What is Growth Marketing? (Why Huge Brands Need It Too)
Nov 19, 2021|Read time: 12 min.
- Growth marketing leverages data and technology to efficiently, sustainably, and substantially improve marketing results.
- The goal of growth marketing is not just customer acquisition, but also creating a loyal, engaged customer base that values what your company offers.
- Growth marketing adopts a more holistic, full-funnel approach than growth hacking.
Fortune 500 companies aren’t known for their rapid growth. The days of high risk 10x growth are behind them. Now, they’re more tortoises than hares, producing modest, reliable revenue increases that you can set your watch to. Yet, there are still plenty of opportunities for massive brands to channel their inner rabbits through growth marketing.
Don’t confuse growth marketing with growth hacking. This isn’t a reckless, speed-fueled digital marketing tactic. Nor is it a bootstrapping strategy that burns through obscene amounts of cash just to rapidly increase a user base.
Growth marketing is a sustainable strategy that helps you amplify profitability without taking on additional risk. In fact, it’s designed for larger companies who want to show the world they still have a few tricks up their sleeve.
What is growth marketing?
Growth marketing leverages data and technology to efficiently, sustainably, and substantially improve marketing results.
Unlike traditional marketing, which tends to focus primarily on the top-of-the-funnel (TOFU), growth marketing focuses on engaging individuals at every stage of the funnel:
- Generate demand to attract new customers
- Convert, onboard, and engage them
- Delight and retain existing customers
- Transform customers into brand ambassadors
Growth marketing involves constantly experimenting with different channels and strategies, then validating the results. If a strategy is successful, it’s thoroughly optimized and deployed at scale.
Growth marketing also considers customers’ changing motives and desires in order to deliver highly customized messaging. Using A/B and multivariate testing, growth marketers can iterate messaging at each step of the funnel to improve conversion rates. They determine what content resonates with each audience segment, then they develop personalized campaigns across multiple channels.
The goal of growth marketing is more than customer acquisition. It’s also about creating a loyal, engaged customer base that values what your brand offers. Loyal customers lead to a lower churn rate and higher customer retention rate, which results in more revenue since the cost of acquiring new customers is so much higher than that of retaining existing ones.
Engaged, satisfied customers also have a higher customer lifetime value. Because growth marketing looks beyond the initial conversion to building authentic, lasting relationships, customers are much more likely to stick with the company for the long haul.
Growth marketing vs. growth hacking
Sean Ellis coined the term “growth hacking” in 2010. It’s a type of marketing that allows companies to acquire as many customers as possible to achieve rapid growth. This strategy is often necessary for startups that are in survival mode.
Growth marketing is more holistic, with a focus on creating sustainable, long-term growth over the entire customer lifecycle. It retains the creativity, agility, and even some of the same tactics of growth hacking, while also keeping the bigger picture in mind.
Dropbox is an example of growth hacking
Dropbox is an example of a company that used hacking to amplify its organic growth. First, they gave every user 5GB of free cloud storage, which was a significant amount at the time. But, the real driver of growth was their referral program in which they gave users additional free storage for every referral.
This one tactic increased signups by 60%.
Hotmail is another classic example of growth hacking marketing in action. As the first free email service, they offered something no one else did. But with a limited promotional budget, they had difficulty getting the word out (this was before social media, blogging, etc.). Then they implemented one small change that helped them acquire one million users within six months: they added a short message at the bottom of every email users sent inviting the recipient to get their own free Hotmail account.
Hotmail and Dropbox capture the essence of growth hacking: creative, disruptive marketing tactics that drive rapid user acquisition at a low cost.
Growth marketing is the next phase. It allows more established companies to continue to grow while also engaging and retaining existing customers.
Benefits of growth marketing
Data and results-driven
Growth marketing is data-driven. It’s vital to rigorously test and tweak every hypothesis, tactic, and channel to determine what works and what doesn’t. This approach eliminates poor decisions based on seniority, instinct, or the loudest opinion in the room. As a result, you can focus on what drives the best results and then doubling down on those strategies.
Growth marketing seeks to create long-term relationships with customers that go beyond convincing them to make the initial purchase. It optimizes for user engagement and retention, as well as delivering value in creative ways that build true relationships. The goal is to create customer-centric experiences that delight your audience and keep them coming back again and again.
Higher ROI on marketing spend
The data-driven nature of growth marketing means that marketing dollars are only spent on what works. Money isn’t wasted on tactics and campaigns that provide a minimal marketing ROI. Significant marketing dollars are only spent after a channel or strategy has shown itself to be profitable on a smaller scale.
Consistent optimization also reduces growth marketing costs. By consistently testing and optimizing, growth marketing teams can incrementally improve the ROI of marketing efforts.
It doesn’t take months to see an impact from growth marketing tactics, even though it’s focused on long-term results. Through rapid testing and iteration, you can quickly determine which tactics and growth marketing channels work best for a given audience.
Rather than launching a campaign and waiting for months to see the results, growth marketers consistently monitor the data and optimize as needed.
Even though growth marketing has significant differences from growth hacking, the components of a growth marketing strategy have overlap. Every strategy must include these four components:
4 Components of a growth marketing strategy
Even though growth marketing has significant differences from growth hacking, the components of a growth marketing strategy overlap. Every strategy must include these four components:
As we’ve noted, growth marketing campaigns are always data-driven. Marketers use data to identify where customers come from, what channels bring them in, and how engaged they are when they arrive. This type of behavioral approach in marketing ensures optimal campaign performance.
Tracking the customer journey allows growth marketers to clearly identify the tactics and channels that are most effective and then allocate resources toward those high ROI activities.
Outside the box thinking
To get the highest ROI from their marketing spend, growth marketers must be creative and think outside the box. If they rely on the same saturated channels and overused methods as their competitors, they’ll see limited results.
Instead, they experiment with new channels, tactics, and strategies to find creative ways to engage with their audience. Some of these efforts will fail, but that’s okay. In fact, the growth marketing framework encourages some amount of failure. If you never fail it means you’re not being creative enough.
The goal of every growth marketing strategy is to get people to see the value of your product and buy into it. You’re not using clever marketing to convince people to buy something they don’t want or need. This might help you gain customers in the short term, but it won’t produce long-term, valuable relationships.
Instead, you’re highlighting the many benefits of your product and how it can solve the pain points of your customers.
Growth marketers believe there’s always room for improvement.
Experimentation and testing are the lifeblood of growth marketing. Growth doesn’t happen by sticking to the status quo. It is the result of constantly experimenting with new channels, creative assets, audiences, tactics, etc. The results from these tests allow you to identify untapped areas of growth and while also optimizing your current marketing efforts.
Qualities of a successful growth marketing strategist
The best growth marketers possess a number of unique qualities that some traditional marketers don’t. For example, they often excel at data analysis, multi-touch attribution modeling, and marketing automation rather than copywriting and design.
Obsessed with data
The best growth marketers live and breathe data. They don’t rely on intuition or years of experience to make decisions. They evaluate how customers are behaving by digging deep into the data. Then they can assess what strategies are effective and where changes need to be made.
They have strong data analysis skills, as well as the technical acumen to use marketing technology to achieve continual optimization.
Growth marketers are constantly testing, tweaking, and optimizing in order to squeeze the highest possible ROI from their marketing dollars. They’re not content with their current results, even if things are going relatively well. Every tactic presents an opportunity to learn something new and improve performance through testing and iteration.
Not afraid to fail
Because growth marketers rely on testing and iteration, they know that some of their efforts won’t be successful. They might try a new email marketing strategy only to have it fail miserably. Or they might venture into a new channel and have it lose money. But growth marketers aren’t afraid of failure for two reasons:
- Failed experiments will have minimal impact since initial tests are done on a smaller scale.
- You’ll never discover what produces the greatest results without also discovering the things that don’t work.
Valuable information can be an outcome of failed experiments. It keeps you from wasting large amounts of money on ineffective methods.
Varied skill set
The tasks a growth marketer performs require a unique variety of skills. They need to be good at data analysis, marketing strategy, creativity, A/B testing, optimization, etc. They typically have a solid understanding of email marketing, SEO, and the top social media platforms, including Twitter, Facebook, and LinkedIn.
Additionally, growth marketers also need to thoroughly understand the product they’re marketing, as well as their audience so that they can create effective messaging that resonates with the audience.
Growth marketing strategies and best practices
Growth marketing is one of several business growth strategies that focuses on the entire marketing funnel. Here are several types of campaigns you can deploy:
Using demand generation for growth marketing
Growth marketers use demand generation campaigns to increase awareness and visibility around their product. Marketing managers often use upper funnel marketing strategies such as social media ads, SEO, and influencer marketing at this stage. The goal is to find creative, cost-effective ways to stand out from the crowd and capture people’s attention.
Lead generation growth marketing tactics
Next, growth teams turn interest into relationships through lead generation. One strategy is to retarget individuals from previous content marketing campaigns and convince them to give you their contact information.
For example, you might send users to a landing page to download a white paper or a case study if they agree to become an email subscriber.
Once the prospect is in your marketing funnel, you can run email marketing campaigns to deliver valuable content on a regular basis. This allows you to develop a deeper relationship with your target audience before you ask them to buy from you.
Deploy seamless activation and onboarding
The activation and onboarding stage is critical. New customers need to understand your product/service and learn to use it effectively. Otherwise, they won’t see the value it provides and won’t continue using it.
Activation and onboarding campaigns teach new customers how to use the product/service to achieve their goals and solve their pain points. They focus on helping new users get to the point of first value quickly so that they can see exactly how they will benefit from the product.
Improve customer retention to support growth marketing
Retaining customers is just as important as acquiring new ones. It costs far less to retain existing customers than acquire new ones.
Retention campaigns help you better understand your customers, what keeps them consistently using your product, and how you can provide more value to them over time. Through customer surveys, feedback from the support team, and analysis of actual user behavior, you can determine what your customers desire and how you can consistently give that to them.
Increase customer lifetime value (CLV)
Increasing customer lifetime value (CLV) can lead to significant gains in revenue.
Doing this requires providing increasing value to your customers so that they are motivated to purchase more from you throughout the course of your relationship. A campaign to increase LTV might look like optimizing your ecommerce website to make better cross-sell recommendations or adding new product features that make it even more valuable to customers.
Ultimately, increasing LTV happens by giving your customers more value than they can get anywhere else.
Examples of growth marketing
Some of the most successful companies in the world use growth marketing strategies to fuel consistent growth.
For example, HubSpot systematically redesigned their website, testing numerous design iterations, analyzing the data, and then implementing changes based on the data. Though it was a very labor-intensive process, it resulted in significant improvements across multiple metrics, including a 35% increase in demo requests and a 27% increase in product sign-ups.
Slack is another example of growth marketing fueling remarkable growth. They are the fastest-growing B2B SaaS company in history, which might make you think they’re focused primarily on growth hacking rather than growth marketing.
But Slack knows that engagement and retention are just as important as acquisition. Their growth marketing plan covers every stage of the funnel:
- Soliciting user feedback and making changes based upon it
- Creating a simple, seamless onboarding process
- Using a freemium pricing model to prove the value of the product
- Analyzing user data to maximize engagement
Spotify leveraged growth marketing to completely disrupt the music industry and become the biggest music streaming platform in the world. Arguably, their most successful tactic was making free, legal streaming music available to everyone at a time when illegal downloading was causing headaches for the music industry.
They’ve constantly worked to improve the user experience, creating personalized playlists and recommendations based on listening history. They’ve incorporated both listening to and creating podcasts, giving users yet more reasons never to leave the platform.
To add a social element to the platform, they partnered with Facebook so friends could see what each other were listening to and share music with one another. Their constant growth marketing efforts have 30% of the music streaming market, more than any other service.
A path to sustainable growth
Your growth marketing toolbox offers many ways to amplify results and efficiency, but none of them will work overnight.
Rather, it’s an iterative, incremental marketing strategy that positions you for long term success. By optimizing the user experience at every stage of the content marketing funnel, you are able to consistently attract new customers while also continuing to keep your existing customers engaged.
The end result is consistent revenue growth, a loyal customer base that drives referrals, and a smooth customer journey from start to finish.
Growth marketing FAQs
Growth marketing leverages data and technology to efficiently, sustainably, and substantially improve marketing results.
Growth hacking allows new companies to rapidly acquire as many customers as possible. Growth marketing, on the other hand, takes a more holistic approach that combines customer acquisition and retention to grow more sustainably.