5 Steps To Developing Your Growth Marketing Strategy
Growth Marketing is the process of using data from marketing experiments to drive revenue for a business.
And the key to developing a successful growth marketing strategy is having a clear processes in place and uncovering the right metric.
It’s within the data that you’ll find efficiencies in driving revenue. With that in mind, this blog post will explain the 5 high-level steps you need to follow to build your growth marketing strategy.
Developing a Growth Marketing Strategy in 5 steps
1. Define Your North Star Metric
A North Star Metric is the one metric that captures the core value that your product delivers to customers.
What does that mean in plain English?
It means it’s the metric that shows that the value your customers are actually getting from your product or service. For example, Air BnB’s North Star Metric is night’s booked. Night’s booked indicates that customers are actually getting value from the platform. Therefore, they should focus all their efforts on increasing night’s booked.
Your North Star Metric should be a tangible and measurable goal. For example, more revenue is not a great goal. What creates that revenue? More users? Ok, how do you get more users? What’s the one metric that, once a user signs up, increases the likelihood of them staying signed up?
The first step in developing a growth marketing strategy is to find your North Star Metric.
2. Identify Acquisition Channels
Now that you have your high-level North Star Metric goal, you can break it down into smaller objectives.
To do this, map out your customer journey:
How do they get from different stages of a customer journey to your North Star Metric?
Identify the acquisition channels that the customer hits along their buying journey.
Here’s a list of 27 different acquisition channels you could test:
Viral/Word of Mouth
- Social Media
- Embeddable Widget
- Referral Program
- Online Video
- Community Engagement
- Giveaways and Contests
- Platform Integration
- Crowdfunding
- Games, Quizzes
Organic
- Search Engine Optimization
- PR and Speaking
- Content Marketing
- App Store Optimization
- Free Tools
- Email Marketing
- Community Building
- Strategic Partnerships
- Contributed Articles
- Website Merchandising
Paid
- Online Ads
- Affiliate Ads
- Influencer Campaigns
- Retargeting
- Ad Network
- Sponsorships (Blogs, Podcasts)
- Native Content Ads
- Content Syndication
Put all ideas on paper, without judging them.
3. Channel Prioritization
By now you should have a big list of ideas that could potentially help increase your North Star Metric. You can’t pursue all your ideas. To create a sustainable growth marketing strategy, you need to know how to prioritize for efficiencies.
A Channel Prioritization Framework will help you find the best channels to leverage. There are many frameworks out there but I like to keep it simple:
Score each channel you’re considering on a scale from 1–10 (1 being the easiest, 10 being the hardest) using the following categories:
- Probability: The probability that the channel will be effective
- Impact: If the channel is effective, how big of an impact will it have
- Effort: How much effort (time, money, staff) is required to properly leverage the channel
For example, you may think TikTok Ads have a high probability of effectiveness, medium-to-high impact, but are very high effort due to the need for constant video content (cost of video content, cost of ads, etc.).
Go ahead and start rating each of your ideas and giving them each a score.
4. Hypothesize & Test with Minimum Viable Effort
Great, we’re almost there. By now you should have your high-level North Star Metric goal and you’ve identified which channels to prioritize based on your typical customer journey.
Now you’ll want to start creating hypotheses. A hypothesis is simply a proposal based on assumptions that can be tested. You can frame your hypothesis like so:
X will increase by Y because of these assumptions.
For example:
Our new user conversion rate will increase by 3% because of these changes to our landing page (list the proposed changes).
Next, you’ll want to test your hypothesis with “minimum viable effort.” Don’t make a huge website redesign assuming it will increase your conversion rate. Instead, create a landing page with some elements of the redesign and send some paid traffic to the landing to test it against the original website and see if there is any incremental increase in conversion rate.
Minimum viable effort testing is important because it will:
- Identify the most impactful channels
- Challenge assumptions before investing heavily into them
Essentially, you’re analyzing if you’re correct about your assumed scores for Probability and Impact on the Prioritization Framework, while keeping Effort low.
5. Scale Experiments that Drive Positive Results
Once you’ve identified the top performing channels and strategies, it’s time to scale up your successful experiments and scale down your unsuccessful ones.
At this point, it’s critical to know what makes for a successful test and what does not. Many people will start to scale experiments without knowing the right metrics to analyze.
For example: If you’re running ads you may see an increase in return on ad spend (ROAS) due to some changes you’ve made. But ROAS isn’t always a great indicator of success. A better indicator may be your marketing efficiency ratio (MER), which measures total sales revenue divided by total marketing spend (from the same time period).
Why may MER be a better measurement of success than ROAS?
For several reasons:
- If you’re only looking at last-click conversions, you will quickly hit a point of diminishing returns on paid efforts.
- Advertising channels have gotten worse at tracking customers across the journey and tend to either over or under reporting.
What happens when a customer sees your TikTok Ad on their phone, then later that day Googles your brand on their laptop, a few days later gets hit with your retargeting campaign on Instagram, and then finally clicks the ad and makes a purchase. Who should be credited with the purchase? Some channels are great at driving consideration, while others are better at driving purchases. MER better represents the overall efficiency in your media spend in relation to business revenue growth.
As you scale your experiments, be clear on which metrics are most important. You should also be documenting your successes and failures to know what’s continuing to work well and what may need another change.
Conclusion
A growth marketing strategy will help you become more efficient in your marketing and overall business growth by narrowing your focus to key metrics that ultimately drive an increase in revenue.
A great growth strategy has 5 key steps:
- Find Your North Star Metric
- Identify Acquisition Channels
- Channel Prioritization
- Hypothesize & Test with Minimum Viable Effort
- Scale Experiments that Drive Positive Results
Before scaling ensure you are measuring the correct metrics to drive true business growth.
With a proper growth marketing strategy, you can efficiently scale your business.
