Conversations and buzz around growth are increasing…
Companies are looking to leverage new tactics, strategies, and tools to hack growth, trying to achieve a hyper-growth rate equivalent to The Hulk.
But companies have a growth problem: their concept of growth is too narrowly focused. A great deal of time, money, and energy are being expelled on traditional and newish marketing channels in an attempt to throttle up growth by driving sales.
This mindset that new customers = new revenue = growth isn’t entirely wrong. New customer acquisition is absolutely necessary to grow a business.
In 2014, Microsoft, Cisco, Quest Diagnostics, Intel, Salesforce, Constant Contact, Linkedin, Marketo, and Twitter (among other brands) had marketing budgets that were greater than 14% of their revenue, with some spending as much as 50% on marketing and sales. Those companies still saw year-over-year growth.
But if you’re stuck on a marketing-focused growth model, then you’re missing out on opportunities to further expand your business and become a dominant player.
Budgeting for marketing is still important; without marketing, your business is going to struggle with promotion and exposure. The key is knowing how much to budget for marketing, and how to use other resources within your company to create additional growth.
Traditional Marketing Vs. Growth Marketing
Companies relying on marketing to fuel growth put a great deal of emphasis on the top of the funnel. 88% of marketers currently use content marketing to attract a defined audience and drive action. That action is a movement from the top of the funnel down into a conversion or opt-in where a visitor becomes a lead that is passed on to sales.
A full 85% of marketers state that lead generation is the most important goal of their marketing efforts.
The problem is that there are segments of the funnel that are being missed. Beyond the acquisition of the customer, there’s an entire lifecycle that many aren’t leveraging for growth.
What is growth marketing?
Growth marketing (sometimes called a growth hacking) is the process of developing and executing experiments (usually over a short period of time) that are designed to quickly grow a company. These experiments typically focus on the total lifetime value of the customer, employing tactics designed to improve not only the value of initial sales but also the number and frequency of purchases in the future.
This is important when you consider that existing customers are more likely to try new products and spend 31% more when they make a purchase, when compared to new customers. It’s also easier to sell to existing customers.
Increasing customer retention rates by just 5% can improve profits by up to 95%. If you want massive growth, you need to change your mindset to focus on more than just acquisition.
Building a Framework for Growth
1. Identify Your Top Channels
Marketing strategies typically involve a number of marketing channels. Depending on your offer, your business model, industry, audience, and other factors, the performance of each channel can vary.
Rather than spreading your budget and efforts equally across each channel to maximize acquisition among audience segments, identify the top three channels for acquisition and engagement.
For example; at ContentMarketer.io my primary channels are
- Inbound marketing
Once you identify your top channels, plan to focus only on those. Pull your efforts from less effective channels.
2. Identify Your Weaknesses
Before you can stimulate growth, you need to find out where the bottlenecks are in your funnel that create customer churn or inhibit the growth of the customer relationship.
Top of the Funnel
Given the typical diagram of a funnel, you wouldn’t think that the widest part of your funnel would be a bottleneck. But this is the phase where you’ll lose the majority of your traffic due to qualification.
I’m not talking about you or your team qualifying the traffic to determine the best leads; this is about your traffic qualifying your brand. Your top of funnel content is that point where a first impression is made.
Based on content quality and positioning, your audience will qualify you to determine if they’re dealing with the right people/experts to solve their problem. If you can’t establish that initial trust, then they’ll never opt in.
Middle of the Funnel
While it’s not the most common bottleneck, you will lose customers at this point.
This is the consideration phase. It’s the relationship-building and nurturing point, but it’s also where a lead determines if their need is urgent enough to warrant action and if you’re the right choice.
65% of marketers have no established process for lead nurturing. If things don’t match up they’ll either opt out or grow stale within the funnel, leading to a huge bottleneck down the line.
Bottom of the Funnel
This is the “final” step where a conversion is made to turn a lead into a customer. It’s also the second most common bottleneck. If your funnel and nurturing aren’t on point, you’ll never get them to cross the finish line.
79% of leads never convert into sales due to poor performance, nurturing, and engagement.
This is a critical point in the funnel that a lot of marketers don’t consider. What does your customer onboarding process look like once the sale is made?
Do you send the customer on their way with a thank you, or does your company have processes and programs in place to continue engagement and relationship building with existing customers?
As you analyze each stage of your funnel, you’ll begin to discover opportunities where you can improve processes, engagement, follow up, and how your teams can play a role in eliminating bottlenecks. Don’t try to deploy anything yet, though; that comes a little later.
Once you’ve flagged weaknesses within your funnel and the customer life cycle, it’s time to start thinking about how to turn those into opportunities.
Don’t try to prioritize weaknesses by severity. In the ideation phase you want to treat them equally.
At this stage, I gather my team together, including people from various departments, to start looking at each problem that’s presented. These brainstorming sessions create a laundry list of growth opportunities that get compiled into a spreadsheet.
There are no concrete plans made at this point – the entire focus of these sessions is ideation.
It’s a complete brain dump from the entire team and nothing more. This is a “right brain” creative process, so focus the activity and ideation there. Don’t get carried away in “left brain” planning and logic, trying to analyze each idea; you’ll get to that soon enough.
4. Prioritize and Plan
Once I develop a list of ideas, I work them individually and prioritize them based on a number of factors:
- What department is involved? Who can manage the deployment and engagement?
- How feasible is it to deploy? What’s the cost and time involved?
- How severe is the problem? What’s the cost of not implementing the fix?
- How will this impact other processes?
- What kind of growth impact can we expect once deployed? What’s the benefit?
- How will we measure it?
This is where you’ll start to develop ideas for reducing churn, improving customer onboarding, and building on existing customer relationships. You’ll also begin to see how your teams can contribute so those bottlenecks are eliminated while the lifetime value of the customer grows.
5. Execute, Test, and Repeat
There are two ways to prioritize for growth marketing:
Startups: Prioritize and deploy based on what will have the highest impact with the least amount of effort. This will help keep your costs down.
Everyone else: Prioritize and deploy based on what will bring in the highest potential gains with the least time to implement.
Growth is all about high-velocity, high-tempo testing. This high frequency of deployment among your list of ideas lets you quickly deploy experiments in order to shake out the insights and determine what is garbage and what is a repeatable process that you want to continue to utilize.
Setting Up for Successful Growth
Once you establish your plan following the steps above, you’ll see the necessity of splitting your efforts to include more than just acquisition.
40% of your efforts should remain exactly where they’ve been – on inbound marketing that generates traffic and continues to feed your funnel. While it’s a decrease in effort, you’ve consolidated your focus to your top marketing channels where the highest potential for leads exists. This focused effort will increase traffic into your funnel, but at a reduced cost and effort.
Another 40% of your effort needs to be put into addressing the bottlenecks.
Your planning phase helped you established a priority list of things to address and experiments you can deploy to improve lead conversion and build on customer relationships.
It’s critical that this be a continued, ongoing effort. You’ve uncovered weaknesses but you also know the sticking point in your funnel where leads are converting. This is where you want to focus – how can you create an advantage at this point that helps you stand out above competitors?
For example, your company could use a service like LeadChat to create a personal connection with prospects at the top of the funnel to drive more qualified leads into the funnel.
That’s 80% – What’s Left?
The remaining 20% of your effort is going to be put to the task of experimenting with other ideas that drive viral growth. This is the point where you’ll tackle churn beyond the sticking point where the customer has said “yes” by:
- Keeping customers engaged
- Nurturing relationships with targeted content
- Experimenting with programs across different departments to delight your customers
- Turning more customers into brand champions
For example, a SaaS company could monitor metrics for log-ins and activity. Accounts that show a decrease in use could benefit from a dedicated support specialist who reaches out to offer assistance and engage the customer. That’s an experiment that could reduce churn by addressing problems before a customer cancels.
Don’t Let Fear Stop You
Don’t be afraid to experiment: throw everything at the wall and see what sticks.
You should never be afraid to fail – at least 70% of my growth ideas have failed. From my experiments, however, 30% have worked.
That’s more growth than I would see if I did nothing.
The Right People for the Job
Don’t get stuck in the mindset that the work falls squarely on your marketing team because it’s “growth marketing.” It’s not about expanding your marketing team or trying to get them to be more productive.
The most effective growth marketing team will utilize people from every division of your company, not just in ideation, but in deployment as well.
Growth marketing takes the full scope into account, from lead acquisition through relationship building over the entire life of a customer. It starts with inbound marketing efforts and continues through the handoff to sales, expanding to incorporate other departments within your business:
- Customer service
Every department has the potential to become a touch point in the funnel for customer delight, advocacy, user onboarding, and churn reduction.
The Right Tools to Support Growth
Maintaining your velocity in deployment can be difficult when you’re building manual processes and experimenting in uncharted territory. Having the right tools at your disposal can make deployment and measurement much easier.
Here are some recommended tools to consider for your growth marketing strategy.
These tools help monitor your brand, competitors, and targeted mentions to stay up on what customers are talking about:
Engagement & Relationship Building
These tools make communication with your customer easy, putting a personal touch on user engagement:
There are endless tools to make social engagement easier and streamline processes for your team. Here are a few of my favorites for scheduling, curation, and growth:
Help identify and eliminate problems within your funnel through A/B testing and optimization with these tools:
You’ll increase the lifetime value of a customer when you can get them to stick around. These onboarding tools help with keeping customers educated, providing them with the right information at the right time:
Time to Grow
From the top of the funnel to the end of the customer life cycle, there are countless opportunities for your business to experiment with new growth tactics.
The first step is diversifying your approach to reduce your focus on acquisition. Analyze the entire customer journey and find opportunities to rapidly execute ideas. Leverage the resources you have among your teams to create the perfect formula for explosive, sustainable growth.
What has been your approach to growth to this point? Have you been successful? Share your thoughts with me in the comments below.