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5 Steps to Creating a Growth Strategy that Actually Works

October 28, 2020

Growing a business is hard. Whether you’re a small business owner, a marketing team member, or an agency, riding that rollercoaster of highs and lows is no small challenge. What’s even harder is setting ambitious yet realistic expectations of what is achievable.

This is why a growth strategy (like the one above) is one of the utmost importance to businesses. In this guide, I’m going to cover what a growth strategy is, how it differs from a marketing strategy, and why it works—with plenty of examples. I’ll also walk you through the five-step process for creating a growth strategy for your own business. The five steps are:

  1. Set your high-level goals
  2. Identify your inputs and outputs
  3. Run growth experiments
  4. Validate your growth experiments
  5. Foster extreme accountability

By the end of this guide, you’ll be able to identify what goals to set and what’s needed from your team to hit those goals. Ready to drive consistent, predictable, maybe even explosive growth for your business? Read on.

What exactly is a growth strategy?

There's a lot of confusion in the marketing world about what a growth strategy and how it's different from a marketing strategy.

First things first, a growth strategy is not a marketing plan. Nor does it mean buying PPC ads, driving traffic via SEO, or running CRO tests on your website. These are marketing tactics that fall under your marketing plan.

Your growth strategy is the big-picture roadmap you’ve created to get your business from where it is now to where it wants to be in the future. This means that it:

  • Involves all departments of the company (versus marketing only).
  • Is aimed at growing the company from many angles (revenue, employees, etc).
  • Encompasses your marketing strategy (and not the other way around).

In sum, a growth strategy is a high-level strategy that outlines everything a business needs to do to grow. It’s a holistic and scientific approach to driving growth.

A growth strategy is not a marketing plan. It's a high-level strategy that outlines everything a business needs to do to grow through a holistic and scientific approach.

Here’s an example of a growth strategy for a hypothetical company “Startup Masters," which we'll be using for our example throughout the five-step process:

how to create a growth strategy growth plan

Do growth strategies work?

It can be hard to grasp the concept of creating an actual, actionable plan for something as broad as “growth” and then seeing tangible results—but it’s not only possible; it works! Growth strategies are the secret sauce behind the consistent growth of some of the world’s biggest companies like DropBox, Dollar Shave Club, WhatsApp, and more. 

Growth strategies are the secret sauce behind the consistent growth of some of the world’s biggest companies like DropBox, Dollar Shave Club, WhatsApp, and more. 

In fact, a well-defined growth strategy for my own company, Venngage, has lead to:

  • 3-fold increase in blog traffic in under a year. 
  • 40,000+ registers per week (vs 400 back in 2016).
  • 150% YoY growth over the last 5 years.
how to create a growth strategy vengage growth

Now that you know what a growth strategy is (and isn’t) and have seen tangible evidence in its ability to drive business growth—it’s time for the fun part: creating your own growth strategy.

The 5-step process to creating your own growth strategy

The process of coming up with a growth strategy for your entire business can feel overwhelming. There is so much that goes into a business and defines its success, where do you even start? Worry not. I’ve broken your growth strategy creation process into five clear-cut steps.

Step #1: Set your high-level goals

Business growth is akin to planning a trip. It’s much easier when you know the final destination.

If you could predict how much revenue your new business would make in the long term before you even got started, wouldn’t that help you figure out the best growth strategy to get there?

The bottom line is, it’s more helpful to start at the end and then work backwards (versus the opposite).

It’s more helpful to start at the end and then work backwards.

So let’s head on over to the end of your growth strategy. This is where you set high-level ambitious yet realistic goals (it’s a delicate balance). Business guru Jim Collins calls them BHAGs, or “big, hairy, audacious goals.”

how to create a growth strategy BHAGs goals

Ex-Hubspot VP of Growth, Brian Balfour, refers to it as the Top-Down Approach:

how to create a growth strategy top down approach

Source

At Venngage, we call them “high-level” or “long-term goals”. So for step one, start mapping out a long-term goal such as your 10-year goal. To do this, ask yourself the following questions:

  • Where do you see yourself and your company by that time?
  • How much should you grow your business?
  • How much revenue do you expect your company to generate?
  • How many employees do you see yourself having?

Let’s revisit the growth strategy example I shared earlier. Here’s what a hypothetical ten-year goal, and steps required to hit said goal, would look like for StartUp Masters:

how to create a growth strategy high level goals

By working backward, it becomes easier to set realistic goals and objectives of where the company will need to be in five years, three years and one year to hit that ten-year goal. You can even start smaller such as with a hypothetical five-year goal, which will help you to map out four, three, two, and one-year targets.

By working backward, it becomes easier to set realistic one-year, three-year, and five-year targets for your business to help you stay on track.

Now that you’ve defined your high-level goals, it’s time for the action part of your growth strategy—the steps you’ll need to take to hit those goals.

Step #2: Identify your inputs and outputs

Once you’ve established your high-level goals, the next step is to determine your key performance indicators (KPIs). For every goal you set, it’s crucial to identify key metrics and results that will help you gauge whether you’re on our way to hitting your goals. Here’s how to do it:

Determine your North Star

One of the first metrics you should identify is your North Star Metric. It’s also known as the, “One Metric That Matters (OMTM).” This metric is the number that best represents the value customers receive from your product. Here’s a handy explainer video by Alex from Web Profits:

Video link 

how to create a growth strategy north star metric

For example, Airbnb’s North Star metric is the number of nights booked. Why? Because it’s a clear indication of their product’s value. The more nights booked, the higher the chances are that customers are having a positive experience with Airbnb and the more likely they are to return to book their next stay. Keep in mind, your chosen North Star metric should have a direct correlation to your company’s revenue and retention goals.

Your chosen North Star metric should have a direct correlation to your company’s revenue and retention goals.

Here are a some more examples of North Star metrics:

  • Customer lifetime value (for ecommerce businesses)
  • Monthly recurring revenue (for B2B SaaS businesses)
  • Total watch time (for media businesses)

Once you’ve chosen your metric, the next step is to figure how you’re currently performing for that metric. Let’s assume you started a new streaming service like Netflix. You’ve selected “total watch time” as your North Star metric. You’ve selected this metric because per your analysis, a higher watch time correlates to higher retention (resulting in more revenue).

Let’s assume users spend around 30 mins per day watching shows on your service. This is how you’re currently performing for your North Star metric. It's your baseline. One of the high-level goals you’ve set is to increase retention by 30% in the next 12 months. To hit this goal, doesn’t it make sense to focus on improving total watch time per user?

Bottom line: figure out how you’re currently performing for your North Star metric and how much that number will need to change to impact your high-level goals.

Set up your OKRs

OKRs stand for Objective Key Results. They refer to specific metrics you’ll track that will influence your high-level goals. In software startups, many founders follow the AARRR framework for setting OKRs. This stands for Acquisition, Activation, Retention, Revenue, and Referral.

how to create a growth strategy OKRs

Source

It can be overwhelming to influence each of these metrics. So, using the example company we began with above (“StartUp Masters”), we’re going to focus on acquisition and retention for now.

Here are the acquisition OKRs dentified during our Startup Masters growth planning example:

how to create a growth strategy acquisition OKRs

StartupMasters aims to influence acquisition primarily via their organic and paid traffic goals. The goal? Scale organic traffic by 130,000 and paid traffic by 70,000 visitors a month.

If you look at the inputs, there are many pages that drive traffic. They've also outlined the required traffic to various sections of their site in order to impact their OKRs:

how to create a growth strategy inputs for OKRs

By continuing to break down your goals into smaller and specific inputs, you’re making it that much easier for you to hit the ambitious goals you’ve set for yourself. And as you hit those goals, you can see your growth plan actually working.

And when setting OKRs, identify metrics you can manipulate on a smaller scale that will have greater leverage. As you continue to figure out which inputs impact your OKRs, start thinking of experiments you can run to influence your inputs.

By continuing to break down your goals into smaller and specific inputs, you’re making it that much easier for you to hit the ambitious goals you’ve set for yourself—and see your growth strategy working.

Step #3: Run growth experiments

Coming up with valuable experiments to run isn’t as easy as it seems. A common trap companies fall into when implementing new product features or marketing ideas is waterfallingWaterfalling occurs when a team continues to add requirements to a project, to the point where the time required to implement it keeps increasing, similar to scope creep.

As a result, what was supposed to be implemented in a few weeks now ends up taking months. To avoid this, I’d recommend you operate on a one- or two-week sprint cadence. You can do this by breaking down big projects into minimum viable tests or MVTs. With MVTs, you can get valuable insights faster and validate whether a large-scale project is worth pursuing.

With minimum viable tests (MVTs), you can get valuable insights faster and validate whether a large-scale project is worth pursuing.

Start by deciding the OKR you’re trying to impact. In our Startup Masters growth strategy example, we're trying to increase retention by 10%:

how to create a growth strategy OKRs goals inputs

The input? Push more users to complete one more project within three weeks. To impact this metric, one experiment they could run is to create a pop-up modal within the project dashboard pushing users to begin a new project upon hitting the 80% completion mark.

They’ve also hypothesized the results of this experiment and the effort required by each team to make it happen. Before pursuing any large or small test or experiment, run them through this flowchart to identify if you can further break them down into smaller MVTs:

how to create a growth strategy that works MTV breakdown

Your goal when planning out MVTs is to run experiments which require low effort, but have a high output. These are “slam-dunks” because you get big wins in less time.

Your goal when planning out MVTs is to run experiments that require low effort but have a high output.

Realistically, not every experiment will be a “slam-dunk” but if you can avoid the “turtles” (experiments that are high effort and low output), you’re halfway there:

how to create a growth strategy that works impact vs effort

Chart created by Venngage

Here’s an example of a well-documented growth experiment, courtesy of Clearbit.

Step 4: Validate your growth experiments

Sometimes, breaking down an experiment into an MVT is still not enough to validate whether the test is worth including in your growth strategy.

You now need to determine if this experiment will have a positive impact on your customers. Afterall, your job as a marketer also entails providing a great customer experience.

Here’s a visual experiment validation checklist you can use to rigorously validate your experiments:

how to create a growth strategy that works sprint indicator

You can do the same thing by writing out your experiments (and areas of consideration) on a Google Doc or Trello card.

Our StartupMasters growth strategy follows the “Jobs to Be Done” framework, which focuses on the goals a potential customer has, rather than solely focusing on who they are as a person.

In this checklist, you can see the various “Jobs to Be Done” listed out. StartupMasters also considers personas an important factor in how they plan their experiments.

As I pointed out earlier, other important considerations include probability of success, effort required per team, and OKR impacted by this experiment.

Once your team starts following this process, two things happen:

  1. It becomes easier for your team to consider all the areas of importance.
  2. You’re ensuring your team is prioritizing the most promising experiments.

Google Docs and Airtable are the tools of choice for HubSpot's growth experimentation process. At Venngage, we use Trello for planning our weekly sprints, and Google Docs for validating our growth experiments—which are simple enough for any company of any size (including yours) to use.

Once you get the hang of the process, experiment with other tools to see what works best.

Step #5: Fost extreme accountability

Last but not least—and perhaps even the most important step in driving growth—is fostering extreme accountability within your teams. Every team member should be aware of the work they’re doing and how that work ties back to a company’s high-level goals. This part could be a separate post in itself. If you want to dive deeper, Brian Balfour’s guide on building growth teams is your bible.

Every team member should be aware of the work they’re doing and how that work ties back to a company’s high-level goals.

Here’s a visual summary of everything Brian touches on:

how to create a growth plan maximum impact

Source

We follow a similar process to foster ownership and accountability across our entire team (and not just marketing). In our monthly team meetings, every member (in charge of a project) shows the company what they launched, what the results were, and next steps moving forward.

how to create a growth strategy that works release and results

The same goes for our marketing meetings. On a weekly basis, every member shares the experiments they launched so they can feel accountable about the work they’re doing. This process will help you accomplish two things:

  • By encouraging your team to share what they launched and what they learned, you’re encouraging them to produce results.
  • If there are underperformers that work at a slower pace or reap less valuable insights, this will push them to improve their output.

Not only that, but you’ll also be able to identify who is an A-player and who is an underperformer. This is often a wake-up call for the latter.

Get ready for consistent, predictable growth

To conclude, there’s no magic hack or silver bullet that’s going to unlock explosive growth for your business overnight.

It’s about driving consistent growth, which comes down to a strong understanding of data, relentless focus on influencing the right metrics, and experimenting with different marketing tactics to hit your goals.

Or as my favourite entrepreneur Biz Stone once said, “Timing, perseverance, and ten years of trying will make you look like an overnight success.”

About the author

Aditya Sheth is a growth marketer at Venngagean online all-in-one design platform. When he’s not busy writing actionable content or running experiments, you can find him reading nonfiction, learning a new skill or listening to rap. You can follow her on Twitter or LinkedIn.

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