HOW TO BUILD A GROWTH MARKETING CAPABILITY

When it comes to growth marketing (or any marketing, for that matter), there’s no one-size-fits-all process. Ultimately, it’s about building a loyal fan base that raves about your brand or product to the wider world.

So how do you pivot your business into building the strategy and bandwidth to handle an aggressive and effective growth marketing plan? Let’s take a look.

SET CHANNEL-SPECIFIC KPIS

The exact channels that you use to market to your customers will be determined by who your target audience is, your team, and your budget. Since growth marketing is all about customer acquisition strategies that support and breed virality, stickiness, referrals, and organic growth, you’ll likely be dipping your toe into areas of marketing that you never have before.

Knowing how to measure success when you’re working with growth marketing can be a challenge. Yes, your revenue and customer value, along with retention and engagement, should all be areas to look at. But you also need to know which channels are working for you and what needs to be axed–the latter is especially important in being able to test new avenues, without wasting budget on a channel that’s underperforming.

Each channel should have its own key performance indicators (KPIs) that your team can reference as you test. What you deem “successful” in your SEO and organic performance is going to look different to your paid channels, where hard cash is being spent and cost per acquisition (CPA) metrics are more readily available.

CREATE CROSS FUNCTIONAL REPORTING

It isn’t just your marketing team and CEO who should be looking at your weekly or monthly reports. Your product development teams, along with customer experience and support staff, should all have access to the relevant data to help them do their jobs better.

Cross functional reporting should be taking place throughout all levels of the organization, with data being pulled in from multiple departments and shared as widely as possible. Got some helpful feedback about a particular product via social media or your customer experience team? Circulate the feedback around so there is an awareness of the customer and product experience within the organization, not just within a specific team or two. 

Where traditional marketing may have been solely focused on the awareness and acquisition stages at the top of the funnel, growth marketing takes a more holistic view. Your reporting should accurately reflect this and become a functional tool that all of your teams can rely on to work more effectively and improve your product.

To be successful in growth marketing, your business needs to have the internal infrastructure to support cross functional communication. The more knowledge that you have about your customers, the more they’ll trust your brand and your product. Leverage this information to create unique and personalized experiences for your customers that gets them spreading the word about how great your business is.

BE FLEXIBLE WITH YOUR FIRST HIRES

There are plenty of attributes that you should be looking for as you expand your team and hire your first dedicated growth marketers. They should, of course, be data-driven and creative, but also not be afraid to fail. As with anything that requires constant testing and retesting, mistakes will be made that you can learn from to improve your offering.

But you also need to be flexible as you make those hires. At this stage, you don’t know what will resonate with your target audience. You may find that you need a “jack of all trades” type or an individual with deep experience in a few key areas when you’re first getting started. Both types of people should be able to handle the testing of different channels and juggle a number of responsibilities.

Once you’re ready to move on from a generalist position, a specialist “t-shaped” marketer will likely support your strategy better. These individuals have a broad range of knowledge in several different areas of marketing, but specialize in a handful. 

For instance, if you’ve noticed that your organic and content marketing efforts are performing well for you, a t-shaped marketer who specializes in SEO and content would be a good fit. They may have a background that also involves paid channels, social media, or email marketing, which will allow them to expertly integrate their specialist skills into other channels that you might be utilizing.

SET REALISTIC GOALS

Knowing what your budget looks like is the key to being able to set realistic goals when it comes to CPA and customer acquisition cost (CAC). Generally speaking, the higher the spend the higher the CPA/CAC will be up front. But once you find channels that are working well for you, you’ll soon see your CPA/CAC dropping to reflect the work you’ve done to build customer loyalty and conversion.

As marketers, making sure that leadership is onboard with financial-based goals can be tricky. It’s your job to explain why you’ve made the budgeting decisions that you have and to justify your spend in certain areas. This is where data will be your biggest asset. 

Put together several options for leadership to look over at different investment levels, along with your recommendations and the data that you’re using to support this. This allows for the highest level of transparency and understanding for key internal stakeholders. While we’d all love endless buckets of money to pull from, you’ll be the one explaining where the funds went at the end of the month or year and be held accountable for the return-on-investment (ROI) or MER. Keeping your goals as realistic and tangible as possible will save you headaches down the road.

BUILD A LIFETIME VALUE MODEL

One of the best ways to better estimate your CAC is to build a lifetime value (LTV) model for your business. This is an estimate of the average revenue that you’ll see per consumer across their lifetime as your customer. 

LTV models aren’t just for subscription-based business, where there’s a fixed amount being spent per month by your audience. Since growth marketing is focused on sustained loyalty and should ultimately feed retention, you can still see a significant value built up by individuals over their years of purchasing your products or services or referring your brand to others. While these calculations can be complicated, below are two (very basic!) models to get you pointed in the right direction and finesse over time:

To calculate LTV for a subscription-based business, you divide the average monthly spend for each customer by your churn rate (the rate at which you lose customers each month).

For non-subscription businesses, LTV can be calculated using the total income that you expect from a new customer. This is determined using the average order value, divided by the number of expected purchases and length of engagement.

Data is the crux of being able to make these calculations accurately. As you develop your growth marketing plan, it’s vital that you’re able to record and surface this type of data and track it over a period of time. Once you have all of this information on hand, you should be able to determine an estimate for how much each individual customer is worth to your business.

DON’T FORGET ABOUT LONG-TERM CHANNELS TOO

The rise of “growth hackers” has been both a blessing and a curse. Quick wins can certainly give you a boost of cash and motivation, but it’s important to remember the long-term growth opportunities as well. 

Avenues like SEO and brand marketing need to find a home in your overarching growth marketing strategy, alongside more immediate channels like paid advertising or influencer marketing. 

Slow and sustainable approaches are equally as important in building customer loyalty and keeping your brand top of mind. Ultimately, that’s the key to growth marketing. Take what you learn from your growth hacking channels and apply those practices to your long-term channels. Investing in both sides of the coin using data-driven metrics is the best way to ensure success.

Interested in developing your own ecommerce growth marketing strategy? Contact us today to build and streamline your processes across a wide range of digital marketing channels.