Growth Marketing for Startups: A Comprehensive Guide
The stark reality is that 90% of startup businesses fail. According to National Business Capital, of the 6.5 million businesses launched every year, only 10% enjoy lasting success. These numbers could be seen as a deterrent for entrepreneurs.
The reality is that customer acquisition is understandably seen as the greatest challenge to startup success. In the early years of business, acquisition equals growth. It’s critical for entrepreneurs to reach out to the biggest audience possible, and to carefully plan their marketing efforts so that a high proportion of that audience converts to customers.
However, conventional marketing that focuses on marketing on time-specific campaigns just does not cut it for startups. The simple fact is that these campaigns require extensive marketing budgets, something that startups for the most part do not have. Moreover, since growth is paramount for the survival of these cash-strapped startups struggling to make an impact, this further compounds the issue.
Savvy businesses understand that marketing is not just about getting the brand name out there. Brand awareness is part of it, but so is customer acquisition and retention. It’s not enough for potential customers merely to know that your startup business exists. What you want is a loyal, engaged customer base that ultimately leads to organic growth – and that’s exactly what you won’t get if you cling to traditional marketing methods only.
Enter growth marketing. A growth marketing strategy focuses on long-term sustainable revenue growth by using an array of innovative and more importantly data-driven tactics that are employed not just at the traffic-driving stage, but at every stage of the sales and marketing funnel. So not only is this data-driven approach essential for acquisition, but also for engagement, retention, and brand advocacy.
In a nutshell, growth marketing is a long-term, strategic methodology that works to help brands achieve sustainable, measurable growth. It is a holistic, data-driven approach that leverages end-to-end funnel optimization to find, attract, convert, retain, and grow buyers into loyal brand advocates and evangelists.
Far from being nothing more than a buzzword for traditional marketing methods, growth marketing takes the traditional approach to new depths. Its origins first came about when strategists tried to find solutions to the various flaws and challenges of the traditional way of doing things.
What is the Difference Between Growth Marketing and Traditional Marketing?
As mentioned previously, traditional marketers focus on building brand awareness and reputation This not only takes time but a huge marketing budget. Years of outbound marketing (paid advertisements) and reputation management could develop loyal customers and bring results.
Growth marketing as a tactic was born out of need -- startups didn’t have the time or money to operationalize “industry best practices” to grow.
Instead, growth marketing is decidedly experimental, focusing on untested or unconventional marketing solutions that can result in massive growth.
There are 3 key differences between Growth Marketing and Traditional Marketing that are Worth Highlighting.
Growth Marketing is Experimental in Nature
Traditional marketers focus on creating brand awareness and reputation through outbound marketing and reputation management. This takes time and a substantial marketing budget. Growth marketing focuses on constant experimentation with untested or unconventional solutions, which could lead to massive growth in a short time.
A classic example of this would be how AirBnB went from being an unknown brand a few years ago to one of the world’s largest businesses by approaching people putting their ads on Craigslist to use AirBnB instead. This involves being creative, taking substantial risks, and being unafraid to use new tools and digital or other platforms.
Growth Marketing is Customer-centric
The core driving factors behind growth marketing are consumers, and in particular, offering value to customers. Moreover, since the focus is on catering to customers and prospects at all points of the marketing and sales funnel, customers often end up feeling nurtured to the point that they are more inclined to become lifelong and extremely happy customers.
Dropbox’s growth story is a great example of consumer-centric marketing. Since you could invite your friend to install Dropbox while both of you receive extra storage, customers are effectively turning themselves into a product distribution channel.
For this type of approach to work, it is imperative that you identify your audience’s extremely unique needs/pain points. This allows your business to position itself as a highly valuable solution that goes way beyond the unique selling proposition that your product/service entails. Essentially, your product or service has to sell itself.
Growth Marketing is Data-Focused
Although growth marketers are ready to venture into unknown and experimental territories, the decision to do so is extremely calculated.
Despite plenty of competition, Quora is the most popular question-answer website. This came because they extensively studied the behavior patterns of the most-visited users and optimized their user experience.
In order for such an approach to work, businesses need to create measurable, specific goals that are continuously monitored. What’s more is that this approach needs to be constantly repeated, with A/B or multivariate testing being used in several areas as a way of trying to find areas of growth that can be leveraged through data
Why Growth Marketing is Especially Important for Startup Businesses
it’s a tough world for startups. Various reports show that up to 90 % of startups don't make it. For this reason, especially, ensuring a sustainable marketing strategy that is on point can be the key to ensuring your startup business survives.
Growth marketing involves minimizing costs, which is ideal for small businesses trying to get off the ground. The money you save will help you offset other online business fees. Since it’s focused on customer lifetime value, it helps you increase retention and repeat purchases.
It costs five times as much to acquire a new customer than to keep an existing one. For one thing, it’s much easier to upsell to existing customers than to convince new prospects they want to buy your products. Existing customers also spend 31% more on purchases than new customers.
Key Benefits of Growth Marketing for Startups
Beyond the cost-centric need to be extremely efficient and growth marketing focused, there are a number of tangible benefits that come about for startups that instill a growth-marketing-focused approach throughout all aspects of their business, including the marketing and sales funnel.
Leveling the Playing Field: While, of course, a small business may never be able to compete with a giant even in the digital space, being able to acquire customers inexpensively and constantly striving to lower this helps to level out the playing field, at least to a certain degree.
Create your Consumer Base: Through growth marketing’s cutting-edge behavioral analysis or even simply by reaching out to their existing customers to receive feedback, small businesses can anticipate the needs of their consumers and even change their products accordingly.
Low-Risk Strategies: Given the number of platforms and individuals inhabiting them, the cost of experimenting as one would do with a growth-marketing-centered approach is extremely low. If one channel catches on in terms of generating leads, this is an added bonus as this provides an additional channel that can be scaled even as the targeting and optimization become more refined.
Extended Reach: One of the most important requirements in today’s market is the ability of your brand to be remembered by an ever-increasing number of people. With its ability to scale rapidly and economically, growth marketing delivers right on the money by promising exactly that.
How to Instill a Growth Marketing Foundation Within Your Startup
Step 1: Examine your Digital Marketplace:
The first step to achieving growth is analyzing and understanding the behavior of your customer base. To gain a lasting advantage, a business must be aware of who its prospective and current consumers are, what value they get out of the company or service, and where, when, and how they interact with the enterprise in the first place.
A major part of this involves understanding:
Who your customers are, what products or services they prefer
When they purchase your product or service
How likely they are to be retained by the business
Overall, this is part of creating buyer persona profiles. Once you have understood how and where your target audience gathers, you can also position your product or service accordingly. Such a process might tell you where people are more likely to respond to incentives: via email triggers or social media referrals or when people are most receptive to ads on a given platform.
Step 2: Goal Setting: Once you have established a better understanding of your customer base, you need to set goals. Specifically SMART goals. A common mistake made by many startups is not setting a clear and concise goal for growth marketing. Contrary to popular belief, startups despite their lack of established history, are well served to have goals, if only to set an internal belief that market penetration of any sort is achievable. An example of SMART goal setup would be as follows.
Make it stand out
Whatever it is, the way you tell your story online can make all the difference.
Specific: The more detailed the goal is, the better it is to understand and pursue. Whether your goal is to increase signups or purchases, it always helps to be as detailed as possible.
Measurable: The goals must be measurable in objective and quantitative terms. This is the beauty of data: it allows you to measure and chart progress. After all, that is what growth marketing is all about!
Achievable: While the potential of growth marketing is infinite, the goals of each iteration of a growth strategy must be objectively achievable by the business such that small incremental changes can be built upon in the future. You should also measure expectations in proportion to the resources invested in the goal.
Relevant: Growth marketing can create several incentives for disruption in pursuing growth. New avenues might seem very attractive when empowered by growth. Therefore, it is all the more important to ask: do the goals align with the values and the overall target of the business, or are they simply pursuing growth in name only?
Time-Sensitive: The goals must be defined in the context of a time frame such that iterations of the strategy can be progressively improved and measured.
3) Establish Key Metrics as Part of Entrenching the Process of Goal Setting
This is quintessential to growth marketing as its entire reason for existence is not just to help you make a growth strategy but to tell you within a short amount of time whether the process is succeeding or not.
. Consider the AARRR approach that is part of the growth marketing foundation, when establishing your startup’s metrics:
Make it stand out
Acquisition: Acquisition refers to the percentage of visitors on the business points-of-sale or website that are likely to transform into leads or consumers (conversion rate), and at what cost (Cost per Acquisition or Cost Per Lead).
Activation: Activation refers to a successful iteration of changing latent consumer behavior into an actual sale instance. Its measurement metrics are similar to that of acquisition: how much time it took to activate a potential consumer into an actual one, the cost of the process, and so on.
Revenue: As a business, it is important to understand when and which product generates the most revenue amongst which segment of users. Metrics such as revenues, ROI, and ROAS are applicable here, not just at large, but also amongst products or product/service lines.
Retention: Once the revenue-generating products and services have been isolated, businesses can focus on which products generate the most value for consumers to make repeat purchases. Based on consumer satisfaction, usage metrics, and the shelf life of a product, businesses can devise strategies for increased retention.
Referral: The last step in using metrics to measure and harness growth is a consumer-to-consumer referral, even in spaces where the business retains a corporate social presence. For instance, through Twitter storms or story shares, the business can measure the rate at which it is being organically referred to other leads by retained consumers. Companies can easily use an array of tactics such as discounts, cash back, referral bonuses and more to encourage referral growth.
7 Growth Marketing Tactics That Startups Should Consider
Once you have understood your audience, established reasonable growth goals, as well as established precise metrics at all stages of your funnel, you can now proceed with deploying the appropriate growth tactics for your startup. The growth marketing strategy can vary depending on the business, as will the tactics that are used. While these 7 growth marketing tactics can be used by potentially any business at any stage, the ones mentioned here have particular value for startups.
1) Pre-Launch Emails: This is tailor-made for startups. Start acquiring interested leads long before launch. Start building your email list early, and create hype.
Gather email leads through gated content, onsite offers, or social media promotions. Be transparent about how your audience’s data will be used, but offer a reward for their consent to be added to the list. Sometimes it’s enough for this reward to be a sneak preview or an early release of an upcoming product.
It’s important not to just sit idle on your list of email addresses: plan out a campaign that counts down the weeks to the launch date, including previews, reviews, related articles, and special offers.
2) Referral Marketing: Happy customers will know who in their circles has similar requirements and interests to them, and can therefore source quality leads. What’s more, the personal nature of their introduction to your brand will build an immediate sense of trust in new leads’ minds.
Integrate your referral program into your sales funnel by incorporating it into your confirmation landing page or follow-up email. Offer a small reward for each referral, such as points toward a future purchase, or a discount for each friend who cites their referral code.
3) Brand Partnerships: From cross-posting on your website to collaborating creatively on a campaign or product, forming powerful brand partnerships is one of the fastest growth hacking techniques.
Not only do such collaborations create organic buzz, but they also act as a triage for quality leads, ensuring that engaged traffic clicks through to your homepage.
It can be difficult for startup companies to make the right connections before they have a reputation of their own. The right partners can certainly help in that regard.
3) Guest Posts: Chances are you already have a company blog. This is an ideal place to demonstrate thought leadership in an engaging and approachable way. But what if you could take your expertise to the next level, and use it to gain new awareness?
By reaching out to adjacent brands and offering them guest posts, you can make your content go the extra mile by providing links to your website. This will both provide click-throughs from interested readers and increase your SEO rankings.
If you’re looking for a cost-effective solution, consider a cross-posting arrangement, wherein you write an article for a partner’s site in exchange for hosting one of their articles on your own site. This builds a sense of connection between brands and should open the door for further partnerships down the line.
4) Influencer Marketing: Similar in terms of style to establishing partnerships, Influencer” is the big buzzword of modern marketing – and with good reason. 49% of consumers rely on influencers for product recommendations. These social media superstars occupy a sweet spot between relatable personal recommendations and engaging celebrity endorsements. By selecting an influencer whose values align with your brand, you’re more likely to be able to negotiate an affordable arrangement, such as sending them products to try in return for a certain amount of coverage on their platforms. In time, these influencers could become valuable affiliates, sharing links to new products and referral codes with their highly active audience.
5)Community Outreach: If you want to build a user base fast, you need to have a clear understanding of what your ideal customer looks like.
You can then create a piece of content specifically targeted to this community. The more specifically you can target this group, the more effective your campaign will be.
This is the strategy Dropbox used to go from 5,000 to 75,000 people on its waiting list overnight.
The founder created an explanation video of Dropbox’s key features, replete with references to memes and inside jokes that only the Digg community would understand.
When he posted this to Digg, the Dropbox explainer video went viral, launching the software into the stratosphere of success.
7) Content Marketing: Speaking of traffic, you'll want to have a plan for bringing prospects to your site. Content marketing is all about producing high-quality content that answers questions your prospects and customers have, and nurturing them to a point of purchase.
For instance, blogs are great for increasing your website's organic traffic and awareness of your brand. Each blog should be optimized for a long-tail keyword term, as this will help to drive targeted traffic (i.e. people definitely interested in what you have to say) to your website. It's a really easy way to increase your startup's digital footprint and start building its name. Over time, as more and more content is created, your website becomes a repository for information. Providing it's all optimized for the right terms, the right people will find it time and time again
Growth Marketing Is Fundamental for Startups, As Well as All Businesses
Business growth is a challenge for organizations of all sizes – though it’s never more important than in those startup years. When small businesses find themselves competing against established companies, they have to get creative. This is where a growth marketing strategy comes into play, and is particularly relevant and frankly crucial, for startups.
As part of a larger growth marketing strategy, growth marketing tactics can help open new doors for smaller companies. The key is to establish a solid growth marketing foundation in your business, by taking many of the steps outlined in this article. With these, perhaps your startup is one of those lucky few (relatively speaking) that can make a true impact and establish a clear presence in a truly competitive business environment.
That being said if you feel that you might benefit from growth marketing expertise that can help your startup to achieve traction, why not reach out to us for a consultation? We look forward to learning more.