Growth Marketing Strategy: 5 Steps to Create One

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Believe it or not, there’s a fair argument that pirates would make the best digital marketers: they’re scrappy, creative, and have their priorities in clear focus (it’s all about getting that treasure).

And ever since Dave McClure introduced his growth marketing strategy’s foundational framework, “AARRR,” the idea of pirate marketing hasn’t sounded so crazy. In fact, it’s been widely embraced as one of the best methods to produce marketing that gets results without getting hung up on irrelevant “vanity metrics.”

By implementing a growth marketing plan that focuses on the right metrics, you can create more efficient strategies that lead to a higher ROI.

Growth marketing plan: Understanding the AARRR Framework

You can’t have a conversation about growth marketing without understanding McClure’s “AARRR” approach and how it gives a small business an edge over its larger competitors.

What does AARRR stand for?

“AARRR” is an acronym that stands for:

• Acquisition

• Activation

• Retention

• Referral

• Revenue

McClure created this outline to teach small companies how to focus on the right metrics that truly impact their business’s success. By shifting a startup’s focus to the channels that move the needle most at every stage, McClure argued smaller companies could find a way to thrive and, in many cases, even outperform bigger competitors. From a practical standpoint, this meant that small companies should determine which channels to focus on based on three criteria, including:

• Perform best in terms of conversions

• Attract the highest volume of people

• Cost the least to operate

Once startups and young companies can prioritize their marketing channels based on the above criteria, they can maximize growth on a razor-thin budget.

The Acquisition stage

The Acquisition stage refers to tracking the first contact point of a potential customer with your brand from the many channels you offer (social media, blog, live chat widget, etc.). You can find this information from your Google Analytics dashboard under Acquisition > All Traffic > Source/Medium:

This will tell you which channels your audience is coming from, can provide more detail on your acquisition costs, and give you a starting point for identifying your best-performing platforms.

The Activation stage

The Activation stage is where you determine the first visit in which someone was engaged with your business. This can be tricky because the term “engaged” means different things to different organizations. For SaaS companies, “engaged” could be when someone signs up for a free trial. For a B2B agency, “engaged” could mean when someone books a demo with your sales team.

And for many marketers, “engagement” is signaled by website metrics like:

• Time on page

• Pages visited per session

• Bounce rates

Once you determine what criteria constitutes “engaged” for your business, you can look through your customer acquisition channels to see which platform is bringing you the best traffic in terms of your conversion goals. For example, imagine people are coming to your website from both social media and through Google. People who visit from social media have an average session duration of 2:32 and visit roughly three pages. People from Google have an average session duration of 00:53 and only visit the page they land on.

In this case, social media is driving a more active audience to your website and is a channel you’d want to focus on optimizing.

The Retention stage

For marketers, the Retention stage is where you get users to keep engaging with your brand after their initial signup or purchase. Fortunately, you’ve got a lot of resources/tools to help you with retention (email newsletters, push notifications, SMS campaigns, etc.).

Email marketing is one of the most widely used channels for customer retention, and you’ve probably received email newsletters before. By keeping users consistently interacting with your business, you’ll tend to find:

• Lower churn among customers (because you’re keeping your business at the top of their minds)

• Increased lifetime value of your clients (because they’re coming back to your paid products/services more frequently)

But now, the big question: how do you track this?

You’ll need to identify which retention metrics are most closely aligned with your conversion goals. Retention metrics refer to the data you have on how new customers or leads re-engage with your brand. That might mean tracking when users:

• Log in to an app or user dashboard

• Open email newsletters

• Come back to your website for a repeat purchase

Each company will need to define what metrics make for a successful retention rate with their unique business or product.

The Referral stage

The Referral stage is where you identify which channels are bringing you the most referrals from existing customers. That way, you can increase your marketing efforts on those channels and get more growth through word-of-mouth marketing.

While tracking referrals can sometimes be tricky, many modern marketing tools allow you to accurately pinpoint where those referrals are coming from. For example, you might:

• Send an email with a referral promotion embedded in it, allowing you to track clicks and shares

• Track affiliate partner links through an affiliate dashboard

• Run a referral contest on social media to see which users are sharing your campaign

For a more detailed guide, check out this in-depth resource: How to Track Referrals Instantly.

The Revenue stage

The Revenue stage is where your customer base spends money on your product or services. There are two main metrics that the “AARRR” framework is concerned about when it comes to revenue:

• Minimum revenue: What is the minimum amount of revenue you need to stay in business

• Break-even revenue: How much revenue will you need to “break even”

The revenue stage is something that needs to be on your radar for growth marketing, but it’s ultimately your sales team’s role. As a growth marketer, your job is to identify the channels that meet your conversion criteria (best performing, highest volume, lowest cost). Then you can use those channels to send better leads to your sales team, who, ideally, will transform those warm leads into revenue.

Define a growth marketing strategy in 5 steps

Creating a growth marketing strategy might seem overwhelming at first, but it’s surprisingly simple once you go through the process. All you need to do is follow the “AARRR” framework to identify the channels that lead to your ultimate goal. But remember, at each step of the way, you’ll also need to determine which metrics define a campaign’s “success” or “failure.” It’s this emphasis on data that makes McClure’s pirate marketing so powerful. Now, let’s take a deep dive into the five steps you need to follow to build a unique growth marketing strategy for your team.

1. Set high-level goals

Start by identifying what you want to accomplish and get specific. This goal can take many forms, but it needs to be concrete and have a clear definition of success. For example, you might have a general goal that you want more newsletter signups from your website. But you’d need a more tangible goal that allows you to determine if your marketing tactics are improving or if they still need work. A better objective would be that you want 20 new email newsletter signups per month.

That said, every company will need to define its own high-level goal and determine which metrics signal whether or not that goal has been achieved. Anything above the bar you’ve set can be seen as a success (and worth doubling down on). Anything below this goal would be a sign that you need to adjust your strategy.

2. Establish KPIs and growth marketing metrics

Now that you have your high-level goal, you can break it down into smaller objectives. Look at which channels are leading to the highest growth and remember our conversion criteria. You’re looking for channels that:

• Perform best in terms of conversions

• Attract the highest volume of people

• Cost the least to operate

Focus on your top two or three channels to start and grow from there as your resources/bandwidth allows. Then from those channels, identify concrete metrics that would define “success” as you work toward your higher-level goal. For example, you might see that your top two performing channels are social media and organic search traffic.

From there, you’d need to create specific KPIs related to your overall objective. You might create a goal that social channels need to drive $7,500 in sales/month, and the blog needs to bring in $7,500/month in Q1. Then you can track the results of how these channels perform to see if they’re moving the needle toward your higher-level goal.

3. Map out your customer journey and evaluate areas to prioritize

To create a sustainable growth marketing strategy, you need to understand both your customer and your customer journey. In the past, this was something that you might have been able to pull off with a free tool like Google Analytics. But as modern businesses are overwhelmed with data across multiple touchpoints throughout the customer lifecycle, even Google Analytics makes it difficult to map out your user journey. This is especially true if you’re using Universal Analytics, which makes it notoriously difficult to accurately track users who move from your website to a mobile app.

Your best bet to track the modern customer experience is using a more sophisticated software like Twilio Engage. This tool is built on a customer data platform (CDP) and gives you deeper insights into your customer’s end-to-end journey through all touchpoints. That gives you the ability to build consistent and personal marketing campaigns from each of your top-performing channels. 

How? Because once you fully understand your customer’s journey, you can more accurately track the success metrics for your goal at each step of the pirate marketing framework:

• Acquisition: Where are the bulk of your customers coming from?

• Activation: Where are people being engaged on their first “happy visit”?

• Retention: Which channels are bringing customers back to your brand?

• Referral: Where is your word-of-mouth marketing gaining the most traction?

• Revenue: Which channels are bringing the most paying customers?

And when you see which channels are getting you the best results, you can build powerful audience segments that help you optimize for an even larger ROI. For a bit more information, check out this short but detailed video on Twilio Engage.

Want to see how it works firsthand? Book your free demo today.

4. Conduct focused growth experiments

At this point, you have your high-level goal, smaller KPIs to reach that objective, and you’ve identified the best performing channels throughout the customer journey. Now it’s time to ensure you’re not leaving any conversions on the table by creating controlled experiments that focus on optimization. The exact tests you’ll run will depend on what your top-performing channels are. However, most testing comes down to:

• A/B tests: This is where you show half of your audience one version of your content, and you show the other half something slightly different. Then you track which campaign performed best and improve future campaigns based on those results.

• A/A tests: This is for smaller audience sizes where you show the entire audience one type of content and later show them a different type to see what resonated most.

So, if you found emails were your top-performing channel, for example, you might A/B test your subject lines to see which one gets the most opens. Or you might A/A test an HTML-based email template vs. a plain-text template to see what your target audience responds to.

Testing is important because it lets you accomplish two things:

• Identify any channels with more potential than you’d previously seen

• Optimize existing channels for even higher conversions

5. Scale experiments that drive positive results

Once you’ve identified your top-performing channels, it’s time to double down on your efforts. Imagine you found that social media brings you more traffic than organic search engines, but the posts that are ranking on Google bring you higher conversion rates. In this scenario, you’d put your social media efforts on hold to increase the output/results of your blog.

As you scale your experiments, keep an accurate track of the results month-over-month to identify any new or shifting trends with your marketing channels.