In recent years, more and more marketers are shifting from traditional marketing strategies in order to focus on growth marketing.
And for a good reason.
The online business arena has changed.
Today, successful companies don’t focus on getting one hit wonder customers that make a purchase and never return.
As they expand their digital footprint, the strategy now centers around getting repeat customers.
It makes sense.
Forbes appropriated stats from Marketing Metrics reporting that there is a 60-70% that an existing customer will make another purchase.
Compare that to the reported 5-20% probability of landing a sale from a new customer.
Therefore, business leaders and marketers alike have taken to developing and implementing growth marketing plans as a means to remain relevant in the industry.
We’ll take a look at the ins and outs of this marketing phenomenon as well as how to leverage it to build a strong company online.
What is Growth Marketing
Growth marketing is the practice of analyzing a business’s customer experience and lifecycle in order to propose strategies designed to optimize a target area.
To be specific, this branch of marketing involves understanding customer data and using that as the driving force behind acquiring and retaining customers.
Growth marketing serves to increase the value derived from marketing campaign metrics. In turn, this will boost profits and reduce income revenue disparity gaps that tend to present themselves in low sale seasons.
As mentioned, today, there is a strong demand for professionals who specialize in this area of marketing.
From as early as 2013, the B2B Technology Marketing Community reported that over 60% of marketers saw acquiring high quality leads as a priority.
This signaled a shift in marketing strategy that was based on securing customers that are more likely to purchase more than once.
Venture Capitalist Tomasz Tunguz explains the importance of customer retention and churn reduction as it relates to revenue by way of a clear hypothesis.
If a SaaS business were to lose between 2 to 3% of their monthly clientele, in order to maintain their annual revenue, they would have to increase their clients by 23 to 47%.
In a study published by Harvard Business School, investigators found that a 5 percent spike in customer retention led to profit increases of between 25% and 95%.
It is upon statistics like these that the axis upon which the operations of growth marketing turns.
What’s more, these stats also form the basis of the strategies that leading growth marketers practice today.
How Growth Marketing Differs From Traditional Marketing
Although growth marketing bears similarities with other branches of marketing, there are some key differences.
They lay in how each type views a company’s marketing funnel and the resulting strategies that are developed to suit.
The marketing funnel describes the user experience that a customer has with your brand.
This encompasses its initial phases where a customer becomes acquainted with your product or service all the way to its final phase which is where you land a sale.
As part of the final phase, it’s important to highlight that the marketing funnel also includes initiatives that are done in order to retain customers once they have made a purchase.
Bearing this in mind, traditional marketing, for example, places most of its emphasis on the top of the funnel.
In other words, in this type of marketing, efforts center around attracting customers to purchase a product as opposed to optimizing the conversion side of things.
On the other hand, growth marketing calls for a marketing team to examine the marketing funnel in its totality.
In doing so, they are to zone in on areas that present deficiencies and work on bettering each one.
The description associated with the profile of growth marketers involves:
- Identifying phases within a company’s marketing funnel that need to be improved
- Determining the methodology to be used to optimize those phases
- Carrying out tests that support or negate the hypotheses determined previously
- Analyze the results acquired from testing in order to draw conclusions
- Continue monitoring and proposing strategies for the marketing funnel based on new customer data
Growth Marketing vs Growth Hacking
More so than traditional marketing, growth marketing is a term that is often associated with growth hacking.
In fact, some schools of thought consider the two to be synonymous.
However, they are distinct in their approach.
First, let us take a look at the similarities between these two:
Growth Marketing & Growth Hacking: Similarities
Both growth marketing and growth hacking share similar functions based on four fundamental principles:
- Revenue: Both types of marketing focus on strategic approaches to inbound customer acquisition and retention in order to increase a business’ revenue.
- Data analysis: Just like growth marketing, growth hacks are based on analysis from qualitative and quantitative data.
- Sound strategies: The methodology implemented in both types of marketing relies on experimental analysis in order to propose an informed plan of action.
- Marketable products: Neither of the two can work if the product or service being advertised is not up to par.
Growth Marketing & Growth Hacking: Differences
Despite the multiple similarities that exist, growth marketers do not share the same vantage points as growth hackers in all areas.
Let’s take a look at the two main differences:
- Growth: Growth hackers and marketers approach growth from two distinct angles. While both strive to optimize your company’s conversion rate, growth hackers focus more on quick growth as opposed to growth marketers who target sustainable growth. Growth hackers determine the fastest way to grow your business. In doing so, some of the plans that they implement may not take into account your business’s long term strategic goals.
- Brand awareness: In a similar vein, growth hackers are not concerned about your company’s brand. In other words, the consistency of your company’s image does not fit into their responsibility. Their focus is on how quickly your business grows. In contrast, growth marketing strategies are consistent with the brand that your company projects.
That said, neither professional profile is better than the other.
Choosing between a growth marketer and a growth hacker all boils down to your business needs.
If your strategy centers around growing your company as quickly as possible, then a growth hacker would be best.
If, however, you are looking for sustainable, long term growth, then you should aim for a professional growth marketer.
Benefits of Growth Marketing
There are several benefits to growth marketing. A few of the main ones include:
- Brand recognition: Growth marketing helps to optimize the visibility of your brand in audiences that are likely to purchase your products. In doing so, it makes your brand recognizable, allowing customers to easily distinguish your business from competitors.
- Search Engine Optimization (SEO): Part of growth marketing may involve Pay Per Click (PPC) social media campaigns on digital marketing channels such as Instagram, Linkedin, and Facebook. Data analysis from PPC campaigns yields information that may be useful for SEO keyword research.
- Nurture Existing Leads: As you acquire new users through your campaign efforts, you can take things a step further by using their data to draw conclusions on their purchasing habits. Then, you can integrate them into your marketing funnel strategy and maximize your marketing efforts.
- Acquire New Leads: Although growth marketing strategies aim to retain paying customers, through your efforts, you will also increase the chances of onboarding new ones.
Growth Marketing Strategy: Planning and Development
Creating a strategy around growth marketing equips your business with a guide that gives your team vision and purpose.
With a growth marketing strategy, you map out the path towards returns on investments through building relationships with your target customers, thus giving your company direction.
To come up with a growth strategy for digital marketing, you will have to take into account key details surrounding both your business and your customers.
As it relates to your business, you’ll need to:
- Identify who your business is targeting as well as the products that you offer
- The long term and short team goals of the company
- The percentage in growth that the company expects to make vs how attainable that percentage is
From customers, you should identify:
- Ways in which your product can solve their problems
- The elements that make competitors’ products look attractive
- Why they elected to invest in your product over those from other businesses
- The challenges that they face during your business’s customer journey
Having understood your audience and your own business identity, you can then start drafting an action plan.
Granted, this plan will not be set in stone. It will be subject to change as you go along gathering more data on your customers.
However, it will act as a guide that will help you to maneuver your business in digital spaces.
How Growth Marketers Implement Strategies
Since growth marketing is such a data driven area, it is wise to contract an experienced growth marketer or growth marketing team who has the expertise to grow your business online.
That way, you can minimize any possible errors that may occur due to being unfamiliar with growth marketing implementation practices.
Once you’ve hired a growth marketing expert, they will analyze your business and determine the areas that need to be tested.
A good growth marketer is thorough in their data collection strategy. For that reason, they will establish a sample size that will be sufficient to draw conclusions that are based on solid data.
What’s more, they will also take into account the impact that the proposed strategy has on your customers in how they interact with your product and brand.
To expert growth marketers, the customer journey is a crucial element in devising an action plan.
This is because they know that marketing a stellar product is only half the battle.
Understanding the needs of your customers also plays a significant role in developing strategies that convert your investments into tangible profits.
Once a strategy is implemented, these expert marketers record and analyze the data that comes out from their marketing campaigns.
They continue analyzing it in order to know whether they should tweak elements of their campaign or do away with it entirely.
Hiring a Growth Marketer Today
Growth marketing is a time consuming and complicated area of business development.
Hiring an expert marketer will allow you to focus on other areas of your business that may be lagging.
During the onboarding process, you may decide to partner with either a growth hacker or a growth marketer.
Both professionals can offer the best growth strategies to your business and expand your online presence.
However, it is important to remember the differences between the two profiles.
Choose the right one for your business’s needs and watch them grow your digital footprint today.