What is growth marketing?
I get asked this question all the time: what is growth marketing? If you ask 10 different marketers, you’ll get 10 different answers. Every company tackles “growth” differently and you’ll often find teams within the same company take different approaches. Today, I’ll help break down and demystify the various levers used to drive growth.
Let’s first start with how we define and measure growth. There are a multitude of metrics like customer acquisition, feature adoption, conversion rate, retention rate but at the end of the day, these all boil down to the bottom line: revenue.
It’s important to recognize that revenue growth can be achieved at any stage of the marketing funnel; commonly referred to as AAARRR (Awareness, Acquisition, Activation, Retention, Referral, and Revenue). To deliver the greatest impact, you should always consider the marginal ROI; evaluating the absolute revenue contribution at each stage of the funnel and prioritizing your efforts where the incremental revenue is highest. For example, investing in acquisition growth is a futile effort if your activation funnel is a leaky bucket. A 1% improvement in your conversion rate will drive a significantly greater impact on your bottom line than a 1% increase in acquisition volume. Taking the time to understand your funnel performance will help you develop a clear strategy and roadmap to follow.
Once we’ve identified where we want to focus our attention, next, we want to decide how to improve it. Growth marketing comprises 3 main focus areas: Demand Generation, Product-Led Growth, and Go-to-Market.
Demand Generation (Awareness, Acquisition)
Demand Gen is the process of creating scalable marketing programs that generate demand for a product or service. It is a marketing-led growth lever that is primarily utilized in the first two stages of AAARRR. While often used synonymously with Paid Media or Performance Marketing, Demand Gen actually encompasses Paid, Earned, Shared, and Owned Media (aka the PESO model).
Paid channels like Search, Social, and Display can offer continuous acquisition at scale but often at a high cost. Not all Demand Gen requires a marketing budget. Optimizing owned channels like your website and blog can help drive on-site conversions and increase organic acquisitions while emails can be a great medium for upselling and cross-selling additional products or services for free. Additionally, Earned Media through media coverage, trade publications, and events can offer a quick injection of awareness and traffic for your company. The best Demand Gen strategies incorporate and integrate all 4 forms of media
Product-Led Growth (Activation, Retention, Referral)
Product-led growth (PLG) is a growth strategy that relies on using your product as the primary lever to acquire, activate, and retain customers. Similar to Demand Gen, PLG involves constant iteration and optimization through rigorous experimentation. However, unlike Demand Gen, PLG requires close partnership between your product and marketing teams to identify opportunities and develop a product roadmap. Marketing additionally plays a key role in leveraging various tactics that drive awareness, education, and adoption of these product improvements.
Common product-led growth initiatives include streamlining activation flows that allow quick and easy self-serve onboarding or enhanced sales-support for more complex prospects. Introducing new pricing & packaging like free trials, freemium versions, or “good, better, best” tiering can also help achieve better product-market fit and expand your audience segments. Additionally, continual in-product improvements to the user experience leads to stronger retention as well as increased referrals which can in turn serve as an essential acquisition flywheel.
While none of these opportunities require a marketing budget, it does involve heavy cross-functional resources across Product, Product Marketing, Design, and Data Science. Depending on the stage of your product lifecycle and growth, it’s important to evaluate the trade-offs and decide how best to allocate your time and resources.
Go-to-Market (Awareness, Acquisition, Retention)
Last but not least, the GTM launch of a new product or feature can drive meaningful growth across multiple stages of AAARRR. Marketing plays a key role in this rollout as your GTM strategy often leverages many of the same Demand Gen channels. However, growth driven by a GTM launch is less focused on the typical iteration and experimentation of these channels and instead serves as a powerful moment in time that creates excitement, rejuvenates consideration, and drives acquisition. This is why it’s important to have a well-oiled demand gen engine that’s ready to go when you go-to-market.
As you can see, successful growth marketing requires a holistic approach that incorporates a mixture of Demand Gen, Product-Led Growth, and Go-to-Market. Every company has different budgets, resources, and timelines so there’s no one-size fits all. The best marketers understand how to efficiently and effectively utilize each lever and build a growth strategy that fits your business needs.
