Let’s face it, finding quick hacks for growth that actually work is as common as finding indisputable evidence of Bigfoot.
Many people claim to have witnessed it, but strategies for growth should not be based on a tall tale. Growth marketing is a skill that is not acquired overnight.
So, you might now be wondering what growth marketing actually entails. Continue reading for a process that creates a “get growth at a sustainable speed” game plan, or jump to our infographic featuring lessons from famous growth marketing proverbs.
Growth marketing is the integration, iteration, and improvement of strategies to acquire and retain paying customers. Growth marketing is a science in the sense that it is a systematic organization of knowledge based on testable explanations for how the world works.
Traditionally, marketing efforts have been separated from the product, with the marketing department isolated from other aspects of the business. Today, growth marketing is integrated within product development. Growth marketers must dig in and immerse themselves in the growth metrics that matter.
Although the name growth marketing implies a strategy based entirely on attracting more users, it’s about more than just that.
The seeds of growth marketing must be planted in the customer discovery process.
Customer discovery is exactly as it sounds: discovering who is having the problem that your product can best solve, also known as product/market fit. Author and entrepreneur Steve Blank argues, “No business plan survives first contact with customers.”
A deep understanding of who the customer is can also guide the growth marketing strategy to best address the goals of the company.
For example, LinkedIn noticed users were deeply concerned with their individual profile’s vanity metrics, allowing the company to easily convince users to give more information, like personal contacts, to leverage the network effect.
The overarching goals of growth marketing are common goals for any business: to acquire new customers, retain existing customers, and increase profits.
As the business scales, growth strategies become more efficient both from a cost and conversion rate perspective. But how can one expect to attain each of these overarching goals from growth marketing?
Possibly the most important goal of growth marketing is to retain existing customers.
The satisfaction of existing users should be prioritized to ensure loyalty to your company’s product or service. Since there is less friction when repeating a purchase, it is far easier to sell to an existing customer than a new customer.
With this in mind, it is contradictory to acquire new customers if they’re not sticking around. Customer acquisition costs can be detrimental to a business model when it is lacking in customer retention.
Focus first on customer satisfaction and retention, and then scale customer acquisition costs.
As customers repeat business and continue to be impressed with their experiences, brand loyalty grows stronger. Brand loyalists can even fuel customer acquisition through word-of-mouth marketing.
After customer retention has stabilized, the pursuit for new customers becomes financially feasible. The acquisition of new customers is the ability to successfully reach new users and convince them to purchase.
One of the tenets of customer acquisition is visibility within the marketplace. Where are customers searching for a solution to their problem, and where does your solution meet them during this search?
Understanding how your customer acquisition strategy aligns with customer retention can signal sustainability. How do these two growth marketing goals contribute to the next goal: profit?
Ultimately, if your growth marketing strategy is not sustainable, your revenue may increase while profitability decreases. How can this be?
If customer acquisition costs exceed the lifetime value of customers, no matter how exponential revenue growth may be, the economics of the business model will never recover.
A successful growth marketing strategy will provide new sources of revenue without putting an unnecessary burden on expenses. If executed properly, retention rate will outpace churn, therefore increasing customer lifetime value.
Growth marketing and traditional marketing are very different, just as traditional marketing is very different from digital marketing. Growth hacking is more about having a mindset for growth and less about implementing tactics traditionally used in marketing.
Growth marketing requires an open mind.
Consider Frank Zappa’s analogy: “A mind is like a parachute. It doesn’t work if it is not open.”1 It can be difficult to break out of the status quo, but perhaps we should all focus on the “status woah.” Think about what subtle changes can wow your users.
Companies with a growth mindset do not waste marketing budget on strategies that have not proven successful. Growth marketers ease into their marketing budgets with an experimental approach to these investments before going all in on a specific strategy.
Many of the strategies common in traditional marketing have difficulty proving their ROI. It’s difficult to estimate and measure the value of a physical placement like a billboard or magazine ad, compared to the click-through rate of a push notification.
This is why a growth marketing mindset requires malleability over any rigid tradition.
Growth marketing is built on the philosophy of iterative learning — the systematic optimization and incremental increase of acquisition, retention, and lifetime value of paying customers. This process allows growth marketers to discover which methods work and, equally as important, which don’t.
What are the steps to mastering the process of growth marketing?
Possibly the most important aspect of growth marketing is the willingness to experiment. Even incremental improvements through experimentation can contribute to massive results. For its relative simplicity, A/B testing is a popular implementation of the type of experimentation common in growth marketing.
But we ask, and with only a bit of facetiousness, why stop at B?
Growth marketing is about testing the moving parts and their impact on performance metrics. It might surprise you when you see the impact seemingly arbitrary elements of marketing material like font weight, background color, and button corner radius can have on conversions. This is why micro testing is some of the most important work of marketers.
In the testing process, it’s important to include a control group as a benchmark to measure the true performance of variables. Isolation of a control group ensures the results are not misinterpreted or inappropriately attributed.
Growth marketers must be aware of the metrics that are meaningful to their business and measure the impact of tests. While these metrics can be starkly different depending on the industry, being cognizant of vanity metrics is vital for every marketer.
Vanity metrics are the false indicators that give the appearance of sustainable growth. Like the number of mobile app installs — these do not actually indicate whether the app is experiencing healthy retention, a vitally important metric.
Now that you have measured meaningful improvement of key metrics, it’s time to scale what worked. Finding strategies that worked during tests, if conducted on a sample representative of the population, are likely to perform well on a large scale.
Scalability is growth, but often times growth is not scalable. This is why it’s important to test what strategies are successful before scaling these tactics. Fail fast, yes, but improve as slowly as necessary to sustainably succeed.
Strategies for growth marketing may not be as alluring as quick growth hacks, but they are nonetheless important for any company seeking sustainable growth. Growth marketing relies on best practices that span preparation, execution, analysis, and revision.
Although plans and projections may never align with reality, the practice of setting goals and performance objectives can guide what strategies to employ. As Yogi Berra famously said, “You’ve got to be very careful if you don’t know where you are going, because you might not get there.”2
If you are tasked with growing a business, it can be tempting to deploy your full arsenal of marketing resources. However, it is important to use caution and restraint when navigating uncharted waters.
Sometimes the most difficult thing to do is nothing. We must learn to practice patience and discipline by starting small, validating a strategy, and only moving forward if it’s proven successful.
This article could alternatively be titled, “How Growth Marketing Is Like Investing,” since the best practices are very similar.
A common thread within the investment community is portfolio diversification, which also happens to be a best practice in growth marketing. Don’t put all your eggs in one basket by relying on a single strategy for growth.
Diversify wisely by allocating a smaller portion of the total expense across various growth marketing strategies, resulting in the best possible combination.
It’s vital to be aware and willing to walk away from a strategy that isn’t working.
The sunk cost fallacy is the tendency to continue with the same behavior, even after outcomes prove negative, instead of altering the course of action. Acknowledge when things aren’t going well and take necessary action to revise your strategies.
Don’t overlook the importance of customer retention.
Often, growth marketers assume attracting new customers should be prioritized, discounting the importance of retaining existing customers. Mobile app marketers, for example, will sometimes try to mask negative retention metrics like daily active users with growth in downloads.
The infamous Silicon Valley investor and founder of Ycombinator, Paul Graham, argues, “It’s better to have 100 people that love you than a million people that sort of like your product.”3
Instead of trying to get millions of readers, downloads, or customers, focus on getting 100 loyal fans. From there, scale the model you’ve proven works with the first hundred.
It’s possible a fundamental change in strategy can have an immediate positive impact on business, yes. It’s more likely, however, the process for growth will be iterative and results will continue to become more pronounced over time, following the traditional hockey stick pattern.
Growth marketers need to be analytical in their approach and willing to act on their findings. Much like the relationship between a contractor and their toolbox, the toolbox for growth marketing is vitally important to building a successful foundation for growth.
It can be difficult to know what strategies to deploy, what metrics to track, and which tools to track them. Luckily, CleverTap has built an intelligent mobile marketing platform that is perfect for growth marketing teams to employ in their mobile strategy.
See how today’s top brands use CleverTap to drive long-term growth and retention