About growth marketing, building growth models and designing experiments (CXL Mini-degree Review)
Bringing it home, Paystack, a startup recently acquired by Stripe for $200M+, grew its worth of monthly transactions processed to over N10 billion and customers to over 70,000 including small businesses, large corporates, fintechs, etc in 5 years.
These growth numbers make me scream!
How did these brands hack growth? What strategies did they execute to help grow their numbers? Which tactics were highly potent and which didn’t perform so well?
These were the questions I hoped the Growth Marketing Minidegree with CXL institute will help me find answers to when I enrolled for the scholarship. I’m incredibly excited and grateful to have been selected for the scholarship.
One week into the Minidegree and so far, the courses have met my expectations.
Every week, I’ll share and discuss major takeaways from the Minidegree that I find very valuable.
This week, my courses circled on growth marketing and how to build growth models for brands.
Below, I’ve given each touchpoint a subheading and discussed my key learnings briefly. Let’s get into it.
Growth Marketing Vs Traditional Marketing
There are 2 main differences between growth marketing and traditional marketing:
- The Focus
For a traditional marketer, the focus is concentrated on top of the funnel i.e. awareness and acquisition. A growth marketer, however, focuses on the entire funnel. A growth marketer thinks of how to facilitate growth across the whole business.
- The Process
Experimentation is what drives the process of growth, no more no less. You need to constantly be experimenting with programs, campaigns, product features.
As you will come to know, some experiments will succeed, and others will fail.
The successful experiments will help you increase conversion, create better customer experiences, and generate data that can be leveraged to make decisions and optimize the funnel. The others that do not perform as well, will provide you with data and key learnings that you can incorporate into your growth process.
Traditional marketers, in contrast, concentrate and execute one single campaign at a time. My time in the fashion and lifestyle industry comes to mind. The focus is always on the one big campaign.
Here, the dangers of getting it wrong are huge. If your one campaign succeeds, be rest assured you will get commended, but if otherwise, it may result in a huge dent. I think this is what a lot of people assume growth hacking is as well. Far from it.
In essence, growth is a marathon and not a sprint.
The founding philosophy of growth
The fundamental concept of growth comes from the lean startup methodology (LSM). In LSM, founders are focused on building a minimum viable product (MVP) — the simplest most working version of a product as quickly as possible with minimum resources.
Similarly, the growth cycle starts by admitting that you don’t know conclusively what the customers want. In a bid to know, you execute the minimum viable experiments.
- You set out creating a hypothesis
- Find efficient ways to test your hypothesis
- Design and run experiments that will validate or invalidate your hypothesis
- Track important metrics and use the learnings to move forward.
I’ll give a hypothetical example,
For an online learning platform(like the one we’re building at Leonine Learning), a hypothesis may be that “customers who receive discount offers after completing their first course are likely to enroll for more courses).
You can use email marketing to test this hypothesis.
To test the hypothesis, we can design our experiment in 3 layers.
- Do past customers want to receive discount offer emails at all?
We can have 2 test groups here — a group that receives the emails and another that doesn’t.
- Why do they convert? Is it the messaging? Or the value of the offer?
- After how long after they completed their first course should we offer them discount offers? One day, 2 weeks, or 3 months? And how often?
Track the open rate, clickthrough rate, etc, and incorporate the learnings into your next campaign.
Simple yeah? Maybe not (LOL).
Eventually, these tests will help you figure out the right message, the right offer, the right customer experience for each customer that patronizes your brand.
The Holy grail of growth
Can you guess? If you thought of experimentation, you are right.
Experimentation helps you spot trends and patterns that will give you a better understanding of your customers; what they like about your brand and messaging, which channels they engage with you the most on, and how they move through the marketing funnel.
All of these will help you improve the one-to-one personal connection with your brand, increase brand loyalty and importantly, help you learn valuable ways you can improve your process.
How do you build a growth process?
When you’re starting out a growth team, knowing your growth process helps you design programs, campaigns, and experiments based on who the customer likely is, how much they have interacted with you in the past, how much they know about your brand, and what actions they’ve taken.
The worst way to build is by rooting your efforts in growth metrics rather than obsessing over customer pain points and seeking ways to optimize their experience. In essence, keep yourself grounded in what makes your customer tick.
Here are a few takeaways on building a growth process:
- Define a high-level strategy of your growth model
The most common framework for defining a growth model is Dave McClure’s pirate metrics for startups — AARRR (Acquisition, Activation, Retention, Revenue, and Referrals) which gives an entire view of the funnel.
- Map out your customer journey
You need to walk through the customer journey in your shoes. Try to see from their lens what it looks like to go from awareness to referrals. This activity is so beneficial. It helps you think about the best ways to deliver value to your customers and gives you a sense of all the available channels you can leverage to reach your customers and increase your metrics.
- Identify your growth channels
Knowing where your customers are in the customer journey helps you decide which channel you leverage.
For example, in the acquisition stage, you should be thinking SEO, SEM, paid ads, content marketing, etc
For activation, however, email marketing, push notifications, etc are what come to mind.
- Move into quarterly planning
The focus at the growth planning stage is finding the most impactful ways to grow the business.
To know this, you need to understand that your biggest areas of opportunity are your customers’ biggest pain points.
You cannot risk going in blind, you need data. Do user surveys, use focus groups, or call your users to get this data.
Explore the data in defining your quarterly goals and start building the roadmap to execute and achieve those goals. One thing to keep in mind here, though, is that your quarterly Objectives and Key Results (OKRs) are a subset of your company’s overall OKRs.
- In-quarter execution
This is the time to build, measure, scale/learn, and repeat.
Start out by building your experiments, shipping them, analyze them and finally automate and scale them if they work. If they don’t, learn from them and scrap them.
So, what makes a successful growth marketer?
John Mcbride describes 3 attributes of successful growth marketers.
- Channel-level expertise: This refers to an experience with growth channels such as search engine optimization, email marketing, etc. At the minimum, you need to have an understanding of how all the growth channels work.
- Analytical Capabilities: A growth marketer should possess the ability to analyze data from experiments and draw valuable insights. This is possible using tools like Excel and SQL.
- Strategic thinking and Cross-functional project management: This is probably where I think I’m great at the most. It refers to the ability to come up with great ideas, prioritize and pick the right experiments to run, lead the implementation and collaborate with other teams, etc
As the growth continues to evolve, the need for specialists emerges. People who are a “jack of all trades” and a master of at least one. These are the people we call T-shaped marketers. Every marketer should aspire to be one.
That’s it for this week. Next week, I’ll be sharing key learnings from the user-centric marketing course. See you then.