4 Key Principles of Growth Marketing

Your nose is buried deep into the never-ending feed of content on your phone. At any moment, there are a handful of different advertisers all clamoring and bidding against each other to get their ads in front of your eyes. You see an ad for some service that solves a problem of yours that you shared with a friend over dinner last night.

Weird, how’d Facebook know I wanted that? Whatever, not interested right now. You scroll by. Cha-ching, Facebook just charged that advertiser $0.03 for the pleasure of being noticed by you for 5 seconds.

Back in 1850, a pioneering saddle-maker just needed to put a sign on his shop on Main Street to capture a large share of awareness amongst the cowboy community.

But human technology evolves. With everyone online in the digital world, it’s possible to segment, measure, and create personalized experiences for everyone that the saddle-maker never could’ve ever dreamt of. The proliferation of iPhones has changed the way we spend our attention and has forced advertisers to evolve - as the availability of self-serve ad platforms like Facebook and Google have allowed anyone and everyone to vie for the attention of individuals at scale.

To run a profitable ad today, you need to be more sophisticated than just putting up a sign. You’re faced with:

• crowded competition

• advertisers from all niches (beyond your own) clamoring for your prospect’s attention

• other content that your prospect might engage with over yours

• shortened attention spans

• your desire to make money off of this marketing, meaning your ad needs to convert

The rapid pace of change in content consumption habits means tactics from 3-4 years ago may already be eclipsed by new trends that have emerged.

Although the end goal of all marketing approaches are the same - there are clear advantages of adopting growth marketing principals for your business. Brand awareness and just being seen isn’t a viable strategy for sustainable business growth, especially not for companies that don’t have huge marketing budgets. You need to be efficient and make touchpoints count. Growth marketing is all about that - it’s a data-driven, customer-centric approach that blends art and science to create more value. It’s also full-funnel, meaning you can continue to create value beyond customer acquisition, helping to increase LTV.

So how’s growth marketing different?

Growth marketing focuses on generating measurable business growth through experimentation and data analysis. It’s obsessed with tracking what actions people are taking (conversions), the rates of those conversions, and the costs associated. Growth marketers typically spend their weeks coming up with theories, plans, and tests to improve on those conversion rates - to provide more value to each user in a way that gets the user to engage more.

Key Principles

There are several key principles, including

1. Customer-centricity:

   1. Growth marketing is centered around the customer, and businesses must prioritize customer needs and preferences in all their marketing efforts.

   2. For example, growth marketers at the top of the funnel focus on creating ads that hook users by opening with specific problems and solutions. In order to do this, they need to know what customers want and fear. At the bottom of the funnel, they may be working to remove blockers and encourage usage through better onboarding, discounting, and other tactics.

2. Data-driven decision-making:

   1. Growth marketing relies on data to inform decision-making, and businesses must collect, analyze, and interpret data to identify opportunities for growth. Success is based on metrics like customer acquisition cost, customer lifetime value, and retention rate

   2. For example, growth marketers are always optimizing towards a success metric - one that they are held accountable to improving and constantly reporting on, typically weekly.

3. Experimentation:

   1. Growth marketing involves continuous experimentation and optimization to identify the most effective growth strategies.

   2. For example, growth marketers are constantly brainstorming new ideas for how to get conversion rate up, including tweaks to the site or spinning up new channels to reach out to prospects through

4. Cross-functional collaboration:

   1. Growth marketing requires collaboration between marketing, product, and engineering teams to create cohesive growth strategies.

   2. For example, programs need ad assets, landing pages, reporting dashboards, and technology - which require multiple skill sets across disciplines to coordinate together

If you’re nailing the principals, you’re spending time and money:

• understanding your customer personas and problems

• accruing and testing hypotheses

• working a fast and iterative process that includes testing new marketing messages, site experiences, audience targets, and more

• getting a quick signal on how things are moving your goal metric (typically with a real-time data dashboard)

• learning about what messages and channels work for your customers

• sharing lessons from wins and losses with the wider team - to inform future plans

• generating value for your customers and revenue for yourself, cutting wasteful efforts

So what’s it look like in action?

During my time at Upwork, (a freelancer marketplace), I spent a year working on the bottom of the funnel and focused on increasing subsequent spend from first-time hiring businesses.

I dug into why customers were churning. We discovered that first-time outcomes were typically bad in this segment - leading to dissatisfaction.

I reviewed customer complaints and learned:

• Clients felt that the freelancers didn’t have the skills they claimed to have - indicating an opportunity for better screening

• Clients felt that talent was underwhelming - indicating that client expectations needed to be managed

• Clients had no idea what was going on with project progress, suggesting that project management practices were lacking

We then piloted a marketing program that proactively educated customers on best practices for the above before their first hire. We also offered dedicated account managers for improving freelancer quality. We used email, phone, and Facebook as our main channels - targeting a test cohort and comparing it against a control group that never got any of these touchpoints or offers.

To execute and measure what was happening, we pulled a cross-functional group of email, analytics, ad, and external phone teams to set up reporting dashboards to track key metrics, like email opens and opt-outs, phone engagement, additional jobs posted, additional freelancers hired, and lift in project spend from clients in our test cohort.

What’d we learn and what were the results?

We learned that people hated being contacted via the phone, appreciated the account management, and were willing to give us another shot if we gave them credit toward their next hire.

We increased project spend from customers by 7-digits on the year - which was a win for businesses hiring, freelancers, and also Upwork. Additional value was driven for all 3 parties - made possible by growth marketing at the bottom of the funnel.

How about you?

What are your own key metrics? What hypotheses do you have for how to move them in the right direction? Do you have a treasure trove of customer insights that you have yet to action on?

Marketing is often one of the most pullable levers - so it’s worth coming up with a few ideas for experimentation.