What is growth marketing?
Marketing strategies typically have four steps, often portrayed as a funnel. First, you generate leads by building brand awareness and drumming up interest. You then drive traffic through the funnel by creating a desire to choose your products, until eventually they take action and are converted into paying customers.
Growth marketing adds a fifth step to this funnel — advocacy. Once customers reach the bottom, the idea is to keep them engaged, nurturing your existing client base. This is an easier and more cost-effective solution to increasing sales than focusing solely on attracting new clients. Loyal customers are willing to spend larger amounts, and will also become brand advocates, generating new leads through word of mouth.
How does it work?
The growth marketing team analyses data and identifies potential areas that could be improved. They then design and conduct experiments, analysing the results and finding the best way to continue growing your business. These tests can focus on any stage of the marketing funnel, from awareness and action, to encouraging loyalty.
As an example, you could test the efficacy of your call to action (CTA) by varying the position, text and colour. Then, by showing the different options at random, you can see which produces the highest conversion rate.
Why do you need a team?
Growth marketing draws on a wide range of skills, from engineers and designers to marketers and analysts. With specialists from each area working together, a team offers the in-depth expertise your business needs to get results. Plus, growth marketing is a scientific process, and drawing on insight from a number of individuals helps avoid any bias and produces objective results.
A dedicated team also gives you the capacity needed to look at each stage of the marketing funnel. With individuals focusing on one stage, every area will get covered. This means faster results for your business.
How do you structure the team?
The structure of your growth marketing team will vary depending on the size and shape of your business. There are several team structures to choose from, and understanding exactly what stage your business is at will help you choose the most effective one.
Micro team: This is great for startups. With a small handful of people setting goals and fulfilling all of the growth marketing roles, this team model requires minimal resources. However, it does mean you have less capacity to test every area.
Dedicated team: For small businesses with more resources, put together a dedicated team. This not only gives you access to a wider set of skills, but also gives you the capacity to run more experiments.
Independent growth team: Teams are structured based on either “workflows”, such as signups and notifications, or “metrics”, like acquisition and retention. Within each team, individual members focus on their own growth roles while working towards their team’s objective. The Growth Manager coordinates all the different teams.
Functional growth team: Teams are allocated an individual metric, and each team has a structured hierarchy. Team members report to their “function heads”, who then report to the Growth Manager or CEO. While this structure gives teams the support they need to achieve their growth goals, the hierarchy means there’s less flexibility.
Key Performance Indicators (KPIs)
KPIs are metrics you can measure which help identify the areas that need improving. The KPIs you want to track will depend on the goals set by the Growth Manager, which are commonly based on customer acquisition, customer retention, or increasing revenue.
For example, if your key goal is to acquire new customers, then it would be useful to test the success of free trial periods. In this case, a useful KPI would be the number of customers who continue using your service once the free trial period is over.
Just like the structure of your growth marketing team, the choice of KPIs will depend on the size and shape of your business. Startups might want to focus on qualitative feedback and brand awareness, while it would be more useful for growing companies to look at CPA (Cost Per Acquisition) and CLV (Customer Lifetime Value).
The next steps for growing your business
When choosing which model to follow, the first thing is to decide what you want from your growth team. If you want them to focus more on product development, then your business would be better suited to the functional model. On the other hand, you might be better with the independent model if you want to take a more holistic approach.
Put together a growth marketing plan and start finding ways to grow your business at each stage of the marketing funnel and beyond.