What is growth marketing?

Growth and marketing are not new concepts, but the concept of “growth marketing” is relatively new. Here’s a basic definition of growth marketing:

Growth marketing is the process of achieving business growth by optimizing the conversion rate of each stage of the customer acquisition funnel through swift, iterative cycles of research, development, testing, and analysis.

It relies on an understanding of the needs and preferences of a specific market segment and internal tools and processes to track, record, and analyze data. The goal of growth marketing is to drive business growth by developing, promoting, delivering, and supporting goods and services that are uniquely tailored to a specific target market.

At its core, growth marketing is a framework to help drive business growth. And one of the great things about growth marketing is that it can be used to boost any marketing strategy–demand generation, content marketing, email marketing, social media marketing, you name it!

So now that you’ve got the general idea, let’s spend a little time taking this definition apart.

Growth marketing drives business growth

Here’s the first part of the definition:

Growth marketing is the process of achieving business growth…

Business growth is the ultimate aim of growth marketing. And you get business growth by improving metrics that have a direct impact on the bottom line: more qualified leads, more customers, more revenue, better customer retention.

Not all metrics are created equal, however. While traditional marketing might focus on improving metrics like social likes and pageviews, these metrics do not drive business growth. While they can be factors in achieving growth or by-products of growth, they do not indicate growth in and of themselves. You can’t monetize pageviews, but you can monetize customers.

Growth marketing optimizes the customer acquisition funnel

Now, let’s take the next part:

by optimizing the stages of the customer acquisition funnel…

The customer acquisition funnel is the path that prospects travel to become leads, customers, and promoters.

While there are different models, the customer acquisition funnel I like best is this:

Let’s go through these funnel stages.

• Attract – Draw visitors to your business with marketing initiatives, such as content and ads.
• Convert – Turn visitors into leads by giving them something of value in exchange for their information.
• Close – Nurture leads into customers by providing useful information.
• Retain – Retain customers by continually offering them additional value.
• Refer – Get referrals to drive new business from current customers by establishing yourself as a trusted business partner. These new leads enter at the top of the funnel and the cycle begins again.

This funnel is a combination of the HubSpot Inbound Methodology and Dave McClure’s Startup Metrics for Pirates. It is particularly useful because it can be applied to a variety of business models and clearly identifies steps that customers can take after purchase.

While marketing has traditionally only focused on the top of the funnel, growth marketers are concerned with the entire funnel: how many prospects they attract, how many of those prospects become qualified leads, how many of those qualified leads generate sales, how many of those sales become repeat sales, and how many of those repeat sales refer other prospects who purchase.

Only by concentrating on the entire funnel can you maximize growth. If you focus only on the “Attract” and “Convert” stages, you may get a lot of leads, but those leads might not result in sales. If your marketing ends at the “Close” stage, then you miss out on the opportunity to generate repeat purchases. If you ignore the “Refer” stage, then you miss out on an opportunity to cultivate happy customers who will promote your business. Focusing on the whole funnel gives you the opportunity to grow your business at each step.

Growth marketing uses experimentation

Growth marketing is a process, not an end in itself, as this next piece points out:

through swift, iterative cycles of research, development, testing, and analysis.

One of the key ways growth marketing differs from traditional marketing is through its use of rapid experimentation to improve marketing effectiveness. The market environment is constantly changing, and there is no guarantee that traditional “best practices” or methods employed by others will work for your company. Plus, there are many emerging channels whose marketing value is yet unknown that could potentially drive growth.

The only way to know if a particular marketing strategy works is through experimentation. This is a framework I like to use to conduct growth marketing experiments:

1. Research a marketing question.
2. Brainstorm potential influencing factors.
3. Prioritize what you think is the most influential factor.
4. Develop a test hypothesis around this factor.
5. Run the test.
6. Analyze the results. Rinse and repeat.

This is a straight-forward, six-step process that ensures that each experiment produces valuable information that can be used to design the next test. It can be tons of fun to “throw a lot of ideas at the wall and see if they stick,” but doing this won’t help you gain useful insights. Developing a testable hypothesis positions you to get the most out of your experiments.

You should be prepared for some of your experiments will fail, so you need to have a process that allows you to run experiments quickly to find those that will work. In other words, you need to “fail fast” to realize results. If it takes you six months to run an experiment, but it only takes your competition one month, you’ll quickly fall behind.

Growth marketing targets a specific market

It goes without saying that you can’t market to everyone. Honestly, if you’re marketing to everyone, you’re marketing to no one. That’s what this next part is all about:

[Growth marketing] relies on a deep understanding of the needs and preferences of a specific market segment… 

Growth marketers know that prospects and customers demand a more personalized experience, and the only way companies can provide this is to know their target market “inside and out.” The best marketing successes are gained by uncovering hidden customer insights and crafting messaging that addresses them directly.

To find these hidden gems, growth marketers not only understand the “what” your target segment does but “why” they do it. This is where real insight comes from. By addressing the underlying motivations of your market, they motivate their audience to act more easily.

Growth marketing relies on data

To uncover audience insights, you must have a ready supply of data. And this is directly addressed in the next part of the definition:

[Growth marketing relies on] internal tools and processes to track, record, and analyze data. 

In order to draw valid conclusions from your experiments and benchmark your progress toward your goals, you must have a good method for tracking, recording, and analyzing data. This can be anything as simple as reviewing Google Analytics reports and entering key metrics in Excel to purchasing an expensive, enterprise-level solution to track your marketing efforts.

The main point is that growth marketers have some standardized process to collect and learn from the experiments they conduct. That way, they’re in the best position to learn from past efforts.

Growth marketing provides value

And now for the next section:

The goal of growth marketing is to develop, promote, deliver, and support goods and services…

The knowledge gained from understanding the target segment and using the findings gained through rapid experimentation can be used to improve all of their processes—from product development, to marketing and sales, to customer support. Growth marketers have the ability to test products before development, test marketing and sales messaging in real time, and improve customer support because they already have some idea of what their customers need, want, and expect.

Growth marketing delivers results

And, finally, the last part to tie it all together:

 that are uniquely tailored for a specific target market to drive business growth.

Business success depends, in large part, on selecting a target market, understanding that market, and developing products and services specifically designed for that market. Without this, businesses tend to flounder because they don’t have an overarching mission to guide them.

Growth marketers are perfectly positioned to gain market-specific insights that can drive business forward. Because they are focused on a specific market segment and continuously running experiments, they have a process to determine what will sell and what won’t, what messaging will work, and how best to retain customers before making costly investments. Yes, they make mistakes along the way, but their mistakes are generally small ones, not irretrievable disasters. And they generally find the fastest way to drive business growth. That’s the power of growth marketing.

And that’s it! That’s the answer to “what is growth marketing.” Wasn’t too bad, was it?

Okay, now that you know what growth marketing is, in the next post, we’ll explore how to run a successful growth marketing campaign.