By Dallin Porter, Communications Manager | Galactic Fed
Originally posted on Galactic Fed
The term “growth marketing” was introduced in 2010, when marketer Sean Ellis who led early growth marketing innovation at Dropbox, Eventbrite, LogMeIn and Lookout, Co-creator of GoPractice.io, an immersive simulation for learning growth, and author of Hacking Growth. Coined the term to describe the experimental growth approach companies like Amazon and AirBnB leveraged, and ultimately evolved the way we look at marketing and its strategies.
The following guide will explain what growth marketing is, how it differs from traditional marketing and strategies you can apply today as a marketer.
Growth Marketing Is…
The next evolution of the digital marketing industry and its ability to harness the numerous new digital channels, and techniques. It takes the traditional marketing model and enhances it with new and sometimes uncommon, approaches that create sustainable growth and a competitive edge.
These enhanced approaches include strategies leveraging channels such as paid media, and SEO optimization, email marketing, data driven content, split A/B testing and creative ad copy. Other specialties of expertise that fall under the growth marketing umbrella are viral content, video marketing, social media, community building and management, copywriting, data marketing and content marketing, as can be seen in Buffer‘s “Marketers Framework”.
Growth marketing is removing the boundaries of marketing to enable every aspect of the customer experience to focus on attracting more engaged customers.” – Mike Volpe, HubSpot
Growth marketing typically focuses on the data behind the marketing, and whereas older marketing models consist of a planning and execution stage, growth marketing continually analyzes the data received and optimizes based on the information, to increase the likelihood of repeat customers.
The growth marketing model lends itself to testing small hypotheses and rapid experimentation. And, as it’s the process of designing and conducting experiments to improve the results of a specific area, it’s often referred to as the scientific approach to marketing.
Growth Marketing Vs. Traditional Marketing
For meaningful growth, startups must completely change the rules of traditional channels or innovate outside of those growth channels. They are too desperate and disadvantaged to adapt to the old rules of marketing. They have to dig deep creatively, and relentlessly test new ideas. If they don’t figure it out quickly, they will go out of business.” Sean Ellis, Founder – GrowthHackers.com
As we know, traditional marketing takes a more simplistic approach, focusing on getting a product in front of the right audience, and ultimately have them open their wallets. Typically companies with large marketing budgets would focus on traditional media: tv, radio, and print advertising. Although there are other stages of the funnel to consider, traditional marketing is much more focused on transitioning a potential customer from the top of the funnel to acquisition as quickly as possible.
Growth marketing was born out of the limited budget of startup companies, with a focus on acquiring customers through unconventional or less expensive means. Growth marketing is considered more optimal because by its very nature, takes into consideration each step of the marketing funnel. Growth marketers realize that there are missing factors to consider and a higher return on investment when you can not only create a customer but keep them around.
If you refer to the visual below, you’ll see that traditional marketing considers the customer’s journey to be complete after the acquisition stage. Growth marketing considers each stage of the funnel individually, with the goal of creating a customer, but a brand ambassador too. Let’s take a look at the AAARRR (aptly nicknamed the pirate metrics) method and break down each section so you can effectively use it in your own growth marketing strategy.
Finance owns the flow of cash in and out of a company. Growth marketing owns the flow of customers in and out of a product.” – Andy Johns, VP of Growth, Wealthfront
Awareness:
Is the moment a prospective customer knows your brand exists. It’s what puts you on their radar and informs them that you may have a solution to their problems. This can include anything from social media marketing to seo-optimized content. Growth marketing may achieve this stage by A/B testing a blog headline, to see which drives more engagement or traffic.
Acquisition:
Is typically the end goal of a traditional marketer, and may be achieved through a freemium model, email capture, or subscription. The growth marketer may experiment with the effectiveness of this by testing the different copy or call to action that asks their audience to sign up, whether in tone, design, or wording.
Activation:
Relates mostly to the onboarding process. It’s what takes a paying customer and gets them to interact with or use your product or service as fast as possible. Statistically the sooner people use your product, the more likely they are to stay. Some growth marketing strategies to improve your activation rates would be including a tour of your app, have a personalized copy, or provide a free demo.
Retention:
Growth hack marketing focuses heavily on retention because if a typical SaaS business loses about 2 to 3% of their customers each month to churn, the business must grow by at least 27% to 43% annually to maintain the same revenue. Retention strategies in growth marketing could include a customer survey, loyalty program, or bundling your new products with existing ones.
Revenue:
When an activation turns into a paying customer, or an existing customer pays to upgrade. Experimenting with revenue strategies for growth marketing could be in-app messaging when a users contract is close to finishing, or even testing different payment models.
Referral:
The moment a customer refers to your business or service, they’ve become a brand ambassador – the highest level of customer loyalty. Creating a repeat or lifelong customer who is in the referral stage is much easier, and achieving this can be done through referral bonuses or incentives.
What Growth Marketers Do
As growth marketing becomes even more ubiquitous with marketing itself, the role of what is considered a “marketer” is shifting as well. You probably have noticed the “growth marketer” becoming a more common term in the industry and on job boards. This distinction is important because it does require a skill set different than what you may find in a traditional marketer. Let’s take a look at a typical “Growth Marketing Manager” job description:
Some key and core competencies to takeaway from this when looking to grow your own growth marketing team are:
Analytical: this skill is crucial in a growth marketer, especially since the “art” of growth marketing can be incredibly scientific – taking and tasting hypotheses, analyzing and optimizing. This also requires the ability to glean insights from data, and also turn data into actionable tasks to execute.
Solution-focused: there’s a key difference between a problem solver and a “problem reporter.” One of the advantages of growth marketing is that you can target specific, smaller areas of your marketing strategy to try and improve them, and focusing on solutions in each of these events are what create successful growth marketers.
Creative: in marketing, very little beats genuine creativity. Since the very nature of growth marketing is thinking outside of the box with unconventional, growth-hacking type approaches, creativity is a skill that cannot be understated and should be highly valued.
Great Growth Marketing Examples
As we said, growth marketing didn’t arrive on the scene yesterday, although many companies are just beginning their foray into the sector. Let’s take a look at some brands who show that they know how to grow:
Dollar Shave Club
Tapping into the now popular form of growth marketing that is video content, Dollar Shave Club proved what you can do when you combine creativity, a catchy message, and an unconventional medium. Their original YouTube ad has now garnered over 25 million views since airing. The brand was young and with a tight budget, so created their $1 a month for razor blades message, introduced the idea through a clever video – and the viral video was born. This approach has now been adopted by hundreds of brands, and YouTube is one of the most sought after advertising spaces.
DropBox
In their early days, mammoth file storing site, DropBox, had very little to spend on marketing. To counteract this, they developed a genius referral program. If an existing user referred dropbox to a friend and they signed up, the user would receive an extra 250mb of storage space, and DropBox would receive another user. This led to a 60%increase in user signups almost immediately. That’s what we call thinking outside the (drop) box.
Heap Analytics
In the B2B space, getting a referral can be a bit more complicated. That’s why Heap used growth marketing to their advantage. If paying users shared the Heap badge on the footer of their website, they would instantly receive 50, 000 analytics sessions per month, as opposed to 5000. This gave them additional insights into who was using their product and acted as a lead generation since now had information about who was visiting their user’s websites.
“Finance owns the flow of cash in and out of a company. Growth marketing owns the flow of customers in and out of a product.”
Although it hasn’t (and probably won’t) fully replace traditional marketing, it’s clear growth marketing is here to stay, and will very likely change the way we view the concept of marketing as a whole. The very nature of growth marketing allows for new approaches and strategies, unconventional testing, and calculated risk and as growth marketing experts, we see and learn the value of it more each day. Use this guide as your introduction to the growth marketing world, or to serve as inspiration for your next campaign; in any case – it’s time to grow.
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