Every business wants to grow. And there is a surging demand for growth practitioners lately. Yet what one does is a very misunderstood concept. As a Growth Agency, we’d like to help you have a better grasp of the type of growth practice that has really proven sustainable results, and to further introduce you to our approach to growth at GrowthSmiths.
Who is it for?
Facebook was the first company from which the type of growth practice that we recommend has emerged, and Chamath Palihapitya was the first Growth leader, as VP of User Growth, starting back in 2007. Thanks to his approach to growth, Facebook has hit 1 billion users instead of roughly 200 million as the projections back then were showing.
His secret sauce?
Not growth hacking. Because silver bullets might get you some cool bumps in specific conversion rates, but they don’t help in the big picture, and they don’t support sustainable growth. In fact, we agree with Intercom that growth hacking is bullshit.
It’s growth as a system, as a process.
Another reputable advocate of the approach ‘growth is a process’ is the ex-VP of Growth at Hubspot, Brian Balfour, who now runs Reforge, an excellent academy for growth practitioners. Disclaimer: our CEO is an alumni of Reforge.
In fact, if you look at most people in Head of Growth or VP of Growth roles that have shown some solid results (most of them in Silicon Valley), they all adhere to this approach.
Now you might also notice their roles emerged after their companies have reached product-market fit. This is important.
Growth is for companies that are post-product market fit.
Why? Because you wouldn’t want to pour water into a leaking bucket. Prove first that you have customers that see the value your product offers, and they stick with you on the long term. You’d like to see your retention curve flattening after some months. Then you can focus on growth.
Because growth is not about building core value. Growth is about getting the current core value to as many users as possible, as quickly as possible, and as often as possible.
To recap, growth is for companies:
■ Of various business models as long as they optimise for growth
■ That are post-product market fit
■ That understand that a sustainable process built for the long term is more important than some successful gimmicks
What does it do?
GrowthSmiths recommends implementing growth systems at 2 levels:
1. At company level
A Head of Growth, with a dedicated cross-functional team or with assigned resources from various departments, would be in charge of overseeing the entire funnel, across acquisition, retention, and monetisation.
You most probably have departments being in charge of different parts of the funnel, and operating in silos would hinder your full growth potential. Additionally, there are certain growth pillars like monetisation that is usually not anyone’s responsibility.
A Head of Growth comes in to put all the puzzle pieces together.
Many times existing departments are left perplexed when there is a new growth team joining them. “Isn’t marketing working for the growth of the business?” That is correct, but they only oversee a part of the growth sphere – in marketing’s case: the top of the funnel, and they also oversee other less data-driven and repeatable aspects of the business – like branding, PR etc.
A growth team comes in to glue all the funnel pieces together.
In practice, it doesn’t mean that a growth team simply owns everything from day 1. It’s usually a lean process, starting with implementing the growth system and then tackling battles one by one. Only after some wins and proven impact, the growth team is expanding its area.
The Head of Growth would build and implement a growth system for sustainable growth, which in a nutshell consists of:
■ Modelling the entire funnel, with all its acquisition, retention, and monetisation components, adding in the baseline numbers for inputs and conversion rates at all points.
This will serve as the one big formula for deciding which experiments to run, as assumptions about parts can return the potential overall growth impact, the overall uplift in your northstar metric. It also serves as a good communication documents, making sure everyone sees the big picture and how the parts contribute.
■ Putting in place a growth process, like an oiled machine for all the future growth activities.
This would include: how to generate experiment ideas, how to build hypotheses around them, how to prioritise growth initiatives, how to actually run the experiments, how to analyse the experiments outcomes and how to communicate internally the learnings and successes.
■ Building and running a growth team.
This team should be independent to run what they need, and not beg other departments for resources. There are cross-functional resources needed – usually marketing experts, engineers, data scientists, and designers. The growth team can be separate entity, or the Head of Growth could have dedicated resources across all the departments, managing by dotted lines.
2. At department level
Each department could benefit from using a growth system for their part of the funnel. That would allow for a more sustainable approach to increasing their metrics, and for better communications inside the department and across the entire organisation.
Typically, departments take a random approach to experiments what could move the needle on their metrics.
They would have a strategy and a plan, and some regular meetings for debates. But they would not really record proper experiments hypotheses. They would not have a repeatable process for running experiments. They wouldn’t use a structured and repeatable scorecard for prioritising growth initiatives.
This is where a growth system (similar to the one at point 1 above) can help.
This being said, let’s look at some of the areas growth covers:
■ Mapping linear channels and acquisition loops
■ Validate and optimise channel-product fit
■ Prioritise and run experiments across channels and funnel stages
■ Track and segment the retention curve
■ Prioritise and run experiments across the different phases of retention (from onboarding to long term retention, as well as churns)
■ Build and optimise retention loops, using user psychology
■ Updating and restructuring pricing plans based on research
At GrowthSmiths, we would add a 4th area:
■ Update team structure and KPIs once growth wins are unlocked
Here’s the thing about these 4 areas:
Typically, when a company thinks of ways to grow, acquisition is the first to come to mind. “We need more leads! We need more users!”
At the same time, monetisation is overlooked as it is hardly on anyone’s job description. But monetisation can be a very impactful growth lever and it’s usually a low hanging fruit.
Retention is also not fully considered. Usually in the hands of Customer Success teams that merely do customer support and not much more, retention is reactive and trying to save churning customers. Especially in SaaS where subsequent renewals and upsells are valued at much more than the initial sale, retention is crucial. It needs to be proactive, it needs a systematic data-driven approach, and it needs people with different expertise to optimise it.
PriceIntelligently published a very interesting study on how companies split their focus between acquisition, retention and monetisation, and which ones are the most impactful levers.
Rethinking structure as the company grows is very important as well. Say you’ve run a successful experiment on increasing the number of leads from integration partners through a campaign that was getting successful customers to leave good reviews on their platforms. It works. Now what? How are you going to incorporate that into your new business as usual? The growth team won’t continue to run the campaign indefinitely, unless at some point it needs more optimisation. Someone (a department or an individual) needs to take getting reviews in their job description and KPI.
A growth lead would make sure to look into all areas, weighting options of what to tackle and pursue experiments in a systematic approach.
To recap, growth practitioners deal with:
■ Building and implementing a customised growth system, which includes the big formula, the process to run experiments, and the resources (running the team itself)
■ Running well-thought and documented experiments across acquisition, retention, monetisation
■ Suggesting structure update to accommodate growth and have growth wins enter business as usual stage
Also, what would growth practitioners not do?
■ Not working on the core value. That’s typically for Product, core Engineering, Product Marketing teams.
■ Not working on hard to measure, long feedback loops items like branding, PR, enterprise sales.
How does GrowthSmiths operate?
Our Growth Agency is helping businesses post product-market fit reach sustainable growth by implementing growth systems across the entire organisation and in growth-related departments, and by running well-thought and documented optimisation experiments across acquisition, retention, and monetisation.
Our methodology is inspired by the best growth practitioners around the world, and we make sure we are up to date with the best practices. However, we filter everything through our own experience and build proprietary frameworks. And then we fully customise it to each company we work with, providing turnkey solutions.
Each customer gets a dedicated senior consultant, that has proven results at high-growth companies, to act as their Head of Growth In-residence. This person would work as a strategist, doer, and team trainer. To do so, we prefer to work from the client’s office whenever possible.
The Head of Growth In-Residence can come alone, as long as there is commitment from the client side to allocate internal engineering, data, design, and marketing resources for growth. We also offer the option to bring an entire cross-functional growth team, as we have our own engineering, data, design, and marketing collaborators. Either way, these resources are very important to ensure the success of the growth practice.
Each GrowthSmith consultant handles maximum 4 clients in parallel. That leaves room for 1 day per week in which all the consultants get together in order to share best practices and improve our frameworks.
That’s us and what we stand for.