strategy?

To be an effective growth marketer, CMOs need to think like brand strategists, salespeople, and venture capitalists. It requires they understand (or develop) the company’s overall vision and objectives and have a deep understanding of the competitive landscape and customer needs. Growth marketers also need to be able to think long-term. Growth marketing initiatives can take months or even years to pay off. Thinking like a business strategist will help CMOs develop the skills and knowledge necessary to lead growth marketing initiatives effectively.

How does business growth affect marketing strategies?

As a CMO, you're primarily responsible for growing your business and brand strategy. Think of yourself as a business owner, use the portfolio framework to analyze your growth strategy, and make sure you invest wisely. For example, let's say you have two product lines: one generating a steady stream of revenue (i.e., a cash cow) and one growing rapidly (i.e., a rising star). The cash cow is older and well-established, while the rising star is newer and attracts a new target audience.

If you were to invest all your resources into the latter, you would neglect your cash cow and put your business at risk. If you focus only on the cash cow, you might miss the opportunity to capture a new market with the rising star. The key is to find a balance between the two extremes and invest accordingly.

What should a growth strategy consist of?

The objective for CMOs is to think in portfolio terms to make better growth, product, and business development decisions.

An actionable growth strategy should consist of the following three key elements:

• How can marketing create and capitalize on short-term opportunities?

• How can marketing discover and make the most of high-growth opportunities?

• How can we use marketing research and development (R&D) to explore new business opportunities?

What are the four growth strategies in marketing?

As the CMO, you are the primary driver of growth in any professional organization. Your job involves 4 common growth planning strategies that include 1. New market penetration; 2. Attracting new audiences; 3. Product development; and 4. Improving sales and e-commerce efforts.

As the Marketing leader, CMOs lead out on market development and expanding into new markets with a go-to-market strategy. You're also responsible for customer acquisition marketing efforts to attract new target audiences or provide something new to existing customer segments. Marketing is the voice of the customer within an organization internally and works with product and engineering teams to develop new products or services. And the CMO oversees sales efforts through direct-to-consumer (B2C), business-to-business, digital marketing, retail, affiliate, wholesale, and e-commerce.

1. New Market Penetration

The simplest way to grow a business is often to increase your market share. You can grow your market share quickly by focusing on improving sales to existing customers or finding new customers in your existing markets. When you start seeing a diminishing ROI in your current market, it might be time to explore expansion in new and adjacent markets. When evaluating your go-to-market strategy for entering a new market, it's essential to consider the following factors:

- Is there an opportunity for growth?

- What are the entry barriers?

- How much does it cost to serve this market?

- What is the potential return on investment?

2. Attracting New Target Audiences

A human-centered approach is essential to understand your customers and to attract new target audiences. You may focus on attracting high-value customers who will spend more money on your product or service. On the other hand, you could focus on acquiring more customers who will spend less on an individual basis. While individual sales will have less value, acquiring them in higher volumes might be easier. The net result is the same. Successful CMOs use market research to segment their target audience based on the portfolio mix of products, services, channels, and customer demographics.

3. Product Development

Products and services only genuinely exist to serve their intended customers. Therefore, product and service development should come from market research conducted by the CMO and her team. The best Marketing departments use data-driven insights to inform product vision and provide clarity to product and engineering teams.

A brand extension is often referred to as brand leveraging. It's an efficient form of product development that helps achieve diversification, as well as both short-term and long-term growth. It involves using your existing brand and extending your products or services into new categories to reach new potential customers. It's surprisingly efficient and innovative to improve top- and bottom-line ROI.

4. Improving sales and e-commerce efforts

CMOs should lead the business in customer acquisition and customer experience by working with the sales and customer service teams. Better customer experiences lead to more transactions, higher order value, and repeat customers. Creating a more efficient sales process, asking customers for feedback, and using data to understand better customer behavior can improve the customer journey.

What are some growth strategies for e-commerce?

Growth hacking is a digital marketing strategy focusing on rapid growth to capitalize on short-term growth and explore new business opportunities. A growth hacker uses creative, cross-disciplinary marketing efforts to acquire new and retain existing customers. Once they succeed with a particular product, service, market, or channel, they devote more resources to developing the portfolio asset until they see a diminishing ROI.

For example, A/B testing your e-commerce experience is an excellent method for acquiring new users and increasing conversion rates. Growth hackers work with their teams to try digital advertising, social media, website landing pages, content marketing, and email marketing campaigns. They track the performance of each experiment to see what works best for their customers.

How can content marketing be used for growth hacking?

Growth hacking is about experimentation and trying new things to see what works best for your brand. As a CMO, you should constantly look for new and innovative ways to reach your target audience. Content marketing is a great way to do this. You can use content marketing to create helpful and informative blog posts, eBooks, online courses, and infographics. By observing what works, you can make more content to reach your target audience and help convert them into customers.

Conclusion

By thinking like a business strategist, CMOs can create more value for their organizations and drive better results. Digital marketing is a constantly changing field, and staying ahead of the game is essential to keep the growth of your business on track.

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