The value of a marketing department for enterprise-level businesses is obvious, but what about the value for small and midsize businesses (SMBs) like yours?
According to HubSpot's "State of Inbound" report, 40% of marketers include "proving the ROI of our marketing activities" among their company's top challenges.
For SMB marketers, this means that some management team members may view your department as a necessary evil that they sink money into without expecting a tangible return on investment (ROI).
It's incumbent on you to move beyond this cost-center mentality and turn your marketing department into a growth center by focusing on the entire sales funnel and aggressively tracking metrics along the way.
To do this, you have to understand what growth marketing actually is, change the way you think about tracking your marketing efforts, and realistically prepare for the challenges and setbacks you'll face along the way.
In this article, we'll guide you through that process by answering a few key questions.
What is growth marketing?
Like many business terms, “growth marketing" is a buzzword that seems to be thrown about without a full understanding of what it actually means.
Let's break it down.
According to Parneet Gosal—VP of growth here at Capterra—growth marketing is simply "marketing done well."
It takes traditional acquisition marketing, “which, for the most, part focuses on the very top of the sales funnel through building awareness of your brand and product and obtaining customers," and expands that focus throughout the entirety of the funnel.
Ultimately, the goal is “to turn your customer not just into an active user but into a brand or product ambassador."
Digital marketer Craig De Borba of OnPoint Internet Marketing adds that:
Growth marketing is the top-level view of the customer's journey and lifetime value. It requires experimenting with the whole of the funnel while keeping all the individual moving parts moving in the same direction.
While much of acquisition marketing is focused on getting customers into the top of the sales funnel (making them aware of and interested your product), growth marketing is about reaching out to customers throughout the entirety of that funnel
A growth marketing mindset, then, means that it's not enough to simply make yourself known to customers. You need to take those customers by the hand and guide them all the way through the sales process.
This not only makes a huge difference in terms of obtaining more customers, but also demonstrates a clearer ROI for stakeholders in your organization and showcases how, exactly, your marketing department is more than a cost center.
How can I track growth marketing ROI?
The first cost-center idea that your marketing department needs to overcome is the idea that you can't track marketing ROI. That is simply not true in this digital age, in which you can track any variety of important metrics.
According to a report by Gartner research director Haixia Wang, 19% of surveyed marketing leaders track their most important metric in real time, 40% track either daily or weekly, and 16% track quarterly (full research available to Gartner clients).
This means that 75% of marketing leaders are tracking metrics on a regular basis and using those metrics to justify their department's ROI.
As Wang notes:
"'Better than last time' isn't good enough. Marketing leaders need to constantly assess their standing with respect to industry peers, best-in-class leaders and market disruptors to set the right targets and measure success."
Wang recommends that you focus on tracking metrics across three key benchmarks:
Marketing spend allocation: How much are you spending on your marketing department as a percentage of your gross revenue? How much is spent on various resources within your marketing department? How much is spent across different marketing channels?
Channel performance: How successfully is your marketing department bringing in leads across various channels (your website, SEO, mobile marketing, social media marketing, partner marketing, email, and offline marketing)? How well are those leads converting into customers/sales? What is your average customer acquisition cost (CAC) across these channels?
Customer experience: What is your customer satisfaction (CSAT) score? Are customers expressing high or low levels of satisfaction? Do your customers engage in a customer loyalty program (if so, what percentage participates)?
To transition from a cost center into a growth center, your marketing department must—by necessity—become a data center.
By tracking all of these metrics, you'll have hard data that you can use to clearly see which marketing tactics are paying for themselves and which aren't. As a result, you'll be able to check whether or not your previous assumptions, priorities, and processes are actually working for you.
Craig De Borba further suggests that you provide performance bonuses to your marketing team based on these metrics. He explains:
Assuming all individual units are working together as a whole throughout the customer lifecycle, what better way to boost campaign performance numbers than to provide bonuses to those for getting their click-through rate higher or ad cost down and conversion rate higher, or having their content shared thousands of times.
The era of just using marketing to create brand awareness and hoping that it turns into higher sales is over. In the age of growth marketing, data is the queen to whom we must all bow down.
What setbacks should I prepare for?
Moving from a top-of-funnel acquisition marketing mindset to a data-driven, growth marketing perspective on the entire funnel is a major change, and you shouldn't expect to evolve overnight.
In reality, you'll likely face some major setbacks along the way.
Such a massive shift in marketing priorities may mean that you'll lose personnel who aren't on board with the change.
Jason Katz, founder of Growth Marketing Advisors, explains that, “This change in mindset is a lot. Some will love it. Some will be challenged. Some will adapt; some will choose not to."
In addition, Katz notes, you'll likely need to create new positions within your marketing department focusing on the technical aspects of tracking metrics and data, as well as aggressively testing customer experience and satisfaction.
You may also, at first, find yourself with increased customer churn.
In this sense, you need to think like a company that's just starting out and recognize that there may be a relatively high level of churn until you have your growth marketing strategies fully established and operating smoothly.
According to Gosal, “Later on down the road, if you've done things right and your users are coming back and you're retaining and engaging them, that churn will decrease exponentially."
What should I do next?
Now that you know the ways you need to shift your mindset from cost center to growth marketing, you may be wondering how best to proceed as you implement such a major change within your marketing department.
First and foremost, be sure to bookmark this blog as we unveil more content designed to help you and your marketing department become growth marketing experts!
Once you've done that, check out these next steps to get started:
Share your expectations: Get all the managers and stakeholders in your marketing apparatus together in one room to begin conversations about a growth marketing focus. If your SMB is small enough, this may mean meeting with your entire marketing team; if not, all marketing leaders and managers should be involved.
Do your research: Learn more about the various tools and technology (such as marketing analytics software) that you'll need to convert to a growth marketing center.
Talk to other growth marketers: Join forums and message boards (like the ones at MarketingProfs and Warrior Forum) focused on growth marketing to connect with other marketers around the country, and the world. You can begin by posting a comment or question below, and linking to any growth marketing forums that you recommend!