Part 1: The Power of Growth Marketing
‘Chief Marketing Officers will have to ‘grow or go’ as Fortune 100 companies switch to ‘Chief Growth Officer’ roles.’ CNBC.
Chances are, you already know a bit about growth marketing — also referred to as growth hacking. This experimental approach to growing your customer base has swept the workforce, influencing everybody from startups to Fortune 100 companies. Entrepreneur and angel investor Sean Ellis coined the phrase “growth hacking” in 2010, to quantify what Silicon Valley unicorns have become famous for: achieving explosive growth, often within short timeframes. If you haven’t yet read his new book Hacking Growth, it’s a must.
Simply put, growth marketing is an all-encompassing approach to growing your business through optimising your customer experience. While traditional marketing focuses on the top of the funnel, and account-based marketing focuses on key accounts, a growth marketer focuses on the entire funnel. Growth marketing is particularly relevant for tech companies that can code growth into a product from the outset. That might be via adjustments to user workflows, unlocking network effects, or designing for virality.
The true promise of growth marketing is in the integration of product and marketing. Traditionally, the two functions sit as separate departments: a product is created, then it’s the marketer’s job to promote it. True growth marketing occurs when the heads of product and growth work in tight collaboration, holistically managing the end-to-end customer journey and testing creative ideas to improve acquisitions, conversions and the customer experience.
A word of warning: there are players who can implement a few gimmicks to produce non-lasting spikes across your vanity metrics. A good filter is to put yourself in the shoes of your customer and ask yourself ‘What would my customers think of this idea?’ If it feels gimmicky, it probably is. And it’s likely to do more harm than good to the reputation of your business. True growth marketing is based on designing and implementing ideas, processes and systems that generate sustainable, ongoing value for your customers. Growth is the by-product.
This is the first of a four part series on Growth Marketing. In the following sections, we’ll delve deeper into the underlying thinking and actions you can take to implement a growth function into your organisation. The contents you’ll find in this playbook are equally valuable for a startup that hasn’t launched its product yet, through to a startup with multiple products already up and running.
Part 2: Goals for Different Stages of Growth
Many people working in the startup world don’t give enough thought to the methods and reasons behind their growth ambitions. They just want to grow, grow, grow! It’s all about those hockey stick curves, right? Wrong. What is much more critical in the early stages of a company or new product is growing consciously.
Simply put, startups cannot afford not to learn intricate details about their customers, their product and acquisition channels through well-considered and constant experimentation.
The lessons to focus on vary at different stages of your startup or product. As a guide, in this article I have highlighted potential growth goals a startup might like to consider. Remember that things rarely go to plan. It’s also likely where you start and end on your journey will be a lot different from what’s outlined next.
First 1–100 Customers
Key question: ‘Do we have a product customers love?’
At this initial stage it’s critical to validate your core value proposition and test for initial product / market fit. Your focus should be on your retention metrics — are users coming back? How often? If the answer is no, you’ll need to re-think your product strategy and pivot if necessary.
You’ll do this by delivering an alpha MVP (initial tests with cohorts of 5 to 10 customers per round), followed by a series of beta tests (cohorts of 50–100 customers per round). You’ll be working like mad to fix bugs and UX gaps in your product’s workflow between test rounds. Your alpha tests should be heavily qualitative. This means in-person interviews and screen recording sessions that allow you to capture a user’s emotional responses along with hearing their verbal feedback and observing where they get stuck or confused in using your product. Think of this as your pre-launch phase.
Key question: ‘How will we gather data and understand user behaviour?’
At this point you’ll also focus on setting up your ‘growth stack’ — a suite of digital tools you’ll use to track user behaviour (qualitative and quantitative), trigger automated communications, store all user details via a central CRM, and so on. I’ll share more about the growth stack in part 4.
Data doesn’t lie, because data doesn’t have ego. Without it, you have no scientific way of measuring what’s working or not. You’ll be stuck with debating opinions internally, which isn’t much fun. Listen to what the data says and by your 100th customer you should have a good picture of what people love about your product.
This becomes your value proposition. Build everything around this.
First 100–1,000 Customers
Key question: ‘What features do our customers want?’
To answer this first question, you’ll work in partnership with your customers to quantifiably and qualitatively gather data that illuminates what your customers love and don’t love about your product. The data should also indicate what new features or UX tweaks will best remove any friction from customers quickly accessing your core value proposition. Ideally you will have someone on your team who wears the hat of a UX researcher, whose goal is to bring new customer insights on a regular basis.
Key question: ‘What channels work?’
To answer this second question, you’ll need to run tests on a number of channels to see where you get best CPA (cost per acquisition) rates. This is an important time to establish clear, scalable, repeatable channels for acquiring customers on a daily basis. You’ll want to test 5–6 channels and hone in on 3. Most startups can’t even identify one clear channel because their efforts in marketing are often unfocused, therefore difficult to measure. More on this in part 4.
Key question: ‘How can we engineer growth into our product?’
As an interdisciplinary team of marketers, designers, engineers, you’ll be coming up with ideas to engineer growth into your product workflows. Designing for network effects is an obvious one for many products. For example, what will make your product even more valuable for your customers if more people join? Marketplaces are a good example for network effects. Airbnb wouldn’t be where it is today if it had only one hundred listings. It’s value grew as supply and demand increased. Another common technique is to provide a referral opportunity straight after the customer’s first ‘a — ha’ moment, or after a customer completes multiple transactions. These are moments when they may have received enough value from your product, that they are now willing to refer their friends.
Another aspect of engineering growth involves improving the conversion rates across your funnel (Awareness, Acquisition, Activation, Retention, Referral, Revenue). You’ll analyse data to understand where customers are dropping off and re-engineer your product’s workflows to drive conversion rate optimisations.
First 1,000–10,000 Customers
Key question: ‘Do we have a viable business?’
Things are heating up. By now you have eaten at least 6–12 months of your runway and are probably looking to raise another round of investment to keep going. You will have gathered enough consistent data to answer fundamental questions about the viability of your business or product. Using what’s known as ‘unit economics’, you’ll solve the following equation: Customer LTV (LifeTime Value) — CPA = $? The answer should obviously be above zero, and more realistically something in the hundreds or thousands of dollars. Because beyond your CPA, you’ll have other costs to cover: staff salaries, office rent, etc.
Understanding your unit economics might reveal some hard truths about your product that require you to adjust your business model. To be in the green (profitable) or simply to increase profits in order to avoid seeking another round of investment, you might be testing new pricing structures or features that can unlock new revenue streams, or pivoting focus towards a new product which the existing product merely becomes an acquisition channel for. Don’t be afraid to be flexible.
First 10k-100k Customers
Key question: ‘How do we scale our operations?’
At this stage, you probably have a small growth team where the collaboration has been fairly organic up until now. This is when you start auditing and thinking about your internal processes and structures so they can endure a larger headcount as you recruit more people to support the next stage of growth. (Again, all of this might have happened for you earlier than the 10k-100k customer base range. Another reminder that this is just a guide and that things rarely go as planned!)
A big team isn’t necessarily a strong team. Spotify engineering culture videos provide a great visual explanation of how team and organisational structures need to transition to support scale. Small, agile teams are proven to be most effective in driving growth. This is when you’ll look to introduce interdisciplinary teams to autonomously lead different parts or different products.
First 100k-1m Customers
If you ever get here, hats off to you! Your company is on its way to becoming the next unicorn. At this stage, you’re simply pouring petrol on fire. You’ve got clear answers on what works. Keep doing what you are doing. At some point, you’ll be developing new products, you’ll be overseeing international expansion.
Summary
Things rarely go as planned, but that doesn’t mean you shouldn’t set aside time to think through your growth goals and key learning outcomes. Growth is a by-product of building something that customers love, creating channels that work, aiming for a seamless customer experience as well as a viable business model, amongst many other things. If you can’t clearly articulate what works or doesn’t work across any of those factors, then you will struggle to sustain continued growth or attract further investment.
The next section covers key behaviours that help increase your velocity.
Part 3: Key Behaviours to Increase Velocity
It’s easy enough to set goals, brainstorm ideas, and develop processes. What takes more time is the development of a key set of behaviours that help you to achieve better results quicker. These behaviours are subjective, hard to detect upfront and learnt through experience.
For me, the attributes that tend to make a big difference to growth speed are:
Bite-Sized Chunks
This is your ability to break down goals, ideas, or experiments into manageable bite-sized chunks. Easier said than done of course. Too often the ideas or experiments being pursued are big and hard to chew. It’s unfortunate given speed is often the only competitive advantage you have as a startup that teams aren’t more critical on the time it takes to validate whether an idea or experiment has worked.
To resolve this problem, your aim should be to chunk down ideas and translate them into experiments that can be completed within 3–6 hours. Setting this limitation will force you to move as quickly as possible through the lean startup ‘build, measure, learn’ cycle. Your developers might cough at that target, knowing your idea will take a lot more hours to build out, but there are workarounds. Ideally, you should avoid custom code at any cost. For your first prototype use readily available online tools to experiment. Or run a round of Facebook Ads to test engagement rates around an idea without building a prototype. Only after rounds of iterations, and a solid validation of your hypothesis, can you then consider a custom built version of your idea that integrates seamlessly with your product experience.
Don’t forget to make it fun. I like to work as a team to identify the MVP for any given experiment. Challenging ourselves this way has saved us days of time on many occasions and accelerated the speed of our learning.
Staying Responsive
Many times we miss easy cues on how we can improve our product: passing comments from customers or colleagues, or new trends in your market or industry go unheard or unnoticed. We tend to continue doing things a certain way, because that’s the way it’s always been done or how we enjoy doing it. Other times, we are so fixed on ticking off a task that we’re not questioning the quality of our approach enough. Maybe the goals for the week are set and it feels safer sticking to them, compared to the discomfort of stopping the team in their tracks to challenge whether they are pursuing the right things.
Watch out for stagnation. All of these subtle behavioral patterns make you and your team more rigid over time. You will take longer to come to the realisations you could have made earlier, had you been more tapped into your environment.
Few have said it better than Bruce Lee:
“Be like water making its way through cracks. Do not be assertive, but adjust to the object, and you shall find a way around or through it. If nothing within you stays rigid, outward things will disclose themselves.
Empty your mind, be formless. Shapeless, like water. If you put water into a cup, it becomes the cup. You put water into a bottle and it becomes the bottle. You put it in a teapot, it becomes the teapot. Now, water can flow or it can crash. Be water, my friend.” Bruce Lee.
The key here is to have a ‘beginner’s mind’. See things with fresh eyes. Sense for and listen to people’s body language, and read between the lines for what’s not being said. Stay open to new possibilities, and do things you haven’t done before. We’ve all heard ourselves or others say ‘It won’t work’, only to be proven wrong with a simple and quick experiment. As Steve Jobs would say ‘Stay foolish, stay hungry.’
Detaching Yourself
I’m terrible at this, as are many startup founders. It’s natural to feel attachment to your idea and the business you’ve built around it, and that sense of conviction can help you overcome many obstacles. But attachment is also the enemy of objectivity, something you’ll sorely need as your business grows. Avoid the truth at your own peril.
Remaining objective through detachment means facing your ego. My ego, as big as anyone’s, loves being at the centre of solutions. It loves its ideas to win above others. It loves to hear its own voice. It loves attention and validation. It also comes with a hefty price tag: it drowns out other, better ideas. It obscures the bigger picture, the warning signs signalling that the path I’m on is leading to a dead end or worse, edge of a cliff.
If it’s not your ego getting in the way, it might be that of a team member, or, often, the CEO. Strong willed environments like startups are prone to this. It ain’t going away, and eliminating it from your personality is near impossible in a single lifetime, unless you are Siddhartha Gautama.
So what’s the answer? As Ray Dalio, world famous investor and entrepreneur, puts it, idea meritocracy and data-driven group decision-making.
Idea meritocracy creates an environment where everyone is encouraged to share ideas. These ideas are then voted against a set of criteria that you and your team set. The ICE criteria is a popular one at startups. Ideas with top scores are first to be tested.
Data-driven group decision-making uses the range of tools available through your growth stack (see part 4) to gather data from your experiment that validates or invalidates the hypotheses surrounding the idea that was tested. Data doesn’t lie, but it’s often difficult to get accurate data. This is where it helps to make decisions around the data as a group. There might be other factors impacting the data that you might not be aware of. For example, the site was down for maintenance during the week, which impacted usage. You would not have been aware of that issue unless a developer was in the meeting. It is important that you take your colleagues on the journey — having opportunities to make decisions together ensures unpleasant surprises are avoided.
Summary
The above are a set of behaviours I have found can help increase velocity. You’re likely to have your own set that you find works. In any case, play around and, set processes or systems like the examples above to reinforce desired behaviours.
The next and final part of the Growth Marketing Playbook covers practical steps, tips and tools for the first three months of a startup’s growth function.
This article includes a guideline of tasks to be focused on by a Growth Marketer in their first three months. It equally applies to a startup that’s just launching, or a startup that wants to improve its growth metrics for an existing product.
Again, the timelines here are not fixed and many of these activities will either happen earlier or later than outlined.
Part 4: First 100 Day Sprint for Success
Month 1
Customer Discovery
Too many startups start without a clear enough picture of who their target audience is. Generally they cast the net too wide, in an altruistic pursuit to please everyone. They have a big solution for a big problem. Not only is this unrealistic, it’s also bad business.
What these startups end up with is generic copy on their website and a product that doesn’t solve an acute pain point for a niche audience. People might like their product, but they won’t love it. I like to go by ‘less features for niches’, a mantra that helps me focus on building a simple product for a niche audience. The key is creating a product that people love. Get 100 people that love your product and would suffer without it, and you’ll have solid foundations for the type of growth startups are famous for.
The key? Mind map all the problems your solution solves. Next, narrow it down to 2–3 problems that you are best able to solve. Then, narrow this list down to one. Now, rethink the type of solution required to solve this one particular problem. Your new solution should be a fraction of the size of your original solution. This is what the MVP of your product should be.
Next, get deeper customer insights via interviews or a team workshop using an Empathy Map.
Translate your key insights into separate Character Personas that you can pin around the office to keep everyone focused on who you are building your solution for.
The whole process outlined above is something you’d review and re-do at regular intervals. Perhaps bi-annually or annually, as the market conditions change, your customer preferences change, or because you’ve pivoted from your original starting point and have ended up with a product solving a different problem.
Value Proposition Testing
Now that you have Character Personas with your customer’s pain and gain points mapped out, use the Value Proposition Canvas to list possible value propositions to test.
You should look to create 3–5 variations for how you pitch each value position. If you have 5–6 value propositions to test, you now have in total up to 30 pitches to test.
Write out each pitch in a spreadsheet, then use Facebook Ads to rapidly test engagement rates. $20 budget per ad is usually enough to test a pitch. For $500 or so, you can really refine and nail your value proposition.
MVP
Starting from a user workflow diagram, through to progressively low to high fidelity mockups and prototypes, iteratively test and refine the MVP for your product that delivers on your value proposition. Tools like Sketch, Proto.io and InVision are great for prototyping. Hooked is a great resource to design a habit-forming product based on your customer’s core needs.
As outlined in part 2, this is when alpha testing commences. If you are in the scenario of joining a company post-product launch — perhaps the product has already been in market for several years — it’s still just as relevant to actively test entirely new workflows.
Building an MVP is an art in itself, and deserves a separate article. It’s only through experience that you gain the wisdom to know intuitively whether the MVP is ready, under or over-baked.
Growth Stack
Just as you’re about to launch your MVP and complete your alpha and beta testing, you need to integrate your suite of marketing automation and analytics tools, aka your growth stack.
It’s likely that you’ve already begun to implement some of these tools on your landing page, used to drum up a pre-launch waitlist. Like the section above, this deserves a separate article as there are many nuances and details in getting your setup done right.
If you are non-technical, you’ll need a front-end developer to lean on at times to help with setup. Here are the key aspects you’ll need to cover, along with links to my favourite tools for the job:
- CRM: To manage your customer details and record all the transactions you’ve had with them. A CRM helps you provide a more tailored experience overtime. A favourite of mine is Autopilot.
- Automated communications: To send automated email, SMS or in-app messages to customers based on certain triggers or conditions. Again, Autopilot is a standout here. Its drag and drop workflow creation user interface makes this a friendly and fun tool to use.
- Behavioural Analytics: To measure cause and effect relationships and develop correlations to better understand and predict customer behaviours. Tools like Heap and MixPanel are solid contenders. They will help you optimise conversions across your funnel, and provide the data you need to measure the impact of your experiments. You’ll also want to use a tool like Hotjar or Fullstory for live screen recordings of actual users on your site. These tools give terrific insights on where you need to make UX fixes.
- Split testing: Optimizely allows you to create and test variations of single pages on your site to identify improvements that work, backed by data. It has proven to be difficult to implement on certain single page apps built on frameworks like Angular. So ensure you really talk it out with your developers before deciding on which tools to use.
- Reporting: Geckoboard is a simple and straightforward tool to setup live reporting. It allows you to configure a dashboard displaying results against key metrics for your business. It allows you to pull data from your various sources via APIs.
- Integration: Segment is the tool of choice for many startups to connect all their applications. It captures data from every customer touch point and can feed it into user friendly reporting applications for you to make better decisions.
My friend Juan has also written this excellent article with further references to help you configure a $0 marketing stack.
Warning: it takes a lot of effort to configure your growth stack, so don’t attempt it all at once. Start with specific use cases. For example, apply the tools to improve your onboarding process. Then move to another use case like improving your checkout completion conversions. Similarly, start your reporting with a simple google spreadsheet tracking before and after results to capture the impact of your work. Move up to a reporting tool like Geckoboard once you are sure you are tracking the right things and you are confident in the accuracy of your data.
Month 2
Channel Testing
You might have noticed that up until now, I haven’t covered outreach activities to drive awareness and draw new customers in — something most Execs would want their Growth Marketers to get on with. I believe it is critical that growth marketers play an integral role in defining their target audience, shaping the value proposition and MVP, meeting customers and extracting rich insights, and configuring that growth stack, before they begin testing acquisition channels.
When you’re ready, the seminal book to read is Traction. It brings a rigorous, no bullshit process to help you find acquisition channels that work for your business.
My process is a modified version of what’s outlined in Traction. These are steps I use to identify acquisition channels through experimentation:
- As a team, using post-it notes, brainstorm as many creative acquisition ideas as possible. That’s ways by which you can raise awareness, and drumming up interest and intent to purchase, sign up, etc. These strategies should be practical and unique, not generic ideas like ‘Facebook Ads’.
- Discuss ideas, create super ideas by combining similar ones. End the workshop, with a fully exhausted set of ideas. You should have at least 50–80 ideas.
- Transfer all your ideas to a spreadsheet down a single column. In the next column, note which of the 19 Traction Channels it fits in. In the other columns, insert the ICE criteria to help you vote and rank top ideas. The final column should then sum up the total score.
- Share the spreadsheet with your team members, get each of them to score the ideas. Aggregated totals from individual scoring helps remove biases.
- Filter aggregated total scores from highest to lowest rank. Scan the results and check for patterns. Again, new ideas might emerge: capture them. Ideally you should pick 5–6 top channels and a set of 3–5 creative ideas for how each channel can be experimented.
- Next, in Google Slides or whatever tool you prefer, create some basic vision boards that detail out your strategy for each of these top 5–6 channels. Use visuals to help tell your story. For each channel, articulate the experiment you’ll conduct. This is where you should challenge yourself to design experiments that take no longer than 3–6hrs to complete. For example, if content marketing is a channel you’d like to test, your experiment might be to write a short blog on Medium and advertise it on Facebook to test click through rates and costs. Note that getting this complete doesn’t require a developer. Anyone can create a Medium account and advertise it. It’s only after you’ve validated that it works, might you look to create a custom blog that is seamlessly integrated on your site. For Influencer Marketing, reach out to an influencer who’d be willing to scope up associated costs and impact.
- After you’ve run your experiments, or completed your studies, you should now be able to table the estimated costs of acquiring a customer. If you are happy with the results of at least 2–3 channels, then these should be your focus for as part of your go-to-market strategy.
Growth Engineering
This is where data, programming and UX meet. How do you increase customer engagement to the extent that they are talking about your product to their friends and family all the time? How do you increase the value of your product for a user if they do invite their friends and family to join? Does adding a social network layer to your product make it more fun and sticky? What happens if you share aggregated data across the platform with customers? Do the data and insights drive loyalty and ongoing use?
It’s the constant adjustments and improvements through continuous data analysis and experimentation that keeps customers engaged and referring you. Over time, efforts from this discipline and focus make up a large portion of sustained growth. It’s the art of saying no to new shiny objects. To avoid being spread too thin, instead keeping focused until you hit new thresholds.
Month 3
Targeting Hubs
Imagine if Facebook had allowed anyone in the world to sign up from day 1. You sign up and see there’s a few people from India, the US, Australia, and people scattered across Europe. None of your friends or family were there. What do you think would have happened next? You’d probably have deleted your account, never to revisit it again.
The genius tactic behind Facebook’s growth was to target specific hubs, one by one. The first was Harvard, and within days the whole campus was hooked. Then it was other Ivy League universities, followed by all universities, and so on. The slow release created buzz and excitement.
Similarly, chances of creating buzz and excitement for your product are higher if you target a hub that your target audience is connected to, whether that’s geographically defined or something else. Concentrating your marketing efforts and directing your channels towards a hyper-localised, hyper-targeted hub amplifies your message.
So what’s the right hub for you to be targeting?
Go-To-Market Strategy
This is where it all comes together! All the outputs from the previous sections are now the ingredients for your Go-To-Market strategy.
It’s now a matter of ramping up or switching on all your prioritised acquisition channels through a well-planned marketing campaign. At this point, you might also consider putting on a launch event with customers, friends and family to celebrate this important milestone of releasing your product and brand more widely into the world.
Normally I don’t plan more than 3 months out in order to remain responsive to new learnings. Using the basics of a Scrum framework helps create a weekly rhythm to build, measure, and learn, as you continuously improve and iterate based on the data you are capturing.
Build, measure, learn, repeat. That’s the motto from here on.
Summary
I’m sure some of what was discussed in this series won’t be relevant for your situation, but hopefully you’re left with a clearer picture of what you need to do next.
If you are wondering where to from here, track back to part 2, which outlines the areas to focus based on the stage of growth you are at.
Otherwise, I hope you’ve found this Growth Marketing Playbook as a useful resource for your next exciting adventure.
Next
Is there something here you think I’ve missed? Or something you disagree with? I’d love to hear your thoughts, and offer help where I can. The best place to reach me is via LinkedIn: https://www.linkedin.com/in/onurekinci/
Got something valuable? Give a clap!
