Growth Marketing Explained and Top Strategies in 2023
- Last Updated July 18, 2022
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So, are you looking for tactics to grow?
Growth marketing is a strategy for building customer relationships and loyalty.
After all, increasing customer retention by 5% can increase profits by 25 to 95%. And 65% of a business’s profits come from existing customers.
So businesses need to develop long-term creative, proven, and compelling strategies for building customer relationships. Such evidence-based planning and creating a loyal customer base is known as growth marketing.
Modern entrepreneurs and growth marketers alike should embrace growth marketing because;
- It creates long-term relationships after customer acquisition.
- It helps engage new customers with your brand.
- It also generates new customers.
This post covers the benefits of growth marketing, its core components, and examples of successful campaigns.
Let’s dive in!
What is Growth Marketing?
Growth marketing is a data-driven approach for attracting, engaging, and retaining customers.
It’s a long-term strategic goal that optimizes your marketing funnel, unlike traditional marketing strategies that focus on specific parts of the funnel. The primary purpose of growth marketing efforts is to improve customer engagement and increase their lifetime value.
For instance, if a marketing team efficiently studies a strategy to use the data for customer acquisition and retention through brilliant tweaks, that’s a growth marketing team.
Examples of Growth Marketing Campaigns
Referral programs and loyalty marketing are examples of growth marketing campaigns, just to name a few. Let me explain:
1. Referral Programs
Referral programs incentivize customers to refer their friends. That’s how Paypal achieved almost 10% daily growth when starting. It works best when growth marketers build trust with customers.
Researchers who studied 10,000 accounts in a German Bank for three years found that customers obtained through referrals are more loyal and valuable than other customers.
Their research uncovered:
- Referred customers were 18% more likely to stay with the German Bank.
- They generated 16% more profit (each around €40)
- The bank earned a 60% return from its €25 referral reward.
2. Loyalty Marketing
Loyalty marketing retains customers while attracting more through incentives like discounts and free gifts.
McKinsey’s survey about loyalty programs found that members of free loyalty programs are 30% likely to spend on the brand, while paid loyalty program members are 60% likely to spend on the same brand hence higher conversion rates.
For that reason, paid loyalty is expanding rapidly in modern growth marketing. And 56% of loyalty program owners are satisfied with implementing them in their businesses.
Growth Marketing Vs. Digital Marketing
Successful growth marketers focus on setting goals, analyzing marketing data, testing different hypotheses, and implementing winning strategies.
On the other hand, digital marketing is creating and distributing marketing and promotional content on channels like websites, email, social media, mobile apps, and search engines. It includes other form of marketing including AI marketing and outreach marketing.
There are no rules for digital marketing – only tactics.
Growth Marketing Vs. Growth Hacking
Growth marketing is constantly testing various channels to find the best way to retain and increase your customers’ lifetime value organically. On the other hand, growth hacking is when you find an underutilized strategy to solve your business problem at a lower cost per acquisition.
So, in growth marketing, you need to grow your audience by testing various channels, which is a slow process. In contrast, growth hacking is carrying out a specific tactic on a particular channel to grow the audience, which is a fast process.
Growth marketing is slow and steady, whereas growth hacking achieves quick results.
What Are the Benefits of Growth Marketing?
- Better decision-making – by testing and analyzing, growth marketers develop clear information on what works and what doesn’t for business growth.
- Adopt better strategies for the needs of a start-up to a growing business – all the growth marketing strategies you adopt, from data collection to testing, can be re-implemented.
- Enhances reputation – growth marketing focuses on learning the customer journey and delivering better solutions to their problems.
- Helps maximize acquired leads – growth marketing also involves observing your leads’ habits on social media, which reveals opportunities to sell and the best ways to market products.
- Attracts new customers – with growth marketing, you learn the specifics that attracted your current customers and use the same strategies to attract other customers with similar interests.
- Low-cost growth – growth marketing budget is relatively low compared to the benefits you get once you implement the strategy.
- Scalability – once you’ve established a growth marketing framework that works, you can scale it because it costs less than paid campaigns and leads to sustainable growth.
- Achieves revenue target – growth marketing organically increases a customer’s lifetime value while attracting more sales.
Core Components of a Growth Marketing Strategy
The foundation of your growth marketing strategy should have the following three core components:
1. Customer Lifecycle
The customer lifecycle is the path your customers walk through as they engage, learn, convert, and re-engage with your business.
There are three lifecycle stages that a growth marketing manager should focus on are:
- Activation – you seek customer interest and attention, for example, using free trials.
- Nurturing – you engage your customers to strengthen the relationship, for instance, through newsletters and updates.
Reactivation – you re-engage the customers to strengthen relationships and loyalty through campaigns like win-backs and loyalty marketing.
💭 CASE STUDY: RAIS published a case study on engaging customers with the right message in their lifecycle. One of their clients shared different emails depending on their customer’s lifecycle stage, which increased the conversion rate by 18% to 157%, better than the average conversion rate of 4.4%.
The client increased the conversion rate by;
- Ensuring new customers get the welcome emails.
- First, winning the customers and positioning them into relevant cycles.
- Re-activating the customers when at risk.
Naturally, the client used an automation tool – RAIS – to send the emails at the right time.
Read further on the best email marketing software for customer engagement.
2. A/B Testing
Growth marketers can apply A/B testing in several formats like social media ads, landing pages, chatbots and email marketing.
It entails applying either “A” or “B” testing to understand which content variation in graphics, design, or copies better engages and converts customers. Then, you can optimize your marketing campaigns around the version that works best.
💭 CASE STUDY: Kiva, a non-profit organization, did A/B testing on its website’s landing pages to find the best variant that encouraged people to sign up.
Their strategy looked like this:
- They used focus groups and brainstorming to identify the areas that needed improvement – unanswered questions and the website’s above the fold area.
- Then they designed three versions of the above the fold area – a carousel, video, and the previous version with a few improvements.
- And designed a landing page variant to answer all common questions
They found out that their audience didn’t care much about graphics. Instead, they were hungry for information. The variant with answers to common questions increased conversion by 11.5% at over 95% confidence.
3. Cross-channel marketing
Cross-channel marketing is connecting your brand with customers through different communication channels and blending the messaging to give your audience a seamless progression as they move through different channels. For example, you can use push notifications, SMS, email, social media, mobile apps, and other channels in unison.
To build better campaigns, growth marketing teams must understand the customer’s communication preferences.
Ideally, they can use A/B test different channels to understand the customers’ preferences. Then build positive brand awareness through consistent messages on each channel.
3 Examples of Successful Growth Marketing Strategies
Below are three examples of growth marketing strategies:
1. Hubspot makes billions of dollars with free tools
Hubspot has extensive marketing software to help businesses grow. They offer free tools for a growth marketer to capture website leads, nurture them via email, and convert them to paying customers.
Look, Hubspot offers the best free CRM software, but you must integrate it with other sales and marketing tools. So Hubspot provides the tools with paid plans. And as the companies grow, they’ll need to upgrade them. That’s their growth marketing strategy.
Hubspot’s growth strategy includes:
- Free tools
- Brand image – Proves to help the customers
- Lead nurturing through email marketing and content marketing.
- Pricing strategy – upgrade and pay as you grow.
The same free tool strategy got Slack from zero to $4 billion in 4 years. It’s about getting users to try your product as early as possible
2. Etsy Built a $2 Billion Crafts e-commerce platform with constant experimentation
Etsy founders in their early twenties did freelance web development. At one time, they read comments and learned craft makers complained about lacking an online platform to sell their products. So they developed Etsy, and in 2005, they announced it to the public.
Etsy’s growth strategy involved experimentation and changing some elements on the site while gauging how users respond. They also empowered their users to be brand ambassadors.
If you use Etsy, check out these 4 tips to do SEO.
3. Robinhood’s zero commission fee structure + referral waiting list
Robinhood is a commission-free stock trading platform. Their first selling point was cutting out commission fees. And since everyone wanted in on such a deal, they used the opportunity to attract almost 1 million users before launching the platform.
Their growth strategy involved:
- Exploiting the target audience’s fear of missing out
- A referral waitlist for its beta version – the users had to refer other users to move up the list
Kickstart Your Growth Marketing Strategy
Growth marketing is a long-term strategy for conversion rate optimization and increasing customer lifetime value and customer retention through incentives like a referral program or loyalty program.
It relies on customer data to develop the best approaches.
Best growth marketers A/B test different hypotheses and deliver messages according to the customer’s lifecycle stage. When using multiple channels to reach their target audience, growth marketers blend together the messaging to give their audience a seamless progression from one channel to another.
Good Luck!
Jessica
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Hi, I’m Jessica 👋 — I work with SaaS companies to implement effective Content Marketing strategies to drive organic blog growth and conversions.
I’m greatly enthusiastic about building content driven by data and meaningful human narratives.
For me, it goes beyond reducing storytelling to brand data – I’m a stickler for uncovering the ‘why’ so that your product is noticed by the people who care.
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