How To Build A Systematic Growth Marketing Process? — A Review To CXL Growth Marketing Training Week -2
In the previous article, we discussed what growth marketing fundamentals are and how growth marketing is different from traditional brand marketing. Still the picture remains unclear how we can actually set up a systematic growth marketing for our own business.
Not anymore.
In this article I will tell you how we can build our own growth model and apply it to any business. It is a systematic process that takes away the guesswork and focuses on having a realistic approach when it comes to growth marketing.
Here is what you will be learning from today’s article,
- Building Your Growth Model
- Analyzing Customer’s journey
- Generating Experiment Ideas
- Prioritizing Growth Experiments
Before we begin, please keep the below ecommerce example in your mind.
Monthly Acquisitions: 100,000
Monthly Activations: 10,000
Monthly Retention: 1000
We can go much deeper but to keep things simple let’s keep in mind the above three things.
Building Your Own Growth Marketing Model
The first step involves, imagining, how your growth model would look like on its highest level. To simplify, what would your Acquisitions, Activations, Retention Rates look like after a year or a quarter after you have started implementing growth marketing.
To do this you need to set goals. As in how much increase you want to see by the end of the quarter / year.
You can have a fair & realistic idea of what you can achieve on the basis of the historical data. Let’s assume you are aiming for 5% growth in your metrics by the end of the quarter.
So the new metric’s would look like this:
Monthly Acquisitions: 100,000 + 5%= 105000
Monthly Activations: 10,000 + 5%= 10500
Monthly Retention: 1000 + 5%= 1050
Now you have a clear picture of what your goal is and what really you are trying to achieve with your growth marketing team.
You need 5000 more acquisitions, 500 more activations, 50 more retention.
Analyzing Customers Journey
Once you have your highest level of growth model at your hand, it’s time to analyze your user’s experience or your customer’s journey associated with your marketing funnel.
You need to focus on these three things:
How do your customers coming from different channels (search, social, referral) react with your website’s user experience ?
What levels of the funnel your customers are dropping off?
What would be the possible reasons they are abandoning your website?
Before you try and answer the first question, consider the following in your mind: your customer doesn’t know your brand, when he is coming to your website for the first time. Then slowly move all the way down to his first purchase. This is also called exploring the golden path.
Once you figure this out, all the right things will start popping out of your mind,
Maybe the landing page experience isn’t good enough.
Maybe the home page isn’t optimized for first purchase and needs a rework?
Maybe the customers aren’t making their first purchase because of the low trust factor?
Maybe the customers aren’t making their first purchase because there is no discount available on the products?
Maybe the customers aren’t making the second purchase because they didn’t have any coupons or offers?
It could be anything. Just jot all the possibilities on a brain mapping device or your notepad :D
The other ways that can help you gather relevant data is by,
Talking To Your Customers
Sending them Surveys via SMS or emails
Doing focus groups
The point is you need some data to come up with possible reasons or hypotheses as to why the customers aren’t taking desirable actions on your website / app.
Once you have sufficient assumed reasons for the existing metrics at each funnel level, it’s time to move to step 3.
Generating Experiment Ideas
Once you have a series of hypotheses at your hand, it’s time to come up with experiment ideas.
Let’s say you want to increase the retention rate of your existing funnel. To do that you have the following hypotheses.
People aren’t coming back to the website because there was no communication between the brand & the customer that would make him come back
People aren’t coming back to the website because they aren’t aware about the convenience of using your platform.
Now, let’s use the first hypothesis,
“People aren’t coming back to the website because there was no communication between the brand & the customer that would make him come back”
Let’s use Email Marketing as the communication medium.
To run an experiment, you will need a dependent variable, an independent variable & an assumption.
Let’s say by sending emails to a particular data set of audience, we will see a 5% increase in the retention rate.
So the Email Marketing as in your medium or action is your independent variable,
Increase in retention is your dependent variable
The % Change is your assumption
What you can do is, take a segment of your audience who haven’t visited your website or platform for the second time, and run an email campaign specific to that audience.
Email copy can be around anything, may be just a generic reminder of what new products have been added, or a generic product review from the client.
Keep in mind that we are testing out if any communication is really bringing your customers back on your website.
Once you run the campaign, you can observe the data,
If the people came back? If yes then how much percent of the people took the action? If its significant you can reiterate your email copy to something better, then scale the email campaign to the entire segment of no retention customers and automate it.
Once you automate it, you have added a substantial increase in your retention rate for a month on month basis which in return can drive your revenue up.
If they didnt come back or if the experiment failed? You can figure out why the email campaign failed, are there any delivery issues with your current email marketing software. Are those emails getting delivered to spam.
If you rule out all the causes of technical failures you can safely assume that email itself is not the main driver of your retention rate. Take the learnings, inform your entire team that email marketing is not something you should focus on, then move on to the next experiment.
You can go further deeper if you want, when you see email isn’t driving you retention, then you can try out Facebook Ads, SMS Campaigns, Google Display ADs and repeat the process until you find the correct answer.
Always remember, the goal of growth marketing is to find what works and what doesn’t? A failed experiment can save a lot of money, time & resources that could have been wasted in the future. Also you learn important things about your customer, such as, from the above, email marketing is not what makes them use your platform!
Prioritizing Experiments with ICE Framework
Still with me?
Great!
So far we have learned how to set our growth model, how we establish the process to come up with hypotheses & test them out with experimentation.
Now, how would you decide upon which of the established growth marketing experiments you should pursue first?
If there are “n” number of experiments how would you prioritize them?
The answer is the ICE framework!
I: Impact
C: Confidence
E: Efforts
Impact
Any experiment you conduct should have an impact, let it be an increase in brand awareness, or increase your acquisitions, or increase your retention rate, no matter what the outcome of the experiment might come.
The best way to measure the probability of impact, is to look at your historical data or insights of your competitors’ similar strategies.
Confidence
Confidence comes with your intuition, as in, how much confident you are whether the particular experiment will succeed or not! If you and your team are just starting out with growth marketing experiments, it will be a bit harder to guess.
If that’s the case, you should probably go with your gut feeling.
It works too.
Efforts
Effort means the intellectual and monetary resources you will be spending on the experiment. Such as creative resources (design & development costs), channel costs (Advertisement charges if you are running a paid media campaign), Intellectual investments such as how much time you will spend on developing the experiment.
All the experiments you or your growth marketing team comes up with, you should rank them against the I,C,E out of 5.
Good comparison idea would be, to compare, Expenses Vs Revenue, which tells you directly how much money you will make against how much you will spend on running the experiment.
Let’s consider this for example,
If experiment A, has the following ICE rankings,
Impact: 5 out of 5
Confidence: 4 out of 5
Efforts: 5 out of 5
Experiment B, has the following ICE rankings,
Impact: 3 out of 5
Confidence: 4 out of 5
Efforts: 3 out of 5
What experiment would you pursue among the two?
The correct answer is B,
And here is why,
Although experiment A has a bigger impact than B, it also has an effort ranking of 5 which means you will be spending more time and money on experiment A than B.
The experiment has an impact rating of 3, so it still has a positive impact and comes with less effort. So the smarter choice would be to go with experiment B.
Also, we should remember, growth marketing experiments are experiments, they also have the possibility of failure. So it’s always good to pursue experiments where you can lose less amount of money & time.
Conclusion
In this article we have learnt how we can systematically set up the growth marketing process for any business.
We also have learnt how to effectively come up with hypotheses that can improve metrics throughout the funnel. Also we have learnt how to come up with experiments to test the hypothesis.
The ICE framework that helps to prioritize the experiments, a realistic approach to conduct experiments.
What is your ideal process for setting growth marketing for your business?
