What’s Growth Marketing?
I was fortunate to attend this year’s Growth Marketing Conference, a fairly intimate event when it comes to marketing conferences. With only 250 tickets available, attendees had the opportunity to personally meet and nerd out over Growth tactics with any one of the 28 speakers. Panels included growth industry leaders such as Andrew Chen, Neil Patel, Jon Miller, and Dan McGaw...just to name a few.
We kicked off the morning with a fireside chat with Andrew Chen and Bubba Murarka titled, “Why Most Growth Hackers Just Can’t Hack It.”
One of the overarching themes many of the speakers focused on was the importance of finding product/market fit. Without it, you will not grow. Chen, known for his straightforward analogy, happily shared this quote:
“Growth is a magnifying glass. If you have a diamond and you put it under a magnifying glass, then you’ll make something big and great. But if it’s just a tiny piece of shit, then it’s just going to be a big piece of shit.”
It makes sense why Growth Hacking, a term coined by Sean Ellis in 2010, has taken off in the past few years. Ideally, once a company has found product/market fit, they then look for ways to optimize growth. This requires allocating resources to specific areas that have been identified as the most viable levers to pull for exponential increase in revenue.
The Google Trends report for the term “growth hacking” clearly shows us the interest in this newly created business function.
Building a Growth Team
Chen went on to describe how a growth team functions within an organization. A true growth team works cross-functionally and includes a product manager, marketer, engineer, data scientist, and designer. Normally, this team works independently of marketing and product to allow for the autonomy to design tests and influence the product roadmap.
Panelists like Juney Ham (CMO, Hired) and Archana Agrawa (Head of Data Science and Growth Marketing, Atlassian) focused on the structure of growth teams and how to organize for success.
For example, Atlassian plans to grow 20x, from 5 million monthly active users to 100 million monthly active users. Agrawa shared how she structured her growth team and the essential competencies to reach that level of growth.
You should model your growth team around these four areas of expertise:
- Data Science
- Develops predictive analytics and focusing on multi-touch attribution.
- Marketing Analytics
- Responsible for business insights and recommendations.
- Data Engineering
- Implements testing at all states of the customer lifecycle.
- Growth Product Marketers
- Focuses on messaging for activation, journeys and in-product experience.
The success isn’t determined by the number of signups, but rather by active product usage and how to drive that usage into conversion. Without the right foundation of structure, competencies, and process, growth initiatives will inevitably fall flat and fail to provide business value.
Metrics that Matter
As a SaaS growth marketer I really enjoyed listening to “How Thought Leaders Get Explosive SaaS Growth” panel with all-stars like Shira Abel (CMO, Cyara), Scott Heimes (CMO, SendGrid), Elizabeth Yin (Partner, 500 Startups), and Tim Matthews (VP of Marketing, Incapsula).
On the topic of metrics, speakers shared insights on which KPI’s matter the most for optimal startup growth. Elizabeth Yin, without hesitation, noted churn rate as the most important metric because investors judge the scalability of a business based on product stickiness. You can focus resources on acquisition efforts to grow the number of leads, demos, and signups; however, if you're unable to retain those initial customers you acquired, then you’re actually costing your company more dollars. A leaky conversion funnel is a strong indication time and resources are dedicated to the wrong customer stage lifecycle. Tim Matthews followed up on this same thought with CAC Ratio and why retention rate is a sure-fire metric to measure growth’s success.
The conversation then shifted to top-of-funnel tactics and how to fill the sales pipeline with qualified leads. The most recent trend is to leverage marketing automation as a means to increase the volume of incoming leads. While this has made the job of the marketer easier, automation has caused a degradation in quality, wasting time and creating noise in metrics data. It doesn't matter if there’s a high volume of leads in the sales pipeline if they are not going to convert into customers.
Scott Heimes talked about the power of analog marketing tactics. Heimes divulged how to segment based on lead quality to determine which contacts should receive a more personalized sales interaction and which should be directed to an automated nurture track. For example, when dealing only with 50-100 top tier leads, it can be worth your time to send direct mail to these contacts. These time intensive tactics show that you actually care about gaining their business and has resulted in many new customers for SendGrid.
The takeaway here is to spend a little more time personalizing messaging to your top leads, and optimize your automation tactics to continue filling that top-of-funnel to nurture lower priority leads.
Sara Varni, SVP of Sales Cloud at Salesforce, gave her presentation titled “One Metric Marketing - How Daily Action Can Drive Long Term Success.” Varni shared how focusing on one metric was the key to scalable growth at Salesforce. The biggest challenge to overcome in growth is aligning marketing and sales goals. Echoing a statistic she shared:
“B2B companies’ inability to align sales and marketing teams around the right processes and technologies costs 10% or more of revenue per year.” - IDC Research.
When each team is aligned on the same one metric, it’s makes it a lot easier to identify processes that really matter to move the needle.
Varni’s four step process to achieve this is:
- Clarify Organizational Priorities
- Evaluate the Metric Effectiveness
- Gain Cross-Functional Consensus
- Revisit, Revise, and Pivot
When anyone speaks about growth, it usually involves a/b testing. Daniel McGaw of Effing Amazing laid it out clearly, we’re all testing wrong. Or as he would say it, we’re all fucking wrong (that’s his shtick). Along with the numerous and equally humorous f-bombs dropped, McGaw demonstrated any optimization testing must be done with a view of the entire customer lifecycle - retention must be considered, don't limit success to user acquisition.
As an example, a variation test that results in more signups is great, but how do you know those signups are quality leads and will result in less churn? Maybe your “winning test” actually increases churn 3-months down the road.
To solve for this is not complicated and simply requires connecting your testing tool (e.g. Optimizely) to one of the many analytics tools such as Google Analytics or MixPanel. You’ll then be able to clearly track your test groups throughout their entire lifecycle.
Wrapping It Up
It is clear that growth is ultimately a long term game when building a new team focused on conversion optimization. And it’s not up to one person, or one team, it’s up to the entire company to focus on growth.
The conference can be summed up in these three key points:
- Focus on product/market fit before scaling. (“Nail it before you scale it”)
- Focus on one key metric at a time. Rally your marketing, sales, product, and customer success teams around this metric.
- Build a multi-disciplinary growth team comprised of specialists in their respective fields.
If you want to learn more about the conference, visit http://growthmarketingconf.com. I’ve also listed a few additional resources to check out below: