Creating Growth Teams for Multi-Channel Businesses
Understanding How Strategy and Customer Value Shape the Team Structure
By: Chris Brandsey, Founder Frame and Flight
Date: 11/10/2022
Growth teams have traditionally been thought of as small scrappy groups that run experiments within a market. However, creating and empowering growth teams within a multi-channel business requires a lot of alignment, a true understanding of the customer value proposition, and a firm foundation of what levers can be pulled to accelerate growth. This is the first of 3 articles I am writing about digital growth — Creating Growth Teams, Building a Growth System, and Optimizing Growth Programs (Loyalty and Personalization). This article, in particular, outlines my thoughts on growth teams and how I’ve seen them created and how they performed for some of the world’s largest multi-channel brands and fast-moving startups.
Your Teams Are Performing but Growth Isn’t Happening
You’ve done it. You’ve built out your Product and Marketing teams. You have a feature pipeline for your product, your marketing team is crushing awareness and activation with campaigns and promos. You have multiple channels, each delivering modest conversions. Life is good, right? Not so fast. Look a little bit deeper and you’ll notice a very common and disturbing set of trends:
1. A pop and drop on new features and promos. This is where you create customer excitement, activate that customer, and never see them again.
2. Your retention rate is slipping signaling that you may be spending more to retain fewer customers.
3. The Product team is rapidly delivering features, but the effort is not contributing to customer retention.
4. The customer experience is suffering from feature overload, non-coordinated marketing efforts, and lackluster retail execution.
On the surface everything is functioning like clockwork but just underneath the surface your digital brand is in trouble. This is where the notion of a growth system championed by a growth team comes into place. We’ve seen this type of team organization at tech startups going through explosive growth and wanting to maintain momentum — Uber, Tesla, Airbnb, and others come to mind. What you don’t hear about is how multi-channel businesses are looking at digital growth teams.
Growth Strategy, Systems, and Teams
Before getting into the details of building growth teams, let’s quickly define the key elements that are needed for growth namely a growth strategy, system, and team. Growth is a fuzzy thing, and the purpose of your growth system is to provide clarity, control, and repeatability for achieving growth. Your growth team operates and experiments within the growth system and a growth strategy is a set of levers you can pull to achieve growth. You can define a growth team only when you understand the strategy, the customer value proposition, and the desired business outcomes. For instance, if your growth strategy is build digital relationships with customers, create a sticky product, and build a seamless customer experience, it’s easy to see that operations, marketing, and product will need to play key roles within the growth team.
Key Elements of Growth
Growth Strategy — The set of levers you can pull to achieve growth. Knowing the levers you can pull to achieve growth will help you define the organizational make up of your team.
Growth System — The people, processes, and technology you use to achieve growth. This is the culture, organizational make up, and mechanics of how the growth team works to achieve results.
Growth Team — Experimenters and orchestrators guided by the scientific method — research, ideate, hypothesize, test, learn, and implement.
Realizing Growth by Aligning Technology Products and Customer Value
Technology Products + User-Base Growth
For many businesses the technology product is a broad set of e-commerce tools. For instance, Starbucks has a mobile app which ties in Starbucks Rewards and Mobile Order & Pay functionality. In a similar vein, Target has mobile purchasing capability where you can shop through inventory and choose your method of fulfillment. The main purpose of customer-facing products is to meet the customer where they are, to build digital relationships with your customers, and remove needless points of friction and anxiety. As an example, Nike’s store ecosystem allows a customer to scan clothing and unlock dressing room doors; capturing customer preference and making it easier to try on clothes. We know how irritating it is to chase down a store employ to unlock a dressing room. When thinking about growing digital revenue it’s best to clearly understand what the customer values (access to dressing rooms) and the desired business outcome (frictionless experience).
The Customer Value Proposition
A key aspect of growth is understanding the value you are creating for the customer and getting those customers to experience that value as much as possible.
During my time at Starbucks, we spent a large amount of time analyzing customer data, interviewing customers directly, and performing large research studies all to derive insight on perceived customer value. For Mobile Order and Pay the customer value was clearly articulated as CONVENIENCE.
When thinking through convenience as a customer value proposition you can’t just look at the app journey you have to understand the entire customer journey and work on improving that. How retail operations direct customers (way-finding), ease customer anxiety, fulfills orders, and hands-off items are crucial to satisfying the customer value proposition. The whole customer experience is important when thinking of growth not just the number of orders on an app. A poor retail operation completely erodes the value (convenience) created by mobile technology. Case in point, when Starbucks was looking for 30% growth on their mobile order & pay channel most of the effort was focused on transforming the retail experience.
Customer Value = Convenience.
Desired Outcomes = Exceptional experience and capability to build digital relationships
Growth Strategy
Understanding the customer value proposition, desired business outcomes, and business capability will help you determine your growth strategy. Many companies know their digital purchasing channels provide convenience to the customer. To provide a high level of convenience, digital products need to be intuitive, offers and promotions need to mean something to the customer (personalization), and the operational experience needs to frictionless and anxiety free. In this case, the growth levers are multi-channel experience, personalized offers, and product features.
Knowing how to balance the efforts across these three growth levers requires significant customer insight. By interviewing and surveying customers post experience a brand can gain key insights into the experience and the customer journey. However, as important as it is to understand customer needs it is equally as important to understand operational needs. Retail operations will often mask chaos and the customer will be none-the-wiser. Hiding these operational hiccups from the customer inhibits scalability of technology and thus growth of digital channels such as mobile ordering apps and e-commerce platforms. In this respect, growth and experience are truly joined at the hip and require an extreme amount of focus by the growth team in easing the experience for customers and operations for retail employees.
How to Structure a Growth Team
Traditionally we seen growth teams that are small, agile, and highly experimental. These types of teams typically are self-serving with either dedicated resources or a dotted-line reporting structure. In this manner, you would see Product, UX, Engineering, Data Science, and Marketing individuals hashing-out growth strategy, testing hypotheses, and consolidating learnings. These teams typically look like this:
For multi-unit organizations with complex operations, these small and localized teams do not have enough firepower to execute on growth strategy. Executive sponsorship and extreme ownership of the strategy are needed across the entire organization. For a QSR or Retail business, growth activities would ripple across Finance, Product, Engineering, Marketing, Operations, Data Science, IT, and Store Development. Below is an example of a vertically aligned growth team. Keeping the team highly experimental will rely on the authority and power imbued on the growth team itself.
Here is an example team structure:
In the above example we have the growth team led by the Director of Product with their only direct report being a Product Manager. The rest of the team members report into their functions and are borrowed resources. The Director of Product owns the budget, the business outcomes, manages market testing, orchestrates the activities of core team (Finance, Product, UX, Marketing, Operations, Engineering, and Data Science) and aligns all activities with Stakeholders and Sponsors. Extended teams may include Store Development, Retail IT, Customer Insights, and Global Strategy. It’s important to flex the team as needed and include those that will drive impact. The Sponsors make up the steering team, which aligns on the goals, the team composition, and smooths capital requests.
The responsibilities of the growth team are extensive. Below is a bulleted list
1. Finance — Determines user economics and builds an annual forecast outlining user growth needs to achieve the revenue target.
2. Marketing Manager — Markets to lapsed user-base. Experiments with habituation tactics and actively moves users into more profitable segments.
3. Product Manager — Builds feature roadmap to enable marketing, shorten funnel, and improve the customer experience.
4. UX Designer — Conducts user experience research on operational flows for both customers and employees, designs the technology to support an optimal customer experience.
5. Data Analyst — Manages A/B testing strategy, supports market testing, ensures lapsed and retained user counts are available and distributed.
6. Operations Manager — Ensures the retail customer and employee experience is primed for new technology additions i.e., employee training, customer wayfinding, etc.
For growth teams utilizing a OKR framework for goal alignment is a great way to get everyone, including the steering committee on the same page. Here is an example OKR for mobile ordering channel growth:
Objective: Ignite growth of mobile ordering channel
Objective Description: Scaling mobile ordering means ensuring customers are experiencing the value (convenience) and we are actively delivering that value.
Key Result: Annual mobile ordering revenue growth of $X
Key Result: Percentage of mobile order transactions
Key Result: Customer rating score of X.0/5.0
Experimentation is the Lifeblood of a Growth Team
We’ve all seen the design thinking cycle of research, ideate, hypothesize, test, and implement. To take advantage of this cycle we must make room for the growth team to execute on the cycle. That means giving authority and autonomy to the team to do what they think is best. Stakeholders and Sponsors (steering team) should focus on key results and whether the financial forecast is at risk thus limiting the management within the growth team activities themselves.
Within this hypothetical team structure, autonomy also needs to be gifted to members of the growth team. For example, Marketing with little direction can be shown daily lapsed user counts and create a process where they identify and push offers to those lapsed users. Experimenting with habituation and encouraging customers into more profitable segments are activities that can be quickly aligned within the growth team. Retail operations experiments tend to be larger capability builds. Testing multiple changes across the system in different markets could be way of achieving an agile approach to large capability developments. The point here is to create learnings; learnings of customer behavior, learnings of retail execution, and learnings of what constitutes as an exceptional customer experience. Experimentation allows the growth team to push the boundaries of the customer value proposition. Remember getting the customer to experience the value more frequently is simply another way of saying growth.
In Summary
Designing a growth team can be complicated especially within a company that is multi-unit with complex operations. In this case, a traditional method of a small team made up of Product, Engineering, UX, and Marketing, may not work. Greater alignment up and down the chain and clarity is needed on the goals, growth strategy, desired outcomes, and customer value. Creating a structured environment for a highly experimental growth team will require a balance of creative and linear ways of work.
A Note About the Author
Chris Brandsey is the CEO and Founder of Frame and Flight, a boutique consultancy company helping businesses achieve digital growth. Prior to founding Frame and Flight, Chris led product organizations at several startups and grew mobile app and omnichannel technology for Starbucks Coffee Company.
