DropBox is known to have accelerated its growth by using its products. It provided storage space for each new business recommendation.
This integration of product and marketing was new at the time. Sean Ellis, the first DropBox marketer at the time, called this a “growth hack”.
Another marketer, Andrew Chen, called the growth hacker a “new VP of marketing.” Coupled with the success of Facebook’s growth team, many high-growth technology companies such as Uber, Airbnb, and Pinterest have begun building and developing what is known as growth marketing?
Growth Marketing is a holistic, data-driven marketing approach. Focus on the entire funnel (not just the top of the funnel) and use scientific methods-make hypotheses, test those hypotheses, and then improve or eliminate them.
Known initially as Growth Hacking, Sean meant that the term “creating creative and collaborative ideas and solving difficult problems”.
Subsequent growth marketers focused too much on the “hacking” side and treated it as a “silver bullet” to solve marketing problems. The term “growth marketing” was promoted to readjust discipline.
Importance of Growth Marketing
Traditional marketing faces two major problems:
1. Cross-collaboration Between Teams is Almost Non-Existent
- The marketing team owns the top of the funnel of awareness and interest.
- The sales department owns the income – consideration and conversion to customers.
- The product team maintains loyalty and support.
Each team is then provided with metrics that measure success at each funnel level. The problem, however, is that teams optimize performance at the expense of each other.
For example, a common goal for a marketing team is the number of leads. However, these low-quality leads can affect other teams (e.g., poor-quality leads are more difficult to convert and retain).
It is just one problem. Another problem is that these teams seldom communicate and collaborate. For example, in such a scenario, the product team is missing out on the marketing team’s expertise in selling new features. This division of departments is one of the reasons most companies haven’t implemented DropBox’s innovative referral program.
Growth Marketing solves this problem by focusing on the entire sales funnel.
2. Marketing teams often have no idea what’s working
Traditional marketing is challenging to measure. Famous American merchant John Vanamaker joked once. “Half of the money we spend on advertising is wasted. The problem is that you don’t know which side is half.”
With little or no knowledge of what works, marketers developed campaigns and tactics based on intuition and (hopefully) educated guesses. It created the need for a rigorous methodology that can create, measure if it works, and redirect/exclude non-working resources from non-working resources to those with growth marketing.
Working of Growth Marketing
The core elements of growth marketing are:
1. Making of a Cross-Functional Team
Since the goal of a marketing team is to carry out the entire goal-achieving process; the team needs more than someone with marketing skills. Sean suggests that the team should include:
Leadership Growth– Select the core area of focus (any part of the goal-achieving process), select the metrics to measure, and select the team.
Lead Product Manager– Manage products and their changes
Software Engineer– Work on the product and experiment
Marketers– Understand different marketing channels and how to conduct experiments
Data Analyst– Develop experiments, extract data, and provide insights
Product Designer– Working on a product and creating a better experience
2. Qualitative Research and Quantitative Data
Data is the key to the growth marketing process. It should be easy to access and analyze. Also, it must be exact.
Sean Ellis, a growth marketer, says “It’s essential that your team have data on each piece of the customer experience—well beyond just how often they visit your website and how long they stay there—so that it can be analyzed at a granular level to identify how people are actually using your product versus how you have planned for them to use it. What this means is that the marketers, data scientists, and engineers must work together to add the proper tracking to websites, mobile apps, point of sale systems, email marketing and customer databases. Once proper tracking is in place, the multiple sources of user information must be stitched together to give you a detailed and robust picture of user behaviour that your data team can analyze. What you want to create is what’s often called a data lake/data warehouse: a single location where all customer information is stored and where you can really dive in and uncover distinctive groupings of users who may be using the product different from other groups.”
3. Testing and Generation of Ideas
Growth marketing teams go through a so-called growth hacking cycle.
The working is as follows:
Analytics: Growth leaders work with data analysts to identify areas of growth opportunity. It can be any part of the funnel you want to focus on. For example, you might see an event or page that causes users to give up or leave a product.
Ideas: Members of the growth marketing team (including product managers, software engineers, etc.) provide ideas on improving areas of focus in the idea pipeline.
Prioritization: Ideas are evaluated based on Impact, Confidence, and Ease of Implementation (ICE) criteria.
Test: Experiment and analyze the results over a while.
Then the cycle repeats.
Is Growth Marketing Right for You?
There is no doubt that growth marketing works. After all, many companies have succeeded. Facebook, Twitter, DropBox, and Airbnb are well-known examples.
However, if you take a closer look, you will find that most of the companies that have created successful growth marketing programs are generally those of:
- Consumer Focus.
- They raised a lot of money.
- We create products that can deliver virality. In other words, more users attract more users.
Growth marketing is not available for most small businesses. In this post, Lars Lofgren, the creator of several growth teams himself, explains why. Here is a brief explanation:
- Probability is hard to understand- Most people don’t understand probability and statistics and do the wrong test. Destructive tests lead to bad results, which leads to harmful programs.
- Most companies don’t have enough data- Accurate testing requires a lot of data, but most companies will never get that.
- Growth teams are too expensive- With the money you spend building your growth team, you can easily create a blog that will rank high on Google and generate tons of organic traffic.
- Growth teams have limited revenue potential- High conversion rates have their limits. Is it worth spending all that money on optimizing these rates?
What should you do if growth marketing isn’t suitable for your business instead?
Marketing with Growth-Focussed Mindset
Our main customer acquisition channel is content marketing. We regularly post content on our blogs and YouTube pages. Over the past few years, we have built this canal and have continued to invest.
We’re not doing anything special here, but we’ve added a tweak to our content marketing strategy. In other words, just like growth marketing, your content is fully functional. Instead of having different content for each stage of the marketing funnel, each piece of our content serves as:
- Acquire new customers.
- Arouse interest in our products by educating customers about what our products do.
- Retain customers by educating them on how to use our products best.
This content goes to every part of the funnel. It:
- Attract new prospects and customers– Google continues to generate traffic by ranking topics searched for by many people.
- Generate interest in our products– Our content teaches potential customers how to create links to our products and how to do so.
- Customer Retention– Our content also teaches existing customers to build relationships with our products.
1. Target Topics with Search Traffic Potential
To rank on Google, you need to target topics people are already looking for. You can find these topics using a keyword research tool like Ahrefs’ Keyword Browser.
Entering relevant keywords will generate thousands of ideas. That way, you can focus on the topics driving growth rather than vanity metrics like traffic.
2. Create High-Quality Content that Deserves to Rank
To be at the top of Google, you need to create content that deserves ranking.
3. Promote the Content
Posting content does not mean that it will be detected automatically. You have to push it and show it to the people you care about.
Growth marketing processes can be challenging to implement. But even if it doesn’t, the element is valid. Experimenting, tackling the entire goal-achieving process-all of these are ideas that can be applied to your business.
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