What is Growth Marketing: A Complete Guide
Everyone seems to be using the term ‘growth marketing’ these days. While some see it as just a fancy marketing term, others confuse it with other similar terms such as ‘growth hacking’ or ‘performance marketing’.
To clear the air once and for all, I’ll be diving deep into what growth marketing really means and also touch on other important aspects surrounding the term.
I’ll be covering lots of information in this guide, but feel free to skip down to any section you want to below:
- Definition Of Growth Marketing
- Growth Marketing vs Traditional Marketing
- Identifying Your Growth Channels
- What Makes a Successful Growth Marketer
- 5 Inspiring Growth Marketing Case Studies
Definition Of Growth Marketing
Growth marketing is simply data-driven full-funnel marketing based on rapid experimentation.
With this definition, I want you to focus on the keywords underlined.
– Data-driven: that’s because growth marketing runs on collecting, measuring, and optimizing soft and hard data. No guess work allowed.
– Full-funnel marketing: that’s because, unlike traditional marketing, growth marketing doesn’t focus only on the top of the funnel (aka customer acquisition). Rather, it considers the entirety of the customer journey.
– Rapid experimentation: that’s because the growth process requires you to come up with a specific hypothesis, test it out rapidly, and measure it to know what works and what doesn’t.
Next, let’s talk about how growth marketing is different from traditional brand marketing.
Growth marketing vs traditional marketing
There are several differences between traditional brand marketing and growth marketing. The first difference is on what they each focus on.
As earlier mentioned, traditional marketing is focused on the top of the funnel – that is, Awareness and Acquisition.
On the other hand, growth marketing marketing focuses on the entire funnel. So, your job as a growth marketer is to drive growth across the business by considering the entire scope of the customer journey.
The second difference is that, unlike traditional marketing, the process of growth is driven by rapid experimentation. In growth marketing, the way you drive growth across all areas of the funnel is to constantly experiment with different programs, campaigns, product features, etc.
Overall, the end goal is to increase conversion, create improved customer experiences, and generate data which you can use to optimize your funnel and grow the business.
Another thing worth mentioning is the fact that the Lean Startup Methodology that’s used in Silicon Valley is very similar to how growth marketing works. They both start with admitting that you don’t really know what your customers want.
However, if you start by thinking you know what they want and you invest heavily into building the product based on a wrong hypothesis, you will end up wasting precious time, money, and resources.
And so, just like the Lean Startup Methodology, growth marketing is all about defining a hypothesis up front about what a customer wants,finding the fastest and most efficient way to test that hypothesis,and designing an experiment that can validate or invalidate your hypothesis.
By the way, its totally fine if your hypthosis is initially wrong because at least you can move forward with the new insights and test the next hypothesis until you find a winner.
Here’s what a real-life example might look like:
Assuming you’re a brand marketer who has been assigned to manage a brand campaign. Rather than saying you know exactly what your client’s customers want and what is going to lead to 10,000 customer acquisitions, you should start with a simple hypothesis.
E.g. Our client’s target customers care about X.
Next, run a quick experiment to see if this is actually that they care about – whether that’s a messaging campaign, a video campaign, etc. At this stage your goal is to see your audience responds to what you’ve put out. Are they engaging with it? Are they sharing it with others?
If your data suggests that your hypothesis was right, then you can double down on that. But if you are wrong, you can collect data , go back to the drawing board and refine your hypothesis for future campaigns.
Building & Optimizing your Growth Process
There are essentially two phases in building out your growth process.
First, define your growth model.
Then, map out your customer journey and identify all your growth channels.
I. Defining your growth model:
Here, you need to be clear about what your growth model looks like at the highest level – whether that is user growth or revenue growth.
The most common framework for growth model is Dave McClure’s Pirate Metric for startups, which is also known as the AARRR framework.
With the AAARR framework, you have:
- A – Acquisition (Bringing on new users).
- A – Activation (Getting your new users to make their first purchase or take their fisrst action on your website).
- R – Retention (Getting them to keep coming back and stay longer).
- R – Revenue (Getting more revenue from each user).
- R – Referral (Getting them to tell others about your product/service).
This could vary slightly for different business, but it’s essentially looking at the entirety of your funnel,and figuring out all the different ways you can affect growth.
All of those metrics represent opportunities to grow your business in different ways. So, your first step is figuring out how these metric apply to your business and what growth opportunity do they present to your business.
Once you’ve defined what your growth model is, the next step is to walk through the customer journey.
II. Map out your customer journey and identify growth channels:
Your objective here is to find out what it looks like to go through the entire funnel from the perspective of your customers.
That’s typically when you start getting a sense of all of the channels you have at your disposal in order to increase those metrics. So, what are all the possible ways that your customers could find out about your business, drive awareness, and get acquired?
Here’s a quick example for a mobile app:
For acquisition channels – you may identify SEO, SEM, PPC, and Content Marketing.
For Activation – you may have email marketing and push notifications.
Then you do the same for Retention, Revenue and Referrals.
Remember, to come up with the right growth experiments, this exercise needs to be done from the perspective of the customers. Rather than think “how can I increase value to my business”, you should think “how can I increase the value I’m delivering to our customers”.
The worst way to come up with growth experiments is to focus on your growth metrics themselves, rather than solving customer pain points that then lead to increased performance.
Identifying your Growth Channels
Being able to identify other growth channels is an important function of growth and you need to choose these wisely. You need to be able to identify which channels are performing well and which aren’t.
But the ones that I’m going to focus on are the top five digital marketing channels that are great for exploding growth for most businesses I’ve worked with.
#1 – Search Engine Marketing (SEM)
The first channel on my list is SEM, which is also referred to Pay Per Click (PPC) by some marketers. Google Ads (formerly Google AdWords) and Microsoft Bing are the most used platforms for SEM/PPC.
And believe it or not, online marketers spent 12% more on digital ads in 2020 despite hit from pandemic. This statistic isn’t surprising at all considering data shows that the ad revenue of Google has grown every single year since 2001.
Since Google and Facebook own 37.2% and 19.6% market share respectively of the PPC market, those are obviously channels that you might want to focus on once you’ve identified that your audience lives there.
Another thing to note is that PPC/SEM campaigns require constant optimization, looking at keyword traffic, checking search trends,and fluctuations on PPC cost. However, with a lot of attention it can drive growth for your business.
A good example of a business that did this very well is Kayak which is a travel searching service.They recognized the power of Google Ads before their competitors.So they were able to optimize obsessively and they dominated their market before their closest competitor Expedia had a chance to catch up.
#2 – Search Engine Optimization (SEO)
The second recommended channel for growth is Search Engine Optimization (SEO).
I’d define SEO as the process of improving your website’s ranking on the search engine results pagein order to get more people on your site.
In May of 2016 a study by Search Engine Land showed that Google now handles at least 2 trillion searches per year – which trickles down to 5.6 billion searches per day, 228 million searches per hour, and 3.8 million searches per minute across the globe.
For a lot of companies, SEO is the main driver of most website traffic as well as the most qualified because the searches are usually from audiences that are intent-focused.
In a study, it was discovered that over 25% of click-through rates went to the first position on the results page.15% and 11% of the click-through rates went to the second and third position respectively.
And for the tenth position on result page, those got around 2.5% clicks. As Sophia Eng likes to say, the second page is where websites go to die.
Some examples of companies that are doing SEO really well are Wikipedia and Yelp, and they have seen massive growth in this channel.
#3 – Social and Display Ads
Display ads are the banner ads that you see on websites all over the internet while social ads are the ads you see on social media.
A good example of a company that executed this very well was the Dollar Shave Club after discovering that over 50% of adults have more than one social media account.That’s why it’s really important to know your audience and where they’re at and what social media channels that they’re using.
Facebook is generally used for B2C companies. On the other hand, LinkedIn works very well for B2B companies who might be looking to target C-suite clients.
For ecommerce companies, Instagram is an explosive channel for growth. An example of a company that did really well on this channel is the MVMT Watch who grew to $90 million in 5 years using Instagram ads and Facebook ads.
#4 – Email Marketing
Email is one of the oldest channels for growth, but still converts really well especially when we’re talking about new prospects and also throughout the funnel. It’s a great channel especially for retaining and engaging existing customers when it’s personalized.
A good example of a company that did really well was Groupon. They initially started sending out emails to let their subscribers know about the deals in their local areas, and once they saw a massive growth from these emails, they stuck to it.
Asides from engaging and activating customers, emails are also a great tool for retention. Ebay utilized this growth strategy. When you make bids on eBay,they’ll get you back on their website when they send out that email that says you’ve been outbid which causes you to then go back to your account and interact with the website.
A good tip that I recommend especially when you have a new email subscriber (who is a prospect or customer) is sending out an email from the CEO (and if you want to make it super-personalized, include your actual phone number or the CEO’s ).
Adding a layer of personalization could boost your engagement rates because it shows your prospects or customers that you actually care.
#5 – Content Marketing
The last growth channel I’ll be dicsussing here is the content channel. This is done through blogs and forums.
Codeacademy and Reddit actually got their start by targeting blogs. And Mint – the finance app – targeted niche blogs early on and this allowed them to reach 40,000 users before they had even launched their business.
So once again, it’s important to know your customers, your audience, where they’re at,what they’re reading, what they’re doing,understand what websites they’re looking at,and look into those websites to find out the social media channels that those websites are advertising on.
That’s a quick hack for you to figure out.
What Makes a Successful Growth Marketer?
There are 3 main components to being a successful growth marketer based on the skillsets growth marketers get evaluated on the most.
- Channel-level expertise: These channels include email marketing, SEO, PPC, SEM, etc. You are expected to understand how these channel works and have some tactical experience as well.
Side note: In my opinion, channel-level expertise is probably the least important because I’m a strong believer in Sam Altman’s philosophy of hiring for slope, not y-intercept. If you’re a total beginner but you’re a fast learner and you’re hungry to get better, then becoming a channel-level expert is not that hard. So personally, I wouldn’t over-index on expertise.
- Analytical capability: Since growth marketers regularly extract data to gather insights on experiments, it’s really important to have a strong analytical background – ideally a combination of Excel skills, Google Analytics, and SQL.
- Strategic thinking & project management: This involves being able to come up with good ideas, figure out how to pick the right growth experiments, how to prioritize your roadmap, how to identify growth opportunities, and how to work with other stakeholders
The combination of these three skills form the foundation of what makes one successful in growth marketing. While you may not be a perfect 10 in all three areas (almost no one is), you still need to have some level of expertise in all of them.
For instance, you can’t have zero skills in one of them and still be a successful growth marketer. It’s simply not possible. What I’ve noticed a lot amongst successful growth marketers is that they have general expertise in three areas and go all in on one or two of them.
5 Inspiring Growth Hacking Case Studies
1. Growth using automation + 3rd party integration: Airbnb
Problem: In the early days, AirBnB was struggling to build their userbase and brand reputation.
Strategy: They found an alternative accommodation listing platform which had 10s of millions of users – Craigslist. Next, they built an automation tool to enable accommodation providers on Airbnb copy their listing on Craigslist with a single click.
Result: Instant access to a massive market which dramatically grew their customer base and boosted their brand reputation.
2. Growth Using User Referrals & Rewards: Dropbox
Problem: Dropbox came on the scene in 2007 but by then the cloud storage market was already too competitive – and several companies in that market were either shutting down or had minimal success. To make matters worse, Dropbox tried growing through traditional methods and quickly found the cost of acquiring a single customer ranged from $233-$388 (which didn’t make sense since Dropbox was $99/year then).
Strategy: Dropbox borrowed their strategy from Paypal’s refer-a-friend program. However, unlike paypal that rewarded users with cash, Dropbox rewarded users with what was revelant to their business – more storage space. So, they made the referral program a part of their user onboarding process, which proved to be successful.
Result: As of 2021, Dropbox has over 700 million users and this growth strategy was one of the turning points for the company.
3. Growth By Creating Free Tools: Hubspot
Problem: Hubspot was looking to grow their email list and customer base and was looking for a creative way to achieve this goal without spending heavily on paid advertising.
Strategy: Hubspot decided to create a free tool that allowed people grade their website for overall performance, SEO, mobile-friendliness, and security.
Result: The tool helped Hubspot grow their email list since you had to sign up to get the website report. Dharmesh Shah, the company’s cofounder in 2015 credited the website grader tool as playing a key role in helping the company grow to 15,000 users.
4. Growth Using Word of Mouth Strategy: Shazam
Problem: Shazam – the song identifier app – had launched and the founders and since the founders were bootstrapping the business and didn’t have big marketing budget, they decided to look for creative ways to incease user adoption fast.
Strategy: They created a brand awareness strategy that revolved around having people hold their phones to the source of the music – which would normally draw attention and make others interested in checking out the app for themselves.
Result: This simple word-of-mouth hack was extremely pivotal in helping Shazam become a household brand – and even making its way into the dictionary as a verb that means to identify a song. Shazam has also been downloaded over than a billion times.
5. Growth Using Social Psychology: Monzo
Problem: Monzo had just launched and didn’t have nearly as much brand credibility as its competitors. So it looked for a way to encourage more signups.
Strategy: Monzo borrowed their idea from applied social psychology and created what is now popularly referred to as the “queue jumper” hack. Whenever a new user signed up, they were placed in a electronic queue where they could see how many users were in front of them and behind them. And they were also given the opportunity to jump the queue by referring others.
Result: This hack paved the way for Monzo to acquire 250,000 users in 2 years.
Whew – there you go! I hope this post was helpful in spinning your growth wheels and giving you a few ideas that you can use to grow your business.
Remember, growth marketing isn’t limited to any particular strategy. What’s most important is having a mindset that can spot growth opportunities.
Share with me in the comments – what growth project is your business taking on this year?
And don’t forget to connect with me on Twitter and LinkedIn for more growth tips and guides.
