How to build a growth process.
This article is the second in a series of 12 weekly articles that detail what I learn in my currently ongoing growth mini-degree scholarship with the CXL Institute.
What it takes to build a growth process.
There are three phases to building a growth process;
- High-level strategy: This is the phase where you define your growth model, map out your customer journey and identify your growth channels.
2. Quarterly planning: The high-level strategy phase is where you define the foundation for your growth process. Once you have that figured out, you immediately move into the quarterly planning phase.
It is at this phase you explore data, identify your quarterly goals and build your roadmap for how you want to execute these goals.
3. End-quarter execution: As the name implies, this is the phase where you start executing on the goals you identified in the last phase according to your roadmap.
At this phase, your job is to build experiments, ship them and analyze them. After analyzing, you either automate & scale them or scrap them based on how your experiments performed.
The most common framework for a growth model is generally Dave Mc.Clure’s pirate metrics for startups which is the AARRR framework.
Defining your growth model.
What is a growth model? To put it simply, A growth model is you setting your growth metrics through the context of the stage in a user’s lifecycle.
Now, there are obviously infinite growth metrics that you can be looking at but the highest level ones that are useful but still specific enough are the ones that end up in a growth model.
Like I said earlier, It’s you setting goals through the context of where the customer is in their lifecycle (Acquisition, Activation, Revenue, Retention, Referral) and it helps you design campaigns and experiments based on who that customer likely is, how much they know about your brand, how much they have interacted with you in the past and what actions they have taken.
Quarterly growth planning.
After you have established the basic foundations of your growth process (defining your growth model, mapping customer journey, identifying growth channels) is when you get into the quarterly planning process.
A good way to start your quarterly growth planning is by exploring the data and doing so through the lens of your customer journey and the growth model.
So think through all of the different steps your customers take from finding out about your product or service all the way through towards becoming a loyal, frequent, habitual customer and then actually look at the funnel, explore the data and try to identify the biggest areas of opportunity which is basically where people are falling off the most in your funnel.
Is it that a lot of people are visiting but not converting or they make the first purchase but don’t return for a second purchase?
One of the most important things to being effective at growth is prioritizing the most impactful things and finding the most impactful ways to grow the business and just guessing is not the best way to do that.
It should be noted that starting a growth team isn’t ideal until product-market fit has been achieved and you are trying to accelerate an already existing and working business.
Here is why; you need to have enough data that helps you understand at least something about what’s working and what’s not working for your customers, if there is no good mileage of paying customers, there is barely enough data to work with.
Another way to look at data is by aiming for qualitative data to identify opportunities. This would typically see you;
- Talking to your customers.
- Conducting user surveys.
- Calling your customers.
- Doing focus groups.
But the first step in coming up with a really good quarterly plan, setting the right goals, and building a roadmap is to really understand the biggest areas of opportunity and the biggest pain points for your customers because that’s actually what you need to be solving for.
Essentially, with quarterly goal planning, you need to start off by exploring the data you have at hand and use the insights gleaned to set your quarterly goals.
Now, the thing about setting goals is that you want goals that are motivating, ambitious, and aggressive enough to push everyone on the growth team to their limits but they also need to be achievable which is something a lot of people tend to forget and then they go for setting aggressive goals that are not achievable.
So it’s important to keep this in mind when setting goals, set aggressive goals but not so aggressive that they aren’t achievable.
How to identify your quarterly goals.
Typically, year-long goals are usually set at the company level, and then most team level and department goals are set on a quarterly basis but at startups setting a goal a year ahead is tough because your business changes so quickly and rapidly that you might not even be focused on the same metric of the goal six months down the line let alone twelve months.
So three months is the ideal timeline for setting your growth goals. You could then use that goal to define your monthly goals or bi-weekly goals.
How to effectively brainstorm.
For highly effective brainstorming sessions, it’s super important to focus the conversation on specific goals. The worst way to do brainstorming is to bring 10 people into a room and say “Let’s just talk for an hour about how we can grow the business” and then talk for 10 minutes about acquisition strategies, 20 minutes on referral such that you are basically all over the place.
To effectively brainstorm, it’s much better to get really focused on a specific metric and then go deep on that.
Also, looking at other businesses that are in a similar space for inspiration is another great way to brainstorm.
The goal of brainstorming is to maximize the generation of ideas and after generating ideas, the next step is prioritization.
You have come up with a number of good ideas, how do you then identify the ones you double down on, this is the point of prioritization.
The Prioritization Framework.
For prioritization, what you basically want to do is come up with a concept on your predicted return of investment.
And a very great framework for approaching prioritization is the ICE framework
I — Impact.
C — Confidence.
E — Effort.
When thinking of which experiments to prioritize after brainstorming, start by estimating the possible IMPACT of the experiment you are proposing then move on to evaluating your CONFIDENCE that you will see the result that you are projecting and afterward define the EFFORT in the context of time and resources that would be required to implement your experiment.
So the above crystallizes what I have learned this past week from my CXL growth mini-degree scholarship. The coming week would see me learn user-centric marketing and how to identify and amplify growth channels.
Can’t wait to share what I learn with you.
The content of this review covers lessons taught by John Mc. Bride, former senior manager of Growth Marketing at Lyft and current Senior manager, B2B growth at Calm.
