Growing a company that’s already quite large is notoriously challenging. Many of the world’s biggest firms and organizations struggle to grow at all during the latter years of their lives, before being disrupted or falling victim to changing consumer tastes. But what’s driving this underperformance? That’s the subject of this guide. We take a look at various traps companies fall into and ask whether any of them might be affecting you.
So, without further ado, let’s take a look.
Why Does Company Growth Sometimes Fall, Despite Regular Marketing?
1. Brand Perception Issues
Established brands can sometimes fall prey to brand perception issues. Customers may view them unfairly, or they may have a negative reputation. Brand perception, however, is critical in today’s economy. Companies have to get the social media mob onside if they want to thrive long-term.
Unfortunately, brand perception issues can develop quickly and without warning, even for small businesses. A few negative reviews or bad comments on social media channels can blow up out of all proportion, deterring future customers.
Dealing with brand perception issues usually requires direct intervention. Simply waiting and hoping for the problem to go away usually doesn’t work (since things tend to hang around on the internet for a long time).
Therefore, hiring a public relations agency is a good idea. These scour the web, looking for mentions of your company to see what’s being said and what, if anything, can be done to correct the negativity.
2. Customer Retention Issues
Large companies and organizations also struggle with customer retention issues. Most people don’t feel much loyalty towards the firms that they use when they are big. Customer retention issues can occur for numerous reasons, so it is difficult to offer a single solution to this problem. Problems can include:
- Poor customer service
- Lack of loyalty programs
- Failing to address complaints or persistent issues
- Erosion of trust
- No new deals
You’ll need to do some legwork to figure out which of these issues is affecting your firm. Usually, it is just one or two that you can drill into. For example, if customer service is the issue, you could add chatbots to your website and train human reps to be more capable.
3. Inefficient Resource Allocation
You also want to study to see whether your resource allocation is up to scratch. Large companies can market all they want, but they can fall from grace if they don’t keep costs down. Unfortunately, organizations are prone to bloat over time. New expenditures pile up, without anyone going through them and auditing them for relevance or usefulness. Sometimes, subscriptions can continue, even if no one in the organization is actively using them.
Inefficient resource allocation is an endemic problem and can be hard to root out. Most companies have success when they break into new, lean units and conduct a new set of activities within those. Keeping new teams at arm’s length encourages them to operate more efficiently until the point where they begin to rival the rest of the organization in terms of size.
Amazon tried this approach with great success, although that company was always fairly lean. It turned its cloud computing division into an almost separate company, allowing it to operate efficiently, similar to a startup. You could try something similar, creating new, tighter divisions over time. This approach works if you’re already locked into a specific trajectory with your existing business.
4. Marketing Issues
Regular marketing is okay when you want to grow a company. But if you run a large organization, its nature needs to change. It won’t work if you keep doing things the same way. For example, data shows that enterprise SEO services tend to outperform traditional approaches. They lead to sustained customer and revenue growth above what’s possible through conventional means.
Marketing can also run into trouble if the company doesn’t adopt tactics that help larger organizations maintain their reputation. For example, you might not be investing in digital PR or other strategies that dictate the online conversation. These marketing issues are usually easy to fix. Usually, all they require is a few changes in the marketing team. Alternatively, many agencies are now set up to help larger organizations. It’s not just about small businesses anymore.
5. Economic Factors
Unfortunately, unpredictable economic factors can also play a role and explain why company growth sometimes falls. These external influences, like tariffs or supply chain disruption, are challenging to mitigate. Just a regular recession can be hard on most firms, weeding out those with weaker balance sheets.
Fortunately, there are quite a few things the average brand can do to reduce the risk of growth stalling because of external events. These include:
- Changing marketing outreach to reflect the new conditions
- Innovating on existing offerings to make them more suitable for the current environment
- Building a large cash reserve that can be drawn down in the event of an economic emergency
- Building redundancies into critical supply chain elements or keeping more inventory
6. Product Stagnation
Finally, product stagnation can stall company growth and make it challenging for firms to make progress. If consumers always get the same experience, it may not encourage them to keep buying from you. Product stagnation is rare among startups since they usually have a new and exciting idea they want to run with. However, it is much more common the larger the organization becomes. Big companies have more resources, but they are also more risk-averse, meaning that they don’t always see the value in trying big new things.
Product stagnation isn’t something that will affect a company overnight; usually, it takes a few years to play out. However, it’s one of those things that continues to compound over time, especially if the rest of the industry is moving forward at high speed. The trick for dealing with this issue is to simply take a look at R&D policies and ask if your staff are really balancing risk and reward efficiently. Usually, you will discover that they are too conservative and unwilling to take the necessary leaps of faith that your enterprise requires.
Final Thoughts
We hope these five reasons have given you valuable insights about why company growth declines, despite regular marketing effort. By focusing on these specific areas, you can prevent this from happening and ensure your business growth is not adversely affected.