To paraphrase a viral meme:
What do we want? We want more customers!
How do we get them? With marketing!
But there's a significant difference between your garden variety marketing and growth marketing.
Today, you're going to learn what growth marketing is and how you can use it to get more customers.
What Is Growth Marketing?
Growth marketing is a marketing approach that helps companies grow faster by identifying their strengths, weaknesses, and strengthening their product-market fit through a series of marketing experiments.
In short, growth marketing helps companies grow by doubling-down on what their audience wants. That's why growth marketing teams focus on (A/B) testing and improving upon the areas that are already working well.
For example, a growth marketing team would look at a specific feature that users like the most, and then identify the reasons it works so well. With that knowledge, they'd proceed to apply the same principles to other features.
They reverse-engineer the traditional marketing process and use data to do it.
1.1. What Is the Difference Between Growth Marketing and Traditional Marketing?
For example, the traditional marketing process looks like this:
- Create a product
- Find the right audience
- Convince the audience to buy the product
Growth marketing has a different approach:
- Analyze the product and the company to find areas of high growth or areas that perform exceedingly well for customers.
- Identify what makes those areas so successful. In other words, why do customers flock to them?
- Apply the same principles to other products, features, and campaigns
In traditional marketing, marketers often experiment with methods and tactics they're not sure will work.
On the other hand, in growth marketing, you're focusing on what already works and then doubling-down on it to stimulate even more growth.
And it's all driven by your data and your customers.
Traditional marketing also tends to focus solely on the top of the marketing funnel, the part where the sales come in.
However, customers have to go through an entire journey to get to the top.
And growth marketing specializes in the entire customer journey, i.e., customer life cycle, from the first touchpoint to the very last.
Growth marketing improves every part of the marketing funnel.
In practice, growth marketing has been commonly employed by startups and SaaS companies that want to reach extreme growth. Just look at Facebook. The platform managed to become the number one social network in only a few years – thanks to growth marketing.
On the financial side of things, growth marketing is also cost-effective.
All the experiments are data-driven, so the success rate is much higher.
2. What Does a Growth Marketer Do?
A growth marketer:
- Identifies areas for optimization and growth, including digital marketing, lead generation, top of the funnel, email marketing, company growth
- Analyzes data
- Works with his team to create and implement data-driven growth experiments
- Analyzes experiments from results
In short, a growth marketer is a passionate data analyst with a penchant for taking action.
3. How to Create a Growth Mindset
The key principles for creating a growth (marketing) mindset are:
- Make data-driven decisions
- Implement practices for eliminating data silos
- Analyze your data and communicate with your customers
- Encourage your entire team to think of failures as opportunities.
- Identify goals and rally everyone on your team around your purpose
- Create a seamless feedback loop between different departments in your company
- Structure your growth experiments well (understand the reasons why they are(n't) suitable, outline clear goals, methods, and use metrics to keep track of performance)
In short, communication is critical.
This is why companies normally have growth teams (composed of marketers, salespeople, engineers, and analysts), and not lone growth wolves. This team has to communicate seamlessly, exchange feedback, and focus on the ultimate purpose.
4. The Growth Hacking Process
The entire process of implementing growth marketing is often called growth hacking. It's a colloquialism for skyrocketing your growth thanks to the application of often unconventional tactics.
Growth hacking takes place through 6 steps that cover the entire marketing funnel:
- Market segmentation
- Market targeting
- Awareness building
- Conversion optimization
- Promotional mix optimization
- Long term marketing tactics
4.1. Market Segmentation and Growth Marketing
Before you get to work, you need to know who your customers are and what they expect from you.
Growth marketing is especially beneficial if you've been doing business and have an audience already.
So the first step is to conduct detailed audience research, based on the prospects and customers you already have. Instead of brainstorming, start surveying: what do your best existing customers have in common?
Pay attention to the term “best existing customers.” The key to growth is not attracting even more prospects that you'll have to convince, but prospects who are already the perfect fit for your product.
Then, create customer personas with the following data:
- Technical knowledge
- Usage and purchase cases and behavior
- Benefits your customers have from your products
By the end of this step, you should understand who your best customers are and what they have in common.
4.2. Market Targeting
Once you've isolated your most profitable customer types, it's time to think in terms of growth: which segment of your audience can help you grow the fastest?
For example, you might have three different types of “good” customers. However, maybe only one of them will help you grow fast. They're the customers you will target with your growth campaigns.
But how do you find the right customer type?
You find the right customer type through extensive and in-depth research.
- Customer journey (What are all the touchpoints between your customers and your brand?)
- Customer life cycle (What do your customers do, want, and how do they interact with your brand during different stages?)
- Your lead-to-sale time (How long does it take for your leads to become customers?)
- Customer acquisition costs (How much does it cost your company to acquire new customers?)
Remember, the goal of growth marketing is to be cost-effective. You should find the sweet spot where growth meets profitability.
By the end of this step, your growth marketing team should find the best customer persona to conduct their growth experiments on.
4.3. Awareness Building in Growth Marketing
Once you've chosen the customers that fit your growth plans, it's time to appear in front of them.
In marketing, the goal of awareness is to make sure that your customers not only know what your business is about but also differentiate you from your competitors.
You want your customers to think like this: Competitors vs. Your Brand
You want to avoid being placed in the same market bucket. Traditional marketing typically wants to cover all the bases.
However, growth marketing focuses on channels where you can build awareness and display your brand in front of as many suitable target audience members as possible. (This is why it's often called growth hacking – to increase brand awareness, growth marketers often use innovative channels and ideas.)
Growth marketers often use the following channels and methods to build awareness:
- Social media
- Referral marketing
- SEO and content marketing
- Posting on message boards such as Quora and Reddit
- Using other people's networks through brand partnerships, cross-promotion, etc.
From there, it's always a good idea to either collect email addresses or use tracking codes so you can retarget visitors with an offer after the initial brand introduction.
You should analyze the current awareness channels to find the most cost-effective ones.
Again, your existing customers play a significant part here. You may already have channels that work great for your brand awareness, so if there's room, you can double down on it.
By the end of this stage, a significant portion of your target audience should be “warmed up” and ready to receive your offer.
4.4. Conversion Optimization
While awareness-building takes care of the first part of the funnel, conversion optimization makes sure that you're turning every possible lead into a customer (in general, and when looking at your funnel stage-to-stage).
First, your team needs to analyze the current situation:
- What's your current conversion rate?
- What are the factors affecting your conversion rate?
- Where do visitors linger on your website? What are your most visited pages?
- What are the drop-off points on your site? Where do you lose attention?
- What do your customers enjoy while working with you?
- What problems are your customers facing?
Conversion optimization is definitely more than just taking a look at your website.
Your growth team should primarily look at your UX (user experience).
From there, they should improve all areas that require attention by conducting the right experiments and double-down on the things that already work.
For example, if you aren't converting many visitors into leads because you don't have an email address capture form, your growth team is going to implement that first.
This is also another part where we sincerely recommend talking to your customers.
We often look at the marketing funnel and see conversion as the last possible stage.
However, we're now beginning to see the benefits of retention. Not only does it help you increase the lifetime value of your customers, but you can also use referral marketing (which significantly lowers your customer acquisition costs).
And when it comes to retention, user experience is crucial, so make sure your customers love using your product. Think about how you can maximize their value, as well.
4.5. Promotional Mix Optimization
During this stage, your growth team will look at all the marketing methods and tactics you're using to find the best performers and areas for improvement.
Your promotional mix contains a lot of moving parts:
- Paid advertising
- Word of mouth
- Sales promotion
- Public relations
And so on!
So, basically, everything that you're doing to promote your business, everything that takes part in the customer life cycle, and your marketing funnel will have to be thoroughly analyzed.
From there, your growth team should find channels that work well, channels that don't work, and decide what they will experiment with.
Similarly to our previous stages, your team can optimize areas that are calling for improvement, introduce new things into the mix, or double-down on channels that already work well.
Nothing should go untouched, but keep in mind: you're still thinking about a specific portion of your target market. Don't go too wide. Instead, focus on your goals and the audience you've decided to experiment with.
4.6. Long-Term Marketing Tactics
Growth marketing primarily focuses on short-term tactics that have a significant impact on your growth.
However, throughout the process of growth marketing, you'll get priceless insights about your customers, your product-market fit, and your business.
It'd be a shame not to use it to inform your long-term marketing.
Additionally, some marketing channels and methods might be great, but you can't get results right away.
SEO is one of them.
It takes months (if not years) to rank for your target terms, so it's definitely a long-term marketing tactic.
You shouldn't discount it just because it's not immediate. You can bridge the gap with Google search ads, but allocate a portion of your efforts to organic, free SEO. The entire point of growth marketing is to find what works.
Some tactics offer amazing results in just a few days. Others take more time, but their benefits are incredible.
5. Growth Marketing Examples
5.1. Dropbox: Referral Marketing
When they first started out, Dropbox came up with an excellent referral marketing tactic that took them from 100K registered users to 4M registered users in a year:
Customers got extra storage space for every friend they onboarded to Dropbox.
This cost Dropbox very little and brought great results. Referral marketing is always a good idea if you already have plenty of satisfied customers.
You just have to find the right incentive.
5.2. American Express: Reward Loyal Customers
Remember what we said about retention being the new end goal?
American Express recognized the value of retention. Instead of simply offering credit cards and calling it a day, they also started allowing their members to collect points and exchange them for great rewards.
American Express membership comes with plenty of perks as well.
So, in addition to attracting your customers, you should also find more ways to delight them once onboard.
5.3. Humana: A/B Testing
Humana, a health care insurance provider, ran an A/B test with their hero image and landing page copy.
They got 433% more clickthroughs with the new version.
In general, A/B testing is incredibly important for growth marketing experiments.
However, be mindful of attribution and know where your improvement is coming from by only testing one thing at a time.
Ultimately, growth marketing helps you leverage your data to improve the way you do business.
Sometimes implementing a growth marketing strategy is as simple as A/B testing your landing page copy. Other times, you may want to make deeper changes or focus on specific areas.
But no matter what, incorporate best practices that will help you focus on the areas where you can grow significantly and quickly with the right game plan.
Add it to your schedule!