Keeping up with marketing jargon can feel like a full-time job as tools and techniques get re-nicknamed seemingly all the time. As a case in point, in this blog we’re going to be talking about growth marketing — but you might be more familiar with this concept being referred to as “growth hacking” or something similar.
Likely because the term “hacking” has a not-so-nice connotation, marketers have coined the phrase growth marketing to refer to strategy that focuses less on volume of new leads and more on the volume of repeat sales. You may have already heard the term growth marketing being thrown around as one tactic to help move your business forward with marketing, but what does it actually mean? And should you add growth marketing to your business strategy this year? Why not keep on reading to find out!
Over the last few years growth marketing has helped to redefine the goal of marketing. In the past, marketing teams were mostly focused on the top of the funnel and lead generation. Marketers tried to churn out as many new leads as possible, which also dictated what metrics they looked at as “successful” with many businesses constantly looking to increase their total number of new leads month over month.
Where most marketing focuses at the top of the funnel, growth marketing requires a deep dive into the whole funnel. This is where companies can focus on the customer journey and find room for improvement and opportunities to upsell along the way. We all know that it’s easier to convert a past customer into a new sale than it is to convert new leads and, at the heart of it, that’s what growth marketing is all about.
By shifting strategy to focus more heavily on growth marketing, businesses can see big increases in their retention rates and in returning sales. Not convinced yet? Just look at the stats:
- Acquiring a new customer can cost five times more than keeping an existing customer.
- Increasing customer retention by 5% can raise profits by 25-95%.
- The success rate of selling to a current customer is 60-70%, while the success rate of selling a new customer is 5-20%.
How to Add Growth Marketing to Your Current Strategy
You’re probably thinking “Great, but what kind of juggling will I have to do with my marketing team to make this happen?” The good news is probably not much! Most marketing teams already have the tools and skillset they need to start shifting to a growth focus.
The real difference between growth marketing and outbound (or any other type of) marketing is the focus. To shift to a growth marketing strategy, an important first step is to review your campaigns and set new goals. Most marketing efforts focus on the total number of leads and driving more leads to the top of the funnel and, too often, completely ignore what happens to that lead once they start working their way through the sales pipeline.
Adding a growth strategy requires a step back from leads to look at the entire customer journey and find improvements and upsell opportunities. To do this, growth marketers look at a set of metrics called AAARRR (also referred to as pirate metrics) which stands for Awareness, Acquisition, Activation, Revenue, Retention, and Referral.
Awareness is the metric that tells us how familiar people are with your brand or product. To better understand that, growth teams can focus on things like surveys to the email lists, polling on social media channels, or posting quizzes online to gauge consumer understanding.
Acquisition is the metric you’re probably most familiar with. This metric tells us how quickly we’re getting new leads. Often companies look at acquisition numbers for specific campaigns but not for the company as a whole. Reviewing this metric can really help show the effectiveness of various campaigns and show where budgets need to be redirected. A growth team would watch acquisition and conversion numbers to make tweaks to consistently increase the number of people converting into customers.
Activation is getting people to use the product or service they purchase as much or as quickly as possible. It’s important to know how your customers are using your product. For example, if an app company never quantifies their activation numbers, they might be great at gaining new customers but if those customers can’t figure out how to use the app and fall off the company will never have a high number of active users. Growth teams would work here to make sure activation numbers stay high by testing new onboarding processes or app tutorials.
Revenue is a metric that all marketing teams should have their eyes on. Understanding how your marketing dollars are contributing to the bottom line is extremely important. Growth teams would not only be focused on growing revenue month over month but also be on the lookout for potential upsell opportunities and how to keep current customers buying.
Retention is the metric that tracks how long your customers stick around. This is a huge focus for growth teams. Here is where they would find optimizations to make the customer’s experience better. This can include implementing customer suggestions, offering tutorials that help customers discover unused features, showing a new way to use a favorite product, and so much more.
Referral is definitely the metric most business would be overjoyed to see growing year over year. This is the job of your growth marketing team! Many businesses would love to see more referrals but don’t spend any time or effort working on a referral program. That can be the focus of the marketing team. Their job can be testing incentives to see which is the most effective in getting referrals and launching new incentives to create more opportunities.
Simply put, the first step to implementing growth marketing is to shift focus to these data points, begin analyzing where the pain points are, and start testing to move these metrics in the right direction.
What is a Growth Marketing Platform?
Having the right tools to help execute any growth strategies is also very helpful! Since growth marketing requires a lot of data analysis and testing, having the tools that make that easier will help make marketing efforts more successful and easier to execute.
A great growth marketing platform will be an all-in-one platform that has great analytics capabilities, social media planning, new landing page creation, and email automation to start. Depending on your business needs, you might also want to look out for heat mapping and A/B testing too. Essentially, an all-in-one marketing automation tool will be key in tying together all the data points needed to test and make optimizations.
Is Growth Marketing Right for My Business?
In a nutshell, growth teams are tasked with making the customer experience as enjoyable as possible so that your customers continue to be your best brand ambassadors. The goal of growth teams is to optimize the brand experience so that customers keep talking about your company and keep making more purchases. Is that something any business should overlook? We think not!