If you’re in the scale-up stage of your business, you might have heard the buzzword ‘growth marketing’ a lot many times. But what exactly is growth marketing? Do you need to adopt growth marketing to grow your business? How is it different from traditional marketing? These are some of the most common questions that any early-stage founders and entrepreneurs wonder about.
Over the last few years, growth marketing has become immensely popular among marketers and business owners. Not just the term, but the adoption rate of growth marketing among marketers has been significant too. In a nutshell, growth marketing is a data-driven process that focuses on every marketing funnel stage, unlike traditional marketing that focuses only on the top funnel of customer acquisition.
Why growth marketing is important in 2021
Growth marketing is challenging. It requires a complete re-evaluation of your marketing strategy and approach to convert and retain clients. However, if it is done right, it is worth the investment.
Whether you like it or not, the competition businesses face now is tremendous. With innovations and technology, startups are disrupting the traditional way of doing business. Hence, the onus lies with the marketers to help companies start and earn more revenues than ever. The top four reasons why growth marketing is worth a shot is because:
Linear path to purchase is a passe
Earlier the journey of a customer from awareness to purchase was predictable. But with the disruption created by technology and the internet, the nonlinear buying journey is a common trend among users.
If you want your company to scale up, you need to focus on every stage a user goes through to make a purchase, and that’s what growth marketing is all about.
Making client retention a priority
Although it is a no-brainer that it costs at least ten times more to acquire a new client, many companies fail to retain their clients. High client attrition means your revenue gets impacted negatively, minimizes your company reputation, and, more importantly, slow growth rate. Additionally, with a high client attrition rate, it becomes further challenging to acquire new customers.
Growth marketing helps you fix this issue. Leveraging growth marketing, you start focusing on your existing customers to build brand loyalty, keep them happy, and engaged. This helps to improve client retention and enables you to attract new clients through word of mouth and positive reviews.
Integrating merchandising and marketing
Many companies now integrate their merchandising and marketing efforts. If you are stuck to traditional marketing, you are just focusing on the top stage of the marketing funnel, thus missing out on customers in other funnel stages. But with growth marketing, your sales team is better positioned to gauge in which stage a customer is in and provide valuable information accordingly that helps boost sales.
Growth marketing is a data-driven process that focuses on every marketing funnel stage, unlike traditional marketing that focuses only on the top funnel of customer acquisition.
Growth marketing vs. marketing
If your company is just like any other companies you might be using traditional marketing like using advertisements on television, print, radio to promote your product or service. While there is nothing wrong with conventional marketing, it often under-delivers. That’s because most of the time, the consumers research online or rely more on word of mouth to make their purchasing decision.
On the other hand, growth marketing is a relatively new form of marketing where the marketers take a data-driven marketing strategy for rapid growth, increasing revenue, and client satisfaction. Growth marketers are a pro at taking risks at every stage of the marketing funnel.
Important components of the growth marketing strategy
An effective growth marketing strategy can be built around important customer acquisition rates, customer lifetime value, customer retention rate, etc. Here are some of the most popular and effective tactics that growth marketers use. Although these are widely used in the e-commerce space, brick and mortar businesses can leverage them too.
The whole purpose of cross-channel marketing is to engage with your customers wherever they are. So, it can be push notifications, email marketing, SMS marketing, in-app message, etc. Remember, it is important to integrate different marketing channels in your growth marketing strategy to maximize your ROI.
A/B testing or, as we know, multivariate testing can be used in landing pages, email marketing, social media ads, and many more. In this test, you put test A or test B or a series of multiple tests to understand which content type works best for your business. Based on the results, you can tweak your marketing campaigns to get the best results. Remember to customize your test for a specific segment of customers to maximize growth.
The customer lifecycle is the different stages a customer goes through, from generating awareness to conversion and repeat. However, growth marketers focus more on three critical lifecycle stages. These are activation, nurture, and reactivation.
In this stage, growth marketers target prospective customers to make them aware of the product. For example, offering free trials is an excellent way to make the customer familiar with the product.
During the next stage, companies engage with the customers and nurture them. Most of the cross-channel marketing happens through different marketing channels like email marketing, push notifications, newsletters, etc.
The final stage is the reactivation stage, when growth marketers focus on re-engagement. This stage is essential for customer retention and building brand loyalty.
There is no reason to believe that one stage is more important than the other two stages. Customers progress naturally through each of these stages at their own pace. Hence growth marketers need to be proactive and tap each of the steps for better engagement and conversion.
The 5-step growth marketing framework
Although the concept of growth marketing is new, its principles have been there for a long time. Today marketers are powered with an array of tools and data that help them to make decisions in unprecedented ways. While evaluating a business for stimulating its growth, marketers rely on a 5-stem growth marketing framework. This includes the following:
North Star Metric
Although the term growth is used loosely by businesses and marketers, what growth means can differ from company to company. It is essential to understand what change means to your business before you decide on the growth strategy. This single point of reference is known as the North Star Metric and is critical to determining your growth measurement. For example, your North Star metric could be sales, leads, subscribers, etc.
Product or Market Fit
As defined by Marc Andreessen, product or market fit means “being in a good market with a product that can satisfy that market.”
If you’re an early-stage business, it won’t be worth investing your time and efforts to scale up until you achieve product/market fit. This means, unless you are addressing an issue to a sizable market, you’re not ready for growth. Not yet.
Data and analytics
The most significant benefit of growth marketing is you are armed with a plethora of data and data analytics tools to make an informed decision. With so many tools available at your disposal, you cannot ignore to leverage them. Any marketing efforts that are not backed by data is like shooting in the dark. Make efforts to choose the right tools that can help you get a deep insight into your business.
Analyze the funnel
Market funnels are unique to businesses that help you gauge the user journey. A funnel has several stages like awareness, interest, evaluation, and action. Marketers map the data received from different analytics tools to these user journey stages to identify the bottlenecks and user drop-offs and take necessary measures to remove those bottlenecks.
Analyzing your traffic
Once you know your user journey, it is time to identify the traffic source. Knowing where your users come from can help you determine the right channel mix. While traffic source and channel mix are unique for business, understanding the sources can better leverage the sources. Broadly categorizing, your traffic source can be divided into paid traffic and organic traffic. If you’re just starting, your focus should be more on organic traffic. But if you’re scaling up, focus on paid traffic too. Having your brand showing up on the paid search will ensure that your competitors are not stealing away traffic when potential customers are looking for your business. If you’re receiving traffic from one channel, that doesn’t stop you from trying alternative channels. Try out small and experiment to see which channel mix works best for your business.
If you are looking to scale up or already seeing substantial growth and looking for ways to tweak your marketing capabilities to maximize your ROI, it is the right time to leverage growth marketing.
Other elements of the growth marketing framework
Know your customers
If you are in business for a good amount of time and looking to scale up, you would already have this data handy. You know exactly who you are selling to. But if you are just starting, you need to have customers, any customer, to determine the buyer persona. Once you have the hard cold data, analyze it as minutely as possible because you need to know everything about this person you are selling. Once you have the buyer persona ready, tweak your marketing efforts to give your customers a sublime onboarding experience.
Align your story
Once you have your buyer persona ready, it is time to align your ‘story’ with your buyer persona. In other words, your buyer persona should be able to resonate with your ‘why.’ Remember, when you align your story, do not fake. Your why should be connected to the buyer’s purpose, be innovative in presenting your solution, and finally, it should be dynamic to keep up with the market changes.
Find the right team
The success of your growth marketing relies heavily on the kind of people you hire in your team. Know that although there is no clear-cut rule on how a growth marketing team should look like, each business has its bandwagon. An ideal growth marketing team should create a smooth and frictionless experience throughout the entire marketing funnel. For example, a tech company, especially a SaaS company, may have its growth team heavily skewed towards engineering. In contrast, a service business may have a writer or a developer with design skills.
Growth marketing can be as simple as tweaking a button here or there or as complex as redoing the entire marketing strategy. The growth marketing method is not for everyone, and not every business can see growth and increased ROI by embracing growth marketing. If you’re just starting, focus more on solving a genuine problem for a sizable market. Unless you have a solid foundation, you’re not ready yet to embark upon a growth marketing journey. On the other hand, if you are looking to scale up or already seeing substantial growth and looking for ways to tweak your marketing capabilities to maximize your ROI, it is the right time to leverage growth marketing. Consider the growth marketing framework as your starting point to devise your growth marketing strategy.