Business professionals in a meeting presentation discussing company growth
You’ve got a product the team’s excited about. The group wants to start getting the word out and building a steady customer base. However, they’re not sure whether to use a traditional or growth marketing strategy. And the group admits that they’re confused about the differences between the two.
While there can be some overlap, traditional and growth marketing dissimilarities are easier to spot when you look at end goals. Each approach relies on strategies that concentrate on distinct time frames, sales funnel stages and ways to generate revenue. Both marketing methods also use different decision making processes, with one focusing more on opinions and the other on data. Here’s how you can spot the differences between traditional and growth marketing.
By Knowing the Points of Focus
Traditional and growth marketing strategies both have in mind the goal of increasing sales revenue. However, businesses that implement product- or service-oriented marketing plans to generate revenue are using traditional tactics. Ad campaigns are geared toward stimulating purchases of specific products or services. Granted, a company may run several simultaneous product campaigns, but the focus is on getting consumers to purchase those particular products.
Businesses that implement growth marketing aren’t necessarily focused on increasing revenue through individual sales of products and services. Instead, growth marketers concentrate on the customer base. They’re interested in growing that base, retaining the customers that become a part of it and building a reputable brand. With a growth marketing approach, sales increase through personalized outreach to leads, current customers and referrals.
Under a growth marketing strategy, the entire sales funnel comes into focus. Marketing efforts and campaigns aren’t limited to creating product awareness and boosting customer acquisition. While those stages are important for increasing revenue, others can be more profitable. After all, acquiring new customers can be five times more expensive than retaining the ones you already have. And those who are loyal to your brand will spend up to 57% more.
By Understanding the Time Frame
When decision makers look to increase sales via products and services, they often want to see quick results. Therefore, businesses that thrive on fast turnarounds, instant sales and trends tend to use traditional marketing. Ads may highlight low prices or limited-time promotions on new product releases. The goal is to temporarily boost sales of those items, create initial awareness and acquire additional customers.
With traditional marketing tactics like these, the customer is often forgotten after the initial sale. That’s why long-term clients tend to get upset when they see a better deal on the same product or service. Although new customers are eligible for that price, existing clients get left in the dust. So some of them switch to a competitor to get the prices they want.
A few companies are now responding to this pain point by offering the same promotions to new and existing customers. However, that’s still considered traditional marketing. Growth marketing seeks to build long-term relationships with clients after the initial sale. Businesses that thrive on these relationships find ways to meet unique needs. Companies using growth marketing also provide added value beyond a single product sale or promotion.
By Reviewing the Strategy
A hallmark of traditional marketing is that its strategies tend to be set in stone. Once you have a plan in place, you’ve got to let things run their course. You may have print ads scheduled for two months and a 30-second TV spot running for 12 weeks. If the campaign performs poorly, you need to wait to go back to the drawing table.
But with growth marketing strategies, you don’t have to sacrifice time and results. There’s more flexibility built into the planning and execution phases. As data comes in, you can switch up what you’re doing.
Say that online video content you published last week is getting lackluster engagement and isn’t converting. In response, you revise the core message and tweak the call to action. If the results improve, you keep it running. But if they don’t, you publish something else.
In contrast to traditional marketing methods, growth marketing strategies leverage real-time and ongoing data. A conventional marketer might decide to run a campaign based on experience, intuition and opinion. In contrast, a growth marketer will avoid making decisions based on their gut. Instead they’ll gather and evaluate data from multiple sources, whether it’s sales results, online traffic, customer surveys or industry reports.
By Examining the Budget
Since traditional marketing strategies are relatively fixed, conventional marketing budgets tend to be larger and less flexible. Businesses that allocate marketing dollars to tried-and-true channels such as television and radio may have higher costs. Running print ads in magazines or newspapers can cost between $2,000 and $160,000. A company using traditional marketing commits to these expenses without knowing whether measurable results will be forthcoming.
Growth marketing budgets tend to be more flexible and often allocate dollars across marketing channels. One month, additional money might be spent on email campaigns targeting existing clients. The next month, email costs will scale down while more of the budget goes toward events and social media. Since growth marketers are constantly experimenting with different ways to reach their audiences, budgets aren’t as established.
Compared to traditional marketing, growth marketing also tends to use less rigidly defined marketing channels. Influencers, live social media broadcasts and online forums are some examples. Businesses implementing growth marketing strategies might spend money on outreach activities and platforms that weren’t intended for that purpose. As growth marketers experiment, they help redefine what campaigns and promotional spending look like.
The decision of whether to go down the traditional path or embrace growth marketing is more straightforward when you’re aware of the differences between them. Conventional marketing strategies are more likely to focus on revenue via individual product and service sales. Traditional methods produce quick results but have less flexibility.
Growth marketing looks to increase sales throughout the entire funnel by creating personalized customer experiences. Growth marketing also tends to rely more on data and experimentation. Both approaches can be effective, but you’ll want to choose the one that best aligns with your company’s goals and outlook.
Source by www.forbes.com