What is Growth Marketing?


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It’s 2010. You’re working at a start-up, and your boss tasks you with increasing user sign-ups for your cool new social media site. Easy enough, right? The start-up just raised $80M in funding, so that’s no problem, and they’re throwing money at any big-name sporting event they can find. Wrong. Your start-up is bootstrapping everything, and you’re given a tight budget to work with. So what do you do? Well, if only you knew about growth marketing back then!

Growth marketing is the answer to this challenge. If you’re in this situation now, you’re in luck because the team at Redefine will give you a lesson on everything you need to know about this new approach to marketing.

What is growth marketing?

Before you try to pour water on all your marketing tactics, let’s define what growth marketing is and talk about its history. Growth marketing is the function of running scientific tests and experiments to help optimize a particular area within the marketing funnel. The goal of growth marketing is to leverage data-driven tests to increase the performance of the analyzed activity while maximizing its ROI.

This mindset, or approach, to marketing is a relatively new practice, and it’s vastly different from traditional methods of marketing a business. Growth marketing is said to have spawned directly from Sean Ellis’ 2010 development of growth hacking. So, let’s talk a little bit about how growth hacking started before we dive into growth marketing (where we are now).

Growth hacking vs growth marketing

In 2010, growth hacking was coined by Sean Ellis, who was looking to add a marketer to his team. Sean wasn’t really interested in any traditional marketer; rather, he wanted an individual who was focused on growing the organization’s user-base as quickly as possible with as little capital as possible. Just like that, the “growth” mindset was formed. Well, fast forward ten years, and growth hacking slowly forked into growth marketing which derives its principles of testing and experimentation from Sean’s model.

Now, you might be wondering what the differences between the two schools of thought are. We think Useproof said it best: growth hackers are the day-traders of the stock market. You know… the real degens, apes, and diamond hands of marketing 💎🙌 (just kidding). 

What they mean is that growth hacking is a marketing function that focuses on generating cash flow quickly rather than sustainably. It’s a “get-growth-quick” mindset. Growth marketing, on the other hand, is a much longer-term play that focuses on data-driven marketing activities that promote sustainable growth. Think smart, long-term investor who makes stock picks that’ll grow and pay dividends in the long run vs a day trader who only cares about tomorrow. 

Importance of growth marketing

We can all agree a long-term, sustainable, cost-effective marketing plan is something all companies strive to reach, right? So, what makes growth marketing so important?

First off, good growth marketers take a look at the entire marketing funnel. Growth marketers are looking to optimize and test everything in the marketing funnel, from awareness all the way to referral. This is proven to be a much more effective approach since every customer journey is different, and there are valuable users in each stage. These are called the “pirate metrics” or the “pirate funnel” because the funnel follows the sequence AAARRR: Awareness, Acquisition, Activation, Revenue, Retention, Referral. 

Secondly, this marketing approach is simply cost-effective. With metrics like CPM on Facebook and other digital advertising platforms increasing over the years, cost-effective marketing approaches have never been more important. Good thing we have growth marketers to help us optimize the most minute parts of our campaigns!

Finally, growth marketing is important because the approach simply follows the data. One of growth marketing’s primary rules is do what works as dictated by data. Data is the true decision-maker in growth marketing approaches, and this helps businesses attract customers that will actually stick around. 

Growth marketing vs. traditional marketing

If you’re new to marketing, you might be wondering what makes growth marketing different from some traditional marketing approaches, aside from being a bit more digitally focused. So, let’s talk about it! 

Traditional marketing often uses a complacent approach where campaigns aren’t given much thought aside from budget and where customers are. It’s a “set it and forget it” approach to marketing where “experiments” and “testing” aren’t words that are thrown around too often. Growth mindsets are setting it, continuously testing, and doubling down on what works. 

Additionally, traditional marketing approaches mostly focus on top-of-the-funnel tactics like awareness and acquisition. Whereas growth marketers are taking the holistic approach focusing on all stages of the pirate funnel. (Yes, even the awareness stage!)

Of course, the most obvious difference between the two is the inclination towards digital avenues over traditional avenues like print or radio.

What do growth marketers do?

All this growth marketing chatter is probably begging the question, “So, what the heck do growth marketers actually test and optimize?” We’ll introduce some real-world examples in the next section but for now we’ll stick to hypothetical examples. 

The growth mindset can be virtually applied to any marketing or business activity within the AAARRR marketing funnel. For example, in the Acquisition phase, the growth marketing test could be experiments on the post-pitch process. Maybe one growth marketer finds out through testing that a certain report or case study sent after the pitch-process increases the rate at which prospects sign-on. Or, let’s say, in the Revenue phase, a certain communication tactic is used to increase a user’s likelihood of upgrading to the next price tier.

Like we mentioned previously, growth marketing can be applied in any marketing activity. Growth marketing can be leveraged in a variety of marketing activities like SEO, social media, content marketing, business development, web development, and so much more. One thing that’s important to keep in mind is that this approach thrives most where data collection is rich and abundant. 

Examples of growth marketing

There are tons of great examples of growth marketing successes from some of the top start-ups in the world. But, here are a few examples of growth marketing that we thought were most eye-opening. 

Facebook’s CAU metric

In Anthony Pompliano’s podcast “The Pomp Podcast,” he speaks with Bobby Goodlatte, a former Facebook Designer. During their conversation, they talk about both of their takeaways from working at Facebook on their respective growth teams. In the first example, Anthony talks about a growth approach that tackles a business metric in the Retention funnel. 

He goes on to explain that Facebook tracked a metric called CAU (pronounced cow… moo!). CAU was the measurement of the response to a question about whether Facebook cares about its users.  During this survey, Facebook would show examples or product experiences to users and ask them these questions before and after showing the feature/experience. With previous teams, this metric couldn’t be moved at all. But the breakthrough moment of this experiment was when the team tested an interstitial notification that said “Happy Birthday – from all of us at Facebook.” So, what they found was that the one phrase change helped positively increase the brand sentiment metric Facebook was tracking.

Facebook’s registration form

The second example is in the same podcast episode but this time from the podcast guest, Bobby Goodlatte. He used an example at the Acquisition phase of the funnel, which involved the Facebook registration form that everyone encounters when first signing up for Facebook. 

He describes in the past that this specific form had been A/B tested numerous times in which numbers only improved slightly. Bobby explains that he was fed up with the form and decided to do a simple clean-up of all the remnants left from the series of A/B tests. This small design clean-up led to a 5% increase in registration sign ups over the 24-hour period they tested it.

Airbnb’s free photography

Finally, the most widely shared example is Airbnb’s free professional photography services for every host. Essentially, Airbnb offered each of its hosts the opportunity to receive professional photos of their listing. This is a growth marketing example that technically touches on a few different stages of the funnel like Awareness, Acquisition, Revenue, and Referral. Airbnb found that this free service offering earned them more bookings, better referral rates, more traffic, and tons of earned media.

It’s 2021 now…

Now it’s 2021, you’re working at a start-up, and your boss tasks you with increasing user sign-ups for your cool new social media site. Easy enough, right? Yes, because you have this article, and you now know what growth marketing is! There’s a lot to growth marketing, and you’ll likely need some expert help with the various stages of the funnel. So when you do cross that road, reach out to the team here at Redefine!

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ABOUT THE AUTHOR
Jason is a Cal Poly Pomona Alum, extreme fan of marketing, and social media advocate. As a Brand Marketing Manager at Redefine Marketing Group, he is responsible for the development and execution of strategy for reputation management, link building, and social media marketing for both the agency and its clients.
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