Myths about Growth Marketing
#1 Growth marketing is for start-ups
You often hear that growth marketing is a start-up thing. Yes, it’s true, growth marketing is originating from the startup scene. Why? Because they have no money, but they do have skills so they needed to be very creative with the skills they have in order not to burn too much money but to grow rapidly.
Meanwhile, the growth marketing mindset has sparked interest from large corporates who are now starting to experiment with ‘what can growth marketing mean for my business context?’. So, is it just a startup thing? It was. Is it still today? Absolutely not.
#2 It’s a cheap way of doing marketing
The second one, is it a cheap way of doing marketing? The same insight here. It can be a cheap way, but above all, it’s a structured and processed way. So, in the beginning, it will not be cheap at all because you’re putting up a process and putting up a process usually requires resources. Nevertheless, you can still start small, and in very cost-friendly ways.
#3 Do you think copying growth hacks works?
Copying existing growth hacks works. Let’s take the example of Dropbox. They grew their business by installing the referral hack. Dropbox didn’t have the big buck at that time to advertise. What did they come up with? They invented the referral concept of where you could insert your email address and a friend’s email address, and if the friend accepted the invitation and joined, both you and the friend received free cloud storage capacity on Dropbox. The concept went viral and since then, it’s about 12 years ago, the hack is called the epic growth hack of Dropbox. Still nowadays, the principle of referral hacks works and there are even tools specifically built around it. Viral loops is one of them you could explore.
#4 It’s focused on acquisition
That’s about the biggest misconception. When people talk about growth marketing they mostly see it as top-of-the-funnel actions to increase reach. In reality, growth marketing is the total opposite. It’s about full-funnel and cross-channel experimentation, focussing on delivering bottom of funnel return in the most efficient way.
So let’s get to the core, If you type in growth marketing in Google then you would probably end up with two of the godfathers of growth, Brain Balfour and Sean Ellis. Essentially these two guys are saying the same thing. Growth Marketing is often missed conceived with growth hacking.
When we talk about growth marketing, it’s actually about installing a new way of doing marketing. If you look at a typical marketing campaign cycle today, you have a business problem, you write the briefing, you go and give the briefing to an agency, the agency comes back with some campaign ideas, you launch a campaign idea and three months later you’re probably evaluating whether the idea is working or not. In growth marketing, you do the complete opposite. You start from the same business context but you create multiple hypotheses around what could work, and then you start experimenting and continuously monitoring which experiments help to shift the needle in the right direction. Upfront, you do not know which experiments will work, yet you will run multiple simultaneously and adapt accordingly. So in order to do this, you need a structured process. You need a different mindset and methodology.
So what is Growth Marketing really?
Growth marketing is the tracked process of rapid experimentation across marketing and advertising channels to identify the most effective and efficient way to grow a business. The art is institutionalizing what works and dropping ASAP what does not work. If you need to rethink one thing, it’s rapid experimentation and institutionalization the things that work.
If you would put this in a mathematical formula it would look like this.
- VP = VP stands for Value proposition. This is the actual product or service that you’re selling. Your VP can be framed in multiple ways. You can define it from a more emotional perspective or from a more functional point of view. So the way in which you frame your value proposition is like the key thing where you can easily experiment with. If you’re, for example, selling a SaaS product, a software product, like Slack, you can easily say ‘it connects people in a professional setting’, which is more of a soft thing. Your value proposition could, on the other hand, be a bit more aggressive, like ‘increases efficiency with X % in your team’.
- CTA = a second parameter is your call to action. The call to action is crucial, but it can vary a lot from very aggressive, like ‘buy now’ until very soft ‘discover more’.
- € = The euros that you have available in your budget. Normally when you make budget exercises you would say: ‘X amount of euros on social and X amount of euros on the search and X amount on euros on email’. In the logic of growth marketing, you say, okay, I just have one budget bucket and the audience to which I am advertising, will decide how it will be allocated based on ROAs. So I’m not predefining my buckets, the audience behavior ‘defines’ where I put my budget.
- CPA = The CPA or cost per action. Every growth marketing project has one key goal or what you call a One Metric That Matters (OMTM). And the actions that you want your consumers or your audience to take in order to get there will probably come at a cost, right?
Imagine that your current funnel is resulting in sales accepted leads at a cost of €50/50$. To get this lead, a funnel has been created. It might start with capturing leads via a Google SEA campaign, a Paid Social retargeting campaign ultimately bringing prospects to a landing page where X percent leaves their details, clicks a button to subscribe, and becomes a lead. If your whole business case has been build around this cost per lead of €50/50$, and you want to decrease this cost, it will be essential to track the CPA throughout the funnel. Only by evaluating each and every step, you will be able to optimize results and make your business grow.
- Channel Mix = Whether you are considering Facebook, Google, email, TikTok, Youtube, … the principle here is that you don’t allocate your budget upfront to these channels. Budget will be allocated based on results and can shift partially or entirely to specific channels if they seem to be the most optimal.
- Audience = Probably the most interesting one is testing your audiences. Too often targeting is being done on too little audiences. In today’s world of hyper targeting options, pixels, custom audiences and lookalikes, it would be a shame NOT to base yourself on the data and algorithms out there to hyperlaser focus and test the market. Don’t blast your media budget shotgun-wise. Use your media budget wisely, and moreover, don’t bother audiences not interested in your message on the hope some of them might convert.
One of the techniques we use for example is launching sets of videos that are boring as hell. You target these videos to what seem to be audiences with potential. Only the people who have watched X% of these videos, we consider as being in the target audience and will be retargeted with personalized advertising. The rest we leave it. It’s a totally different way of thinking about audiences and targeting criteria, and it will drastically increase your results.
Find out more about growth marketing by following these courses:
https://academy.upthrust.eu/courses/
