In this post I reflect on why Growth Marketing should be on the agenda of Board Meetings and how Boards can develop a growth mindset.
There are many definitions of Growth Marketing – sometimes also referred to as Growth Hacking. In essence Growth Marketing is a data-driven approach that uses experiments to determine how to optimise results for all stages of the marketing funnel and the customer journey.
Let’s review some of the characteristics of Growth Marketing relevant to the Boards of businesses.
Focus on the whole funnel. At Board level discussions about organic growth are often limited around acquisition and retention metrics and hardly deal with strategies to keep customers engaged, retain them and ultimately make them into brand champions.
Such a restricted view of the marketing funnel limits the Board’s view regarding the extent to which the business is on a sustainable growth path. Growth marketers are master experimenters at every stage of the funnel and work closely with the whole business to gain better insights.
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- To what extent does your Board have a full understanding of the company’s performance at all stages of the funnel?
Traction Thinking. Billionaire PayPal founder and early Facebook investor Peter Thiel famously stated: “Poor distribution – not product – is the number one cause of failure”.
I have sat in too many Board meetings where the CEO or the CTO proudly presented their new product development roadmap but I almost never heard, within the same meeting, a clear plan in respect of gaining traction for the newly planned product and service. In most cases traction is an afterthought. I hear:- “Once we have built our great product we will deal with gaining traction”.
This is a major problem. In their brilliant book “Traction” Gabriel Weinberg and Justin Mares advise companies to spend time constructing their product or service and testing traction channels in parallel to solve this problem.
Growth Marketers are masters not only in running experiments to identify and fine-tune the best traction channels but also very often in moving from a campaign driven to a product driven approach to drive growth. The product/service in itself can be designed as the most effective growth tool to gain traction. This way the product/service is engineered as a growth loop driving a sustainable and organic customer acquisition. Dropbox was an early adopter of this approach creating a virality effect by encouraging users to recruit other users. Zoom and Slack are other great examples of using their product as a growth loop.
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- Has your Board ever discussed the opportunities to move from a campaign to a product driven strategy to drive sustainable growth?
Experiments. Boards are very often in their set ways when it comes to reviewing the marketing performance of their businesses. Budgets and performance measures are in most cases still linked to known and established initiatives. A fundamental principle of Growth Marketing is running experiments. The base assumption is that you will only learn and understand what works by continuous testing. Experiments can be as small as running an A/B test to identify optimal design of a button of the landing page. Such a small change can lead to a significant improvement on conversion rates.
I argue that experiments should be part of the performance review and budget planning.
Amazon’s Jeff Bezos likes to say:- “Our success is a function of how many experiments we do per year, per month, per week, per day… being wrong may be less costly than you think, whereas being slow is going to be expensive for sure ”.
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- How many experiments have you been running in your business so that you can say with confidence that each marketing $ is being spent in the most effective way?
North Star Metric. Boards are too often presented with vanity metrics which might look impressive on Board papers but do not provide a real understanding of the sustainable growth path of the business.
Typical vanity metrics are the number of daily/registered users, the number of page views, the number of followers, ad impressions etc….
These are all lagging indicators. They tell us what has already happened to the business. Viewed in isolation these metrics do not tell the Board anything about the impact on the growth path of the business.
The Board would be better served with a single critical metric which is a leading indicator of business success:- the “North Star Metric”. The North Star Metric is a leading indicator of sustainable business results and customer value.
In their ebook the Product Intelligence platform provider Amplitude brilliantly present a framework on how to define such a North Star Metric. Amplitude’s North Star is designed around a North Star Metric that Amplitude calls Weekly Learning Users (WLUs). Amplitude defines WLUs as “the count of active Amplitude users who have shared a learning that is consumed by at least two other people in the previous seven days.”
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- Does your Board have one North Star metric which helps them to understand to what extent their business is on a sustainable growth path?
The above listed points are just a few of the learnings I took away from the 12 week Growth Marketing course and which I think are very relevant for the Boards of businesses. On reflection, it is all about having a growth mindset. It is about not being stuck in set ways. It is about not limiting decisions purely based on past experiences or based on seniority. In the fast moving environment we live in, chances of success increase if businesses apply an evidence based decision making framework based on continuous cycles of testing and learning through experiments.
Businesses have come a long way in addressing the diversification of their Boards. However, Board members are still mostly hired based on their past experiences. Experience is important for sure but why not diversify the Board further and include the younger generation of digital natives as growth experts? You will be surprised how they will enrich your Board with their energy, innate understanding of technology and experiment driven ways of growing businesses. A great way to instil a growth mindset at Board level.