Companies use different tools to promote products and services. For example, they launch contextual advertising, invest in SEO optimization of the site, or pay bloggers for advertising.

There is another approach based on constant experiments. It is called "growth marketing". Its concept allows you to quickly test different promotion methods and choose the best ones. We tell you how growth marketing works and how to use it to speed up business growth.

What is growth marketing: two terms

First, let's note that there are two terms that need to be distinguished: growth hacking and growth marketing. They are not the same thing.

Growth hacking helps increase a company's profits here and now, using an unconventional approach.

For example, Dropbox once decided to give additional space on the cloud for inviting friends. Such unconventional actions worked instantly at the time. Invented → done → made a profit.

Growth hacking, that is, hacking the growth of a product or company, may not be related to advertising at all. Growth hacking helps a business increase profits in other ways. For example, at the Houston airport, people complained about waiting for their luggage for a long time - as much as 9 minutes. The company reduced the waiting time to 6 minutes, but people were still unhappy.

One of the airport employees came up with the idea of moving the belt to another part of the building. While passengers were reaching the belt, their luggage was already waiting for them. Customer loyalty increased, but marketing had nothing to do with it. This is a good example of the growth hacking concept.

Here's what Sean Ellis, who coined the term growth hacking, says about this concept:

Growth marketing is a promotion strategy based on hypotheses about how to advertise a company's product or services.

In this case, many hypotheses are developed, tested, adjusted, and tried again. This is long and painstaking work, but in the end, growth hackers manage to find tools that lead to explosive growth. A growth hacker is an employee who is responsible for developing and testing hypotheses.

So, growth marketing is a tactic in which a business focuses on finding innovative strategies for attracting and retaining customers. To find these strategies, new hypotheses and tests are used that help quickly discard ineffective options for attracting customers. Thus, the company invests money only in those tools that lead to business growth.

Growth marketing is a strategy for explosive growth in promoting services or a product. Growth hacking is a broader term. Growth hacking is an opportunity to improve a product and thereby increase the customer base, sales, and the number of active users. The growth hacking concept can be applied not only by marketers, but by all employees of the company.

Features of growth marketing

Below we will consider the key features of growth marketing, but let's start with its differences from traditional marketing.

In traditional marketing, a company invests in large-scale tools and gradually optimizes work with them. For example, a company decides to use SEO promotion and selects topics for content for the year. During the year, they analyze which content brings more people to the site. These observations are used to select popular topics for articles for the next year.

Growth marketing is work in short iterations, when many hypotheses are quickly tested and the most successful ones are scaled. Let's say 30 new hypotheses are developed and tested for two months.

During this time, growth hackers have time to assess whether it makes sense to invest in an affiliate program and customer onboarding, change the design and text on the landing page. If user registration increases only after onboarding, the company decides to invest money in this area.

The most important difference between these two types of marketing is that growth hacking is based on a scientific approach. Growth hackers develop new hypotheses and conduct experiments to test which methods work to grow a company multiple times. They determine the best and worst tactics for business promotion based on data.

In growth marketing, non-standard approaches and creative options are used. One of the most famous examples is the case of AirBnb, a platform for booking accommodations. When the company was little known and needed to urgently increase brand awareness, employees came up with an unusual method of promotion. AirBnb ads were duplicated on the well-known CraigsList platform and links to their service were added. Thus, AirBnb received traffic from another site, which at that time was much more famous.

This approach brought AirBnb about 50,000 new users, and they invested significantly less money in such “advertisement” than if they had to work with conventional marketing strategies. Other companies couldn't do what AirBnb did because CraigsList saw their mistake and fixed the code on the site so that no one else could advertise using their service.

Growth Marketing Goals

The main goal of growth marketing, like growth hacking, is to multiply business growth. However, there are other goals:

increase the number of users;

increase sales;

create viral content;

increase customer retention.

Each of these goals can be accompanied by two words: fast and inexpensive.

Growth Marketing Principles

The main principle of growth hacking is: “Fail fast — fail cheap”. It works for growth marketing too. The growth hacking principle means that the sooner you can understand which of the new hypotheses are failing when testing them, the better.

The sooner a company or startup understands that a hack doesn’t work, the less money it will spend on testing. Therefore, growth hackers strive to reduce the amount of time, resources, and money invested in a non-working growth hacking or growth marketing hypothesis. This helps to quickly find new tools that lead to significant growth of a business or project.

Traffic channels

Growth marketing uses the same traffic channels as regular marketing: contextual advertising, email newsletters, SEO promotion, advertising on social networks and recommendations from opinion leaders, word of mouth, referral programs. The only difference is in the methods of work.

Regular marketing: we use SEO promotion to attract 100,000 people to the site per month. We use social networks to increase brand awareness.

Growth marketing: we developed 15 hypotheses on how to increase the effectiveness of SEO promotion. The first hypothesis: if we add banners with a time counter and a discount to articles on the site, registrations will increase by 20%. The second hypothesis:…

Growth Marketing Tools

There are dozens of growth marketing tools: lead forms, A/B testing, website banners, pop-up windows. We will tell you about three main tools that will help you build hypotheses.

AAARRRR funnel

Teams use this framework to break down the customer journey into stages, study the process of interaction with them and the user experience. The AAARRRR funnel assumes the presence of seven stages that the client goes through:

Awareness, or information. A person understands what problem he has and learns how your product can solve it.

1

Awareness. A person understands what problem he has and learns how your product can solve it.

2

Acquisition. The goal of this stage is to get contacts of potential buyers.

3

Activation. A potential buyer becomes an active user.

4

Retention. This is the moment when a user becomes a regular customer. For example, he buys a subscription for a year.

5

Revenue. At this stage, the goal is to increase LTV (Lifetime Value), that is, the so-called "lifetime value" of the client.

6

Referral. At this stage, the goal is to get customers to recommend your product to their friends and acquaintances, and encourage them to share their experience using the product.

7

Revival. The goal is to sell a service or product to those people who got into your funnel but never made a purchase.

Sometimes the AAARRR funnel is used without the last stage. Both versions of funnels help to create hypotheses based on information about the target audience. The idea is to break down the customer's path into stages, find bottlenecks and build hypotheses for each.

For example, the problem was discovered at the sixth stage. This means that we need to develop new hypotheses to find options for increasing the number of recommendations from existing customers. One hypothesis might sound like this:

If we give users a month of free use of the service for a review post on Facebook, 10% of our customers will use this offer.

The stages of the funnel can be rearranged or removed. It depends on the business, service or product the company sells.

Lean Canvas

Lean Canvas is a spreadsheet template used to build a business model. However, this tool also helps to find growth points for a business.

Lean Canvas consists of nine blocks:

1

Problem. Describe three main problems that you must solve with your product. Think about the needs of your potential customers.

2

Solution. Describe three suggestions for solving the problems you identified in the first block.

3

Key metrics. Describe the key indicators of your business: revenue, number of active users, etc.

4

USP — unique selling proposition. Benefits that make your services attractive to customers. Describe the value of the product.

5

Hidden advantage. This is something unique that competitors do not have. Something that they cannot copy.

6

Consumers. Divide the target audience into segments and describe them.

7

Channels. Think about which channels you will use to attract each segment of the target audience.

8

Expense structure. Describe all business expenses.

9

Income. Describe all sources of business income.

Customer Journey Map

This is a user journey map that helps you understand the customer's behavior in a selected scenario. This could be a purchase scenario, a product return, or using a referral program.

You can use this map to find bottlenecks and growth points. After that, you can create and test hypotheses on problem areas.

Instructions: How to Use Growth Marketing in a Company

1

Identify the problems you want to solve and develop hypotheses for them:

Select the funnel stages or user journey stages you want to improve.

Record all new hypothesis ideas for each stage.

Write down what result you want to get from each hypothesis.

List the specific metrics that are affected by the hypothesis.

Hypothesis format: If we do ... , this will bring us ... .

Example: If we give a discount on the first lesson, we will increase registration by 20%.

2

Prioritize and determine where to start. To do this, determine which of the hypotheses can have the greatest impact on the company's growth and how much time is needed to evaluate it.

3

Launch new hypotheses. Grow hackers say that launching a hypothesis should not take more than six hours. At the same time, testing hypotheses can take a long time. At least a week, at least a month.

How to test hypotheses depends on the hypothesis itself. For example, if you decide to choose the best color for buttons on the site, this means that you need to evaluate the conversion rate with different button colors. First, make red buttons and evaluate the conversion for two weeks. Then change the color to green and look at the statistics. And so on.

4

Conduct an analysis based on the test data. Record the results: what you got during hypothesis testing, how the metrics grew. This can be recorded in tables during testing or use Agile methodologies (Scrum, Kanban). For example, work with hypotheses on Kanban boards. In the end, you need to choose the best hypotheses and scale them.

Sean Ellis, who first coined the term “growth hacking,” identifies three stages for successful implementation of explosive growth:

Product-market fit
Research
Scaling growth

The first point is the most important for growth marketing and growth hacking, because if the product or service is not needed by users, there is no point in further work.

First of all, study user reviews. If they are happy with the product and are not ready to give it up, then you can move on to the second step.

Now you need to study users to understand why they use the product. AAARRRR funnels, Lean Canvas, Customer Journey Map are suitable for this. These tools help find new growth points and generate hypotheses for testing. After that, formulate and test hypotheses, use the data obtained to find the best tools for hacking business growth and scale them.

Famous examples of growth marketing

Growth marketing, like growth hacking, is used by startups and companies that have been on the market for a long time. We share examples of how companies were able to increase the necessary metrics due to explosive growth.

Tinder case

Marketing director Whitney Wolfe figured out how to build an effective dating app promotion system to quickly attract users. To do this, she traveled to college campuses and told girls why they should install Tinder.

When the girls signed up, she went to the men's part of the campus. There, Whitney told the guys about the app, which had thousands of single girls registered. After traveling around college campuses, Tinder employees tripled the number of users: from 5,000 to 15,000. This is an example of how to use growth marketing if a startup needs to be developed quickly, but there is not much money for promotion.

Twitter Case

The Twitter story, on the contrary, is about finding ideas for explosive growth in a steadily growing large company. This service gained 30 million subscribers, but it was difficult for the company to grow further. Twitter hired a team that tested different hypotheses, and one of them worked the best.

Users were asked to add 10 people with similar interests in different categories as friends: politics, music, and so on. This helped increase user activity. This is a great example of growth hacking at the Activation stage in the AAARRRR funnel.

Facebook case

It is very important for any social network that users spend a lot of time on it. To make people visit Facebook more often, the company launched an email newsletter. Users were notified that one of their friends had tagged them in a photo. Three out of four users went to Facebook via the link in the email.

This is an example of how user activity can increase thanks to knowledge of your target audience. After all, people were interested in seeing who tagged them and in what photo. Facebook created artificial excitement, and very successfully.

Myths about growth marketing and growth hacking

When starting to implement growth marketing and growth hacking, companies do not always correctly understand how it works. We've compiled three main misconceptions about this strategy.

Myth 1

Growth Marketing and Growth Hacking Guarantee Rapid Growth

Although this strategy is called growth hacking, it does not guarantee that the company will see an increase in sales or users in a few days. Some hypotheses or actions will not work. How much time is needed to find explosive hypotheses depends on the team of growth hackers and the business itself.

Myth 2

The growth team will do everything themselves

In fact, it is better for full-time employees to get involved in the process, because no one knows the company, the product, and the customers as well as they do. A growth team hired from outside is not enough. Personal immersion by team members or managers is needed. Growth hackers cannot work without the help of people who know the business well.

Myth 3

Believing that this specific hypothesis will work

It is important for growth hackers to be unbiased and only look at the numbers that are obtained as a result of tests. Only data will help adequately evaluate hypotheses and achieve success. Growth hackers should not have their own point of view on each hypothesis.

In conclusion, growth marketing and growth hacking are pivotal strategies for businesses aiming to achieve rapid and sustainable growth. While growth hacking focuses on immediate, unconventional methods to boost profits, growth marketing employs a structured, experimental approach to refine promotional techniques.

Both strategies emphasize the importance of hypothesis testing and data analysis to identify the most effective tools for customer acquisition and retention. By leveraging these innovative approaches, companies can navigate market challenges and drive exponential growth efficiently.