Growth is culture. Stop talking only about user acquisition and performance
Growth is a culture, not a cool name for a department. A “Growth” professional (should) evaluate all the opportunities in which the company can grow by changing certain processes (or even adding them). And these opportunities for improvements and corrections of routes are in all departments of the company. For example:
Improving onboarding processes for new employees to maintain the “honeymoon” for longer, delivering content that helps entrants understand the company culture, processes, and teams and roles and responsibilities are about “retention” of talents. We know that keeping an employee is, on average, 2.5x cheaper than hiring a new one — and an engaged employee delivers more and better.
A “Growth” approach would understand that the development of a culture guide — such as Netflix or Hubspot did — may help the newcomers adapt to the new work environment, new routines, and methodologies.
Optimizing for web search engines (SEO) and app stores (ASO), leveraging organic acquisition is also a form of growth.
Creating a content strategy that encompasses a series of formats (podcast, video, infographics, ebooks, etc.) and a good distribution increases the brand awareness and, with that, the understanding of products and services, bringing customers that will potentially stay longer with your company (improving lifetime value).
The growth of a company, after all, is a set of factors.
Originally “Growth” came from “Growth Hacker,” a term coined by Sean Ellis in mid-2010, who defined this professional as someone whose true commitment is growth — and all resources are directed towards improving growth potential.
He talked about startups with few resources, that need to make the best of what they had to show their growth potential, with smart financial management skills.
But things went wrong and all of a sudden, the “Growth” professional was created to replace “traditional” marketing with a “data-driven” marketing view—pure photoshop stuff.
Notably, Andrew Chen (General Partner at Andreessen Horowitz, a venture capital firm in Silicon Valley), changed the conversation from the global (company) to the local (department) view when he wrote an article in 2012 entitled “Growth Hacker is the new VP of Marketing.”
After his concept blows the Silicon Valley idea of marketing, he deliberately excluded branding, content, public relations, and many other marketing and communication functions from the concept of marketing strategy.
By saying that the traditional marketer would not understand a series of technological integrations to achieve results, he praised that engineering would be the best kind of professional to lead a marketing team and strategy, as they know how to use mathematics, code and data.
After that, with the expansion of the term in Silicon Valley and the boom of startups, all conferences on the topic (which have been going on since 2011) are about “new marketing,” “data-driven marketing,” and these strong buzzwords that enchant those who believe that changing role names means innovating (or causing a sensation of innovation).
And what we have seen is exactly this: tech companies have become user acquisition machines, but without any retention, maintenance, or customer care strategy for its users. LTV is going downhill, but the monthly Cost of Acquisition per Customer (CAC) is always controlled.
Growth requires the adoption of a specific methodology, data, processes, and people.
As an “incredible” way to show that startups and technology companies are great centers of intelligence and examples in using data to acquire customers, everything became Growth Marketing.
But within Growth Marketing, these same companies added only the discipline of media performance to improve the cost of acquiring customers (CAC) in the concise term (one month), disregarding some other things to make the ideal LTV.
Example: if each new customer costs you U$ 10, it means that you spend U$ 100 for ten new users in the first month. Let’s call them “January users.”
In the second month, only 50% of those January users are using your product/service. In other words, the acquisition cost of these active customers rose to U$ 20.
In three months, three customers from January remain active (a cost for each of U$ 33.33).
In three months, the company lost 70% of its recently acquired users (churn). And then, here comes the CRM team to reactivate those customers (usually with a coupon/promo approach, not a product/ service offer).
What do companies do in general? Make the onboarding system and the journey of new users more fluid and data-oriented to engage with the users regularly with the service/ product? No.
They go to the data science team and request them to create a new acquisition model to decrease CAC from U$ 10 to U$ 6.
Was the problem really solved? Of course not. What is crazy is that a lot of the business model that an investor buys is 100% based on acquiring users and not on customer engagement and product/service evolution.
I swear, I’ve seen tons of business plans based on Facebook's acquisition cost and Google’s Joint Business Plan (JBP). Zero on product development and improvement. Zero on increase organic acquisition. All bout making Google and Zuck richer.
In a recent interview, Sean Ellis commented on this huge romantic confusion surrounding the meaning of the term he coined — and the fact that things started to be evaluated under a microscopic lens.
“Growth hacking is about running smart experiments to drive growth within your business. Marketing is about experimentation to move growth as well. The problem is that marketing is also about a lot of other things.”
In that same interview, Sean Ellis states that (SIC) “Most of the things that most traditional marketers do are not really scrutinized by their impact on (company’s) growth.”
In short, people began to blame marketers for “spending and waste” rather than creating models to validate the actions and activities performed by them (A.K.A, if engineering is not getting it, it may be wrong).
Better and deeper integration between sales and marketing CRM to have a unique customer track? No. Let’s put everything on Google “because you can predict.” Typical.
Ultimately, it seems that these companies, instead of worrying about the core activities of their products and services to keep people active, they have become big media companies: “I have 26 million users, look at all my data”. Yeah… Nice.
Growth, in fact, would look at the entire funnel of acquisition, engagement, and retention, and would have recurrent and targeted actions (data science goes here to define behavior, types of use, etc.) to keep the different users active and giving meaning to the product as the time goes by.
If you only look at CAC, you only create a mathematical model for media, and distribution means you are not a growth person or a hacker. You’re a media, a performance professional, spending a lot of money by saying that you’re “A/B testing” continuously.
Take care of the company’s actual growth. Promote the culture of Growth broadly. And believe me, a world where creativity and data science go together is better than looking for someone to blame.
