Growth marketing 2024 playbook: Focus on customer lifetime value

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Utilize this guide to establish growth marketing experiments centered on acquisition, activation, retention, referral, and recurring revenue. Instead of fixating on eye-catching advertisements and superficial metrics, the emphasis for 2024 lies in strategic growth marketing that centers on cultivating genuine customer loyalty.

Prominent brands recognize that the most valuable customers aren’t those who make isolated purchases, but rather those who become devoted enthusiasts, consistently contributing to recurring revenue. Here’s a framework for designing marketing tests that propel users through the AARRR funnel, guiding them from initial acquisition to sustained revenue generation and beyond.

What is growth marketing?

Growth marketing is a specialized marketing approach with the primary objective of expanding and elevating a business by fostering customer loyalty and advocacy.

In contrast to conventional marketing strategies, growth marketing places less emphasis on quickly acquiring new customers and focuses more on identifying and nurturing the right customer base, securing their long-term allegiance to the brand.

Effective growth marketers possess a profound understanding of their target audience, comprehending how individuals progress through the entire customer journey, spanning from initial brand awareness to the actual purchase, subsequent repeat purchases, and referrals.

These skilled marketers leverage customer data and market insights to construct an ideal consumer profile and engage in inventive experiments, disseminating their messages through the preferred channels of their most enthusiastic supporters.

Growth marketing vs. traditional marketing: AARRR framework

Dave McClure’s AARRR framework, also known as Pirate Metrics, stands as one of the most widely recognized growth marketing frameworks.

McClure noticed that many startups he advised were overly fixated on vanity metrics, failing to discern which metrics genuinely reflected business growth. His fundamental belief was that the most loyal customers, and the users they bring in through referrals, offer a superior return on investment compared to any other marketing channel.

The AARRR framework expands upon the traditional marketing funnel by extending it beyond a user’s initial interaction with a purchased product or service and delving into their enduring relationship with the brand behind it.

The stages within the AARRR growth marketing funnel are outlined as follows:

  1. Acquisition: This phase begins when a user first becomes aware of the brand.
  2. Activation: Users move on to this stage when they have a firsthand experience with the product or service.
  3. Retention: In this stage, users not only engage with the product but also develop a strong affinity for it, prompting them to return for more.
  4. Referral: Users who are highly satisfied with the brand often become advocates, recommending it to friends and family.
  5. Revenue: The ultimate goal, where users transition into reliable sources of recurring revenue for the brand.

By dissecting the customer journey into these distinct phases, the AARRR framework provides a comprehensive perspective on the path to sustainable growth and customer loyalty.

Growth marketing in 2024: Getting started

As growth marketing revolves around engaging and encouraging your most dependable customers to endorse your brand to their acquaintances, your initial step should involve defining these customers or identifying those most likely to fit this profile. Furthermore, it’s essential to pinpoint the specific brand value or product attributes that consistently draw them back.

Leveraging data from the previous year can aid in crafting a picture of your ideal customer. Take a retrospective look at your 2023 performance, seeking patterns and commonalities among repeat customers. This data will be instrumental in shaping or refining your buyer personas. Key sources to examine include:

  1. Demographic information derived from advertising campaigns.
  2. User journeys and interests, which are subject to constant evolution, with the pace varying across different industries.

It’s worth noting that today’s ardent supporters might have been your fans two decades ago, but they have likely aged over time. If an in-depth analysis of your demographic data reveals unexpected insights, you should pose two critical questions:

  1. How can I adapt my marketing strategy to maintain resonance with my current audience over the long term?
  2. If my marketing efforts no longer resonate with individuals in this demographic, what steps can I take to modernize my message and connect with a younger audience?

Analyzing Purchasing Trends, the Good and the Bad

Do your most devoted customers share similar shopping patterns? Do they acquire comparable products in a consistent sequence over a similar timeframe? When you can discern a temporal connection between user purchases, you can employ sequential remarketing to enhance brand loyalty among users inclined to engage in such buying behavior.

Conversely, if you notice a decline in brand loyalty among repeat customers following the purchase of a specific product or service, it’s crucial to solicit their feedback. Be prepared to address their concerns openly, both in private conversations and public forums. Social media and email serve as effective marketing channels for ensuring customers feel heard, even injecting a touch of humor if it aligns with your brand’s voice.

NPS Survey Findings

Are there any products or services that clearly stand out as favorites among your fans? If so, consider how you can effectively leverage these products in your growth marketing initiatives.

Moreover, when multiple customers raise similar complaints, use this feedback as a catalyst for reevaluating your user experience, customer service practices, and product roadmap. This presents an opportunity to identify areas for enhancement. Incorporate the process of addressing user feedback and pain points into your content marketing strategy to foster ongoing improvement.

Define your North Star metric

The North Star metric, often abbreviated as NSM, is a singular key performance indicator that encapsulates the fundamental value your product offers to its users. To be considered an effective North Star metric, it should possess the following attributes:

  1. Measurable: It must be quantifiable, allowing you to track and measure its progress accurately.
  2. Long-Term: The North Star metric should represent a long-term goal that remains relatively stable over at least a year, rather than fluctuating frequently.
  3. Within Control: It should be influenced primarily by factors within your control, minimizing dependence on external variables.
  4. Strategic Alignment: The metric should align directly with your company’s overarching vision, mission, or strategic objectives, reflecting its contribution to the organization’s overall success.
  5. Core Value Proposition: It should closely relate to your product or brand’s core value proposition, highlighting the core benefit users receive from your offering.

Examples of North Star metrics from successful companies include:

  • Spotify: Time spent listening, as it reflects user engagement and the value of their music streaming service.
  • Airbnb: Number of nights booked, showcasing the platform’s success in facilitating accommodation bookings.
  • Facebook: Monthly active users, demonstrating the platform’s ability to maintain and grow its user base.

In the context of growth marketing experiments, any key performance indicators (KPIs) used should align with and contribute to the achievement of your North Star metric. This ensures that your marketing efforts are consistently focused on driving the core value your product provides to customers, ultimately leading to sustainable growth.

Growth marketing experiments to try in 2024

Acquisition: Cross-Platform Lead Generation Content Marketing

If you’re aiming to attract your most ideal customers, consider implementing a cross-platform lead generation content marketing experiment. This approach involves identifying where your ideal customers congregate and tailoring your content to effectively draw them to your brand. Here are some suggested variables to test:

1. Format: Experiment with various content formats such as how-to guides, ebooks, webinars, videos, industry reports, whitepapers, case studies, surveys, quizzes, and problem-solving templates.

2. Tactic: Explore different tactics, including lead magnets, promotions, contests, giveaways, challenges, and influencer partnerships, to entice potential customers.

3. Call-to-Action (CTA): Test different CTAs such as “Sign up,” “Subscribe,” “Join the Club,” “Try Free,” or “Create Your Free Account” to determine which one resonates most with your audience.

The key to success in this endeavor is to begin by testing a single variable across all available platforms, such as social media, email marketing, or your website, and then fine-tune your strategy based on the performance of various formats, tactics, and CTAs on each platform.

Here are some potential Key Performance Indicators (KPIs) to monitor:

  1. Conversions by Source/Medium: Track the source of your leads and how they were acquired, whether through social media, email campaigns, or other channels.
  2. Conversions by Landing Page: Analyze the performance of specific landing pages in terms of lead generation and conversion rates.
  3. MQL to SQL Conversion Rate: Measure the rate at which Marketing Qualified Leads (MQLs) are converted into Sales Qualified Leads (SQLs), indicating the effectiveness of your content in nurturing potential customers through the sales funnel.

By systematically experimenting with these variables and closely monitoring KPIs, you can refine your cross-platform lead generation content marketing strategy to attract and engage your most ideal customers effectively.

Activation: Conversion Rate Optimization

When your goal is to enhance the customer experience and boost activation rates, it’s essential to identify where customers tend to drop off in their journey. Conversion Rate Optimization (CRO) is the systematic process of introducing deliberate changes to your customer experience to assess whether those modifications lead to improved conversion rates.

Here are some strategies to declutter and enhance the customer journey, ultimately improving the customer experience:

  1. Clear Product Benefits: Enhance the hero section copy on your website or platform by prominently featuring the clear and compelling benefits of your product or service. Highlight how it solves users’ problems or fulfills their needs.
  2. Streamline Purchase Process: Analyze your sales or sign-up process and work on minimizing the number of steps required for customers to complete a purchase or registration. Simplify the journey to reduce friction.
  3. Form Optimization: Review and potentially reformat form fields to make them more user-friendly and less intimidating. Ask for essential information only, and consider using autofill or progressive profiling to collect additional data over time.
  4. Simplify Layout: Evaluate your website or app’s design and remove any unnecessary buttons, links, or pop-ups that may distract or overwhelm users. Keep the focus on the primary action you want them to take.

Additionally, it’s crucial to reevaluate your onboarding workflow. If users are signing up but aren’t converting into paying customers, consider incorporating instructional content that guides them on how to effectively use your product. This could include video tutorials, interactive guides, or tooltips that help users unlock the full potential of your offering.

By implementing these strategies and regularly monitoring user behavior, you can improve the customer experience, reduce drop-off rates, and increase activation rates, ultimately leading to greater customer satisfaction and loyalty.

Retention: Reengagement Campaigns

To encourage your customers to keep returning, you’ll need to navigate the overwhelming amount of marketing noise that inundates the typical user’s inbox, reading list, social media feed, and search results. Retention proves to be one of the most challenging aspects of any business development strategy. In this stage of the growth marketing funnel, the goal is to experiment with various customer re-engagement methods to determine which tactics effectively remind users why they appreciate your brand.

Here are some suggestions to consider:

  1. Personalized Offers: Tailor your offers based on a customer’s purchase history, demonstrating that you understand their preferences and can provide value aligned with their interests.
  2. Time-Sensitive Promotions: Create urgency by offering time-limited promotions, encouraging customers to take action swiftly to benefit from exclusive deals.
  3. Emails with Updates: Send emails showcasing new products or features introduced since the user’s last engagement, keeping them informed and intrigued.
  4. Remarketing Ads: Utilize remarketing ads across various platforms to rekindle interest among users who have previously interacted with your brand.

While the “hate to see you go” email is a common re-engagement tactic, you can differentiate yourself and gain valuable customer insights by incorporating a brief customer feedback survey. If someone had a subpar experience with your brand, you may not win them back immediately, but their feedback can help enhance the customer experience for future users.

Here are some potential Key Performance Indicators (KPIs) to track the effectiveness of your reengagement campaigns:

  1. Click-Through Rate (CTR): Monitor the rate at which recipients of your reengagement messages click on your offers or content.
  2. Customer Retention Rate (CRR): Measure the percentage of customers who continue to engage with your brand over time, providing an overall picture of retention success.
  3. Re-engagement Rate: Assess how successful your campaigns are at bringing back previously inactive or disengaged customers into the active user base.

By employing these strategies and monitoring relevant KPIs, you can create effective reengagement campaigns that entice customers to return and stay engaged with your brand, ultimately bolstering your retention efforts.

Referral: Turning Superfans into Influencers

When it comes to incentivizing your loyal customers to refer their friends, you can tap into the power of referral programs and leverage your existing fan base to kickstart the process. Here’s how you can encourage your loyal customers to become advocates and refer others:

  1. Discount Codes: Offer discount codes that benefit both the referrer and the new customer. This mutually beneficial incentive can motivate your superfans to refer friends and family.
  2. Commission-Based Incentives: Implement an affiliate program where customers earn a commission or rewards for every successful referral made through their unique affiliate links. This approach can encourage them to actively promote your brand.
  3. Upgraded Services or Gifts: Provide your loyal customers with upgraded service levels or special gifts in exchange for testimonials, reviews, or referrals. This not only rewards them for their loyalty but also fosters brand advocacy.

In terms of tracking the success of your referral efforts, consider monitoring the following Key Performance Indicators (KPIs):

  1. Customer Referrals: Keep track of the number of referrals generated by your loyal customers. This metric directly reflects the success of your referral program.
  2. Social Listening Metrics: Utilize social listening tools to measure how often users mention your brand or share your content on social media. This can help gauge the extent to which your superfans are actively promoting your brand to their networks.

By implementing these strategies and keeping a close eye on relevant KPIs, you can effectively encourage your loyal customers to become brand advocates and leverage their influence to refer friends and family to your business, ultimately boosting your referral efforts.

Revenue: Building a Customer Loyalty Program

To increase customer lifetime value, consider implementing a customer loyalty program. These programs not only signal to your customers that you value their relationship with your brand but also incentivize them to stay engaged and make repeat purchases. The success of your loyalty program depends on making the incentives exciting and tailored to your customer base.

Here’s how you can structure a successful loyalty program, with flexibility based on your industry and customer behavior:

  1. Punch Card Loyalty Programs: Historically associated with physical stores, punch card loyalty programs have evolved to include virtual options for e-commerce businesses. Customers earn “punches” or points for each purchase, eventually leading to a reward or discount.
  2. Points-Based Loyalty Programs: Assign points to every dollar spent, allowing customers to accumulate points over time. These points can then be exchanged for discounts, cashback, or other exclusive perks. This framework encourages customers to spend more to earn more rewards.
  3. Tiered Loyalty Programs: Tiered programs can be structured either as subscription-based or based on the amount spent. Customers are categorized into different tiers, each offering unique benefits. As customers progress through the tiers, they unlock more valuable rewards. The key is to retain their tier status by continuing to engage with your brand.

In terms of tracking the success of your loyalty program, monitor the following Key Performance Indicators (KPIs):

  1. Customer Lifetime Value (CLV): Assess the increase in the average lifetime value of your customers as a result of the loyalty program. It reflects the long-term revenue generated by a customer over their engagement with your brand.
  2. Monthly/Annual Recurring Revenue (MRR/ARR): Keep an eye on the growth in recurring revenue attributable to the loyalty program, as it indicates the program’s contribution to sustained revenue generation.

By implementing an enticing and well-structured loyalty program and monitoring these KPIs, you can effectively enhance customer lifetime value and foster greater loyalty among your customer base, thereby boosting your overall revenue.

Is your marketing strategy ready for 2024?

If the trends from 2023 are any indication of what’s to come, it’s clear that 2024 will be a year marked by extensive experimentation within the realm of marketing. By preparing in advance and strategically conducting experiments, you can unlock fresh opportunities and insights for both your marketing efforts and your team. Embrace the spirit of innovation, adaptability, and continuous learning to stay at the forefront of the ever-evolving marketing landscape in the year ahead.

Original news from SearchEngineLand