When WordStream began receiving complaints that the seven-day free trial of their PPC management software wasn’t long enough, the brand decided to A/B test 14-day and 30-day trials.
The results? Prospect trial to conversion rates fell with the longer trials.
WordStream confirmed that seven days was plenty of trial time, and they didn’t need to waste resources chasing customers down a longer funnel.
No changes were made to the customer journey, and it had nothing to do with revenue lift. Yet, this was a successful growth marketing campaign.
Lessons were learned, resources were saved, and “opportunities” were confirmed to be bad moves.
In this article, you will learn how growth marketing compares to traditional marketing and its key components. You’ll also learn how to apply growth marketing to five key channels and how to plan and execute experimentation.
What is growth marketing? (And what it isn’t)
Growth marketing is a data-driven approach to marketing. It uses rapid experimentation and learning to identify and capitalize on growth opportunities without blowing a ton of budget.
It isn’t about finding quick hacks to boost short-term revenue.
Growth marketing borrows a concept from the lean startup methodology. It starts with the premise that the marketer doesn’t know the ideal strategy or messaging, and the only way to establish this is through testing.
Marketers following this practice start with a hypothesis, design and run an experiment, and interpret results to fuel future experiments. This provides context on which growth efforts to focus on in the short- and long-term.
For example, a growth marketer at Grammarly might begin with the hypothesis that a promotional email campaign targeted at millennials will result in a 10% increase in new subscriptions.
The growth marketer would design and run an experiment (ideating, drafting, and sending the email), and then review the data to confirm or disprove the hypothesis.
From the standpoint of the growth marketing team, it’s a win-win situation.
If they’re right, they will have influenced an increase in new subscriptions with a target segment.
If not, they’d know that promotional emails don’t have an impact, and they won’t waste time or resources on similar campaigns going forward.
Having tested and confirmed their hypothesis, Grammarly’s growth marketers could then run more granular A/B tests to establish:
- What degree of discount has the biggest impact?
- What is the point of diminishing returns?
- What type of messaging works best for these emails?
- What day of the week is most effective for engagement with these emails?
Growth marketing is a practice that is applied to the full marketing funnel. Traditional marketing efforts tend to be directed at the top of the funnel (brand recognition, recall, etc.).
As such, successful growth marketers must have a broad understanding of a variety of digital marketing strategies and tactics.
Growth marketing is about moving toward organizational goals and objectives with confidence from experimentation, meeting them efficiently without overspending.
Optimization across the entire funnel: Growth marketing vs. traditional marketing
The first distinction between traditional and growth marketing models is that traditional marketing, which is often product-focused, is oriented toward top-of-funnel efforts.
Traditional marketers work to build awareness and emotional connections to product and brand.
Growth marketers focus on the entire customer journey. They work to improve top-of-funnel metrics like brand awareness and identify opportunities to improve customer activation, retention, and referral efforts.
The second distinction is growth marketing’s emphasis on experimentation.
With traditional marketing, you set a goal, such as improving brand awareness, and then put a chunk of your budget into one or two avenues (e.g., a live stream with an influencer on social media).
If your campaign works and your brand awareness metrics improve, you win. But if you’re wrong, you might spend an awful lot of money with little results.
It’s also difficult to tell if your brand campaign directly influenced brand recognition. Perhaps the seminar your CEO led at the same time is responsible for some of the surge in new followers.
Without experimentation parameters, you can’t rule out other variables.
The growth marketing approach to this problem would be to develop a series of experiments.
You might start by running brand-focused LinkedIn ads with geotargeting. Then, compare any change in the awareness metrics you’re measuring in that region with other markets. You might conclude that running brand-focused ads on LinkedIn does improve brand recognition.
Your next experiment might be to test new messaging, or media, to understand what has a greater impact on brand recognition.
What are “pirate metrics?”
Pirate metrics is a model growth marketers use to guide their growth activities.
They are so named for their acronym coined by Dave McClure, AAARRR:
- Acquisition (generating leads and gaining new users);
- Activation (getting customers to use the product more often);
- Revenue (crosses over into pricing strategy);
- Retention (reducing churn and influencing repurchasing);
- Referral (influencing customers to refer others).
Many growth marketers will include “Awareness” in their model to tackle experimentation at the top of the funnel.
Where does growth hacking come in?
Growth hacking is a term that emerged from the Silicon Valley tech community and the lean startup methodology.
Lean companies focus on building an MVP as quickly as possible using minimal resources (like “hackathons” where programmers compete or collaborate in sprints to design a program by the end of the event).
Growth hacking is the mindset of someone who wants to work quickly to find the best solution fast (not always the perfect solution) to start getting results.
This evolved into the notion of looking for a silver bullet; a single hack to skyrocket your company’s growth.
But the silver bullet doesn’t exist, and it’s not growth marketing.
Growth marketing doesn’t prescribe quick-fix hacks that any company can apply to “10x their revenue.” It’s about identifying the channels and tactics that work best for your organization and then maximizing marketing efforts by confirming the best moves through experimentation.
How to build a growth marketing strategy: Setting off on the right foot
Compared to traditional marketing initiatives, growth marketing is more pragmatic. Because of this, growth marketing is strategic in different ways to traditional marketing.
The danger of being so methodical about marketing is getting stuck in the experimentation phase. So growth marketers need to set up their tests and then get started quickly.
Before running your first experiment, take these three steps: define your growth model, map the customer journey, and prioritize your channels.
1. Define your growth model: Uncovering worthwhile experiments
To build a growth model that achieves business-critical goals, you must first map out the metrics, activities, and touchpoints that influence them.
For example, say you’re trying to improve top-line revenue. This is a broad goal, so you’ll need to uncover experiments that improve any metric influencing purchasing behavior and retention. Think of it like a “trickle-down” model. If X increases Y, then you’ll want to increase X.
Drill down to determine which metrics contribute to your goal: revenue per user, number of paying customers, churn, and new customer acquisition.
How do people discover you? At what point do they sign up, and where does the “aha!” moment occur that inspires users to subscribe? Getting your analytics house in order will give you the data you need to answer these questions.
2. Map out the customer journey: When to test
Using your analytics data, you can uncover which channels drive action at each stage of the funnel.
At the acquisition stage, channels might include SEO, paid advertising, content marketing, etc. For activation, it might involve push notifications, email marketing, and so on.
The best way to establish the journey your audience takes from awareness to purchase and advocacy is to approach things from the customer’s point of view.
Spotify does this with its map of the customer’s music sharing experience:
Spotify conducts customer research to identify how users feel at each stage of the sharing journey, from visiting the app to how the share was received.
Once you’ve mapped out the entire user journey, including customers’ emotional states at each stage, you’ll reveal available channels for testing.
3. Identify and prioritize your key growth channels: Where to test
Once you’ve identified the best channels from your customer journey map, determine which to prioritize based on the impact they make on your business goals.
For example, if Spotify wanted to improve advocacy, the frustration users have with shuffle play after sharing may be a good place to start.
Spotify could then test whether alternative play options improve the user experience at that stage and whether it impacts how often users share music with friends.
In another example, let’s say most of your acquisition comes through organic search, but conversion rate to signups is lower than you’d expect.
This channel would become a priority, and you’d design experiments to improve on-page conversion rates. These experiments could include:
- Identifying highest performing pages or content and creating more like it;
- Testing new calls-to-action by aligning offers with the funnel;
- Evaluating new tools or widgets to serve those calls-to-action, such as OptinMonster or Sumo.
Good channel candidates for growth marketing experiments are those that demonstrate a high return on investment and a high ability to scale.
Perhaps LinkedIn gives you a great response rate for the time invested in reaching out to prospects. You can also see that there is a huge pool of candidates to choose from.
However, with cold email, perhaps you get a good response rate but you don’t book as many demos. In this case, ROI is good but scale is limited, making LinkedIn the better option.
Infusing 5 channels with a growth marketing approach
The philosophy behind growth marketing can be applied to any channel. Let’s see how that applies to five of the most common among marketers.
Paid social: Turning marketing dollars into users
Paid social is primarily used to impact awareness and acquisition metrics, so your experiments may be designed to understand how best to influence:
- Website traffic;
- Ebook downloads;
- Webinar signups;
- Free trial activations.
Take Semrush, a suite of solutions for keyword research, PPC planning, competitive research, and content optimization.
A hypothetical goal may be to increase the total number of users. A growth marketer at Semrush might design a series of experiments to understand how to grow qualified leads and nurture into paying users.
They’d start with the simplest hypothesis: “Running paid ads on Facebook promoting a lead magnet will grow our total number of MQLs.” Then they run the experiment.
Having confirmed that paid advertising does impact the acquisition of new MQLs, a second experiment would be set up to determine what offer delivers the most new leads.
For example, Semrush has a variety of case studies, webinars, and ebooks available for download.
Semrush’s growth marketer might next set up a multivariate test to run a series of paid ads. Each campaign would promote a different lead magnet, with the goal of understanding which offer generates the most leads.
Having established this, a third experiment would test new copy and messaging.
This webinar, for example, teaches two things: lifting traffic and improving conversion rates.
The growth marketer would then run an A/B test, with one ad pushing the traffic message and another pushing the conversion message.
When running paid media experiments, start with a small budget, measuring results early and often. Look for metrics that act as an indicator of success or failure. For example, if you’re driving traffic to a landing page and seeing a high bounce rate, it’s wise to pause the campaign to figure out what needs improving (targeting, creative, messaging etc.).
Organic social: Build a community
Brands with large audiences may find organic social to be an effective channel for acquisition, retention, and referrals.
Take Dollar Shave Club, a subscription service and retailer of razors, skincare products, and shaving accessories.
With a significant following, organic social is likely a key growth channel for Dollar Shave Club, particularly for retention and referrals.
Take this post, which leverages user-generated content to both promote their product, and publicly thank a new subscriber.
A growth marketing experiment might start with the interpretation that promoting user-generated content (UGC) improves customer lifetime value (CLV).
Validating this assumption can be as simple as using a UTM code to measure traffic from this specific page. This will help you attribute traffic to UGC and understand the impact it makes on conversions.
Once this assumption is validated, test the hypothesis that content promoting rewards for sharing UGC (like t-shirts) will increase engagement metrics and encourage more UGC.
A third experiment could be run to understand the best time to post content like this. Knowing that shares peak at around 10 p.m. EST, an A/B test could be run to explore the hypothesis that posting about UGC at this time will improve visibility and drive more engagement.
Though Dollar Shave Club’s organic strategy appears to be growing their following, there is an opportunity to improve by differentiating content across social channels.
Currently, Dollar Shave Club cross-posts the same content on Twitter, Facebook, and Instagram.
Instagram is better for engagement than Twitter for the same piece of content, indicating that the brand might not reach its audience as effectively as possible on Twitter.
A growth marketer at Dollar Shave Club could set up an experiment to test the hypothesis that customer storytelling content performs better on Twitter than meme-based content.
They’d then use the number of likes, comments, and shares each type of post earns as a guiding metric in confirming this hypothesis.
How you experiment with organic social will depend on your existing audience size and the amount of traction you get on a given channel.
For example, if you’re starting from a blank slate, the first decision should be which channel you prioritize. Once you know this, you can focus your resources on building an audience there.
Reverse engineer what already works and run experiments over the long-term. Building a social audience is a marathon, not a sprint. Dedicate yourself to a content format and aim for consistency. Work toward increasing your audience size before moving on to user acquisition or sales.
Leading growth at a more established brand? You can afford to get more granular with your experiments as it’s likely you already have ample attention on your chosen social channels. For example, if you’re looking to convert more Instagram followers into users, consider testing content formats that demonstrate the value of your solution.
Search engine marketing: Driving ROI from searchers
Running search engine marketing (SEM) experiments requires testing more than just the ads themselves. You must work to optimize the entire customer journey; from search to click to conversion.
Take Smartsheet, an online collaboration and work management tool, that relies heavily on Google Ads to drive traffic and free trial users.
Smartsheet runs heavily measured PPC ads. Before it can start testing things like creative and copy, the brand needs to determine the best keywords.
There are nearly 1500 search phrases related to “spreadsheet software” alone, so step one would be to identify the most intent-focused keywords, and then run ads against each of them.
Having established which search phrases perform best, Smartsheet’s growth marketers will run testing experiments to understand what messaging performs best in generating click-throughs:
“We’ve found rearranging copy in a headline or changing the description line from prose to a customer quote can increase click-through rates by 8% or more.” – Brent Frei, Co-founder of Smartsheet [via FastSpring]
Subsequent growth marketing tests could focus on identifying the best geographies to target. They’d do this by designing a multivariate experiment that compares click-through rates and subsequent signups by geographic location.
Here’s a rundown of each stage of the SEM journey and how you should experiment on each.
- Keyword targeting: As illustrated in the Smartsheet example above, look to identify and test new keyword opportunities. Similarly, seek out “negative keywords” that drive wasteful traffic (users not searching for your product or solution).
- Ad groups: What happens when you break out keywords into their own ad groups? Do you see an increase in performance across those groups? Does one perform better than the other?
- Ad copy: Always be testing your messaging. Test new headlines and descriptions against each other. Once you find a winner, test it again.
- Ad extensions: What happens when you include call, text, or even download extensions? Experiment with ad extensions to see if they improve or hinder the customer journey by measuring conversions.
- Landing pages: This is where the action happens. Test headline copy, calls-to-action, and forms to increase conversion rates from traffic.
Organic search: The holy grail of reliable traffic
Testing new organic search experiments can be invaluable in understanding what on-page optimization tactics improve sign-ups and conversions.
Take Qless, a SaaS platform for queue management and appointment scheduling. One of Qless’s core verticals is the retail industry.
Qless holds several page one positions, but they don’t hold one for the search phrase “queue management system for retail.”
This would be a prime target keyword for their current Retail page. It has a low keyword difficulty and a higher search volume than the phrase the page appears to be targeting: “queue management for retail stores.”
An initial experiment could answer whether it’s worthwhile to change the URL slug from “queue-management-for-retail-stores” to “queue-management-system-for-retail.”
Additionally, the phrase “queue management system” isn’t used on the page verbatim.
A second experiment could be designed to test the impact of including this key phrase, with subsequent experiments testing how the frequency of use impacts search rankings.
It can take Google some time to recognize changes. Like all things in SEO, you must be patient to see how these experiments impact results.
Content marketing: Turn readers into raving fans
Content marketing is an effective channel for building trust with new customers and turning existing ones into advocates. By demonstrating your expertise, you build authority, awareness, and get in front of an audience that are looking for the solution to a specific problem.
Take Zapier, a SaaS tool that helps users connect their tech stack and use automation to create custom workflows.
Zapier’s content marketing strategy, which helped propel them to $140 million in ARR, started as a series of experiments on their blog.
Now, Zapier uses a variety of content marketing tactics to influence both acquisition and retention metrics.
The Zapier University, for example, is a series of online videos aimed at helping users get the most out of the platform.
A growth marketing experiment could be set up to investigate the impact of these videos on retention at the onboarding stage.
The brand might do this by distributing the content via email to half of their audience, tracking engagement metrics, and measuring the influence on CLV.
How to plan and execute growth experiments
The first thing growth marketers want to do is develop a hypothesis. But before that happens, you need to make sure you’re setting up experiments to work as efficiently and effectively as possible.
There are three considerations to bear in mind when planning growth experiments:
- How can you develop tests that can inform effective changes? If you’re testing aspects that make no difference, then you’re wasting time and money.
- How can you reduce the cost of testing and optimization? You shouldn’t spend months planning; you need to generate tests quickly.
- How can we improve the speed of experimentation? The more tests you run, the faster you can establish answers and use them to drive growth.
To achieve all three goals, you need to understand the problem you’re trying to solve. This starts with customer research.
Growth marketers must understand what is important to their customers and what motivates them to purchase (or to keep purchasing). This understanding is what informs the hypotheses.
Start by developing a series of questions that aim at this need, such as:
- What do our customers need?
- What do they think they want?
- What are they doing about their problem currently?
- How are they making the decision?
- What gets in the way of deciding?
Strategies such as voice of customer research can help you to establish answers to these questions. You’ll then use your findings to question each aspect of your marketing efforts.
Take Codecademy’s strategic testing program, for example.
Codecademy knew that price is a decision-making barrier for customers, but they were driven to increase annual subscriptions. Codecademy designed an experiment to understand the impact of pricing differentials between monthly and annual subscriptions.
They tested the hypothesis that “exaggerating the price difference between annual and monthly plans will increase annual subscriptions.”
They found that this was the case in high-GDP countries, but not so for low-GDP geographies, meaning that they’d need to adopt a region-based pricing strategy to optimize annual subscription rates.
Growth marketing is a process of continual evolution, testing, tweaks, and experiments that seek to improve user experience right through the customer lifecycle. The aim is to drive growth through the channels that have the greatest impact.
Though growth marketing should be carried out strategically, it’s crucial not to get caught in the trap of continuous planning and strategy. Start running actual experiments as soon as possible.
Become a powerful growth marketer in CXL’s Growth Marketing Minidegree.