Learn what growth marketing can offer at any stage of your startup.
Growth marketing your way to a Series A – one stage at a time
What is growth marketing?
Growth marketing is a customer-centred, data-focused, and experiment-driven approach to increasing market share and generating revenue.
Growth marketing is not exclusively practiced by startups. Mature companies use it, too. But it is especially useful for early-stage companies, because it emphasizes using the resources you have in a deliberate, focused, data-driven way to achieve maximum results.
While this guide is primarily targeted to early-stage companies pursuing Seed to Series A funding, it’s important to understand what growth marketing offers at all stages of your startup.
Product Development Stage
You’re using preliminary growth marketing tactics to set yourself up for success. This includes building out your first web presence, speaking to potential customers, and developing a unique brand identity with key messages and differentiated product positioning.
Product Validation Stage
You’re using growth hacking and basic marketing principles to find beta users of your product, build engagement with your audience through education and excitement, and generate buzz about the problem you’re solving. You’re also obtaining feedback from your customers to quickly iterate your product or service and to further grow your user base.
Product Traction Stage
You’re using intermediate growth marketing to rapidly increase your user base and expand beyond your beta users. After your Product Validation activities, your beta users have helped you identify your “must-have” features and eliminate the biggest issues.
Growth & Scaling Stage
You’re using advanced growth marketing to move from focusing on top-line revenue to the bottom line. You’re developing processes and systems to decrease the cost of finding, converting, and servicing customers.
At the product validation stage, focusing on your customers, data, and experimentation allows you to understand who the best early users of your solution are, engage with those early users, and receive valuable feedback.
Don’t underestimate the importance of these activities early on. Early-stage companies often focus on perfecting their product before launching. This is a mistake. If early-stage companies burn their funding perfecting a product, only to learn they’re missing a must-have feature or misunderstood a key market requirement, they won’t have the funding to adjust.
On the other hand, using growth marketing to share your solution with the market, obtain feedback, and iterate allows you to focus your resources on projects your customers care about – and that they’re willing to purchase.
At the product traction stage, growth marketing allows you to use the initial data and customer insights from the product validation stage to grow your audience. You can transform beta user experiences into marketing messages that attract other customers. Experimentation allows you to test different messages from your product validation stage and accelerate your growth.
These activities help you grow and record the metrics that demonstrate, in hard numbers, your business’s viability and growth potential to investors.
At the growth and scaling stage, your focus is on engineering an efficient operation, so you can attract customers and generate revenue as cost-effectively as possible. In other words, you want to reduce the cost of doing business. By engaging with your customers, understanding the data, and further testing, you can develop, market, distribute, and service your products profitably. Then you can expand your market (or find new markets) and use your efficient operating model to boost your bottom line.
Notice from the stages above that there are multiple growth marketing strategies and tactics at each stage. There’s everything from keyword analysis and SEO to performance marketing and media relations. The challenge is that you can’t do everything. Early-stage growth marketing is about focus, after all.
The key to overcoming this challenge is selecting the right growth marketing approach or strategy.
The Performance-Based Strategy
What does this strategy entail? You’re using paid channels and tactics (e.g. Pay-Per-Click social and search ads, affiliate marketing) to meet marketing goals. You only pay when a certain goal is accomplished, either click through for an ad or a purchase for an affiliate link.
Which companies should use this strategy? You should use this strategy if it would be difficult for customers to organically find your product. You need to be where they are when they need you (e.g. searching for an insurance provider).
The Content-Based Strategy
What does this strategy entail? You and your users are developing educational and engaging materials for your current and potential customers.
Which companies should use this strategy? You should use this strategy if it helps your customers derive more enjoyment from your solution or teaches your customers how to have the most successful experience with your solution (e.g. a meal delivery kit subscription service). Also, if there is an opportunity to capture organic search traffic with relatively small competition.
The Virality-Based Strategy
What does this strategy entail? You are using word of mouth, networks, and referral bonuses to build awareness and engagement with your product. You’re taking advantage of social media.
Which companies should use this strategy? You should use this strategy if the enjoyment of your product or usefulness of your product relies on other users, whether they’re your friends or colleagues (e.g. money transfer services, social networking platforms, online marketplaces).
Understanding the different strategies or approaches to growth marketing removes the cognitive overload of decision making in an early-stage company. Instead of analysis paralysis from a fear of missing out (“Should we have a referral marketing program?” “Should we build a knowledge base?”) you can identify which strategy aligns with your business and focus your efforts on perfecting that strategy.