If you’ve been researching the latest and most effective marketing strategies to help your business grow, you might have come across two terms: Growth Marketing and performance Marketing.
Have you ever wondered what the difference is between these two marketing methods?
Of course, as the name suggests, one method focuses on growth, and the other focuses on performance.
But that is not all. There are some substantial differences between these two marketing methods.
Even though the ultimate goal of these two methods is to develop the business and get more customers, the process is entirely different.
In this article, let’s look at what growth marketing and performance marketing are and how they differ form each other.
What is growth marketing?
Growth marketing is the future for any business that focuses on long-term growth. It is data-driven and relies on real-time analysis of tried and tested marketing strategies to acquire, retain, and ultimately turn customers into brand advocates.
Growth marketers work to gain relevant customers for a brand and retain these customers by solving their problems and gaining customer loyalty. They connect with the customers through every stage of their journey with the brand.
It aims for full-funnel growth. While most traditional methods of marketing focus on brand awareness, lead generation, and customer acquisition, growth marketing takes a step further and retains these customers.
The Pirate Funnel is one of the fundamentals of growth marketing. They break down the entire customer journey into six simple stages, making it easier for growth marketers to understand and solve customer issues.
The stages of the pirate funnel are
- Revenue, and
Growth marketers repeatedly experiment with new and creative ideas and use metrics like A/B testing to measure which works best for a business.
The data collected from these experiments can be used to create highly personalized and relevant marketing strategies for customers.
Below are some of the benefits of growth marketing for businesses.
- Data-driven marketing strategies make sure the campaign succeeds in reaching its goal. Marketers don’t need to rely on gut feeling to know what works and what doesn’t.
- Businesses can save time by speeding up the marketing process and focusing on areas that require attention.
- The growth marketer can save money by implementing strategies that are tested and proven to work.
- Growth marketing heavily relies on customer satisfaction. From the time they learn about a time, growth marketers follow and guide customers throughout their journey.
What is performance marketing?
Performance marketing, as the name suggests, is based on the performance of the advertisements. It is a type of online marketing where marketers only pay after a particular action is taken, or a goal is achieved.
The goal of performance marketing can be anything from a sale, a lead, a click, or an impression.
The main focus of performance marketing is to gain as many new customers as possible. It gives minimum focus on customer activation and retention.
Since brands only pay when the customer takes a particular action, they can save a lot of money through the process.
Unlike traditional marketing, they don’t have to spend a bulk sum for a single ad campaign and pray for the miracle to happen. Brands can spend less money and generate high ROI.
Some popular channels to implement performance marketing strategies are
- Search Engine Marketing (Google, Bing, etc.),
- Social Media Marketing (Facebook, LinkedIn, Twitter, etc.), and
The benefits of performance marketing are as follows.
- Budget-friendly – Brands only pay for the results they get through a campaign. This helps them save money while efficiently competing in online marketing.
- Result-oriented – Performance marketing pays great attention to the results (clicks, leads, etc.) a brand gets for its campaigns. It makes it easier to track and monitor the campaign’s performance.
- Brands can use channels like social media, search engines, and websites to market their brand and products to relevant audiences.
- The success of a performance marketing campaign is centered around its ROI. The better the performance, the higher the chances of success.
- Brands can track their campaign’s performance through analytical tools. They can optimize the content when it doesn’t work or is not up-to-date.
Difference between Growth Marketing and Performance Marketing ?
Growth marketing and performance marketing have very few things in common. Here are some of the differences between them that brands should take note of before choosing one for their business.
Growth marketers aim to achieve long-term, substantial growth for a business. They experiment and implement strategies that work well among existing and potential customers.
They establish meaningful relationships with customers and stay with them throughout their customer journey.
Performance marketers use tried and tested strategies to create advertisements that can give maximum results in the shortest time. They aim for short-term results, usually impressions, clicks, leads, etc.
Growth marketing heavily relies on customer relationships. It is customer-focused and tries to create strategies that meet the customers’ needs. They support and solve customers’ problems whenever and wherever necessary.
Performance marketing, on the other hand, is completely profit-focused. Its main goal is to achieve its desired goals and acquire as many customers as possible. It aims to gain a high ROI in the shortest time.
Growth marketers repeatedly experiment with new and creative marketing strategies that can give the best results for the business.
They take these proven strategies and optimize them to add a layer of personalization to suit the customer’s needs.
Performance marketers use tried and tested marketing methods to attract and acquire more customers.
They create paid advertisements that can give them quick results in a short time.
Growth marketers ultimately aim for the growth of a business. They aim to build real-time quality customer relationships for retention and advocacy.
Performance marketers, on the other hand, use specific key performance metrics like CPC (cost-per-click), CPL (cost-per-lead), and CPA (cost-per-acquisition) to measure if the goals are met.
Which one to choose for your business?
Well, this is a tricky question. Because both growth marketing and performance marketing benefit business in different ways.
To make things easier, here are two factors that brands need to consider before choosing a marketing strategy.
- What stage is the business in?
- What are your business goals for the future?
If a startup company is looking to grow its customer base and increase brand value, then it should go for growth marketing.
It focuses on optimizing and building content for long-term growth, not just to get clicks or impressions that provide short-term growth.
Growth marketing understands what makes a company grow and works on developing it through data-driven marketing strategies. They help create marketing models that steer the company toward success.
On the other hand, performance marketing requires a higher budget to keep your ads running. You also need to know which platforms your target audience is frequenting.
This marketing method can be helpful for brands that have already established themselves in the field and have a huge cash flow.
So, whether growth marketing or performance marketing, choose the one that suits your business.
Frequently Asked Questions
Knowing who your audience is when creating marketing strategies can help you create more customized ads that cater to the audience’s needs. Customer personas dig into the customers' Job To Be Done (JTBD) and let you know how your customers use your products to achieve their goals.
User personas are very beneficial to understand the customers who use your products. They help you
- Understand user behavior,
- Create user-centric products,
- Create consistency across the business,
- Improve workflow in design and product development, and
- Know when and where to position your products for better reach.
Some sources where you can get customer information to create personas are
- Online surveys and personal interviews taken on customers,
- Your website, to know how your customers found you and which websites they come from,
- Keyword research, to know what terms your customers use to find your products and
- Through sales representatives that work closely with customers or distribution centers.
You can create six types of buyer personas after gathering all information about your customers. They are
- The innovator,
- The perfectionist,
- The value shopper,
- The impulsive buyer,
- The bargain hunter, and
- The loyalist.