When you look for a definition of ‘Growth Marketing’ on the internet, you will most probably read that it’s all about rapid experimentation. When analyzing the most innovative and fast-growing businesses, there is no doubt that rapid experimentation can be a real game-changer. For example, Netflix is running over a hundred experiments a year and Airbnb just passed the bar of 500 per month.
These companies don’t just measure the number of experiments they launch a year, they also set ambitious targets to drastically increase them. Jeff Bezos even stated that the success at Amazon is a function of how many experiments they do per year, per month, per week, per day. A lot of weight is put on the velocity aspect of experiment production. And even if I also live by Mark Zuckerberg’s famous motto: “Move fast and break things”, there are 2 other aspects of Growth Marketing that are as important as speed, but often overlooked.
The power of data
The first one is the power of data. To crack the virtuous circle of growth you need to exploit your data to the fullest. Once you have launched your first set of experiments you can start capturing, structuring and analyzing your data. You only rely on that data to decide whether you continue with an experiment or not (kill it or scale it). And in most companies the growth process stops here. But when you dig deeper into that data, you get knowledge. The kind of knowledge that will make your business grow in a more sustainable way.
There are different kinds of knowledge you can gather from your experiments:
- Knowledge that will help you come up with new, more well-founded experiments to enrich your experimentation backlog. To give you a concrete example, by deep diving into an experiment we launched for one of our clients in the B2B sector we saw that a lot of leads that came in were part of the same LinkedIn community, so the next hypothesis we wanted to test out was if targeting these specific LinkedIn groups would be more effective than our current targeting strategy. And it was! Not only was the lead inflow higher, but we were also able to significantly reduce the cost per acquisition.
- Knowledge that will help you prevent making mistakes in other experiments. Take some time to try to find out why certain experiments didn’t work, in order to avoid making similar assumptions in the up-coming experiments. For instance, for one of our clients in the B2B sector we built an ROI-calculator as lead magnet. The experiment was not bringing in as much leads as we had hoped for, so we started digging into the data and saw that there were a lot of people starting the ROI-calculator but left the calculator the moment they had to fill in their personal details. So, we launched a new version with a reduced number of personal questions at the end, which drastically increased results. We applied that learning to all similar up-coming experiments and this insight even became the starting point of a new test where we wouldn’t ask any personal details in the calculator, but rather retarget them in a later stage with a high value content piece where people were much more willing to leave their personal data behind.
- Knowledge that will enable you to further improve your scaled experiments. By applying that knowledge, you will achieve wisdom. The purpose of Growth Marketing is not to experiment for the sake of experimenting. But rather to create a solid and high performing baseline with your best working experiments that drives impact. We always aim for a 70-30 budget split: 70% of your budget goes to your baseline to assure enough qualitative inflow and the remaining 30% needs to be reserved for testing new things.
After killing, scaling and launching a new set of experiments you will get even more data. The more data you will gather, the more insights you will get to drive even more business growth and so it continues…
Or should continue, right?
In reality, we see that there is a natural tendency to go back to ‘business as usual’, rather than ideating hypotheses and continuously test. And this is even the case when teams have the right skills, tools and processes in place.
Growth mindset
What is most often missing is a growth mindset, which is the other imperative to crack the virtuous circle of growth. A growth mindset embraced by both employees and the company itself.
Carol Dweck, Professor of Psychology at Stanford University, defines those who embrace a growth mindset as individuals who believe their talents can be developed through hard work, good strategies, and input from others. They are convinced that they can learn anything they want and are eager to. They also embrace challenges, persist through obstacles, and seek out inspiration in others’ success.
However, attaining and preserving a growth mindset is no easy task as we are often confronted with our own triggers that obstruct growth: facing a challenge or a setback, being criticized, or even seeing colleagues getting the promotion we worked so hard on to get. These triggers can make you lose confidence and self-esteem and push you towards closed-mindedness, which will hold you back in your journey towards growth.
That’s why on top of having people with a growth mindset, organizations also need to foster a culture of growth. Companies that embody a growth mindset are typically built around these 3 pillars:
- Nurturing curiosity: Curiosity doesn’t only help you to come up with more creative solutions, it also makes you less vulnerable for confirmation biases. When your curiosity is triggered, you tend to look less for data that supports the hypotheses of your experiments. Curious people will also be more likely to question the status quo and won’t settle for the first solution that crosses their path, which most of the time results in better outcomes.
Especially in Growth Marketing it is important to nurture curiosity because over time most tactics will decrease in performance. Simply because of audience fatigue, lifetime of creatives or even the law of supply and demand. Let’s take the example of LinkedIn campaigns: targeting people based on job function has been a very powerful targeting strategy in the past. Unfortunately most companies are now aware of this tactic and set up all their campaigns based on this criterion. Demand has skyrocketed and resulted in very high CPC, making it crucial for businesses to have curious employees who will test new tactics to come with more cost-effective solutions.
- Encouraging continuous learning and appropriate risk-taking: People with a growth mindset don’t care about being proven wrong and seeing their hypothesis being refuted. They don’t see it as failure, but rather as a learning opportunity. And companies that value and reward this attitude will not only see their employees feed the learnings right back into their organization, but they will also avoid two common pitfalls of experimentation: (1) hunger for approval and (2) design experiments similar to those we know were successful in the past. And if employees don’t dare to go too much out of their comfort zone and take risks, chances are slim that they will come with your next big idea that will revolutionize your business.
- Insisting that data trumps opinions: shift from making decisions based on your gut-feeling to a data-driven decision-making process. I would even add that it is not only important that senior management insists that data trumps opinions, but that they also live themselves by this rule. Nothing kills motivation and innovation more than needing to follow the so-called HiPPO - highest paid person’s opinion – in the room.
So, to crack the virtuous circle of growth, use your data as fuel for your growth engine and foster a culture of growth to turbocharge.
Want to find out more about data?
References:
Harvard Business Review, Harvard Business Review and Top Hat.
