The Only 5 Growth Models Tested By Successful Businesses Today
I had the exciting opportunity to emcee The Focused Leader 1-Day Intensive last month. Naturally, I was thrilled! But. . . I found out only two weeks before the actual event.
I always get compliments when I wear my light blue blazer, so I decided to order the pants that go with it and turn it into a complete, blue suit. I found the pants online and ordered them with expedited shipping (picking my size based on the jeans I wear on a normal, daily basisâbig mistake).
The pants arrived a few days before the event, so I took them to a seamstress who promised fast service to get them hemmed. I walked into the dressing room, put on the pants, and. . . discovered they were about six sizes too small!
I couldnât come close to buttoning the pants. I showed them to the seamstress, and she shook her head; it would take double the amount of fabric to make the pants fit.
Of course, it was too late to reorder the pants in the correct size, so I called a friend, drove to Nashville, and got fitted for a brand new suit.
After a weekâs worth of stress and a half-day of driving around Nashville, my suit was perfectâbut I could have avoided that entire experience if Iâd stopped to take measurements first.
How many times have you done the same thing with your business? Are you posting on social media or paying for advertising before youâve stopped to ask if the pants even fit?
How to Establish a Measurable Marketing Model for Growth
One of the key ingredients to an Essentialist Marketing Plan is to establish a measurable marketing model that provides key metrics along the way; metrics which tell you if youâre on the right track.
???? Do you know where your customers came from last month?
Once you know which of your marketing efforts are driving results, you can make better decisions. Do more of what works, less of what doesnât, and measure your marketing experiments.
We live in the age of information, and you have access to more data than you could possibly processâwhich is why you need to clarify which marketing model youâre using before you begin.
That clarity will help you narrow your focus to just tracking the data that matters to your business growth. In The Lean Startup, Eric Ries identifies three growth models that startups rely on to consistently grow. Iâve identified two more, which are a kind of hybrid of the original three.
1. Viral Growth: Leverage Word of Mouth Marketing
The word âviralâ has come to mean many things. In this case, growth can be viral, even on a small scale, by word of your business or products spreading from one person to another.
Also called âword of mouthâ marketing, this model depends on people talking about, recommending, and sharing your business with the world. This model shows up in small-town business communities, big cities, and all over the internet (thatâs how organic social media already works).
If this is your growth model, you need to be focusing on creating a phenomenal product, along with informative content that tells a compelling story. Good branding makes it easy for your customers to tell their friends about what you have to offer, so they can go check it out.
This is how Warby Parker rose to fame, seemingly out of nowhere. They provided beautiful eyeglasses, with a painless buying experience, that was so good people kept telling their friends. Do you know people who wear Warby Parker? If so, theyâve probably told you (not so for people wearing Wal-Mart glasses instead).
2. Paid Growth: Invest to Scale with Advertising
How much would you pay for ads if you knew that every $1 investment led to a $2 return? Obviously, as much as you could!
Thatâs the big, bold promise of modern-day advertising, with deeply-detailed targeting technology available, such as ads on Facebook, Google, and elsewhere on the web. Even billboards are making a comeback in the competitive war for attention today.
Successful Paid Growth is focused on tracking your Return On Investment (ROI) closely, which requires an attention-to-detail and mind for data, because of the plethora of data available. Essentially, it comes back to one core question:
Are you getting more money out than youâre putting in?
If the answer is yes, you can scale your campaigns to grow your business, but Paid Growth isnât magic.
WickedReports analyzed $1.5 Billion in Facebook advertising, and discovered that the average Facebook advertising campaign lost money in 2018! On average, each campaign starts with a negative eighty-two percent ROI and takes four months to reach a negative fifty percent ROI.
That means that on average, after four months people are making $1 for every $2 invested (A.K.A. a bad deal). Even if you reach a positive ROI, you have to manage cash flow closely, because you typically pay for ads before you see the results.
Still, Paid Growth works well for many companies, including Blue Apronâwho youâve probably heard sponsoring a podcast, or offering a discount or free trial somewhere in your newsfeed.
3. Sticky Growth: Develop Irreplaceable Infrastructure
Sticky Growth is difficult to pull off, but if you get it right you create a business where every single customer is going to stay with you for years and pay a growing collection of fees.
Essentially, you can leverage Sticky Growth when you create products that become irreplaceable infrastructure, somewhere in your customerâs life. These are products with a high âswitching cost,â where happy customers arenât likely to leave.
The company thatâs done this the best is probably Quickbooks, which has become synonymous with âaccounting softwareâ and is the backbone of so many companies that they canât fathom every making a switch.
If you can tap into Sticky Growth, you can afford to invest money in direct phone sales or expensive brand awareness projects, without a time-specific offer. You can take your time making each sale because the real value comes in over the long-term investment of each customer you serve.
4. SEO Growth: Rely on Robot Referrals
Search Engine Optimization, or SEO, is a growth strategy focused on becoming the source of key information your Target Customer is already searching for.
I like to think of this as an adapted form of Viral Growth, where youâre relying on robotsânot peopleâto refer your business as the solution. Google is the dominant search engine, but your Target Customer may also be searching on Pinterest, YouTube, or Amazon.
Have you ever noticed how Wikipedia shows up as the #1 or #2 website for almost any search on Google? Thatâs because theyâve become the internetâs encyclopedia, and you need to do the same thing for your industry-specific content to reach your Target Customer when theyâre searching.
Focus on optimizing in-depth content to become a niche publication, creating content thatâs so good other people will link to you. That, plus linking to your own content, shows the robots that youâve got content worth seeing and sending people to.
5. Affiliate Growth: Pay People to Send You Customers
Growing your business with an affiliate network is a hybrid of both Viral Growth and Paid Growth because it involves other people talking about your product or business on your behalf, but money also changes hands.
The biggest difference between Affiliate Growth and Paid Growth is that with affiliates you only pay a commission after youâve already seen the results.
If you already have Superfans talking about your product, this can be a great way to incentivize them to spread the word further. Develop relationships with a core network of affiliates who can promote you, in exchange for a percentage of the payment for each sale they refer.
This is how ConvertKit established themselves in a highly competitive market, before they were known for their core software product or feature set. Of course, you have to have a good product to achieve consistent success with Affiliate Growth, because your affiliates are putting their reputation on the line to recommend whatever you have to offer.
Iâve enjoyed my experience with both sides of the Affiliate Growth model. In fact, my friend Matt McWilliams published a case study on how I made $5,359 in one monthâs affiliate commissions early on.
Which Growth Model Will You Use?
Whichever growth model you choose, the key to success is to focus on one measurable marketing model, and dial that in. Any one of these models could be the key to your success.
There is no shortage of opportunity today, but there is a shortage of execution. Stay focused, my friend.
Question: Which of these measurable marketing models do you think fits your business best?