Mastering the path to exponential growth - Review
Over the past 12 weeks, I've experienced some of the best growth experts in the world (courtesy CXL Institute), and I've taken in a lot, some of which I've shared.
In this article, I'll try and explore some best practice that will help you to master the art and science of growth marketing.
Fundamentally, there are multiple levers of growth, thus:
Acquisition - this is where one offers the incentive to users to try product.
Activation - that "aha" moment when the user gets to have a first time experience of the core value of the product.
Retention - at this stage, the user has experienced the core value of the product and returns to consume more.
Referral - this is key to looping in new users and generating more value to the business.
Revenue - when the consumer pays for the product.
Businesses in the Software as a System (SaaS) and media categories, particularly, need to retain customers to be sustainable. Growth depends on a high Customer Lifetime Value (CLV).
Because value drives retention, the customer has to realize the value of one's product as quickly as possible. That means the path to usage and the customer experience should be as frictionless as possible. Key to this, is the need to determine what metric is imperative to growth, for one's business, and how to get there through user retention.
This is where, one needs to look up...
...And determine the North Star Metric (NSM)
Before determining that key metric that influences growth for one's business, one should consider that, the NSM:
- Should reflect aggregated value delivered to the user/customer
- Is the lens for evaluating tests and monitoring overall progress of one's marketing and product iteration activities?
Examples of NSM are Airbnb (Nights booked) and Facebook - monthly active users (MAUs).
Because testing is key to the realization of NSM, experiments should be closely related to objectives, which should in turn be linked to the NSM.
Once there is an understanding of one's NSM, and the relationship between the variables that move that NSM, then testing will drive growth. This is because NSM is a reflection of the aggregate value of one's product. Now, there are two (2) types of testing, thus:
- Testing to discover (pings) - In this type of testing, one makes a lot of guessing, and learnings, over time, to discover ideas of where the opportunities are
- Testing to optimize (A vs. B) - Based on the assumption that there is a better way to do everything that one is doing, and one finds that through testing variation, and incremental testing to grow faster
When testing, one is better off leveraging within the business, to have the biggest impact from a win, and that is through data. This data come be found in the various units within the business, whether, product, marketing, customer service, analytics or design.
Now, for testing to be effective, it needs to be focused on specific objectives. This is due to the fact that impact needs to be applied on the right priorities, to leverage the biggest growth opportunities.
The Growth Process
One needs to engage the entire organization to be able to leverage the insight and skills of different units, to be able to be effective.
That said, what is an effective growth process?
One thing, I've learned and believe is that digital marketing always throws up new insights and sometimes one gets blindsided by events. But there are some things that can be considered standard, which is:
- Engaging the entire organization to leverage every possible insight, skills and thought-leadership
- Driving immediate growth results through focused rapid testing
- Pushing sustainable growth though constant learning and iteration
The growth testing process is driven by 4 key considerations:
- Analyze situation (to find out what's holding back growth): This lends itself to discovering high leverage growth opportunities that one could then use to drive growth. It also helps to create a "situation document" and the opportunity for quantitive analysis and feedback, as well as learn from past testing activities.
- Idea generation for objective: This is where the creative problem solving skills come to bear on the growth process, through brainstorming around the objective. Here, one can also encourage ideas from any of the team, regardless of their role.
- Prioritize in weekly growth meetings: In this situations, team members are encouraged to nominate their favourite ideas for testing. The ideas for testing are also pitched to the team to achieve alignment, and the required resources and expectations are agreed upon in this meetings. It is always a great idea to hand over ownership to the one who's most passionate about the nominated test idea.
- Launch tests: At this stage the test-owner determines the minimum viable test, and schedules the resources required for execution. They also ensure success metrics are defined and tracked.
Analyzing tests and repeating to drive growth
At this stage, one is basically focused on ensuring that statistically significant sample size is acquired, to enable triage analysis of the test hypothesis. It's also imperative to share the impact that testing has on the progress towards achieve the set goal.
In all, one has to keep the objective, top on mind for the team, to ensure that the process stays on track. So, question one may ask is what happens at this stage of the growth process, where things could go either way?
Remember, this is all a learning process, whether one is doing something completely new, or testing two (2) know hypothesis to determine the winner. So, the subsequent scenario could be something along these lines:
- If the test failed to work; one has to capture the learning from it and use it to pivot in another direction
- If it worked; then, it's a big opportunity to systemize and automate.
Whichever way one looks at it, both sets of scenarios influence the next set of tests, and it goes on and on, in a continual process of testing and driving growth, through insight harvesting.
The growth team
The purpose of the growth team is to plan and execute cross-functional growth testing to achieve high level objectives. This includes identifying what the high level objectives are, and working to achieve or exceed those objectives. If you're thinking about the best way to build your growth team, there are two (2) models that can be considered.
- Autonomous (independent) team model: This team usually reports to the chief executive, and therefore tend to achieve greater speed and iteration. Examples of this model can be found in Uber, Facebook and Pinterest
- Functional team model: This team reports to another team, usually the VP of product, and tends to help develop trust that growth will not be pursued at the detriment of user experience. This model can be found in the growth processes of LinkedIn, Twitter and Dropbox
You may be wondering who should be on the growth team, and that's a legitimate consideration for anyone interested in the growth of their business. As the custodian of the fortunes of the business, one assumes the automatic role of Growth Master (unless, one wants to relinquish it to a third-party), and therefore head of growth.
This normally requires and multi-skilled ability and/or a wide knowledge in digital marketing disciplines. That said, one can start with outsourcing or shared resources (if one operates in a larger organization that has other operating units), in engineering, design, marketing, analytics, etc.
With time, as and when required, one can add dedicated people to form a core team that will help to achieve the required testing goals, or contract temporary specialists to explore the various channels, with the view to confirm roles when channels are proven to be worth the investment.
The Growth Master role
Qualities of the growth master
- This requires one with an entrepreneurial spirit, willing to take the risks and accountability for a difficult job
- Disciplined to follow processes, as this is key to achieving sustainable growth
- Has the mindset to pursue continuous improvement, and always looking for opportunities to improve
- Must be analytical, and passionate about looking for proof in data and not going by gut feelings
- Show leadership to keep the team focused and motivated to go through the rigmarole of continuous experiment and analyzing
The above qualities are what will come in handy, as the one performs the Growth Master role, through analyzing data to find the high level growth opportunities, helping the team to focus on generating ideas that will impact the key objectives, and running weekly growth meetings.
The process of growth in one's organization is a journey of discovery and learning, to execution and analysis. Therefore, experience is one of the key aspects of the role of a Growth Master, and it presents an opportunity to find areas to improve after each experiment, and to apply improvements in the next project or activity.
With time the role becomes easier, as skills and knowledge are built through observation and reporting.