Growth Marketing is the process of improving an output (e.g. new customers, revenue) via testing & iteration of prioritized inputs across the funnel (e.g. direct response ads, optimizing landing pages, emails).

1. Growth Perspectives +
Lessons Learned
Rob Palumbo for General Assembly
April 2020

2. Agenda
● What is Growth Marketing?
● How do startups grow?
● How to get a job in Growth Marketing?
● Questions?

3. "The hardest thing for most startups today is the path to
market...
finding a way to reach customers, and then building a
machine to acquire, monetize, and retain them"
- Chamath Palihapitiya,
Former Facebook, Head of Growth
Source: https://www.socialcapital.com/annual-letters/2018

4. What is Growth Marketing? 📈
● Growth Marketing is the process of improving an output (e.g. new customers,
revenue) via testing & iteration of prioritized inputs across the funnel (e.g.
direct response ads, optimizing landing pages, emails + notifications)
● Having attractive unit economics is a key condition before investing in growth

5. Key conditions for investing in growth 🔑
● Customer Acquisition Cost (CAC) < Lifetime-Value (LTV) – To have a sustainable business, the cost to acquire a
customer must be significantly less than the expected lifetime value of a customer (3X is a typical benchmark)
● Short payback period (< 12 months) – This is the amount of time it takes for a customer’s profit to “pay back” CAC
(a few months is 👍; shorter payback periods imply the business won’t need to be reliant on outside capital to grow)
● Healthy retention rate (for repeat usage products) – Typically, the higher the retention rate, the better for LTV over
time. In the stickiest businesses, retention will flatten for a cohort of users or even grow over time (smile curve)
● Large total addressable market (TAM) – The size of the market (typically expressed in $ value or number of
customers) is ideally large and growing; it helps for the TAM to be easily reached via existing acquisition channels
Source: https://www.nfx.com/post/new-rules-growth-profitability/

6. Common pattern in growth (B2B + B2C):
A proven way to reach customers and build an audience
=
Provide value over time (ideally, for free) in the product, then
upsell or cross-sell to a paid service!

7. Examples of “free” as a core pillar of a growth strategy ✅
● B2C: Peloton’s free home trials or online workouts
● B2C: Credit Karma’s Free Credit Scores
● B2C: Properly’s Free Home Value Reports
● B2B: Hubspot offering Free Website Grader
● B2B: Offering Free Guides, Demos, Trials

8. Why does ‘free-as-a-strategy’ work so well? 🆓
Lower acquisition & activation hurdles
(+ lower CAC)
By allowing customers to sample the product in
a way that helps them quickly derive value
without paying for it, you lower the hump they
need to get across in terms of trialling
(+activation)
Additionally, ‘free’ messaging just works for
driving awareness and promoting products
(+acquisition)
Own the relationship & retain the lead
(+ higher LTV)
When the buying time does arrive, the lead is
already using your product (+conversion). You
don't need to put the same amount of effort into
providing value and it is extra effort for them to
defect to an alternative (+retention)
Additionally, you can invest in the relationship
over time and add value or cross-sell products
(+monetization)
Source: ProfitWell: State of Freemium

9. Think about your current startup or projects 📚
Who are your target customers and what do they value?
What can you give away for free?
How can you build a relationship with your target customers over time that is
non-transactional?

10. Important Lesson:
Not all traffic is equal
Valuable audience >
Big traffic numbers
A good growth process
must drive outcomes
throughout the funnel;
driving traffic or even free
sign-ups is not in itself
valuable

11. Modified AAARR: Inputs for Growth at Properly
AWARENESS + BRAND
ACQUISITION
ACTIVATION
RETENTION
REFERRAL
How do we get people to become aware of Properly?
How do we get people to try Properly?
How do we convert people once they try Properly?
How do we get people to return to Properly?
How do we get people to refer Properly?

12. Growth requires an experimental mindset
● Ask: where can we create the biggest impact? (i.e. it’s not solely about
running ads at the top of the funnel; thinking only in terms of paid
marketing is a suboptimal approach)
● Growth takes a systems-level approach…. testing across the funnel
● How can we prioritize ideas? Example: I.C.E. Score method
○ Impact: if it works, what is the impact? (expected value $, user #’s)
○ Confidence: what is the probability of success? Evidence?
○ Ease: How easy is it to test? What is cost in resources/time?
● Higher population experiments = faster learning (wins and losses)

13. How to get a job in Growth? Go wide on knowledge, deep on skills
Source: Brian Balfour’s How to be Customer Acquisition Expert