hether you’re an entrepreneur, who’s looking to raise Venture Capital, looking to get accepted into an accelerator program, or just looking to bootstrap and scale your business to millions of revenue, you’re going to want to master the three T’s.
For you to understand what is Growth Marketing is, these three T’s will separate you from the other amateurs out there who don’t know where to start with their ideal business. The first is Team. The next is Tech. The third one is the Traction.
- The “team” are those people who are behind your company. Your team focuses on branding your company. They’re responsible for building the business together as a team.
- “Tech” is what software or technology you’re building that makes you defensible. The tech involves traffic sources like Email Marketing, Agile Marketing, Pay Per Click, and mobile app marketing.
- “Traction” is how far along are you in your business, how many users, how many customers, and how likely are you to be successful in the future. So the key to understanding traction and how you get it and keep it is in Growth Marketing Vs Growth Hacking. Your marketing experiments determine how far your traction will go.
Before we move on, I want you to take a moment and define what does traction means for you. Think about what does traction looks like and what is that next Milestone you need to achieve to get to the next level in your business. Think about how you can be able to get the funding or to get that revenue that you really need.
What happens when you master these principles? Well, for us to answer that question, we want to tell you about the lead pages.
Leadpages is a software company that grew 250,000 leads and 40,000 paying customers in just 18 months. Not only did they do that, but they raised $38 million in capital and guess what? They didn’t even have to touch a dime of that Venture Capital because they’d already grown just so much revenue on their own.
This could be your story to as long as your master Growth Marketing and Growth Hacking in your business, you’ll be on your way.
So now that you understand why it’s so important to match your business, let’s get into the three areas of “traction” (sales development).
The first is your funnel. The second is your metrics. The third is your tactics.
What is a funnel? It’s the moment someone discovers you and your company to knowing, liking, and trusting you all the way to paying you with their time or their money, depending on your business model. It’s the user’s journey from you being a stranger to you being their favorite company and/or product.
For instance, if you think about a funnel relating to dating and the goal is to marry someone. Your first step is to find its potential life. You find her and invite her on a date. She says, “yes” and you go on the first date. You have an amazing time and you guys are really loving it. Since the first date goes really well, You’ll probably want to invite her on a second date and she says, “yes” again. You go on the second date.
Now fast forward a year later and you’re like, “This is the one. I’m asking her to marry me.”And when you ask her to marry you, she says “yes.” And she loves you so much that as she tells all her friends about you.
That is a funnel!
What are the steps in a growth marketing funnel?
Step 1: Awareness
Reaching your potential will never happen if no one knows you exist. The first step in moving someone through the funnel is for them to become aware you exist. The more people who know you exist, the greater your potential is.
Step 2: Acquisition
When you find that your potential life, that is your customer acquisition phase. A Fractional CMO helps you develop that acquisition. That’s when you’re going out, identifying, and attracting your ideal customer for your company. When you use Fractional CMO, you’re giving your business a chance to grow in sales development.
Step 3: Activation
When you find this person and invite them to that first date and she says “yes”, that is the activation phase. That is her saying “Yes. I am interested in what you have to offer. Your company activation might mean entering their email address, creating an account, or downloading one of your tools. The Marketing Operation for this is to present an offer that cannot be refused.
Step 4: Retention
So after you’ve enjoyed that first date and invite her to the second date and she says “yes” again, That is what we call retention. She begins to stick around, and she’s having a great time. Then eventually, she’s like, “You know what? I was worried about you. I’m really feeling this. You are feeling all my needs.”
Retention is when you might get repeated visits from a customer. You might have them doing other repeated actions like downloading more tools or spending more time on your app.
Step 5: Revenue
So now, you guys have gone on a couple of dates, she said yes to you over and over, you’ve nurtured the relationship, and she knows likes and trusts you. And now it’s time to pop the big question: Will you marry me? Or in other words, will you pay me? Are you ready to spend the money with me? Are you buying what I’m selling? When you got going to say “yes” to you at this phase, that’s when you’ve got revenue.
Step 6: Referral
Think of referral as the last stage of your funnel. So now, let’s say you both are married. If she’s still feeling you, she’s going telling all her friends about you. This is similar to your company when someone buys from you and they are still satisfied with the experience. That’s enough to excite them and refer their friends to check out your product. You could think of this Marketing Automation, but you won’t be dealing with the hassle of communicating with those who may not find interest at first.
Summary of The Funnel
So as you can see, a funnel, in your business, is just like the funnel in dating. When someone finds you with a mobile app marketing, for instance, that’s you acquiring customer acquisition and attracting the right customer. And then you’re going to nurture that relationship and show them that you’re solving the problems they have. You’ve got the right tool, and that’s when they develop the knowledge, the likes, the trust, and then you pop the question and they say, “Yes, I want to pay you money.” That’s when you’re in the money. After the revenue is in place, that’s when your new customers will refer to all of their friends. This is how successful entrepreneurs build sales development.
This is a similar type of funnel that you need to optimize in your mobile app marketing business.
Your mission is to start branding your funnel through messaging and positioning. What is your current funnel look like and what is the message?
Start with an acquisition. Where are your users finding you? What is your sales development? What marketing experiments are you going using to find customers?
Then prepare an activation. What is their first experience with you? What is that first critical action they need to take to tell you that they’re feeling what you are putting out there?
Next, get that retention to where they’re coming back to your app or to your website. What are you doing to bring them back? What is your retention currently looks like?
And then, determine your revenue. What are they paying you for and how are you facilitating for sale?
And finally, what are you doing to facilitate your customers referring their friends to you? What is your current referral stat looks like?
Your metric essential is basically, your vital signs. As humans, our vital signs might be our blood pressure or heart rate. These are the things that say if we’re healthy or sick.
If investors are looking at a business or you’re looking at it as a business owner, there are four metrics that matter.
Metric #1: The Cost
This is the amount of money that you pay to get a customer on to your platform. The key here is knowing the cost to acquire a customer across channels. Like on SEM, it may cost you three times more to acquire a customer than it does on Agile Marketing. Every business is different, and you’re interacting with your potential customers in different ways. It might be through free content, it might be through paid acquisition, marketing experiments, and advertisements. A simple way to save on a cost might be through word-of-mouth or by affordable Pay Per Click Advertisements. So, it’s up to you as a business owner to dissect how the health of every channel is performing for your business.
Metric #2: The Lifetime Value (LTV)
Their lifetime value is very important. This is based on how much money in the lifetime of your customer are they paying you as the business owner. Just like with your cost to acquire a customer, you break it out by channel. You got doing the same thing for your lifetime value. You may find the customers who come from SEM, for instance, are worth more to you and have a higher lifetime value than the customers who come from Agile Marketing.
Metric #3: Churn Rate
Your Churn Rate is you looking at all of your customers and the percentage of them that fall off every month. This is very common in Email Marketing due to the lack of responses and replies. Your Marketing Operation could also be inconsistent. Marketing Automation is no longer automatic. There’s no messaging and positioning between you and your customers. There are multiple ways your churn rate could change on a day-to-day basis.
Metric #4: Referral Rate
A referral rate is also known as a Viral Coefficient. This is great because it’s like free marketing. It’s the word of mouth value of your company, and it tells you, for instance, for every hundred customers you have, they’re referring another 25 customers just through word-of-mouth. So those are customers that are not even painful to acquire.
Tactics are what’s going to help you optimize your metrics. Before we get into the tactics, let us give you a quick warning:
When you are using tactics, you have to have a strategy. You have to know who your ideal customer is because tactics without a strategy are tactics without tact and that is not going to get you the results you want.