This article is the first in a series of articles on growth marketing – A Game of Growth. Growth Marketing is a very different game from traditional marketing. It’s the game that high growth startups such as Uber, Dropbox, Airbnb, Trello, and others play, and have become very good at it.
Most marketers are looking for the next growth hack or the one growth strategy which made these companies grow beyond their own imagination. But the truth is that it’s not just one hack, but a series of actions which make them so successful.
The game of growth is often misunderstood as it’s not about the next big growth hack, or strategy, it’s about the process that you follow to unlock serious growth.
If you’re sincere about learning the process that these high-growth companies follow to become billion-dollar companies, I highly recommend you to read all the chapters word-by-word.
What (the heck) is “A Game of Growth”?
“A Game of Growth” is my quest to learn how to grow an idea into a multi-billion dollar startup. Just like other games, this game of growth is about achieving your goals, while respecting the rules of the game and following a winning process. It is a set of strategies and processes that once you learn, can unlock serious growth for your company.
I am passionate about growing SaaS & eCommerce businesses. Even though I worked as a digital marketer, and then started a digital marketing agency, I wanted to improve the process that I followed to grow my clients’ businesses.
For that reason, I joined the Growth Marketing minidegree program by CXL, which is a prestigious program to hone your growth marketing skills. I knew about this program for years, but didn’t take any actions. Then I heard about it again from one of my indirect mentors, and growth expert, Joshua Bretag (Cubatica).
I am writing this series to structure and enhance my learnings, as well as share my knowledge with you. “A Game of Growth” covers mostly what I learnt from the CXL program, but also my understanding of the game from my own experiences.
The learnings, opinions and views expressed here are mine, but I highly recommend you to join the program to develop your own understanding and growth process from it.
Some of the top technology companies train their growth marketers at CXL Institute.
What (the heck) is Growth Marketing?
Growth Marketing is a process that is primarily driven by continuous full funnel optimization experimentation with funnels, campaigns, messaging, etc.
The traditional digital marketing, on the other hand, focuses on awareness, acquisition and engagement across channels.
Growth Mindset – How To Develop It?
A growth mindset starts with the understanding that you are always trying to discover more about your market. Rather than building out your marketing campaigns (and spending time, money and resources) based on your assumptions and hypotheses, you are trying to build hypotheses around your market and then proving them right or wrong, based on your experiment results.
A growth mindset is similar to lean startup methodology where you build a Minimal Viable Campaign based on a hypothesis and then optimise, build and improve upon it.
For example, in a typical digital marketing campaign, you say – “I know that price is the most important aspect of my product, so I will market my product as the cheapest way to solve their problem. This will attract a lot of visitors.”
In comparison to that, a growth marketer starts with a hypothesis – “I believe that pricing is important to my market, so I will run an experiment to communicate about pricing on our homepage. I will measure if there is any increase in conversions. If it improves conversions, I will test if a better copy can further improve it. If it doesn’t improve conversions, then I will test if there’s something else like convenience rather than the pricing which is critical to my market.”
This way, even if the results of your experiments are negative, at least you would have discovered new information that would unlock the growth for your business.
How to become a growth marketer?
To be a successful growth marketer, you need to, first-and-foremost, have the growth mindset. If you don’t experiment to discover more about your market, you are not a growth marketer.
Secondly, you need to be a T-shaped marketer and have expertise in one or two digital channels, while having a good understanding of the rest of the digital marketing channels. You could be an expert in content marketing, but understanding digital ads or product design or referral marketing is just as important to be a growth marketer.
Growth doesn’t just come from the marketing team, and the whole company is involved in the growth. Therefore, as a growth marketer, you need to understand how others can help and be able to conduct effective experiments even when they are not your expertise.
Third, you need to have capability to analyse data in excel and SQL, which will come handy to measure the results of your experiments, draw conclusions and develop further growth experiments.
Fourth, (and often an overlooked skill of a growth marketer) is to be good at strategic thinking and project management. Ability to design experiments and get everyone in the team together is a challenge. As a growth marketer, you are relying on people from different skills and departments to execute the experiments, while keeping an eye on the strategic roadmap of the product or the company.
In my experience, the fourth aspect of growth marketing is the most critical one and requires a growth marketer to be a leader who can put together a growth mindset in the company.
How to build your growth process?
There are six steps to building your growth process:
- Defining your growth model
- Mapping your customer journey to the growth model
- Identifying your growth channels
- Planning your growth goals
- Building and prioritizing your experiments
- Implementing your experiments
Let’s have a look at each step.
1. Defining your growth model
Your growth model is the set of metrics that impact your business model represented in the form of a mathematical equation or a model that determines the growth of your business.
Just like any other mathematical model, your growth model has three components:
i) independent variable (inputs) = Your KPIs
ii) dependent variable (output) = Your Growth
Once you have identified your growth model, you will focus on your inputs (or KPIs) that lead to the growth. It’s best to start with the high level metrics first, and then drill down to more detailed metrics.
The higher management can focus on higher metrics and then specific teams can be formed to work on each detailed metric.
To give you an example, for SaaS businesses, the growth model can simply be
Growth = No. of users x user CLV
You can get more granular and add into the equation, the variables that impact user CLV: average revenue per user, and average duration of a user.
Therefore, the CEO of a SaaS company can focus on growing just three KPIs and analyse them every quarter: no. of users, average revenue per user and average duration of a user.
However, as you move to the execution-level, teams should look into more granular variables that impact these three high-level KPIs.
2. Mapping your customer journey to the growth model
In order to build a strong growth model, you should include variables to map with the entire customer journey or the funnel.
One of the common growth frameworks is AARRR – Acquisition, Activation, Retention, Referral, Revenue, which represents the full funnel or the customer journey from just learning about your business to becoming a loyal fan and generating revenue for you.
Growth in each customer journey stage leads to the overall growth in the business. Taking the same example of SaaS business, your growth model should include growth in each of these stages. This will accelerate your growth knowing that your funnels are not drying up at the upper levels.
Now, your growth model will not just look at the revenue growth (as we did in the first step above), but also growth in acquisition, activation, retention, and referrals.
3. Identifying your growth channels
Once you have identified your growth model, next thing is to identify your growth channels. For B2B and B2C, growth channels vary differently, but depending on your market, some channels might be more effective than others.
At this stage, you are not ignoring any channel unless you test them out, but you are simply trying to define where your users are: where do they do to solve their problems, where do they network with other users, where do they buy similar products from, which experts do they listen to, which websites or magazines do they read.
4. Planning your growth goals
Once you have defined your growth metrics and channels, it’s time to plan your goals. Now, look into your data through the lens of the growth metrics and see where the biggest opportunities lie. Where are the biggest problems or where are your customers falling off?
Are a lot of website visitors signing up for a free trial? How’s the conversion? Or is it that they are signing up, but not purchasing the product. Are there some issues with the purchase process?
Maybe they are purchasing once, but aren’t coming back for the second purchase or dropping off after the first month. Why didn’t they buy the second time?
Looking into data will give you more insights about your growth model, which you can use to define quarterly goals.
A good framework to define goals is the OKR method, that is Objectives and Key Results. The objectives are qualitative goals and Key Results are quantitative growth metrics.
5. Building and prioritising your experiments
After you have given the key results to specific people or teams, their job is to brainstorm a list of experiments to achieve those key results. An effective way to do that is to get really focused on just one metric for an hour or so at a time, and get as many ideas as you can that would improve that particular metric. Then spend another hour on another metric. This way you will have a long list of focused experiments.
Of course, you can’t work on all the experiments at once. You need to prioritize and a good framework to prioritize experiments is the ICE framework. So each experiment must be evaluated on a scale of 1 to 5 for their Impact (I), Confidence (C), and Ease (E).
Impact: How big would be the impact of that particular experiment on the specific metric growth? Is this experiment going to have a huge impact on the metric growth?
Confidence: What is the confidence level that you have on this experiment? It could be based on your own experience from past experiments. Are there any other teams doing the experiment?
Ease: How easy is it to conduct the experiment in terms of resources – time, money and people? Do you need the engineering team’s help, how many hours might it take to set up the experiment?
This will give you a priority order for the experiments. The experiment which scores 5 on impact, but 1 on ease of doing the experiment might be less prioritised than another experiment which is 4 in terms of impact but 5 in terms of ease of doing it.
6. Implementing your experiments
A complete experiment goes through this process:
- You design a minimum viable experiment
- You ship the experiment
- You analyse the results of the experiment
- Based on the result, you either automate and scale the experiment or you scrap the experiment, if the result was negative.
Each experiment starts with a hypothesis. And with each result, we are trying to either prove or disprove the hypothesis.
For example, you are a subscription based company. You’ve identified that your objective is to increase the CLV of new customers. The key results can be to increase the subscription of Premium membership type by 30% in this quarter.
Based on that, a good hypothesis can be that increasing the number of emails to the new users regarding benefits of Premium subscription in the first 15 days can increase the subscription by 15%.
A good hypothesis always has assumptions. In this case, the assumption we’re making is that people will buy more Premium subscriptions after 3 emails because they will be more educated about the premium.
With this experiment, you are going to find whether your assumption was correct or not. If you’re able to increase the Premium subscription after your experiment of sending 3 emails within the first 15 days of sign up, then you have proven your hypothesis right.
But if the purchase of a Premium subscription doesn’t increase, you have just still learnt something that sending emails within 15 days doesn’t increase the purchase of premium subscriptions.
There you go! You have now learnt all the fundamentals of growth marketing. This is the first in a series of articles on growth marketing – A Game of Growth. If you want to get notifications when the next articles are released, please subscribe to the newsletter, and share this article with 2 of your friends or colleagues.
If you have any questions regarding growth marketing or CXL Institute, leave a comment or contact me via Linkedin.
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