Words growth and marketing are super important to a business and almost always captivates the attention of all entrepreneurs and people in business. But when they’re used together Growth Marketing becomes a completely different topic. It’s actually a very fascinating business topic that we’d like to get more in-depth with. What exactly is Growth marketing, and how you can use it to your advantage and get the most from your selected approach. Let’s begin!
Growth Marketing 101 – The Basics
There is a lot of philosophical and terminology-related debate, surrounding the term Growth Marketing and what exactly it stands for. Some people claim it’s a marketing strategy, only applicable to the modern user from the millennial and Z generations, other hypotheses state that it’s all marketing processes, related to trying to optimize specific areas of business and improve metrics. We think that the latter description suits the definition much better. Hence, in this article, we will focus on how you can empower growth marketing strategy to raise, reduce, wondrously way, shape or form make a particular, measurable metric – better for your business.
Traditional Marketing focuses on brand awareness and customer acquisition, only (most of the time). Growth marketing offers a much more holistic approach and engulfs additional areas to get the most benefit. Also known as the AAARRR funnel. More on that – later.
Growth marketing, as we’ve established, is a set of processes and tasks which you do and complete, respectively, in order to make your business run more efficiently. But what exactly are those processes? Well, to be as efficient as possible, marketing ideas can’t rely just on emotion alone. They need to be backed by scientific and fact-proven information.
If you watched Mad Men, the TV show, you might have caught on to the fact that the lead character – ad creative Don Draper creates these almost magical ads, full of nostalgia, or rich with emotion. However, out in the real world, where you have to continuously run ads and be visible to audiences, you can’t just wait for the perfect idea. And creating the most emotional ad might not even result in success for your business. It’s about refining and enabling awareness, acquisition, activation, retention, revenue and referral parts of marketing.
Within companies, this area of marketing is handled by an independent department. However, if you don’t have the resources to hire or dedicate people to it, almost everything can be done by a single person, only on a small scale or without too much detail.
How can growth marketing benefit your business?
If you’re running a business or working in one, you can’t be settled with your current results. The long-term goal is to always keep on growing and expanding, wouldn’t you agree?
Growth marketing enables just that. But how exactly can you focus your resources and attention on it? Well, it all revolves around monitoring, tracking, and experimenting to optimize all processes, related to your results and/or goals. So, for example, you want to reduce the number of subscribers you lose each month (customer churn). First of all, you have to understand what kind of growth (benefit) will the reduction of churn bring. Just for example’s sake, look at the visual below.
Growth marketing example for reduction of churn rate
A growth marketing strategy, focused on customer churn reduction (retention), will and should bring the desired results. So, here’s how you enable growth marketing to reduce customer churn:
- Get data on why customers are leaving and unsubscribing from your service
- Brainstorming ideas for the elimination of those factors and/or fixing technical issues
- Experimenting and testing to see how these alterations impacted and improved your business
- Further experiments (if necessary)
Growth marketing is all about data management and data analytics. Hence, you’ll need access to digital tools for data gathering and processing. The first and most accessible outlet can be your Live Chat
plugin. Your customer support team can gather insights from unsatisfied and unhappy customers to understand the reasons for churning.
On the other hand, you could also implement a questionnaire or set up the subscription cancellation in such a way that the user would have to leave their reason for cancelling their subscription. Your staff can then follow up with a personalized email.
AI data processing tools are getting more accurate and more insightful by the day. This means that you should definitely look into what digital data management tools like 3rd party plugins, ranging from website heat maps, all the way to demographics data, tells you.
All things considered, to reduce churn rates, you have to find the reasons for churning. You do that by gathering and processing data from your customers. By asking them directly or finding out answers via changes in their behaviour, your business can seek out the cause for churn and, over time, eliminate and/or workaround that particular issue.
All areas of growth marketing – which ones work for you?
In the field of growth marketing, there is a thing called the pirate funnel. This particular funnel is the name for all processes related to the field and areas of responsibilities that a growth marketing strategy must cover. The acronym for the pirate funnel is
(like the sound pirates make in books, movies).
In this paragraph, we‘ll glance over every area of the pirate funnel to see which areas of growth marketing you can enable to grow your business quicker.
Let’s start from the bottom. Referrals – you have heard of them. There are a lot of worldwide companies (called Multi-level-marketing companies) that operate almost purely on a referral basis. Amway, AVON, and a few others come to mind. Referrals are also given to users by almost every single business. Share your special code with a friend, have them sign up, and you get a discount, credit, etc. This is how the Referral level works.
But what about referrals for your business? If you find a way to offer really great incentives for referrals (e.g., good discounts, perks, gifts, etc.), it can definitely work and make pretty much every metric for your business better. Ranging from new customer acquisition all the way to cash flow, everything is improved through the help of referrals. But, you do need to research different ideas to find which particular referral method would work best.
This point is probably the easiest to get. Since it’s related to the income of your business, you know which metrics need tracking.
- Cart size
You always want to sell your product for the highest possible price, upgrade every customer to the maximum package, have the highest cart size and the fewest returns, refunds, etc.
Achieving that isn’t all that simple. However, pricing plans might need revision every quarter or at least once a year. Since you’re likely to compete in a sector with numerous businesses that offer a similar service or product, keep your competitors’ information close by, to make what you have – much more attractive. We always recommend comparing revenue per user against customer acquisition cost. This comparison should give you the most obvious understanding of what areas of revenue you should focus on more.
Retaining customers is the area that is mostly related to the problem of customer churning, which we gave an example of earlier. If you want to retain customers, you have to make them as happy when using your service and/or buying your products as possible. Sometimes churn is unavoidable (natural causes, a person moves away, they change the workplace, etc.). However, some churns are definitely your own fault, and you should look into that.
Retention is heavily linked to personalization and user experience. You can charge a bit more if, in exchange, you offer much more benefit(s). This kind of rule won’t apply to prestigious and very reputable brands like Chanel, Gucci, etc. People are just mostly happy to touch and own such a thing, and it won’t be hard to retain them. However, with more accessible brands, it can be a struggle trying to find ways to improve user experience and customer experience for your clients. Keep in mind that if your business is digital-only, you must have continuous testing with users and seek improvements to your online interface. For brands that also ship physical products, you must allocate your attention equally to both areas to refine such things as packaging, product presentation, etc.
Trust us; if you invest in user experience, it will bring a lot of dividends for your business.
To activate your customers, you have to do certain actions to make them take action. Sounds understandable? Well, the best way to measure is to see how many clicks did your advertisement received. So, if, for example, you want to have a 2% activation (engagement and click-through) rate, you have to expect 20 people to click on a link or send you a message after 1000 has seen your ad. If you get only 10 clicks per 1000 views, you need to implement a growth marketing strategy to get a higher activation rate.
Instant activation is also linked with better retention. So, if you’re able to activate the urge for people to get your product and/or service right away, it’s much more likely that they’re going to stay loyal to you in the foreseeable future.
The acquisition is actually linked with retention and referrals. The acquisition is commonly generated by referrals and leads towards retention. The term acquisition means getting new customers. It doesn’t matter which method or tactic was used to generate new leads; it is always in this category.
Right now, you can utilize a lot of different tools, tricks, and techniques to gain traction from potential consumers. Besides continuous refinement of your user interface and customer experience side of things, you have to strive to find techniques and ways to generate more new users. Can it be proactive communication? Is it hidden somewhere in the rearrangement of the menu buttons on your site? Or maybe, just possibly, you can generate a lot of new customers if you’ve just rewritten the copy on your website?
Brand awareness and customer awareness are measurable metrics that show how much familiarity do customers have with your brand and its products/services. The best way to measure awareness online is to track engagement on your ads and page visits. Awareness is raised by pretty much every piece of advertising which leads clients to familiarize themselves and interact with content that you’ve created. Whether it be SEO-driven blog articles, instructional videos, funny advertisements online, or social campaigns. Awareness results in long-term brand value increase as well as a much more stable source of revenue.
How to use growth marketing in your business field?
So, we’ve talked so much about what exactly growth marketing is and extensively covered the theoretical aspects of it. But what about making it work in the real world. What kind of tactics are employed by businesses out there?
To begin with, every business has a unique identity and brand voice with which they work. Amazon expands and grows very differently from someone like a new vegan food chain or an electric scooter-sharing platform. The key is to determine the target demographic and refine as many ad campaigns to attract them by improving one, a few, or all of the AAARRR metrics that were mentioned before.
So, depending on your business are, we recommend understanding your clients and seeing the main weaknesses of your niche (overall) and your business in particular. Let’s say that you have a problem with a lot of clients testing out your product and never coming back to it with your competitors having much of the same issue. The key is to then work on Retention and Activation as these two areas are giving you the most trouble.
In terms of activating and retaining your clients, you have to create more engaging ads, offer incentives, improve and upgrade the user interface and make your target demographics see why it’s cool and beneficial to be your member or a customer.
Just as a pointer – take note of the info in the graphic below.
If you plan on advertising and utilizing growth marketing, unless your audience is absolutely and overwhelmingly keeping track of traditional media platforms, go all out on digital platforms. In the coming years, digital advertising spending should outdo traditional ads by 68% to 32%, according to predictions.
Is it worth investing if you have a very niche product?
It’s clear that pretty much everyone has their own strategy. For example, within a new sector, a business could only need to spend 10,000$ on ad space to get a 1% additional market share. However, someone like Coca-Cola, who works in an established and very competitive market, might need to spend 100 million to get the same benefit.
Is it worth it? Well, it depends on the benefit gained. If, in the first example, the 1% of a total market share equals 10,000$ per year – it’s totally not worth it and you have to find ways to optimize your ad, to spend less for the same result. In comparison, the carbonated industry size is approximately 225 billion USD
. This means that by spending 100 million, Coke would get rewards equal to 2.25 billion USD, which is probably one of the best investments a business could ever make. Hence, we can move towards the idea that growth marketing investments should depend on the market size and projected benefit. Sometimes it’s beneficial to go all out, even if you’re only going to break even short-term because having a larger chunk of an emerging market can make you the industry leader after 5-7 years. However, if you’re in single-product dropshipping stores or are continuously searching for winning products to focus new shops around, then definitely work on short-term gain via raising awareness, activation, and revenue. For niche and small e-commerce businesses, focusing on short-term growth marketing can actually be much better than trying to devise a master plan for the long term.
Best tools to use for growth marketing
Just like in any other area of business, growth marketing has its own unique tools and apps which make it easier for you to get desired results. In general, growth marketing teams are focused on the pirate metrics, which we keep mentioning so often. And since metrics revolve around data, it’s only natural that tools, being used in their line of work are mostly advertising apps with immense data processing power, e.g., Facebook Ads, Google Ads, MailChimp and programs of that nature. Let’s see how these four can influence growth marketing plans for the better.
Facebook is the global giant which owns not just the social media platform with the same name but also Instagram and WhatsApp, amongst many others. Facebook Ads (now commonly labelled as Facebook Business) is a one-stop platform that can cover all your advertising needs on Facebook, as well as Instagram.
Just an example of how Facebook Business looks.
You can quickly and almost effortlessly create new advertisements and campaigns, select your desired target audiences, watch the ad performances, revise them almost seamlessly and have a ton of data to analyze and work with.
For example, you can know how much engagement your ads received, from where it came, how much $ you spent per one click, amongst many other tools. This is just the tip of the iceberg, however. Your business can find out almost anything, with regards to the strengths and weaknesses of marketing strategies.
If Facebook Ads are the go-to tool for beginners and e-commerce one product stores, then Google Ads is the choice for more experienced users as well as businesses with a long-term plan. With Google Ads, it’s all about SEO optimization. You have to understand what keywords are people looking for.
For example, if you’re located in Manchester, UK and sell memory foam mattresses, you’d likely be interested in having ads set up in a way that shows up when people type in Memory foam mattresses in Manchester, etc.
Once you research keywords successfully, you can then progress to optimizing ad spend to attract as many people from Google, as possible, with as little cost.
Every year it seems that email marketing is on its last legs, it’s dying, etc. However, every single year it still accounts for a large part of business advertising and marketing spend. Newsletters are being sent out left and right, trying to attract new and/or returning business.
In the world of the newsletter and email marketing, MailChimp reigns as arguably the most popular choice. It’s easy to use, very widely known and has attractive pricing for even small businesses. See how many people opened your emails, how many clicked on your links, etc.
Just an example of the MailChimp interface.
So, let’s sum up. Growth marketing is a set of processes and tasks which you do to improve the performance of your business. In general, growth marketing is divided into a few subcategories – AAARRR (pirate metrics). These pirate metrics are key measurable performance indicators that help businesses advertise, promote and grow whilst also eliminating weaknesses that might’ve held them back before. It’s key that a business analyses customer sentiment, its own niche as well as its own strengths and weaknesses before undertaking a growth marketing campaign. Try to focus more on the digital side of things and implement state-of-the-art advertising tools to help you out. We hope this was useful!