Downloads doesn’t mean Growth. Getting downloads does not mean that your users understand your app, it doesn’t mean that they use your app and it doesn’t even mean that they have even logged in.
We have been delivering quite a few workshops around growth and helping companies to adopt the growth mindset recently. We decided to gather some of the questions and learnings from these workshops in a short little post about Growth Marketing.
Interestingly, Growth is not something that is new at all. Marketing has been around forever and companies have been doing a lot of the things talked about in modern growth playbooks for even longer.
Whats new and Why should you care about Growth?
Most business are moving to mobile at scale. Mobile is clearly the future of customer interactions and key to delivering best of breed customer experiences that drive loyalty and retention.
With the move to mobile, companies have been merging Product, CRM and Marketing departments creating a new generation of disciplines but also tool to support and scale the growth framework.
New User acquisition is getting more expensive every day. Because of this, companies are turning to the growth mindset to try and get move value out of every new users. Product-Led Growth companies often display the following traits:
- High Revenue per user
- Rapid Global Scale
- Sustainable Growth
- Shorter Sales Cycles
- Lower cost to serve
What is Growth Marketing?
Growth Marketing is the process of conducting experiments (rooted in data) to optimize and improve the results of a target area to impact certain metrics.
“Over the past decade, customer data has become a rich source of insight that fuels disruption and innovation across all industries. User analytics software has given the power to anyone, not just data scientists, to get answers to more questions quickly—and at a lower cost.” – Mixpanel, 2019 Product Benchmarks Report
Where to start?
Once you have created a product that people love, Pirate Metrics is a great place to start with Growth Marketing.
10 years ago, Dave McClure, venture capitalist, angel investor, founder of startup accelerator 500 Startups introduced the world to a 5-step framework for growth. That framework was called AARRR, or also the Pirate Metrics.
AARRR stands for Acquisition, Activation, Retention, Referral and Revenue and is pretty much the bee’s knees when it comes to understanding your customers, their journey and optimizing your funnel as well as setting some valuable and actionable metric goals for your startup.
“McClure got people past vanity—how many people are looking at my page?—and into thinking about the whole customer lifecycle, the most efficient way to break it down, and how each part could be improved. It was a sea of change in the way founders thought about their businesses.” – Archana Madhavan, Amplitude
AARRR is widely accepted as the five most important metrics for a startup to focus on. That is because these metrics effectively measure your company’s growth while at the same time being simple and actionable.
- Acquisition – How are you acquiring leads for the business?
- Activation – How many of those ‘leads’ you’ve acquired actually experienced your core product value?
- Retention – Was your product value so good that people decided to come back for more?
- Revenue – Was the core product value good enough for a user to pay for it?
- Referral – Was your product value so good that people decided to tell their friends about it?
One of the most pleasant thing about this framework is that if you are tracking your pirate metrics right and that your metrics are going up, then your business is growing faster every day!
Give us a shout if you would like to have a chat about Growth Marketing in your business.