What is growth marketing?
We talk a lot about growth at Growclass, but we know it’s a misunderstood field that can still leave folks confused and wondering “what is growth marketing, anyways?”
That’s where this handy guide comes in, helping you:
- Break down the basics of growth marketing,
- Understand which marketing skills you’ll need to succeed,
- Maximize revenue for your business, and
- See how it differs from traditional brand marketing
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What sets this guide apart from the endless hoard of handbooks online?
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With this guide, we'll show you just how accessible the world of growth really is, and the positive impact it can make for your marketing team or your business.
From the top we’ll answer the most frequently asked questions about growth marketing, and wrap-up with a cheatsheet so you can easily refer back to your key takeaways.
So, shall we begin?
Is this growth marketing guide for you?
It is if:
- You’re a founder/marketing leader who’s done with acronym-obsessed agencies and all-strategy-no-execution consultants
- You can’t waste any more time, resources and money on too-good-to-be-true marketing hacks (and “hackers”)
- You’re ready to take control of your growth and harness the right channels to make your business ping delightfully with sales
Now that you know if this guide is for you, let’s dig into the good stuff.
See you on the other side.
So… what is growth marketing, anyways?
Growth marketing is about more than just crafting theories about your customers. It’s about testing these theories, then adjusting them, and then testing them again in real-time.
Through these tests, you get the sweet, sweet data you need to make informed business decisions rooted in insight — vs. assumptions — straight from your customers.
In short: Growth Marketing is a hypothesis driven, experimental approach to marketing rooted in making decisions with data.
New to marketing? Acronyms got you hella confused? Then our ultimate list of growth marketing terms and acronyms is for you.
Imagine, for example, that you’re a scrappy, grassroots community organizer. You’re consistently engaging with the people you want to support, getting to know them better so you can find out exactly what their problems are, and how you can help solve them.
You are endlessly curious about your community.
Now imagine instead that you’re a flashy career politician, dropped into a neighbourhood you’ve never lived in before to win the election for your party. You’ve never met with the people you want to represent, and when you do speak to them, it’s at a public debate where you read scripted talking points about what your party thinks they want to hear.
You are focused on getting your message across.
The difference between traditional marketing and growth marketing
In traditional marketing you spend a lot of time looking inward. You take your company’s goals and align them with a customer profile that’s (almost always) built on untested assumptions.
Then you craft a brand story that you think will help you connect with potential customers, and increase the likelihood that they’ll buy from you.
Growth Marketer: Finding opportunities to convert at every stage of the funnel, from awareness to referral.
Traditional Marketer: Focusing at the top of the funnel, with awareness and early customer acquisition.
In this way, traditional marketing focuses on awareness and early customer acquisition — so, traditional marketers tend to hang the top of the funnel.
But that’s not the only part of your business with the opportunity to bring you real growth.
Think about it, you’re an ecommerce beauty startup hellbent on growing. A traditional marketer is looking to bring in new customers. Sales, promotions, influencers, PR, ads. All great, and necessary growth avenues.
Growth marketers are looking at those things too, but through a slightly different lens:
- How much did each new customer cost through that influencer campaign?
- Did your sale customers ever come back and repurchase? What is the lifetime value of those customers vs. non sale customers? What did that sale do to your margins?
- Did your PR strategy bring real backlinks from legitimate publications (SEO gold!!) or did they fade off in a month?
- How did we bring in our most valuable customers, who repurchase every month? How can we find more of them?
- Last month you had 100 add-to-carts that resulted in no sales. What happened? How can we get them to complete their purchase?
- The customers who were buying often, but have stopped, are so valuable. How do we incentivise them to come back?
Growth looks across the funnel, finding opportunities to convert customers throughout: from awareness all the way to resurrecting customers who have fallen off.
In its entirety, the growth marketing funnel includes: awareness, acquisition, activation, engagement, retention, resurrection and referral.
Look, we get it — traditional marketing is how it’s always been done. But if you’re reading this, you understand that things are changing. That you need to get with the times to succeed.
As a growth marketer you do just that, constantly investigating and testing what you’ve learned about your potential customers, creating a powerful, data-driven feedback loop.
Your tests are lean, so you don’t drain your budget on things that won’t deliver. And, remember, these are experiments, meaning you’re able to pivot and iterate your strategy based on the data you collect — to make the greatest impact, fast.
Growth is hypothesis driven, experimental, and based on behavioral psychology.
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Consumer psychology has entered the chat
By now, you’ve noticed how growth differs from traditional marketing in its investigative and experimental approach to building strategies around data mined from your best customers.
In this way, growth lives at the intersection of data, marketing and product, and is rooted in consumer psychology.
In Growclass, we break down how you can get into the heads of your most valuable customers, to uncover the leanest ways to convert them.
Growth marketing — an equation
Now that you have a handle on growth, here is an (overly simple, but helpful to start with) equation to measure growth:
acquisition - churn + resurrection = total growth
To break it down:
- Acquisition = how many people signed up for your service
- Churn = how many people are falling off and/or not repurchasing
- Resurrection = How many people that left, or stopped buying from you, are back
In this way, growth offers a fuller, clearer picture that doesn’t just count the new customers you’ve gained, but considers those that have dropped off, and those who’ve returned.
The growth conversion funnel:
Awareness is all about discovery. How does your target audience find out about your business?
Word of mouth is the best (and cheapest) way to build awareness, but the avenues for discovery are endless: from organic social media and search, to paid content, ads, influencers, media and more.
A caveat here on media and the press: PR is not growth (though we break down exactly how you can leverage it to your advantage here).
Where PR is useful is:
- Bringing credibility to your brand
- Securing high value backlinks to increase your SEO
Now that your customer knows you exist, you want them to get interested. In the words of a bad Bachelor metaphor, acquisition is when your customer gives you your first rose.
So what does that action look like for your business? Not a vanity metric. Things like impressions (which, to be registered on an ad, only needs to see its code loaded on the page — without actually being seen by your target audience) don’t count.
Instead, what’s the most valuable first action your customer can take?
Usually, it’s paying you, though depending on your business it can be when your customer enters their credit card information, or wraps up onboarding.
Acquisition channels are either paid, or unpaid:
• Paid Acquisition – You’re paying to have your target audience see and engage with your content. Think of ads and sponsorships where you’re paying for impressions, reach, conversions, clicks, referrals and more.
• Unpaid Acquisition – You’re leveraging marketing channels to drive “organic” engagement with your audience, from unpaid media (PR) to content marketing, social media, and more. You’re investing in the cost of labor to bring these channels to life (i.e. the hours you or a member of your team takes to work these channels), not metrics like impressions, clicks, etc.
Congrats! You got yourself a customer. But did they actually, you know, use your product/service?
This is what activation is all about. Where Spotify acquires customers when they set-up an account, they haven’t activated them until they play their first song in the app.
Activation is a one-time event where your customer gets the value of your offering.
So how can you get your customer to this critical step?
In Growclass, we dive into tactical ways to get your customer there.
You can scrap the “potential” in front of your customer or user — at this stage, your goal is to increase their, well, engagement with your product or service.
Engagement can be broken down into three things:
- Frequency of use
- Intensity of use
- Depth of use
You want users to go beyond simply purchasing from you, to spend more money and try more features.
A few ways to measure engagement includes:
- Daily, weekly or monthly active usage
- Repurchase rates
- Depth of feature usage
- Time spent on site or in app
- Open rates
- Click-through rates
Data has a fun role to play here, too, in helping you quantify and demonstrate this impact. Consider platforms that show you how far you’ve progressed with them through streaks.
Your goal with engagement is to make customers feel smart, accomplished, and valued — by showing them how you’re helping improve their lives, saving them time and making them look good.
Head’s up y’all! Retention is your most important metric for growth.
Because it costs much, much more to acquire a new customer than to retain someone — we’re talking 5 to 25 times more, according to the Harvard Business Review.
We humans are creatures of habit, and where possible, prefer sticking with the devil that we know.
Now while retention is about the familiar, this doesn’t mean it looks the same across industries.
In e-commerce, retention looks like:
- Repurchase rates: Are customers happy with their purchase, and coming back for more when it makes sense (i.e. buying a new face wash that’s meant to be used daily once a month), or purchasing other products from you?
For SaaS and subscription companies, retention looks like:
- Churn: The percentage of customers who, after trying your business, decided it wasn’t for them and left (once again, this depends on the nature of your work — i.e. an accounting software should see clients staying on-board for the lifetime of their business). How many of them were active on day 1 vs. day 31?
A great place to kickstart your retention strategy is your exit flow. Take the e-learning course that offers a lite subscription for folks who find they’re not using the platform as often as they thought.
Your goal is to make the experience an opportunity for you to gather data from your customers, and use that data to offer personalized options for them to stay.
Think about the journey for your customers. What’s it like? Where are there opportunities for you to learn more about them, and offer custom solutions?
You get that holding onto your customers is cheaper than getting new ones — in the same way, bringing back someone who left will cost you way less than acquiring one.
- You already have their contact info
- They already understand your product
Awareness doesn’t need to be a part of the equation here, but good data and an experimental mindset does.
For your resurrection strategy, you want to remind your churned customers of your value, with a lil extra sumtin-sumtin: be it a phone call with the founder, a discount, or a freebie.
If you’ve got a team, segment your churned customers and assign them to different members. Run experiments, get competitive, and see what strategies perform best. Was there specific messaging that performed best? Add it to your sales emails.
And, remember: this doesn’t have to be stressful. Treat your resurrection experiments as a fun learning opportunity — after all, in the worst case, you’re still left with the same customers as before, and best case? You’ve gained ground, baby!
We’ve spent enough time talking about winning customers back. Now, let’s focus on those champions who love what you’re doing.
Referral is all about giving these customers a megaphone so they can do your selling for you.
A great referral program is made up of two things:
- Incentives: What motivates and incentivizes your customers? How can you make yours a unique and delightful experience?
- Timing: When is my customer motivated to share my product or service? When are they happiest?
Plan for growth
Congratulations. You’ve officially learned the difference between traditional marketing and growth marketing, and how the growth funnel works.
Now, you have a strong foundation to do the real hard work of building something your customers love.
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