Growth marketing is as much about attracting new customers as it is about increasing revenue among existing ones. Initiatives usually focus less on driving immediate sales and put more emphasis on sustaining incremental profits. As customers build emotional connections to brands, the likelihood that they’ll spend more increases. A whopping 93% of businesses agree on this point.
But growth marketing tactics involve some degree of experimentation and a learning curve. Companies sometimes have to take a leap of faith with initiatives and find out later whether they’re successful. That said, growth marketers can learn from those who have found ways to achieve long-term results. Here are some tips on how growth marketing can drive customer retention, business efficiency, customer lifetime value and cost-effectiveness.
Greater Client Retention
When customers stick around, it usually means there’s something about your product or service offering that’s unique. Your brand is providing a value that clients can’t find elsewhere. That value could be tied to consumers’ self-perceptions or represent something tangible, such as exclusive technologies.
Growth marketing campaigns that focus on retention provide insights into why customers keep buying from a business. Surveys, A/B tests, behavioral analysis and anecdotes from front-line staff will increase the effectiveness of your retention campaigns. The insights these practices reveal can tell you what value certain market segments see. As you grow your client base, you’ll have more opportunities to build relationships and personalize product offerings and promotions.
As a result, you’ll increase engagement rates and turn more customers into brand ambassadors. Their positive word-of-mouth advertising will provide a steady stream of referrals, adding to your business’s growth over time.
Increased Business Efficiency
Growth marketing involves experimenting with different tactics at all stages of the sales funnel. From awareness to action, you’re finding out what works and what doesn’t. Email campaigns might produce higher conversion rates once leads have already engaged with a few blog posts. But you may discover it’s the virtual events and webinars that really excel at attracting prospects and creating awareness.
Over time, all the trial and error, research and fine-tuning you do will lead to better results. You’ll know what type of messages will get leads and existing customers to take action, whether that’s filling out a contact form for more information or making a purchase. The processes you develop will also become less time-consuming. Once you learn which growth marketing activities are most effective, you can develop templates and turnkey procedures.
Improved results and streamlined processes mean more revenue and higher productivity. Your business will become more efficient, and your ROI will go up. You’ll avoid wasting portions of your marketing budget on outreach efforts that produce lackluster results. Instead, that money can go toward campaigns, media and channels with proven track records.
Improved Customer Lifetime Value
Customer lifetime value represents the estimated net profit someone will add to a business during their relationship. They may spend thousands of dollars each month or take two years to accumulate that much in sales. The key is that customers with higher lifetime values are the ones that keep coming back.
It’s often easier for businesses to convince people who have already bought their products and services to do it again. As long as customers are satisfied and there’s enough incentive, they’ll return to get more of what they already like. They might also try new offerings, make upgrades and purchase add-ons.
Growth marketing campaigns and tactics help find which customer segments have the highest lifetime values. Once businesses identify those segments, they can optimize campaigns to increase customer lifetime value and revenue. For instance, data from subscription-based business models and loyalty programs often reveals the most profitable segments. You can focus more of your cross-selling and retention efforts on those customers to increase lifetime value.
Cost efficiency is greatly influenced by what businesses spend on marketing, software and applications and customer acquisition and retention. In 2020, a typical marketing budget represented 11% of a company’s overall revenue. That number fell to 6.4% in 2021. Marketers are under more pressure to do more with less and increase cost-effectiveness.
Growth marketing strategies can help address each aspect of cost-efficiency. Business strategies become more personalized to audiences. Companies begin to implement software and tech tools that are the right fit for their processes and goals. And customer acquisition and retention rates start to climb, improving metrics that measure costs associated with acquiring and retaining each client.
In general, personalization is known to increase the amounts customers spend. Personalized experiences that offer rewards, product suggestions and services based on specific behavioral data demonstrate that a business sees customers as individuals. Information from CRM software, mobile apps, loyalty cards and website tracking applications helps marketers build customer profiles. Those insights lead to more effective outreach and less marketing spend.
As marketing budgets become tighter, businesses are looking for ways to get more out of what they spend on customer outreach. Growth marketing strategies and tactics help companies pinpoint and refine efforts that will increase ROI. While the process involves a fair amount of trial and error, the goal is to produce long-term, revenue-generating results.
Businesses can use the data gained from experimentation to create more personalized, effective and streamlined marketing campaigns. This in turn leads to increased client retention, improved business efficiency, higher customer lifetime value and better cost-effectiveness. As conversions and repeat purchases go up, your business will ultimately reach its financial goals.