Marketing is tough. It isn’t easy to attract, acquire, and retain customers. As competition is getting fierce, brands are all set to spend more on marketing. Leaders across several industries are all set to increase their digital marketing budget in 2021 by 25 percent.
Increasing the marketing budget isn’t enough to stand out from the crowd. How you spend resources is the key. Your marketing strategy must not merely focus on acquiring customers, but on customer retention, CRO, and sustainable business growth.
How to do it?
Two words: Growth marketing.
What is growth marketing, why it is important, and why you must switch to it are the hot questions that are answered in this post.
What Is Growth Marketing?
Growth marketing, often referred to as growth hacking, is a systematic approach to using different marketing techniques to attract and retain customers. It involves experimentation to find the most effective marketing channels and campaigns to grow your business. The two key distinguishing characteristics of growth marketing are:
- It uses data and experimentation to find the best marketing channels and techniques.
- It focuses on sustainable growth.
In other words, it’s a perfect data-driven duo of marketing and growth.
Unlike traditional marketing, growth marketing covers the complete funnel from awareness to referral. A major portion of revenue comes from your existing customers and this is practically achieved by growth marketing (where you target and actively engage with your customers):
Canva has the perfect growth marketing strategy that helped it acquire more than 15 million users in 7 years with 300K+ paying customers. The company is valued at $2.5 billion due to such massive growth.
How did Canva achieve it?
By testing, experimenting, and reaching its target audience at the right places. The company didn’t wait for organic growth just because they had the best design platform that people are craving. Rather, it invested in several marketing channels that ranged from blogging to social media marketing to inbound marketing and more:
That’s what growth marketing is all about.
You don’t sit and wait for things to happen. You go a step ahead and use data and all the resources to reach your audience, convert them, and then retain them for life.
The Power of Growth Marketing
So, why should your brand pursue growth marketing, and what makes it the right choice?
When you start investing in growth marketing and you have a robust strategy, you'll enjoy numerous benefits you aren’t likely to access with traditional marketing.
Let’s explore the perks of growth marketing:
1. It Covers the Full Funnel
Growth marketing covers the entire marketing funnel. You don’t leave your customers after acquiring them; rather, you keep them engaged. Converting customers into repeat customers and ultimately loyal customers is what makes growth marketing different from other marketing strategies.
Here is what the growth hacking funnel looks likeIt is based on the AAARRR framework:
Dropbox used this model to grow 3900 percent in 15 months with a simple referral program. This wasn’t a fluke. It was a well-thought-out growth marketing strategy in action that led to tremendous growth.
2. It’s Data-Driven
Growth marketing is data-driven. It is based on intensive experimentation. And what’s better than using data to make critical marketing decisions?
Consider what type of content your ideal customers love, what marketing channels they use, how they interact with your website, what types of creatives they like the most, etc. The answers to these questions can either be judgmental or data-driven.
And growth marketing focuses on data.
You don’t just find what works best and replicate it. Instead, you go a step further and decode why it works. Growth marketing tells you why one marketing campaign works better than the other.
3. You Gain a Competitive Advantage
Think anyone can create another Airbnb or Dropbox?
Growth marketing gives you an edge your competitors can’t imitate. As highlighted above, Dropbox has more than 700 million users worldwide who are actively involved in generating referral revenue for the company.
Since growth marketing is entirely data-driven and requires an adaptable mindset and approach to marketing, even if your competitor copies your strategy, it won’t have the data.
You can copy someone else’s growth marketing strategy, but you don’t get the data that drives the strategy. And this puts you ahead of your competitors.
4. You’ll Increase Revenue
Yes, growth marketing is cost-effective, especially in the long run.
Because you optimize your marketing spend and invest in campaigns that deliver the best results. It focuses on conversion optimization.
It helps you generate more revenue from your current customers instead of acquiring more customers by increasing marketing spend. And this makes all the difference.
For example, if you increase the conversion rate from 1 percent to 2 percent, you'll get more customers with the same traffic without increasing the marketing budget. Similarly, implementing a referral program that increases customer lifetime value from $100 to $150 will not cost you a lot of money.
How to Make Growth Marketing Work for You
Getting started with growth marketing requires a growth mindset. You must incorporate a growth marketing strategy into your business and here is how to do it:
1. Understand and Implement the Growth Funnel
The growth funnel is the key and it uses the AAARRR model (as discussed). You need to identify all the stages in the funnel, have a distinct strategy for each stage, and incorporate these stages into your CRM and analytics tools.
Of course, it is a challenging task. You can’t do it overnight as it requires data and insights, such as what marketing channels to use for customer acquisition, what type of content to write, and so on.
The idea is to define a complete end-to-end customer journey and convert it into a funnel. Here is an example:
Define clear strategies for each stage of the funnel with a focus on customer retention and referral.
2. Identify and Set Clear Conversion Goals
Identify and define clear conversion goals for each stage of the funnel.
There must be clear definitions of conversions and what makes a conversion successful. For example, a SaaS user switching from a free trial to a paid subscription is considered a conversion. Similarly, Facebook fans clicking a blog post link on your Facebook page might be treated as an awareness goal.
Create conversion goals for each stage that advance your customers through the growth funnel. These conversion goals help you create specific strategies and tactics to boost conversion at each funnel stage.
Don’t let customers sit idle at one funnel stage doing nothing. They must move to the end of the funnel.
3. Use the Right Tools
Growth marketing can’t be done manually. It uses data and data is generated by apps and tools.
Using the right marketing and data tools is essential for growth marketing success. What types of tools do you need? Here is a list:
- Marketing and keyword research tools, such as Ahrefs and SEMrush
- Analytics and behavioral analytics tools, such as Google Analytics and HotJar
- Conversion rate optimization tools, such as VWO
- Retention and referral apps, such as ReferralCandy
- Automation software, such as MailChimp
- CRM software, such as Salesforce
Your tech stack has to be exceptional. And all the tools must be integrated and must work together for an easy flow of data.
Growth Marketing Is a Philosophy Not a Tactic
Growth marketing is more than a buzzword. It is more than a marketing strategy or a growth tactic. It is a mindset, a philosophy.
It requires focus, teamwork, and consistency to make it work for your brand. Getting started might be a challenge as it requires a lot of initial work. Reaching out for help from an expert growth marketer or a growth marketing agency will put you on track immediately.
Not sure where to start? Contact us for consultation and see how we can help you develop, execute, and implement a growth marketing strategy.