The State of Growth Marketing and Why it Needs to Mature
The Growth Marketing movement (aka growth hacking) – now nearly ten years old – has had a significant and positive impact on the efficacy of demand marketing. It’s brought a focus on outcomes and attention to the science of optimizing conversion.
Yet ‘first generation’ Growth Marketing has hit a wall – increasingly constrained by many of the fastidious attributes of the growth hacking mindset. In particular, it largely remains a ‘tactician-level’ activity that has not risen to the level of a holistic approach to sustainable business growth that is embraced by senior executives, particularly at larger enterprises.
The State of Growth Marketing.
Ten years after Sean Ellis coined the term “growth hacking,” interest in Growth Marketing certainly has not waned – especially in VC-backed software/SaaS circles.
The team at the Growth Marketing Conference is still packing people in each year anticipating more than 2,000 attendees this year, according to the latest Sponsorship Prospectus.
The vision of customer-centric and lifecycle-aware demand marketing remains solid. Matt Bilotti with Drift captures this POV in a great post:
Over the last few years, Growth Marketing has helped re-define the goal of marketing.
Successful marketing is no longer only about the top of the funnel and acquiring customers – it’s about acquiring customers who are going to stick around.
Growth without retention isn’t growth after all. And growth is more important than ever.
Yet the reality has lost some steam.
Too often Growth Marketing in practice is just an evolution of a tactical lead generation mindset – where the ‘value’ seems to get lost in translation. Maria Pergolino — a seasoned software CMO and Marketo alumna notes in a LinkedIn post:
Some have said demand generation is different from Growth Marketing because demand generation only focuses on top of funnel and Growth Marketing or growth hacking covers the entire funnel including their time as a customer. Essentially, Growth Marketing is often defined as marketing for customer acquisition + customer retention. And demand generation is often tied to creating a new customer only. …
I would … argue that many growth marketers are only working on top of funnel campaigns, simply based on my knowledge of those with the title (regardless of some saying that it implies focus on customers and retention).
It is time for Growth Marketing as a discipline to mature.
So what does ‘next generation’ Growth Marketing look like? The next step is to evolve past optimizing individual tactics, and move to orchestrate the entire marketing, sales, and product ecosystem for growth. This holistic view brings into account every touchpoint a buyer has along their journey and improves that end-to-end experience so, ultimately, the entire customer lifetime value increases. This is how growth hacking for a product evolves into growth marketing for the enterprise.
The next evolution of Growth Marketing is toward Strategic Demand – i.e., a state where ‘demand chain management’ and optimization becomes possible as business growth is built around and adaptive to buyer behavior, not product push.
Growth Marketing continues to be a ‘hot’ area. How did it hit a wall? Let’s take a look at some of the background on Growth Marketing and its challenges today.
The Challenges Facing the Evolution of Growth Marketing
Today Growth Marketing is somewhat of a victim of its own discipline. The attributes that are the cornerstone of Growth Marketing are also why it has been challenged to mature as a holistic and strategic discipline and to scale.
Some of these challenges include:
Short-term and tactical focus.
Too often Growth Marketers are focused on “… unconventional tactics used by companies to achieve explosive growth in a short amount of time. …. People often perceive it as a one-stop shop. A get-rich-quick scheme if you will,” comments blogger Neil Patel. Not coincidentally this short time frame aligns with the time period during which many VCs want to rapidly increase value before a liquidity moment; unfortunately, it is not a frame focused on building longer-term, sustainable growth – whether for sales or in the overall business.
Upper funnel focused.
The charter of Growth Marketing – as Maria Pergolino highlights above – is to drive demand both pre-sale and post-sale and to optimize customer lifetime value. Yet too often the tactics of Growth Marketing – given the reality that many growth-stage companies (and their VCs) are more focused on customer acquisition than growth – cause the Growth Marketers’s time and resources to be over-focused on the upper funnel – and not on post-sale demand. Ironic.
‘Testing and tinkering’ on portions of the funnel without a true vision for optimizing the funnel end-to-end.
Also, at odds with the charter of Growth Marketing, the dispcline’s tactics lead to a focus on “making seemingly small, carefully tested changes on a huge or rapidly growing base,” according to VentureBeat. The result is a perpetual cadence of testing and tinkering – without ever developing a broader vision for the buyer journey, the brand experience and the critical path that Growth Marketing should be driving.
In the worst case scenario, constant experimentation leads to a string of random acts with immediate benefit but that in total do not lead to a finely tuned, highly repeatable, highly predictable model for generating demand and closing business. I.e., Growth Marketin efforts fail to build a demand engine for the business, and so the result is a perpetual state of random acts of sales and marketing.
Tactician-level execution vs. executive-level vision.
The Growth Marketer of recent years often has been a ‘one-man-band,’ essentially engaged in digital arbitrage. Identifying and exploiting marketplace gaps to increase sales and customer retention are a far cry from an overall brand and customer-journey vision that demands and then enables marketing.
The same VentureBeat piece from above notes that the profile of a growth marketer often is “a talented person focused religiously on growth, with the right analytical skills to tightly track that growth, [who] can scale a company very quickly. …. ‘These new marketers are statisticians and experimenters and technical product people before they are brand people.’” But that’s also part of the challenge, the Growth Marketing cohort too often is not operating strategically.
Cannot scale and operationalize growth tactics.
Too much of the experience and focus of Growth Marketing has been applied to ‘growth-stage’ companies, but on a larger scale, growth marketers have struggled. Ayushman Jain at Microsoft notes:
[T]he more you dig into it, the more you’d observe the examples, best practices and thought leadership to be focused on companies or platforms with small to medium scale — from Stage B to just over post-IPO scale. … As a growth marketer at Microsoft, I constantly grapple with problems similar in nature to the ones growth marketers in the valley are trying to solve. However, I constantly learn the hard way that the same solutions are not effective at enterprise scale, irrespective of how much product innovation your company may be driving.
The Evolution from Growth Marketing to Strategic Demand
How can we tackle the challenges of modern Growth Marketing and help the discipline to evolve and mature? How do we transition to a Strategic Demand state?
There are four core shifts we must make in our Growth Marketing approach in order for the discipline to become more strategic. Read The Evolution from Growth Marketing to Strategic Demand to learn more.