The term ‘growth marketing’ has been popular in the industry for quite some time now. Mainly led by software companies looking to find their product-market fit more quicker. And then scaling that success beyond.
Over the past couple of years, it evolved from being a singular approach to finding the right funnels for growth to proactively optimizing and scaling all of them, enabling sustainable growth.
But isn’t that what regular marketing is supposed to be? Yes, and no. According to the AMA, marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.
In simpler words, marketing focuses on what you want to say, to whom you want to say it, and when you want to say it. It focuses on your message and everything related to it.
How is Performance Marketing Different from Growth Marketing?
Growth Marketing and Performance Marketing can be thought of as a subset of marketing but that does not do justice to them. I like to think of them as an evolved way of marketing in the modern world.
What is Performance Marketing?
Performance Marketing is focused on engaging with marketing programs where the costs can be directly correlated to the revenue they generate. It means a clear ROI on investment and the exact value that the marketer will get for spending money on it. Influencer marketing, affiliate marketing, and search marketing are good examples of performance marketing.
What is Growth Marketing?
Growth Marketing is when marketers use growth hacking techniques to conduct experiments on all or some of the marketing channels and strategies on a consistent basis. While regularly optimizing their tests and figuring out the most effective way to spend the overall marketing budget.
Growth Marketing is essentially a mindset, that enables your marketing teams to think about the impact of everything that they do. Whether it is traditional advertising or performance marketing, that growth mindset can really get the best out of every effort and ensure that the business keeps growing.
Growth marketing is a fundamental approach, not just a subset of marketing because it’s proactive. It’s about planning, strategy, optimization, and scaling. It’s about making sure that every channel you use is working towards the same goal. It utilizes the principles of performance marketing and uses calculations to understand, optimize, and eventually scale, all aspects of marketing.
How to Get Started with Growth Marketing?
Start by analyzing your current marketing funnels. Even if you are a new business, or haven’t started yet, you can consider your marketing plans as your current marketing funnels.
From there on, it is a simple process of experimentation. Think about every aspect of a marketing function, not just the whole funnel or channel. For example, you can experiment with something as simple as changing the color of the CTAs on your website.
How to do Growth Experiments
Create hypotheses for any experiments that you can do with your funnels. And then assign a score to these hypotheses. The score will be totally subjective at this point, but a good practice is to contemplate as accurately as possible. Divide your scores into 4 parts.
These are self-explanatory, but if you are scratching your head.
Confidence is the number you give to the hypothesis on how sure you are that this will result in positive growth.
Impact is how much of a difference will it make compared to the current outcomes.
Effort is how many working hours or resource spend will it require for you to test this.
Probability is the chance of success for this experiment.
All of these scores should be on a scale of 1 to 10. Once you have all of your hypotheses listed, you can then choose which ones to go for first.
But that’s not all. Experimenting does not mean that you take the successful ones at face value and scale them. Outcomes have to be dissected and measured properly.
With each outcome, you need to analyze and understand the learnings, opportunities, and mistakes. More opportunities mean more experiments can be done derived from this one. More mistakes mean you would have to redo the experiment with a different configuration. And more learnings mean that you might be able to scale your growth marketing strategies with a few tweaks.
How to Get Started with Performance Marketing?
As compared to growth marketing, performance marketing is more objective than subjective. You start by gathering all the data that you can about a marketing function. And then optimizing it for maximum output.
Let’s take the example of influencer marketing campaigns on YouTube. The idea is simple – get all the metrics in one place. In this case, the number of followers for each of the influencers you want to go with, their audience demographics, and their video views statistics, among other things.
You put that data in a nice spreadsheet, analyze the ones with the most ROI respective to your target audience and make your decision.
But, just like growth marketing, it does not stop there, in fact, things are just getting started. Performance Marketing dictates that you keep on measuring the results from all of these campaigns and make adjustments as required.
So, let’s say that you have 10 influencers that are doing really well and getting customers for your business, and the rest are not doing so well. You put more of your budget towards the influencers that are performing and cut it from where it is not getting you the bang for your buck.
As for any marketing technique, there are subjective considerations to be made as well. Some of the influencers might be failing because of a lack of relevant content, direction, or resources that you need to provide to them.
The Winning Formula
Every business is unique and might find success with Growth Marketing or Performance Marketing. But there is a simple winning formula, and that is to combine both approaches wherever possible.
What I mean by that, is for you to really dive into what Performance Marketing is doing for your business and run experiments on it. While scaling Growth Marketing experiments using Performance Marketing tactics and taking your growth to the next level.
Both these approaches complement each other in a lot of ways, and when done right, can become a major boost for the growth of your business.
If you want to dive more deeply into how these approaches can help your business – I help businesses find their north stars and work toward sustainable growth. Contact me and let’s talk about your business.