Why your digital marketing is not apt for growth

2024-09-09 17:39 Industry

Conventional thinking and common sense whispers to B2C businesses that they need to turn to digital advertising to boost sales. Thousands of performance marketing agencies are earning their quid off the back of this approach.

Maria Tsarkova, Growth Marketer and co-founder of Solid Water Marketing Agency:

Let’s say I am starting a B2C health tech app with a subscription model and I need to grow the number of users. Immediately, my mind turns to influencers and advertising on Instagram/TikTok and other social media platforms as the most straightforward marketing tactic. Often, if I am lucky enough to have found a skilled performance manager, I might see increasing follower numbers, a healthy cost per click, and good volumes of traffic to my app. But quite likely, zero paying subscribers...

North Star vs. Cost per Acquisition: difference #1

While digital advertising is a legitimate and potentially very effective way of letting people know about your brand and maybe even driving traffic to your website or app, taken out of the wider context, it may become your biggest money sucker with no returns.

In very general terms, digital marketers use technical skills to structure, launch, and manage ad campaigns on social media, Google Display Network, and Emails. A digital marketing manager looks after such metrics as cost per click, click-through rate, cost per lead and conversion rate (usually a ‘conversion’ would mean conversion into a lead). A digital marketing manager is not worried about what happens next after a user clicks on your ad or a button on your landing page.

Marketing funnel. Sourсe: liveagent.com

Growth marketing, on the other hand, is the approach that implies seeing your user/customer through all stages of the marketing funnel and even beyond. Growth marketers follow customers through the full lifecycle, from the first touchpoint to loyalty or churn, and spot potential levers of exponential growth across acquisition, retention, and loyalty.

Growth marketers work with more nuanced and cumulative north star metrics, while digital marketers work with flat-out campaign metrics.

Airbnb Case Study

Anastasia Dobronravova, Senior Growth Marketing Manager at Solid Water:

In summer 2009, Airbnb was looking for ways to boost bookings in New York. There were enough properties, and the prices were significantly lower than hotels, but still, the number of bookings didn’t grow. As it turned out, the hosts weren’t doing a great job of presenting their listings. According to the Airbnb team, “The photos were really bad. People were using camera phones and taking low-quality pictures. Surprise! No one was booking because you couldn’t see what you were paying for.”

The ‘growth marketing’ solution was low-tech but effective. The team rented a $5,000 camera and went door to door, taking professional pictures of as many New York listings as possible. This approach led to two to three times as many bookings on New York listings, and by the end of the month, Airbnb’s revenue in the city had doubled. Then they scaled this to Paris, London, Vancouver, and Miami.

Whereas a performance marketing expert would think in terms of scaling up ad campaigns to increase the numbers of views and clicks among the target audiences, a growth marketer thinks from the perspective of addressing user concerns, removing roadblocks and building non-obvious solutions, often beyond the digital marketing toolkit.

Campaigns vs. Sprints: difference #2

Growth marketing is all about testing ideas quickly and with minimal costs — a small investment in renting a camera allowed Airbnb to secure a multi-million dollar growth source. The main goal of growth marketing approach is to quickly get insights that can help your business grow. To make this happen, growth marketers don’t plan for six-month paid digital campaigns. Instead, we study the entire user journey, build the log of hypotheses about the levers of growth, and test them quickly through the most appropriate means - influencer endorsement, BTL, experimenting with product bundles, or fixing the onboarding journey.

Collaborative Approach vs. Silo Mentality: difference #3

Daria Partas, Strategic Communications Advisor, Co-founder of Solid Water Marketing Agency:

Another key difference between hiring a digital marketing expert and a growth marketer is how they work with the rest of the team. Digital marketing experts would look at creating a digital media plan to achieve certain performance KPIs. For example, a skilled digital marketer would be seeking strategies to lower the CPA or increase the Conversion Rate. This allows them to work within a clear remit without having to worry about the North Star metric, however it has been defined for a specific company.

Growth marketers, on another hand, have the tendency to annoy the product team, and the development team (and other people minding their business) with their hypotheses. For example, a growth marketer may discover - through in-depth customer interviews - that the customer’s onboarding journey is broken and can be fixed with simplifying the registration process. . The value proposition might have been irresistible and the cost per click might have been lower than market benchmarks but if your leads are struggling to register on your app and become paying customers, the effectiveness of digital campaigns does not matter in the end.

North Star Metric qualification. Sourсe: n-ix.com

Growth marketing approach suggests that the whole team is working towards the North Star, everyone doing their little bit to achieve it.

When exactly do you need growth marketing?

Hire a growth marketing agency when you aim for growth. Startups raising a Series A round are a perfect example. When product-led growth has exhausted itself and the metrics of paid digital campaigns have stabilised but you need to find sources of quick growth to deliver to your investors, shifting to the growth marketing approach is a must.

The growth approach will help identify blind spots, build the list of hypotheses, conduct tests, and find ways to grow your North Star metric in the most efficient way.

Not everyone needs a growth marketer.

A small business selling birthday cakes online that is consistently generating inbound orders fulfilling capacity should keep doing what they are doing with paid social and paid search .

Digital marketing will drive your orders. All you need is optimise your Paid Digital campaigns and achieve a profitable Cost per conversion (CPC). But when you think you have achieved a plateau, consider hiring a growth marketer to identify new pathways to revenue growth.

And before we go, here is one more case study from us: walletii by Ooredoo

This year we managed the pre-launch campaign of a new fintech app in the MENA region — walletii. It’s a digital wallet that helps people transfer money, pay bills and send money internationally to 200+ countries.

Here is how we applied the growth marketing approach to support walletii launch in Oman:

1️⃣ The list of hypotheses

We started with researching the market, competitors, media landscape in the country, and media consumption — and created the list of hypotheses about channels, creative formats, language of communication, etc. The goal of the pre-launch campaign was to test as many hypotheses as possible in a short amount of time, so that the learnings could be implemented in the launch strategy later.

2️⃣ Interviewing real customers

A straightforward way to promote a fintech app is to create ads highlighting its features. This is exactly what walletii competiotrs are doing: what can be done there and how useful the app can be. But growth marketing is all about understanding your users and their problems. Albeit walletii is indeed a state-of-the-art solution with great UX and useful features, we sourced customer insights by conducting in-depth interviews with people falling into our user profiles. Their answers about the pain points and the information sources they trust, inspired and informed our copy, creative concepts and our media plan.

3️⃣ Testing creatives

We developed 2 entirely different creative concepts that matched with customer pain points to analyse what will get us the best Conversion Rate, AND we tested different ad formats in all our channels. The most successful concept and formats will be scaled during the launch.

In this case we worked mostly with the top of the funnel (as the app hasn’t launched yet), but used a growth marketing approach.

If you want to understand whether growth marketing is suitable for your business now, book a 30-minute call with our agency.