Growth Marketing Strategy
What research on 1 000 tech startups and 40 000 hours of tactical experience say about Growth Marketing Strategy for a business
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So, let’s talk about the marketing strategies that fuel your growth – so-called growth marketing strategies. Now, most businesses I meet don’t really get that there are many moving parts to a growth marketing strategy. Most of them believe that it is like creating a media or marketing plan. Ie. static plans that you decide upon that align with your marketing budget and calendar year.
Needless to say, a growth marketing strategy is dependent on more than what your product offers or the market’s understanding of your value proposition.
One could say that it is much more like a financial plan and you (as a growth person) is much like the accountant of your company. Ie. you understand exactly what drives your growth at any given point in time.
What’s the best growth marketing strategy?
When McKinsey Co studied the 1 000 most successful tech startups in Europe they noticed four significant patterns amongst the companies they investigated.
Based on these patterns they were able to derive four different growth strategies.
I love their way of categorizing these startups as it totally makes sense with the tactics I have applied throughout the years.
I have taken the time to try to assemble a matrix of the different growth strategies they found.
I strongly recommend you read their article before moving forward in this one as I will use their four different business types as the categorization for the rest of this article.
What the McKinsey study tells you about growth
In short, the McKinsey study splits the tech startups they have covered in their study into four categories and four different growth strategies.
- Network growth strategy
- Scale growth strategy
- Product growth strategy
- Deep tech growth strategy
1. The network growth strategy
The network growth strategy is one that fits businesses whose offering either gets better the more people join (like electric scooters, marketplaces, social networks, etc.) or businesses that make use of networks to grow (much like most influencer one brand-driven businesses like Daniel Wellington or Gymshark).
They focus on the adoption of users, meaning they probably focus a lot of attention on user behavior, trends, liking, and try to attract early movers and trendsetters.
The early strategy includes finding empathy and stickiness (as in LEAN Analytics) and growth metrics should probably focus on either returning usage/purchases, time to wow, and churn.
I found it kind of surprising that McKinsey found that first-mover advantage was less important than the businesses understanding of “localization”.
But it makes total sense when looking at the effect that language localization did for Facebook, and what the creative freedom offered by Daniel Wellington did to the effect of their influencer marketing.
Examples of network growth strategy businesses
Daniel Wellington (Stronger, Gymshark etc.) are companies that utilize the structure of the network economy to build products that help people say “I AM…”. Or in other words, they help people use a product to explain some part of their identity.
This growth strategy works because it targets people that other people follow. People who live full lives that change over time.
A product will never have those features unless it is a technology product that follows Moore’s law.
And as such, it has a natural and exciting progression/development, just like the vlog or instagram feed of an influencer.
If you are like Daniel Wellington and manage to develop a situation where an influencer uses the product you are selling, their followers will to some degree decide to follow.
They do this to say that “I am like [influencer]”.
This is a great launch strategy for all consumer brands and for SaaS products (if you’re working with an expert network of influencers).
However, the longevity of such an approach has its flaws as it only works when the product is being used by people with who the recipient wants to identify.
However, when the group of people using the product becomes undefined in character, the influencer will move on, and so will their following.
Looking at Daniel Wellington we can clearly see when this shift happens by studying the similarities between their demand as measured by searches in Google and their sales numbers.
Thus I am very wary when I look at investing in identity-driven network companies. The one thing I tend to look for in these brands that utilize networks to grow is if they manage to go from defining an “I AM…” into being able to define a “We Are…”
Looking at Gymshark we can truly see that they have shifted into focusing on what they are (as a group) rather than focusing on their early messaging that focused on what Stronger is currently doing.
You can spot the difference merely by looking at the kind of content they post in their Instagram feeds whereas Stronger focuses more on individuals whilst Gymshark focuses more on community.
To further underline how I believe network companies should communicate we have to turn to one of my Swedish favorites (Yepp, I’m Swedish too).
VOI electric scooters wouldn’t be possible without its network of users. Thus, it isn’t like any of the businesses I’ve previously mentioned. It is a real network business much like Facebook, Uber, Foodora, etc.
However, it has used the initial understanding of networks, influencers, and “local” circumstances to launch in each new city.
However, the difference is that they initially helped build the category by focusing on the “freedom” and individual mobility of the individual – “I AM a VOIRIDER”.
Nowadays they have switched into becoming distinctly different from their competitors by pushing the narrative of the responsible electric scooter rider (in EVERY ASPECT of their communication).
Thus making everyone who rides them give a secret nod to each other. We might all be different, but whilst we’re on a VOI, we share a set of values. And we’re absolutely not like the people who drive and throw those other electric scooters.
2. The scale growth strategy
The scale growth strategy focuses on building company infrastructure that is streamlined and optimized to acquire as many customers as possible.
I’d say this is probably the most linear growth strategy of all of the ones in this study.
The only way to reach increased profitability is by either reaching market domination, being able to increase prices, creating brand equity, or increasing productivity using process and/or technology.
The reason for this is that the strategy focuses on over-indexing in people working in sales and marketing.
As the market matures and more competitors enter, the price to consumer (especially when working with commodities) is set by the market.
The only way to increase profitability is to:
- Either acquire competitors and become a giant that can avoid competition by buyouts
- OR by having stellar branding that makes consumers think that your product is of superior quality, thus making them pay more for the same
- OR by increasing your productivity and thus making your operations do more for less than your competitors, and thus earn more on every unit of time spent on producing your output (product/service)
In terms of businesses that have done a good job using a Scale growth strategy, we should turn our eyes to Spotify and perhaps also Oatly.
They have both focused on over-indexing on either sales or marketing. And although none of them would probably admit to it as both would say they’d invest mostly in product… they actually haven’t.
Examples of scale growth strategy businesses
Spotify has acquired partnerships, advertising and developed their freemium model to make people go from free to paid users.
When analyzing them from a “jobs to be done”-perspective we can clearly see that they cover the social, emotional, and functional needs in their product offering, but that the reason for doing so hasn’t been to improve the product but rather as a way to expand their market – ie. marketing.
This is a spectacularly intelligent growth strategy from a scale perspective as it focuses on minimizing churn (social needs) and increasing built-in product virality (emotional needs).
The main tell that they don’t have a product-focused growth strategy here is their top-down focus on app functionality. It is evident that they are talking to you.
They call it “Your library” (used to be your playlist), whilst it is actually MY library (I created it). If they would have had a product-led strategy, I am 100% sure that they would have built their whole product experience in a first-person narrative.
I mean. There is an easier way, looking through the financials. But hey, I just wanted to get that said as well. 🙂
For Oatly this is a much easier way to prove. Although their not-marketing boss continuously says that they don’t operate any data-driven marketing, nor that they have a marketing department.
Their group of creatives, surely do a ton of what others would call marketing and they seem to spend a ton of money on it as well.
They do actually spend a significant chunk of money on RnD but in terms of what’s significant for their market growth (which is actually growing slower than the market) their investments in creatively telling stories about their brand (ie. marketing) is what is currently driving it.
3. The product growth strategy
A product growth strategy focuses on product-led growth which is much less of a marketing activity than it is a viral mechanics activity.
We will get into viral mechanics in another post. But for those of you who are really curious, you can have a look here.
Sometimes these viral mechanics are referred to as growth loops, but I’m OG and use them to do everything from sending emails to posting content on YouTube and building referral programs for mobile apps.
So. For me they’re called viral mechanics – not to limit the scope.
I have tried to find a really great video by Reforge on growth loops that I once saw, but I cannot seem to find it.
Although this one goes a bit out of scope, it is still very good to watch to understand what growth (and what growth ppl really should be about).
The strategy focuses on finding enough engineers or developers, along with UX/UI people to create a product experience that makes your product grow as users use it.
It has features of the network strategy. But whilst the network strategy works without a viral product, a product-led growth strategy does not work without viral mechanics.
As soon as you’ve figured out what makes your users share, invite and get other people to use your product, you can make these features more or less prominent in your product.
In doing so, you can control the flow of people being acquired as customers.
I am deeply shocked that not more businesses utilize this opportunity to a wider extent, but I guess most companies either lack the right combined competencies to build growth loops that work – or simply have an old-school business or marketing governance of the business.
Examples of product growth strategy businesses
In this space, I’d like to mention Klarna and Heja.
Klarna makes a clear argument for using a scale growth strategy, but when reading through their quarterly reports, that claim actually doesn’t make sense. They want to attribute their growth to their marketing activities, but I’d like to argue that their clearest growth attribute lies in their product’s payment efficiency.
This is what marketing-driven growth looks like (H&M):
This is what product-led growth looks like (Klarna):
Simply looking at the two graphs above we might see a future where Klarna’s growth is driven by marketing.
But until now, it has had a “smooth” (get it, smooth, yeah) curve upwards rather than the distinct marketing shape of up n down.
Side note: Perhaps this is also an indication that Klarna is currently making poor strategic decisions as their demand curve seriously seems to bend in the wrong direction.
Besides the demand curve, I feel like I can place them in a product growth strategy when looking at some conversion rates where Klarna is installed and comparing them with other checkout systems.
Also knowing that conversion rates are increased when the three most popular payment methods in a market are accepted, the Klarna system becomes superior to many others.
This means that customers will request it and shop from places that offer Klarna as a means of checkout.
Even in markets where PayPal and Apple Pay are the dominant players, we have clearly seen a shift when Klarna is installed as they offer more freedom and an opportunity to delay payment.
Thus the consumer can buy more every time they buy.
It is thus a superior payment product for consumers and a significant growth enabler for the businesses that Klarna serves.
Understanding and focusing efforts to support this type of growth would be highly valuable for them. If they aren’t already.
Heja is a sports team management platform. I guess one could argue that they are a network business, but since they are like Facebook was before they removed the University separator, they have clear limitations if they’d utilize a network strategy alone.
Yes. They can make use of networks of parents, players, and coaches in driving growth, but that will only happen through the use of the app.
And enabling functionality in the app that makes it possible to challenge other teams would most likely further increase their opportunities with a network growth strategy.
However, a management platform only works when it actually helps you manage people and their productivity.
If you’ve ever studied games deriving a businesses North Star Metric, you’d surely come across the “productivity game”.
Understanding product-led growth in terms of Heja, you have to understand that no parent or coach will actually recommend the product if it is not being used.
At the time of writing, Heja has over ten thousand reviews on Appstore and their average rating is 4.8.
This would not happen if the app didn’t solve a real problem when you used its product.
I’d thus like to argue that despite its current limitations in terms of the population it caters to in its current functionality and focus, it is solving what many other apps fail to do. Ie. it actually matters.
And given that prerequisite, it should focus its strategy on product-led growth going forward as well.
4. The deep tech growth strategy
Finally, let’s try to flesh out some more clarity about the deep tech growth strategy.
Here we are really looking at businesses that make use of the latest research and turn them into innovative products. They over-index in R&D and create relationships with researchers, scientists, and universities to establish a base of authority.
They utilize these gatekeepers to validate the future promise of their solution.
In doing so, early investors and customers are willing to spend a lot of money and time in helping the deep tech companies develop their product until it actually becomes useful for real.
In this space, we find companies such as Neo4j and Mendi.
Two companies that are entirely different businesses but grow because they make use of technology to solve problems that were either inaccessible or weren’t possible to solve with prior technology.
Examples of deep tech growth strategy businesses
Neo4j is the company that helped journalists debug the Panama papers. Their graph-based solution enables a seriously simplified method of accessing as well as doing something with VAST data lakes.
Ie. they actually make data useful and will be the navigator in enabling true transparency in non-structured data sets.
This was not possible before and the more engineering and researcher talent they manage to employ, the more data they will enable easy access to.
This was not possible before and anyone who wants to solve such a problem will naturally tend to become a Neo4j user, if not a customer. (Yes, they have a free playground).
Mendi is the brain training platform that supposedly helps you train your brain away from a ton of different unwanted traits.
Launched through Kickstarter in the midst of Corona, they had some initial problems with deliveries and functionality (just like all Kickstarters).
But as their product promise actually would give people with some severe problems a solution that wasn’t previously accessible, they have managed to survive nonetheless.
Looking at their partnerships, it is also easy to see that their focus is partnerships that give their promise for the future clear authority and validity.
The McKinsey study does not tell you what growth strategy to use
I hope I have clarified some of the smoke built in the McKinsey study. OR I have wasted some of your time up until now.
Their study, however, solely focused on how much money the company had acquired in terms of investment and on what resource they were over-indexing their expenditure.
Not to say that this is a bad thing, but in terms of growth marketing strategy, it doesn’t give you much in terms of HOW you should actually start growing.
The natural bias of only looking at winners
There is a natural bias built into looking at winners alone, IE. you cannot rule out that losers used the same strategy but lost based on some of the tactics they applied along the way to support these strategies.
When looking into what growth marketing strategy actually works – we thus have to make it a bit more non-linear, and it perhaps becomes a bit more complicated.
However, don’t distrust. I will try to give you a simple model/template/matrix to use in the end so that you can know where to start.
So, how will this make you grow?
Well in order to utilize some of these strategies you need to put them into the context of where you are. I mean, when I read the McKinsey report my brain started sparking with tactics and micro-strategies.
Ie. I started thinking about things to do!
But I realized quite fast that not all people could translate the strategies into useful activities and a weekly to-do. So. The rest of this text are for YOU guys! The crazy ones, the misfits, the round pegs in a square hole…
Is your market Growing or Slowing down?
The first thing you have to consider when creating a growth marketing strategy is whether or not you are operating in a market that is growing or slowing down. The second thing you have to figure out is at what rate that is happening.
It is futile to try to build a brand on a market that is slowing down as the true rewards will come at a much later stage (maybe will help you survive to the last one standing but…). A much better thing to do when your market is saturated or shrinking is to invest in innovation. Ie. invent the products that will fit on the new market.
Equally, it is futile to invest in performance marketing in a market where there isn’t any demand. If not yet understands the benefits of your product or service, they will not understand that they should look for it. Thus category driving brand communication is a better growth marketing strategy to employ once you have found a product or service that actually has some product-market fit.
The limits and construct of market growth
In terms of market dynamics that affect your strategy, there are actually only four states a market can express.
Now, I’m sure there might be other ways to see this, but I see market growth as a logistic function whereas you have a limit in terms of the total population that would EVER use your service/product given its many use cases.
A washing machine has the limit of homes able to fit it, whilst anyone could have an iPhone if they’d afford it. Thus the market limit for washing machines is lower than they are for iPhones.
The same goes when I launch music on YouTube. Pop and hip hop have much larger communities than let’s say synth music. And so, when understanding how much the potential is in the market I first make an assumption (based on some data) of the market size.
Why use a logistic function?
Well, because it gives me some math to calculate how the market is growing at any given time. Looking at how new things are adopted in any market it also pretty much follows the pattern of a learning curve – or a logistic function. When finding a model that helps me solve complex market problems, the logistic function is, therefore, an easy enough way of working. If not exact, at least a best fit given the time I’d like to put into it. 🙂
The phases of market growth
The next step is to understand where I am entering the market. Each market situation has its own complications and focuses. In the below section I will explain what governs these market structures and why it is important to have different focuses depending upon how mature your market is.
1. The market isn’t growing yet
A market does not grow because of two reasons. People do not want your solution or people do not know of your solution. This happens when you have come up with a new solution that either isn’t useful yet (you haven’t found your market-fit) or you simply haven’t marketed your product.
What to do: This is a period of solid grunt work on your behalf with the mission to find your first followers. The initial people with who you can test your product, messaging, and ideas. Have them explain these solutions back to you and seriously engage in finding empathy for the needs amongst the people you want to target.
Empathy is really important when you do not grow
In short. Talk to a ton of people in all ways possible. But more importantly – listen to what feedback they give you and try to interpret how you can learn from what they say.
A great method for debugging people’s comments and truly finding what they mean (cause you cannot really listen to what they’re saying – too many people don’t say what they mean) – is a method called Jobs to be done.
You might remember that I referred to it when I gave the example of Spotify’s product development above. Jobs to be done is really just an interview method that helps you derive people’s social, emotional, and functional needs.
Have a look at this video from Clay Christensen about the theory of Jobs to be done. If you need help running workshops on it you can contact my old friend Jonathan Briggs (founder of the “digital Harvard” Hyper Island).
Market-fit can change over time
A market fit can change over time as your market grows. Ie. the reason as to why you have a superior solution than other services targeting the same need.
- Amazon started out as a superior way to find new books and ended up being a superior shopping experience for all products.
- YouTube started as a video dating service and ended up being the world’s most used horizontal (TikTok for vertical video) video creator platform
- Allspice started out as a spice for meatballs, now I use it for a ton of other dishes
- In pharma, many prescription drugs can be used for several indications – usually communicated to solve one, but are then expanded as more research is conducted and time is spent with the doctors prescribing them
Not only the market for products grow, content and ideas do to
This holds true for content and ideas as well. In terms of content, however, have chosen to call market-fit for “smallest acceptable truth” instead.
Facebook initially had the smallest acceptable truth that focused all communication around the “relationship status” and made this a prioritized update. As they opened the platform they switched it to “being tagged in a photo on Facebook”. And they then built all of their essential user experience around tagging people.
I mean. Even Gagnam Style had a time of no growth when it was posted on YouTube. I am unsure what the smallest acceptable truth was there. But it is likely that the dance became a meme that someone copied and then the smallest acceptable truth became wether or not you had seen or participated in one of these dances.
2. The market is experiencing exponential growth
As soon as someone (or you) is able to explain how your product is useful your market will start growing.
- If your solution is superior to something that has existed before, your market will grow fast.
- If your solution is easy to communicate with, it will grow faster.
- If your solution is something that people feel they need to express who they are, it will explode.
The more businesses that enter your market, the faster your market will grow. The reason for this is that more businesses mean more people are trying to explain how good you are. If only one of ya’lls manages to make the market understandable, it will benefit all of you as the adoption of what you’re selling will increase faster.
The need and the usability of something don’t have to be enforced by a gimmick or a meme, however.
Circumstances might change, it might affect your growth
Circumstances outside your industry can increase the need for something you are offering. Consider the market for solar panels, cyber security, guns & ammo as well as GameStop stock.
All of which have experienced shifting demand curves and market sizes based on circumstances that have nothing to do with their own product development or marketing. They rather exist in circumstances where energy prices, hackers, war and memes are growing in popularity.
Over spending on brand, is actually a good idea for long-term growth
In a market that is growing exponentially, you will have to focus on winning the growth game in the long run. At this point in time, more businesses will start entering your space. You probably have pretty high returns or profits as demand will be higher than supply (especially holds true for physical commodities as a result of transportation lines).
Even if you are not experiencing any profits, perhaps because you’re a media company offering something for free that you will later charge money for (such as Spotify). This is really the time when you can establish a strong brand.
Either by delivering stellar product experiences OR by producing stellar marketing.
That is really the option you have.
You are extremely unlikely to be delivering both as your company is growing at the same time as your market is growing and you will either have problems with internal growth OR have problems with not being able to grow fast enough.
Yes. There are businesses that can scale to infinity with only three people. But I’m not talking to you guys. Because even the most dynamically expansive platform services will experience growth problems in terms of funding and finance as they will experience financial risk at higher volatility than otherwise.
Focus on growing a superior product, or fake it
So. The way forward is to focus on product experience and make your product a real premium option. Combining this with referral programs, waiting lists, and high prices – simply anything to limit people’s access to your product whilst building a reputation of greatness.
OR. You can fake it by focusing all of your effort on building a love for your brand using beautiful communication – such as Oatly did.
Yes, their “milk” didn’t come from cows, but was it actually better for the environment? I guess no one cared, cause we all felt like it was.
Was the iMac really a superior computer to its PC competitors? I don’t really know, but I felt like they were.
Remember, at this point in time, you are catering to the late-early adopters. Given you are selling some consumer-facing (not industry product) product with a potential mass market. This is really just the time when you can establish yourself as one of the options in the market.
People love you, or what you do
This is also where most startups go wrong. Instead of focusing on product or brand, they focus on performance. Without equity in your brand or value in your product, you are SURE to fail over time. People either need to love you for who you are or for what you do. And if you can’t make it, fake it. Sad, but true.
Or do both. But I still haven’t seen anyone able to do that. Please shock me in the comments with examples.
And since you don’t have as many competitors at this market phase, it is SO much cheaper building your brand, than let’s say doing it when your product, solution, and competition are already known.
3. The market is experiencing linear growth
At some point in time, your market will start panning out. The acceleration of the market will go from positive to zero and the market growth rate will go from exponential to linear.
This, however, doesn’t mean that you will stop growing exponentially. It means that the market will. You are now moving into the territory of the early majority to the late majority. This is where the big chunk of your business will live over the coming years.
Focus on an organisation, product and offer that scales
The focus should be put on evolving your value proposition as well as on rigging your organization to scale as fast as possible.
If you have the best value proposition amongst your competitors you will be favored when compared.
If you have an organization that is scaleable – or even better – an offer that is scaleable (using growth loops for example) you will acquire more customers than your competitors do in terms of budget and time.
In other words. Acquisition, conversion rate optimization, sales optimization, processes, and IT support become of the essence. You need to be able to support growth at scale to win more and better deals.
This is where you build your viral mechanics, growth loops, consider establishing influencer networks, etc. This could also be the time to create consumer communities. Especially if your NPS and product satisfaction/quality score high.
Yes. Your branding will be important at this phase, but it will cost you more in terms of either creativity or budget to have the same impact as you would in the early phases.
One focus you should have at this phase is to build meme culture around your brand. This means you should create assets that a sworn fan can buy from you such as clothing, attire, artifacts, stickers, etc. Anything where they can show that they chose you.
It is really favorable for those who run the network strategy at this point. Scaling will gradually become more expensive as returns to scale will go down over time as salaries etc start to rise.
Understanding interest on interest is important to maximize growth
Product-led growth strategies (or at least its tactics) should be employed as far as you can to increase the productivity of your work. If you build them to support content loops, financial loops or social loops doesn’t matter.
Even if you only create a referral program, understanding that a 1.1 efficiency – meaning that one in every 10 new users recruit another user/customer, gives you a 10% higher bottom line result OR 10% cheaper marketing. Depending upon how you see your business.
4. The market is experiencing diminishing returns
If the image above doesn’t tell you a clear enough story. Perhaps the following words will:
Diminishing returns means your market growth is shrinking. This means that everything will become more expensive. I mean EVERYTHING! From employees who will be looking to maximize their salaries to large companies starting to move into your business competing with wasteful no-profit strategies to gain market share, to the pricing of the raw materials.
This is really the time your focus needs to shift to innovation. Actually, it should have already, but now you really have to. Because just like Kodak, you’re about to go busto. If not today, then tomorrow. And maybe, just like Kodak, you might have the equivalent of the digital camera laying around on a shelf somewhere (as they did) and you must start working on taking it to market-fit.
Before someone else does.
And thus put yourself out of business.
Which Amazon tries to do to itself again and again.
There are many early signs of a market going down the drain, but most companies do not tend to want to see them. In the coming 10 years, we will see businesses like Banks, Social networks (the way they’re built today) and Governments go top-up as a result of Web3. However uncomfortable that might sound right now.
I will surely write a post about how to innovate your product at this phase as I’ve developed a complete program for this purpose. But not today.
Growth marketing strategy for a business that is Growing or Slowing
This is the time we get back to the matrix I posted at the very beginning of this post/article/or whatever this mammoth of a text has become.
- In the top horizontal line, you have the four phases of market growth. Starting with a huge promise, ending with declining returns to scale.
- On the vertical line to the left, you have your own business growth
Perhaps this goes without saying. But it is clear that you can grow faster, slower, or with your market’s growth rate.
If you grow faster than the market, then you’re either lucky or better, if you grow at the rate of the market or slower, you are either unlucky or worse than the best performers.
In this section, I will outline the focus and the tactics you should employ for each one of the combinations. Some of which are the same for several market/business growth situations.
YOU will have to ask questions in the comments or write to me on LinkedIn if you want to challenge me or give other answers to the same combinations.
MVP – Unclear product
This should be your focus if you are not growing at all or if you are declining whilst the market is either expanding or has a huge promise for the future.
Developing a strong MVP is as I’ve laid out before in this post, some dire work that requires a ton of empathy. It is not very suitable for the narcissistic CEO, creative, brand manager or product developer. But rather for their empathic counterparts.
Understanding your Jobs to be done, and how to find them
You truly need to listen and have a structured method for listening such as the JTBD framework I mentioned above. The focus should be to derive a product that people need, rather than getting blinded by what you want to build or what customers say that they want.
Do not!! Let me repeat. Do NOT forget to collect all of the people you manage to vow in a forum, Facebook group, Discord channel, or Whatsapp group. Somewhere where you can reach them. They will be your gatekeepers and most loyal users if you treat them right going forward.
Put them to work with you and for you.
Brand expansion – You’re unknown
You should spend as much money as you can on building your brand when people don’t know who you are or what you do. Most people get into telling people what they can buy from them right away or focusing on the offer.
This is the wrong strategy. Especially early in the market growth.
Once you have found your MVP – do like VOI, Apple, Tesla, etc., and find a hero story that matches the dreams and emotions of those you have built relationships with whilst building your MVP.
The true tactics of building a brand
The tactics to do this are truly simple but overcomplicated because agencies need to invoice.
- Excite someone – Make them happy, horny, hangry – Make them feel
- Direct their energy – Give them a very simple way to commit
- Support with memes that help them communicate with others
That is how you expand your brand. I will make a video about it that I will later embed here. But anything from fake news to product launches that gain traction use the same tactics here.
Growth Loops – When the late majority is adopting
Competing with others is really difficult when a lot of players enter your market with similar solutions. This usually happens when a market matures. Regardless of whether or not you have an IP strong enough, people will enter as “the next and better [you]”.
It is thus super important to increase the value of every new customer you acquire. They can either help you recruit new users or customers by giving them social or financial incentives.
There are different kinds of growth loops
Social incentives are such that the product becomes better, or the individual gets more social status/klout when they invite other people.
Financial incentives are money or bonus points if you get more people to join.
The third type of incentive is built on emotions. They usually focus on giving people access to content or trigger people to create content that helps them say something about themselves or get some kind of emotional gratification.
For different platforms, there are different types of content that will make you become more visible. I separate them into two categories – meta and meme platforms. Where content that goes viral on meta platforms (Facebook, Instagram, LinkedIn, Google etc.) focuses on helping a person express something unique about themselves whilst meme platforms dig into promoting content that helps a group express that they belong.
Depending on what platform you want to gain visibility you should design your output content that the user can create or get, whilst designing the incentive system accordingly.
I will explain how you can do this in detail in my post about Growth Loops.
Value Proposition – Inferior reach or Pricing
Sometimes you have to work on your value proposition. Especially when you are in a market where everyone else seems to be growing whilst you’re not growing at all.
Something must be wrong with your offer, product, or brand.
Remember, people are looking for your solution, but you clearly aren’t being chosen. You need to understand why.
Learn the ABC of growth marketing and you’ll do good
Usually, this is because of pricing or because of complicated landing pages. You’re having conversion issues or traffic problems. Digital tactics to the rescue! Yey! Read the ABC on growth when I’m done with that article if you want to know more about what you can do to harvest demand in a growing market better.
Most of the time, you are experiencing problems with reaching your customer or with pricing. Understand which one it is and fix it fast. Either through partnerships (reach), marketing (reach) or better suppliers (pricing), less profit (pricing) or productivity increases (pricing).
Workflow optimization – Sweet spot!
If you are experiencing accelerated growth in a market that is growing at a linear pace, then you, my friend, are obviously doing something right.
Please give yourself the luxury of working on your workflows, processes, internal happiness, and optimizing the way you do things. Given that you are in this space, you have probably done this already – or some really cool brand campaign.
Either way. Put your focus on becoming a lean mean growth machine. Don’t get lazy (which most people do), cause this is a sweet spot you want to maintain yourself in for the longest possible time.
Profitable growth focus – Saturated market
This is where I would switch all of my focus to performance marketing. Ie. I would simply focus on harvesting the little market or brand switchers left out there as cheaply as possible and to a profit.
I would not bid for anything else than branded keywords in Search. I would do almost all of my communication through CRM, and I would use most of my resources for coming up with the next thing to do.
Traffic acquisition – Superior offer/reach
If I manage to grow whilst my market is slowing down, it is probably because I have a superior offer to my competitors. OR that I have the best brand of the bunch.
Either way, I’d focus on partnerships, affiliate marketing and SEO in order to get my offer distributed in as many places as possible.
I’d also work with my Growth loops and optimize CRM communication, but I wouldn’t really do much to drive awareness else than if I had come up with a new solution that would open a new market.
Innovation focus – Better solutions exist
I think this pretty much says itself and if you are in this space you have two options. Actually, you have one option if you want to grow. And that option is to innovate.
Network Growth Marketing Strategy from the first day to unicorn
So how would you actually go about setting a network growth marketing strategy for a company?
Well. The first thing is that you need to figure out whether or not your product is a network product OR if it could be used in several different networks to explain the identity of its people. As mentioned above in the VOI/Uber vs. Stronger/Gymshark examples.
Network product strategy
A network product gains in value for each of its members as new members join and more people use the network.
Consider the case of VOI. Even though you want some portion of your scoters to be available for use, you also want most of them moving around to different parts of the city so that they are available wherever you want them.
As a consequence, the users will use the scooters more, the more they are used.
“Duh, great strategy J-dawg… make people use the product more…” haha..
No. And yes.
The trick here is to get people to use the product in a way so that there is a good distribution and density of scooters all over the city. VOI solved this using driving zones, free parking zones, and limiting the time you could drive your scooter every journey.
Zones and time created the kind of distribution that they wanted so that people would have a scooter within a certain length of the walk. Thus making it worth the while to walk the extra mile – and maximizing the usage of their total network of scooters.
I have no clue if this is what they intended to do. But it surely works that way.
A strategy of habit
Much like the product growth marketing strategy the network growth marketing strategy aims at creating a habit. The difference really lies in what you optimize towards. In the network strategy, use is itself viral as it needs the network to work. In a product strategy, you focus on a specific feature of your product to make people use it to invite or share the word about the product.
- Scooter company (Network) – focus on getting enough scooters close enough to make the walking distance close enough to make it worth using a scooter – I suppose we can call this churn reduction.
- Financial transaction company (product) – focus on building a referral program on top of their product or a review system that incentivizes users to share their experience about the company – growth loops.
Facebook Growth Example
Another example that I almost didn’t want to talk about as it is F-washed too many times. But I think it serves its purpose in this case.
When Facebook launched they quite soon understood that people increased their use of the platform significantly after they acquired 7 friends.
Thus their optimization to decrease churn was to get people to acquire 7 friends as fast as possible. Equivalent to the scooter example, they optimized for usage.
Uber Eats Growth Example
But when looking at Uber Eats, which I would argue uses a product growth marketing strategy in contrast to its mothership Uber which uses a classic network strategy.
This is manifested by its review system and constant push for shareable discounts.
Ie. The solution in itself does not require a network of users (although it requires a network of merchants) – however, merchants do not recruit users and users do not recruit merchants.
Thus growth happens by users attracting users, and merchants not being able to skip the party.
Network Graph – Influencer strategy
If the product/solution in itself isn’t a viral or network product, then the same effects can be utilized when connecting your product with some significant identity or some cultural value.
1. “I am..” – network growth using identity
Finding a solution to how people can use your product to explain who they are, will significantly increase your growth rate as they will use your product to talk to other people in networks.
If you get people of influence to do this, they will act as gatekeepers to the audience they can influence. Thus amplifying the effect of the identity they manage to portray using your product or service or brand.
2. “We are…” – network growth using culture
As you manage to get your network to express their identity you can start shaping this identity into what “we” are. This is done by setting rules for who is included and who is excluded.
This has been beautifully done by VOI (as explained at the beginning of this article), but I think the most absurd example of this was when Clubhouse was formed. Their terms of service laid out the full tactical approach to creating “we”-clusters that included and excluded people from sets and sub-sets of users.
If you did one or another thing on the platform, you were given access to doing more of the same thing. As your access grew, your role on the platform changed and you went from being a normal user to an organizer who could set your own rules (meta-perspectives).
This was the key to their hyper-growth, but also to their downfall as they didn’t nurture this evolution. They didn’t create top lists where users could compare themselves with others and thus they didn’t give the cultures that shaped the stickiness to express themselves even more.
Also. The growth journey ended.
If they would have had a plan on how to constantly progress, adding features that would help the user progress their status – then it probably wouldn’t have been an end to their growth and they would have maintained their position much like TikTok.
Putting the two network growth strategies together
You can of course use both of these perspectives of network growth in parallel with each other. Those who do generally grow like wildfire.
I will write more tactical articles explaining how you do this going forward, but I think you understand what the strategic focus should be when you use a network growth marketing strategy at this point.
What are the steps to consider when setting a network growth marketing strategy that makes you go from the first day to Unicorn?
- Establish if your product will grow the more people use it or if you want to make use of influential people and cultural artifacts to grow
- Understand that you will have three sets of users heavy users and promoters used as the co-creators of your product experience, heavy opinion-makers used to share a ton about how they use your product better than others, the rest of the consumers who will use your product because it is easy to use. I explain a bit in this podcast.
- Focus first on helping users access your product/service as often as possible – see what makes them come back
- Then focus on helping them use you to talk about themselves
- Then focus on helping them cluster with other users based on rules you set up first (which can be as vain as VOIs “we are the responsible scooter riders”)
- Then focus on helping them set their own rules in smaller clusters – giving them away to become distinctly different from other users
- Then hope you’ve reached the prerequisites of your IPO and go start another startup as you’ll have more of the same going forward
- Your long term strategy will be that of M&A to merge with and acquire any other product that is stealing the attention of your core user group
Then you will fade away. 🙂
Scale Growth Marketing Strategy from the first day to unicorn
I think the scale strategy is much more straightforward as a strategy as it borders classical growth models making use of marketing and sales as their main strategic advantages.
What most brands forget however in today’s market is that you have a ton to gain if you invest heavily in your brand at the beginning of your company’s and industry’s lifespan.
Looking at anything from Uber to WeWork, to Apple, to Tesla, to Redbull, to Oatly. The endless account of brands that grew up with competitors but focused on brand communication early on.
The key components of the scale growth marketing strategy
1. Brand communication
Focus on building emotional ties to your product. Do what Apple did to the “megabyte”. They translated it into “all the music I love”.
No one had an emotional bond to the megabyte. But they had an emotional bond to the music a megabyte could carry.
Make your strategy about that emotional bond and use it in your brand communication.
2. Active sales representatives
Set targets. Break them down into phone calls. Use bonuses. Make everyone read Good to great, 7 habits, and all of the other books that make a kick a** sales rep.
Don’t focus on lead scoring. Focus on volume. Only focus on lead scoring to eliminate really worthless leads. Make incoming leads answer questions that disqualify them.
If you use outgoing calls and email communication. Try to optimize personalization and never forget that your outreach needs to breathe out the brand you are building in the rest of your communication.
3. Story about the story
Your brand should not change, but the discussions around it have to. You need to create meta perspectives where people can use your brand to start interesting conversations.
I use a rule I call “did you know that”-rule. It states that you should be able to tell at least 3 new stories about your brand every month. Three things people can learn and use to seem interesting to others.
You can use podcasts, forums, email footers, or other such formats to communicate these “stories about the story” that makes the person who talks about them interesting even moreso interesting tomorrow.
What are the steps to consider when setting a scale growth marketing strategy that makes you go from the first day to Unicorn?
- Find MVP in a niche of users – find your nerds who will love you forever
- Make being a nerd in what you do cool by turning nerdy conversations into mainstream memes – The crazy ones, Oat milk drinkers, etc. – those things weren’t cool until they were backed by some really cool ad concepts 😀
- Overindex on your salespeople to be able to harvest on the brand equity that you build – outreach is 100% the most effective way to do this in combination with a marketing tactic that is based on reach/frequency at the lowest possible cost
- As you grow and your market matures – focus more heavily on product development to maintain the possibility for people to use your product in a way that makes them interesting – your product must act like an influencer and pass the “did you know that…”-test every day
If you manage to maintain this I think the scale strategy is the most maintainable over time. Yes, you will change your tactical focus from brand to performance as your market gets more saturated, but you should never move away from the key concepts.
Product Growth Marketing Strategy from the first day to unicorn
The product growth marketing strategy is mainly not a marketing growth marketing strategy but a “product-led growth” strategy. This means that it focuses on key features in the app and makes them viral.
The product doesn’t even have to be digital, it can be very non-digital. However, the packaging, delivery, send-along material, customer journey, or customer service can trigger an experience that is viral and leads to growth.
In the world of product-led growth, there are two things to focus on more than anything regardless of whether or not your brand communication is awesome. Yes, you do benefit from over-indexing on branding at the beginning of your journey.
Moreso than not this should most likely be based on building hype around the people working in your company and the culture you’re building.
However, if you don’t focus on Time to wow and Growth loops, you will be sc* in the long run.
The key components of the product growth marketing strategy
1. Time to wow
Time to wow is the time it takes for a user to validate your product promise. This can be evaluated in many different ways.
Some measure the time it takes for a user to visit an app the second time. Ie. if there is a short time between the first and second use of the app, the value was perceived the first time they used the app.
If the time is too long. They didn’t get what was valuable in the app.
Likewise, when the product isn’t an app, the wait time from promise to actually receiving some return on that promise post-purchase needs to be shortened.
Not only because users like to get updates on something that takes a while to deliver, but also because this is the time their expectations are the most heightened.
Time to wow happens several different times during a user journey with non-digital products. The model I have enclosed in the picture below can be used for digital products as well, but it is actually mostly true for products that aren’t.
- Focus on giving them assets to share as they are likely to have heightened anticipation during this phase
- Focus on educating the user so that they can use the product to the max
- Focus on giving them something they can use to pimp their product
2. Growth loops
I mentioned growth loops earlier in this article and outlined different kinds of growth loops that exist. My point is that a growth loop is any behavior where user activity amplifies your growth.
It can be anything from a well-rounded referral program to a co-creation setup for your product blog.
We see endless companies make use of user-generated content in social media. This behavior triggers more people to post about the company – thus generating a loop where the reach of the company products increases over time.
Such functionality can be built into the product:
- Collaboration – although that might push it into the network category 😀 – but in this case, I’m thinking of weddings, shopping lists, etc.
All of which are moments that can be co-created with the user and that will spark some kind of sharing to some degree.
What are the steps to consider when setting a product growth marketing strategy that makes you go from the first day to Unicorn?
- Work on decreasing time to wow until your churn shows promise of decreasing with every iteration
- Focus on advertising that builds your people, join conferences, be proud of the product you’re building and the problem you’re solving
- Increase your spending once you have 3:1 ratio of people returning to use your product or engaging with your company – if you have a transactional product consider the educational track where you interact with your customers at some frequency for them to get the max value – if loyalty product then focus on repeat purchases/uses
- Now turn to growth loops making each acquired user/customer worth 1.1, then 1.3 new customers – build specific features such as referral programs or artifacts that people can use when sharing their experience of the product
I am saying this at the most abstract level of thought. If you have problems applying the advice then please reach out.
Sometimes a good product-led growth marketing strategy means you distribute an A4 paper on delivery containing some joke, put stickers on your hotel wall with short stories about the hotel thus triggering a user to share that experience – or simply behave like a stellar person people want to return and talk to again.
But most of the time. It is a kingpin referral program. 🙂
Deep Tech Growth Strategy from the first day to unicorn
Finally, we have come to the last strategy to outline. Which is also the one I know the least of. Especially when it comes to real Deep Tech. For the small deep tech – those that are launched through Kickstarter I know how to get the foot off the ground.
But not how to sustain growth over time unless adapting one of the other strategies.
But for all innovations, the core strategy combines a bit of niche-ness from the scale strategy, a bit of hype from the network strategy, and a bit of time to wow from the product growth strategy.
What are the steps to consider when setting a deep tech growth marketing strategy that makes you go from the first day to… well… off the ground?
- Find a community of nerds, friends, family, and people experiencing the problems you are trying to solve with your innovation – this group will validate that the problem exists and that it will be a great relief if the problem is solved
- Find influencers and give them ways to become interesting when they talk about your solution – focus on selling the vision of your product – what problems will it solve rather than what features it contains
- Create a ton of “did you know that”-facts about your product
- Setup a Kickstarter to identify your first potential customers AND BE VERY OPEN THAT THIS WILL NOT BE A SMOOTH RIDE – too many Kickstarter companies promise too much on delivery and features and don’t spend enough time talking about the vision
- Set your target low – just enough to finance the communication and some kind of beta version – if just in the shape of a pre-study to see if the project has feasibility
- Your initial network has the role of creating and distributing the stories in enough ways for you to find out what stories really stick
- Then you set up your second Kickstarter with the news stories and the new perspectives – using the acquired network as the first “Kickstarter” of your new campaign
- Do not count on them to support you financially the second time around but use them to verify that you delivered on your previous promise
- This time around support your Kickstarter with some advertising budget and try to get some small incremental return on investment
- NOW turn to investors to try and get the proper kind of funding you need to actually deliver on your long term vision
- Always keep your early backers in the loop – for good or bad – always over-communicate with them and be honest about where you are
If you manage to do this, your network will grow over time, the interest for your innovation as well as stories are being shared about early tests and trials – which in turn will hype you up to attract better investors…
You know. I have never worked with one of those 10-year innovation projects, but for the small ones that grow into 100 million dollar companies, I have actually been involved in a few.
And for those, this pattern applies. Please give your 5-cents in the comments if you have better suggestions and I’ll add yours with a link to where ever you call your home online.
However, this is the way I see deep tech get off the ground if not backed by institutional investors, to begin with. But that’s another type of growth I don’t expect the readers of this article to be into anyways. So. There we go.
So you reached the end of this article about growth marketing strategy.
I will develop this article with more examples links to tactics and a ton of other stuff over time.
You might agree with me or disagree with me. Regardless I would really appreciate it if you’d write your reaction in your own blog and link to this one.
Not only because it will help me gain search rankings, but also because I love getting a taste of the old Internet where we simply shared our thoughts with each other and linked to each other.
I do allow for pingbacks. Just sayin’.
Or comment on some aspect of the article or give your hate or praise in the comments of this post.
Grow with love!
And remember: Those who mind don’t matter, and those who matter don’t mind!