What is Growth Marketing (2023)?

“No great marketing decisions have ever been made on qualitative data.” 

These lines, by John Sculley, the CEO of Apple Inc. from 1983 till 1993, perfectly reflect the approach behind growth marketing. 

At its core, growth marketing combines both data analysis with creative tactics to generate new customers while retaining existing ones. It is a holistic strategy that looks at all aspects of the customer experience, not just demand generation. used as an overall business strategy that incorporates all aspects of customer experience into one unified effort.

Let’s take a closer look at what growth marketing is, its objectives, and how businesses can leverage different growth marketing strategies to optimize marketing spend. 

What does Growth Marketing Actually Mean? 

Growth marketing is an approach to product development, digital marketing, and customer acquisition, with a relentless focus on…you guessed it, growth. 

It is important to note that growth marketing is not just about creating flashy advertisements or ‘hacks’ that get quick results; rather, it's about understanding your customer base and leveraging data to determine which channels will be most effective for reaching your target audience.

Growth marketers analyze the entire marketing funnel, from brand recognition to the post-sales experience, to identify opportunities to convert visitors into customers, and loyal customers into ambassadors. 

Interest in growth marketing continues to rise — since 2018, searches for growth marketing are up a whopping 50% (Google Trends):

There’s a simple reason for this: you can’t market in 2023 the same way you did in 2018. The cost of paid media is rising, it’s becoming harder to rank for SEO, especially in the wake of the Google Helpful Content update,  and venture capitalists are no longer fans of ‘growth at all costs’. Businesses big and small are now looking at different strategies to trim costs and position themselves for success going forward. 

Growth marketers generally execute strategies around:

• Product-led growth (PLG) 
• SEO 
• Email marketing 
• Paid ads and retargeting
• Product analytics 
• Affiliate marketing

…and more. 

Your growth marketing needs will change based on your business model and what strategies work best for your target audience. Generally speaking, growth marketers must have base knowledge around the following topics, as well as specialization in certain areas: 

• Behavioral psychology
• Data & analytics
• UI/UX design
• Copywriting
• SEO
• Content marketing
• Funnel marketing
• Email marketing
• Community building
• Paid ads

Growth Marketing vs. Traditional Marketing

Growth marketing is not new, but its rise in popularity has caused confusion with how it stacks up against traditional marketing. Here is how each of the approaches work: 

Growth Marketing

Growth marketing is a (relatively) newer approach to marketing that focuses on optimizing various digital channels to increase customer acquisition, engagement, and retention. All of this positively impacts revenue.  

Marketers who use growth marketing techniques strive to understand their customers better by collecting data from various sources. They often use website analytics, customer surveys, interviews, and split testing campaigns and products to gather meaningful insights. 

They use this information to create personalized experiences for their customers at every touchpoint of their journey.

Growth marketers also tend to be more agile than traditional marketers by quickly responding to changes in customer needs instead of waiting for a campaign cycle to end before making adjustments. Think ‘2-week sprints’ not ‘Q4 campaigns’. 

Traditional Marketing

Traditional marketing is the tried-and-true approach to advertising and has been used by many businesses for decades. It relies heavily on using traditional media like television, radio, print, and billboards to drive brand awareness and sales. 

This method focuses on creating an emotional connection with customers through messaging that resonates with them. In many cases, traditional marketing is like “throwing ideas at the wall and seeing what sticks.”

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This isn’t to say that traditional marketing isn’t digital marketing, because it is. The difference is that traditional marketers take the same approach to digital channels. I.e. run ads to generate awareness, send marketing material to subscribers via email, etc. None of these approaches are revenue first, which is how growth marketers view their work.

The Most Effective Growth Marketing Strategies

Growth marketing strategies generally center around customer acquisition, conversion, and retention. Here are some examples of the most effective types:

A/B Testing for Copy

A/B testing is one of the most powerful tools in a marketer’s toolbox. It allows you to experiment with different variations of content, messaging, and design elements to find out which versions are more effective at getting customers to take action.

Also known as split testing, A/B testing focuses on creating two or more variations (A and B) of an element, such as a headline or call-to-action button, and then running these variations against each other to see which version produces the desired result.

For instance, Groove HQ, a SaaS company, successfully leveraged A/B testing to increase their conversion rate by a whopping 100%. 

The problem: Their blog was attracting thousands of visitors, but their conversion rate was abysmal: 2.3%. 

The solution: They used A/B testing to come up with a “copy-first” design that resonates with their audience, creating a long-form landing page. Their conversion rate nearly doubled to 4.7%! 

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Personalized Email Marketing

Email marketing continues to offer the highest return on investment of all marketing channels. For every $1 spent, marketers can generate $36 in return. 

The top marketers look at a business’ email marketing performance and devise ways to improve returns. Personalized email marketing involves using data about customers or prospects to create individualized emails that are tailored to each person's specific needs or interests. 

The goal of personalization is to make recipients feel as though the message was created just for them by providing relevant content that resonates with them.

Growth marketers look at different KPIs, including:

• Open rates
• Clickthrough rate (CTR)
• List growth rate
• Bounce rate
• Unsubscribe rate

For instance, IncStores, a specialty flooring company, used ecommerce retargeting using exit-intent popups to grow their list by 300%:

They ran A/B tests to determine which exit-intent popup was generating more conversions. For instance, this one converted 2.65% visitors: 

A/B Testing Marketing Channels

When you bring on your first growth hire, they will generally start by analyzing the performance of your company’s existing marketing channels. 

Growth marketers analyze how different marketing channels are performing, such as specific landing pages. The process begins by setting up your test parameters—what are you hoping to learn? Next, you create two versions (A and B) of the element you want to test.

This could be anything from an email subject line to a landing page headline. Then, when visitors come to the website, they will be randomly assigned either variation A or B. A/B testing offers marketers valuable insights into customer behavior and preferences by allowing them to measure results directly in real-time scenarios. 

By understanding what resonates most with customers and prospects alike, marketers can optimize their content for maximum engagement. It’s an effective growth experiment which often yields positive results.  

Customer Retention Strategies

Customer retention is important for any business looking to nurture its existing customer base while increasing their loyalty towards the brand. 

A successful customer retention strategy should include initiatives such as special discounts, loyalty programs, personalized emails, and more. These initiatives can help keep customers engaged with your business over time and increase their lifetime value (LTV).

If a business has a higher churn rate, growth marketers are responsible for analyzing the customer lifecycle and identifying reasons for churn, and then coming up with strategies to reduce it. 

Statusbrew, a SaaS business, managed to reduce its churn rate by 20% by analyzing why customers were leaving, and then implementing a strategy to save those accounts. They took several key steps:

• Added live chat to offer support to their users
• Redesigned their cancellation page
• Trigger conversations via Intercom
• Instant notifications via Slack in case of an account cancellation
• Create a drip campaign to send follow-up mails

For instance, they began requiring customers to provide a reason for canceling their account to gain more information about why people were leaving:

The Main Challenges in Implementing a Growth Marketing Strategy

A comprehensive growth marketing strategy generally involves elements from various approaches, from conducting A/B tests to identifying ways to acquire and engage new users to achieve measurable and sustainable growth. 

However, many businesses face challenges when implementing growth marketing strategies. 

1. Hiring the Right Growth Marketer

Finding the right growth marketer with demonstrated experience is quite difficult, especially for businesses with limited capital. As a result, many companies are now moving towards fractional employment, allowing them to leverage the experience of proven growth marketers without worrying about bringing on a full-time employee. 

Growth marketers need to have a deep understanding of both digital marketing and data analytics in order to develop successful strategies. Finding the right talent for this role can be difficult. It’s important to look for people who are creative problem-solvers who thrive in fast-paced environments. 

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2. Devising an Effective Test Plan

Testing is a key component of any successful growth marketing strategy. However, creating an effective test plan can be challenging because there are so many variables that need to be considered when designing experiments. 

Marketers need to consider what kind of tests to run (A/B tests vs. multivariate tests), how long each test should run for, which metrics should be tracked, and a lot more. 

This is much easier said than done, since it’s important to make sure that all experiments are conducted in a controlled environment so that results aren’t skewed by external factors such as seasonality or competitors' activities.

3. Analyzing Results

Growth marketers run experiments to learn, regardless of whether it’s a success or failure. Oftentimes, marketers have inconclusive tests, where the data does not point to any key outcomes or actions. 

It’s important to keep track of all data points collected during experiments and analyze them thoroughly in order to draw accurate conclusions about what works and what doesn’t work when it comes to driving customer acquisition and retention rates up. You should also be clear about what you are trying to learn and what success looks like before you start an experiment.

The Bottom Line

Implementing a growth marketing strategy can help businesses grow quickly by optimizing the customer journey and increasing customer acquisition and retention rates. However, many businesses struggle because they simply don’t have the resources to bring on a full-time growth hire. 

The landscape, however, is changing. Businesses are increasingly adopting a lean structure, and many consider full-time only to be a recipe for failure. A fractional growth marketer can help you unlock more value and scale your business, while costing significantly less than a full-time hire. 

At Divisional, we can connect you with an experienced Head of Growth to help with key challenges, such as building a go-to-market strategy, vision mapping, and effectively planning resources. 

Turn momentum into sustainable growth. Connect with your new growth marketer today.

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