If there is one frustration that marketing & growth experts face, it is communicating the value that has been created for the client’s brand, arguably more than creating the value itself.
The main reason why this occurs is due to the difficulty of measuring data and getting the information that attributes the results back to our efforts.
This has always been the nature of marketing since the days of billboards and magazine covers and although the transfer of focus to digital has made this a lot easier, directly attributing to our efforts is still a major headache. A frustration not just for marketing agencies to communicate their works’ value, but just the same for businesses to measure their own growth efforts.
Firstly, what is growth?
The days of marketing executives are at the beginning of the end and will be replaced with a new bread of individuals, these being growth executives. The first company to first form an internal growth team was Facebook back in 2011, and the rest is history with major success stories such as Airbnb and Uber following.
This is shift is occurring for two main reasons:
• It is more cost efficient for businesses to employ individuals with a more vast skill-set.
• There are no more silos between departments, instead it is pushing all four in cohesion which also guarantees better results.
What skill-set does a growth executive have?
To over-simplify how they work, growth comes from the following actions:
1. Building your own audience.
2. Tapping into audiences that already exist.
3. Breaking down feedback your audience gives on your product.
4. Analysing the data gathered from first seeing your brand, to using your product and post-sale experience.
Using these actions as a framework is what gives us direction into what metrics that should be measured to determine the success of a project.
What metrics should we be measuring?
For all projects, we created a dashboard of the metrics we will be measuring, with a north star metric being identified which the main metric that drives revenue.
This dashboard is the basis which guides us to finding the pain-points that we need to address, and thus where our focus should be.
To give this context, we will use one of our start-ups, taaable.com as a case study.
The below is our growth framework being applied to taaable, an online booking platform for consumers to book restaurants without any hassle.
This then leads into us creating a spreadsheet where we can properly analyse growth performance and can be seen below:
As you can see above, we have mapped out the metrics based on the factors:
1. The users journey from seeing our brand to converting.
2. Our business goals which determines that north star metric.
Being a digital product, the metric which establishes the value of the start-up is the daily active users. When you see case studies online on how ‘an app grew to 20,000K users in the space on X time’, these are mostly buzz titles. It does not mean anything if these users have downloaded the app and does not user it on a regular basis, and therefores provides little indication on how valuable your product actually us.
Same with our case, sign-ups are a vanity metric. It is a good indication on how effective our acquisition strategy, but the basis for any business is retention as this is what will make or break the business in the long-run.
With that being said, churn rate is the silent killer of all businesses so I strongly advise before looking to scale your business to revisit how good your product actually is. There is little scope in focusing on gaining customers if you are losing customers just as quickly and this can only be established once you are tracking these metrics.
How does the journey to growth look like?
Profitability is a wonderful destination, but the journey to getting there is painful and most actually never arrive. In my experience, this is normally down to the lack of structure in terms of what the primary focus should be and adapting it when necessary.
How does the journey to growth look like?
After founding three start-ups and numerous affiliate brands, we have now established a template for user acquisition for start-ups. There are three stages to reaching profitability, these are:
Below is a table, illustrating where your focus should start and shift throughout different stages of scaling your start-up.
The fundamental point that needs to be understood is the flow of focus below:
First is not acquiring customers, but creating a good enough product experience to keep them. Simultaneously, run A/B testing on a small budget to figure out which channel will your main channel for acquisition for when it is time to scale.
Fun fact: 70% of growth comes from a single channel, so establish that first and then move on.
Once that has been set, you attempt to scale your business by scaling that one channel that has proven most fruitful. This will where you focus shifts to optimisation channel and keeping your acquisition cost per customer as low as possible.
Finally, you have reached growth. This is where you start acquiring customers in a profitable manner on a consistent basis 🙂 The nature of channels change due to constantly changing user behaviour, so once you find a method that works, go in hard!
The journey to a profitable business is messy, long and tough – and taking a measured approach is a must in shortening this journey and ensuring you get the most out of your painful lessons, and that you are wiser for the future.
Andrew Borg Costanzi