Tips for Achieving Sustainable Volume Growth

When launching growth initiatives, we often aim for their Total Addressable Market (TAM)—the largest potential market we can reach. However, this can lead to spreading our efforts too thin and disappointing results. Instead, focusing on the Service Obtainable Market (SOM)—the segment we can realistically serve with current capabilities—provides a more achievable target and smarter resource allocation. Concentrating on SOM allows us to create strategies tailored to the specific needs of the customers we are prepared to serve right now. This approach aligns better with current market demands and increases the potential for sustainable growth. Starting strong in a smaller area can pave the way for broader success later. Examples: • 𝗚𝗲𝗼𝗴𝗿𝗮𝗽𝗵𝗶𝗰 𝗘𝘅𝗽𝗮𝗻𝘀𝗶𝗼𝗻: A dessert brand focuses on introducing its new frozen treat in warmer temp regional markets with a known appreciation for frozen desserts before planning a nationwide launch. • 𝗡𝗲𝘄 𝗣𝗿𝗼𝗱𝘂𝗰𝘁 𝗟𝗶𝗻𝗲: A beverage company launches a new line of organic juices in cities known for health-conscious consumers to test market reaction before rolling it out to broader markets. • 𝗡𝗲𝘄 𝗩𝗲𝗿𝘁𝗶𝗰𝗮𝗹: A gourmet snack company begins selling its new artisanal chocolates in upscale grocery stores, aiming to establish a premium brand image before expanding to more general supermarkets. To do this... 1. We have to say 'NO' to the allure of being opportunistic 2. We have to say "YES' to winning where we've already got strength 3. We have to niche down into our SOM until it hurts (especially for visionaries) Last year, we were winning new clients at Schaefer in many categories. Sidnee and I were saying "yes" a lot. We saw opportunities everywhere, and we doubled our revenue year over year. That sounds like a win, right? Wrong. Not all growth is healthy. In the process, we discovered that our win rates were far lower outside of our niche (food & beverage). We were expending far more energy into these other deals than when we showed up to a new opportunity with the deep experience we have in food and beverage brands. The difference was stark! By conserving more energy and resources during the sales and operations process, we've found that we win more work, have better output across all clients, and are carving out a leadership position as a boutique research and marketing strategy firm helping food, beverage, and nutrition brands nail their next expansion. How can being more focused on the customers you currently serve help you find more success? --------------------------------------------------------------- 🤔 Poor strategy kills even the greatest effort --------------------------------------------------------------- Need help entering a new market? Geography | Verticals | Product | M&A We can help you make the right decisions. Backed by strategy.

CannaBrands, here are 5 strategies which I’ve found consistently drive profitable and efficient growth without costing any extra money 1. Increase your focus on high value customers—I used to conduct quarterly business reviews with our biggest dispensaries where I’d calculate how much money they lost each day when they stocked out of our product and resorted to selling cheaper substitutes. I’d also prime them for upcoming new product launches. This is a time to show them how you can support their success, not how superior your product is. 2. Target the geographies where your prime demographic shops—our brand packaging, product formats, and price points appealed to soccer moms and high tech employees who shopped at Costco and weren’t as price sensitive. This is a main reason our highest volume stores were concentrated in Bellevue, Redmond, Issaquah, and Kirkland. (If you’re not familiar with the Seattle area, this is where Microsoft, Costco and T-Mobile are headquartered) 3. Offer to set up Vendor Managed Inventory—partnering with a customer in this way will cut down on phone calls, emails and delays in your sales process. Make sure you keep the trust that you’ve earned. Don’t overstep by overselling. 4. Focus on regions where you’re not getting your fair share of the business—some states publish free sales data by county. In Washington, it was 502data.com. Since we had statewide presence, I’d compare our geographic revenue mix to the industry’s, and if we under-indexed in a highly populated county, I’d target the biggest stores in that area. 5. Land and Expand in your stores—new stores would often buy only one or two of our product lines at the start. So I’d incent the sales team to sell-in additional lines over time using the formula: 100 stores in your territory x 10 possible product lines = 1000 total lines. The incentive $$ stepped up when your stores portfolio hit 40%, 50%, and 60% of that 1000 total. There you have it. 5 strategies which require some extra effort, but no extra money to execute more profitable and efficient sales growth. I guess that’s not 100% true—the commission checks will be bigger, but that’s a good thing, amirite? What strategies and incentives have you found successful? #fractionalcfo #cannabisindustry #consultingservices

I’ve spent the last few months examining our business model at Barrel and distilled 3 actions for sustainable growth: 1. Hone in on an ideal client profile and be disciplined with the opportunities we choose to pursue. 2. Build trust by delivering value and great client service on the first engagement with a newly acquired client – it doesn’t have to be a big-budget project but preferably an impactful project that demonstrates that working with us is a good investment. 3. Be proactive in learning about the client’s business, priorities, and goals. Have conversations about what other areas of the business may benefit from our involvement and be prepared to provide approaches & pricing on ways to continue working together. Are any of these surprising or expected? Let me know your thoughts.

Here's a crucial piece of advice for fashion brands experiencing their first wave of growth 👇 Imagine this... Your fashion brand is riding a wave of success. Sales are booming, and your brand is gaining traction. VCs offer you money to amplify that success by significantly increasing your advertising spend. The appeal is undeniable-you're on a high and you want to keep the momentum going. Plus, you'll have the money to invest. So, why not go all in? Here's what often unfolds over the next 6 months: Initially, everything seems great. Your ads are performing well because your brand is trending, and customer acquisition costs (CAC) are low. However, this honeymoon phase doesn't last forever. Organic growth begins to wane, as it inevitably does in any growth cycle. As a result, the once impressive performance of your ads starts to fade. The actual value these ads were adding becomes questionable, likely overstated by optimistic weekly reports. Before long, your CAC increases dramatically. What once took a few months to see a return on investment now stretches to 12 months or more. As a consequence, your cash reserves dwindle rapidly, putting your business in a precarious position. I think a lot of fashion brands can relate to that. DO THIS👇 → Sustain Organic Growth 1) During the initial growth phase, focus on maintaining a healthy profit margin on the first order from new customers. 2) Continue to invest in organic growth strategies such as SEO, content marketing, and social media engagement. These methods build a sustainable foundation that doesn't rely solely on paid advertising. → Monitor CAC & LTV Cohorts Closely 1) Keep a close watch on your customer acquisition costs and be wary of rapid increases. 2) Consider diversifying your marketing spend to include a mix of organic and paid. 3) Make sure your customer quality doesn't suffer as you scale. Cohort analysis is a must (RetentionX). Your initial LTV assumptions must be sustainable. They must hold as you scale. → Avoid Over-Scaling Too Quickly 1) Don't rush to scale your advertising spend without understanding its true impact on your business. 2) Increase your advertising budget gradually while closely monitoring the results. Avoid sudden, unsustainable spending spikes. → Protect First-Order Profitability 1) Ensure that your first-order profitability remains robust as you scale. 2) Optimize your product pricing and cost structures to maintain healthy first-order margins. This ensures that your business remains profitable even as you invest in growth. → Plan for Long-Term Sustainability 1) Focus on building a business model that balances short-term profitability with long-term growth. 2) Develop a strategic plan that includes multiple revenue streams and continuous improvement of your products and services. This will help create a resilient business that can withstand market fluctuations.