Marketing has always been an essential backbone to the success of any business, but with the advent of technology it has grown beyond what it was formerly known for, with various forms of marketing taking the central stage in this blossoming age. A couple of years back, posting an Ad on a newspaper or headlining it as a commercial was premium marketing whereas now, marketing is involved in every inch of the consumers experience.
Sean Ellis (Dropbox’s first marketer) first coined the term “growth Hacker” to mean “creative, collaborative idea generation and problem-solving to thorny challenges” but overtime it has grown beyond that. Now Growth marketing has fully grown to encompass all major parts of a business from Brand awareness to sale and even product branding.
What is Growth Marketing?
Growth marketing is a subset of marketing optimization that goes beyond only promoting a product and instead promotes client loyalty and trust in order to aid in business expansion. Utilizing the full marketing funnel (rather than just the top) and utilizing A/B testing, email marketing, search engine optimization (SEO), and data analysis to design smarter, more effective growth-promoting techniques, this sort of marketing maximizes your efforts.
The term "growth" in growth marketing can refer to increasing the number of users, increasing revenue, or even raising brand awareness. Instead of the conventional "create a product, then market it" approach, growth marketers try to discover what benefits users and keeps them coming back. The goal is to "build, then market, then analyze, then remake, then remarket."
Growth Marketing VS Traditional Marketing
In traditional marketing, there is priority towards brand awareness and client acquisition without devoting much focus to what occurs once a prospect becomes a customer.
The above marketing funnel follows a customer’s journey from awareness down to final purchase. In the funnel, traditional marketing only involves awareness (lead generation), interest (lead cultivation), consideration (lead conversion) and intent (willingness to purchase); while the rest of the funnel is controlled by the sales team.
Whereas in growth marketing, the entire funnel is focused on by a growth marketer. Growth marketing is wonderful in this regard, as it focuses on every aspect of the customer’s journey to further drive focus towards creating loyalty between the brand and customer.
The funnel above is known as The Pirate Metrics (AAARRR Funnel); it is the bread and butter of every growth marketer as it covers every essential in a brand’s journey towards growth:
Awareness, Acquisition, Activation, Revenue, Retention, and Referral
Awareness
Brand-building activities that inform potential customers about your company's name and the services you offer are known as awareness campaigns. Through strategies including paid marketing efforts, social media outreach, SEO-optimized content, consumer research, and company announcements, potential customers are attracted into this stage. In the modern era, social media is a vital part of any effort to raise awareness.
Acquisition
The process of collecting leads and net new customers, whether through gated content, chatbots, a freemium sign-up, or any other method, is known as acquisition.
For instance, HubSpot uses tweeter ads to advertise their new Hubspot Academy to us marketers. It's shrewd because we are aware that customer "love" is what propels revenue, generates conversions, fosters engagement, and ensures retention.
Activation
User activation is the process of persuading customers to utilize a product or service they buy as often or as soon as possible. As the importance of customer experience grows in the business-to-business sector, this area is rapidly becoming the realm of marketers and revenue teams. For example, Facebook discovered that if users acquired seven friends during their first ten days on the network, they were far more likely to return and engage with it.
Revenue
All business-generating activities are referred to as revenue, such as clients buying products, agreeing to service contracts, or upgrading their present goods or services.
A growth marketers’ job would be experimenting with pricing strategies, to develop the optimum and easiest way to convert acquired leads into paying customers. They might also look into upselling strategies like alerting users when their plans are about to expire with mails, decoy strategies and influenced scarcity.
Retention
Retention refers to a company's capacity to maintain existing clients and continuing generating income from them. In other words, retention enables a brand to optimize a client's lifetime value (LTV) and raise the profitability of an existing customer.
In order to turn first-time purchasers into recurring customers, growth marketers must employ a variety of strategies such as enabling frictionless purchasing and excellent customer service to interact with consumers after purchases or sending emails that guide customers through a complex product or service after purchases, HubSpot and other customer relationship management (CRM) systems can be used to their maximum potential in this regard.
Referral
Ideally, whenever customers are genuinely satisfied with your product or service, they would simply refer new clients to you. However, growth strategists should be able to nudge customers to do further actions by offering extra rewards.
By offering monetary incentives or discounted trips to clients, Uber was able to build its business by effectively using referral services to both their drivers and regular customers.
Core Elements of Growth Marketing
Growth marketing is undeniably effective. After all, many businesses have had success employing it. Well-known examples include Facebook, Twitter, DropBox, and Airbnb. With adherence to the core elements of growth marketing each of these companies stand out above their competitors, the elements include
- Focus on a data driven growth plan
- Having a well-balanced cross-Functional Team
- Proper generating and testing of ideas
1. Focus on data driven growth plan
To be effective, a comprehensive growth marketing campaign needs a clearly defined growth strategy. This plan is typically a measure that directs the entire organization toward a specific objective. For instance, well- known companies have a North-star metrics that guides their growth process and serve as growth markers:
- Spotify = ‘Time spent listening ‘
- Airbnb = ‘Number of nights booked ‘
- Facebook = ‘Monthly average users ‘
Big companies use the North-star Metric to focus on a single goal and OMTM (one metric that matters) to focus on the improvements in each department that can further be updated with each new data as growth marketing depends on data. The data need to be precise, accessible, and simple to examine.
Growth Hacker Sean Ellis writes in his book ‘Hacking Growth’:
It’s essential that your team have data on each piece of the customer experience—well beyond just how often they visit your website and how long they stay there—so that it can be analyzed at a granular level to identify how people are actually using your product versus how you have planned for them to use it. What this means is that the marketers, data scientists, and engineers must work together to add the proper tracking to websites, mobile apps, point of sale systems, email marketing and customer databases. Once proper tracking is in place, the multiple sources of user information must be stitched together to give you a detailed and robust picture of user behavior that your data team can analyze. What you want to create is what’s often called a data lake/data warehouse: a single location where all customer information is stored and where you can really dive in and uncover distinctive groupings of users who may be using the product differently from other groups.
2. Having a well-balanced cross-Functional Team
Growth marketing doesn’t exist alone. Everyone in a company works toward the overall growth. Hence, the team needs more than just people with marketing skills. A proper team should cover:
- Product development: that pays attention to the ins and out of the product or service. Examples of the individuals in this field would be the product manage, software engineer and product designer.
- Analytics and developers: track and organize data such as organic traffic and campaign insights, data that can motivate marketing to try something new with their digital campaigns. We have the data analyst in this field.
- Customer support: are the individuals in constant contact with users: we have the consumer support personnel and marketing specialist.
All individuals are essential for the Lead growth marketer to make use of to ensure growth.
3.Proper generating and testing of ideas
Growth marketers are in a constant state of experimentation and ideation, generally known as the growth hacking cycle.
-Analyze
The growth lead collaborates with the data analyst to identify potential areas, they try to discover where can be improved.
-Ideate
The growth marketing team's product manager and other members give suggestions for how to enhance the target area focused on.
-Prioritize
The ideas are then crossed according to Impact, Confidence, and Ease of Execution (ICE).
-Test
The experiment is conducted, methods like A/B testing are used; For instance, you might try 2 versions of your email newsletter, the first emphasizing a certain benefit offered and the other emphasizing some feature of the product. These different versions form the A and the B of A/B testing and are analyzed after a determined period of time.
Hence, the cycle starts again.
The Takeaway
With the advent of social media and digital marketing the market is on a new high and growth marketing plans are necessary for any business that wants to stay in the lead. But it requires a solid foundation to grow from, so if your company is still in the startup phase, you should establish yourself before devoting too many resources to growth marketing.
That shouldn’t stop your brand or company from having a quality growth plan or metric to stick towards.
Top businesses have simple growth loops that they use to source a never-ending cycle of customers, you can also employ these loops to push your business to the top.