As with any aspect of marketing and business growth, there are lots of different marketing models, optimisation processes and customer funnel types.
For simplicity, we’re going to use the Pirate Funnel (also known as AAARRR) to define our customer journey and the G.R.O.W.S. process, which we’ll talk about a little further on.
What is the Pirate Funnel?
The AAARRR framework or Pirate Funnel is used to gain answers to the questions posed at each of the funnel stages:
1. Awareness
The first stage in the funnel also ties into the final stage – referral. This creates a cycle where new customers interacting with a company for the first time, pass through each of the funnel stages, and as they exit, they recommend other people to your company to start the cycle over.
The key to understanding how many people you reach in the awareness stage lies in the advertising channels your company markets through.
For example, vanity metrics will tell us things like:
The type of metric varies depending on the channel being used but commonly, marketing channels used to gain awareness will include landing pages, social media and email.
2. Acquisition
The second stage of the funnel is about making customers engage with your company. This is less about volume and more about quality.
Acquiring lots of customers at this stage is great for bragging rights but if they fail to move through the rest of the funnel, it’s a wasted exercise. What we want to focus on here then, is making sure the right customers are engaging with your business.
We do this by defining our customers using buyer personas. It’s much easier to ideate and create growth experiments once we know exactly who we should be talking to, in terms of our audience.
You can also use Gabriel Weinberg’s ‘Bullseye Framework’ to identify the 19 traction channels.
3. Activation
The third stage is about forming a powerful connection between your product or service and the customer. They need to be blown away by the experience and compelled to engage.
Buyer personas are once gain useful here as they help determine customer pain points and how you can solve them.
Another tool is to gain feedback from customers about what they value most and focus on strengthening that.
Most digital products or services will have an onboarding process of sorts. Dig into this process and see how customers are responding throughout then make necessary changes that optimise performance.
4. Retention
Perhaps the most relevant metric for analysing retention is a company’s customer churn rate.
In short, customer churn is how many people stop using your product or service within a given timeframe, for example, a month or a quarter.
As marketers, we know that the cost of acquiring new customers can be up to 5x as much as selling to existing ones. This places a heavy focus on customer retention strategies.
The Kano Model helps marketers rank a product’s features and benefits in the importance of customer satisfaction. Knowing what to prioritise for customers can be the difference between positive retention rates and negative churn rates.
5. Revenue
This stage tells us how much money is earned from each customer, also known as the ‘customer lifetime value’, or CLTV.
For customers that continue to spend with a company, the CLTV will be greater. The same works for the reverse.
The CLTV metric is important because it tells us which types of customers are loyal and continue to produce revenue for the business. This data can be used for retargeting customers and tells marketers which channels and which buyer personas they should be marketing to.
6. Referral
The final stage in the Pirate Funnel is fairly self-explanatory - this one’s about the customers who love your product or service so much, that they tell other people about it. Hopefully, this creates another sale and another long-term customer for the business.
The Net Promoter Score (NPS) is a good system for measuring customer feedback. The most common example would be something like, “On a scale of 1-10 how likely are you to recommend us to a friend or family member?”
Other forms of referral include social media sharing buttons, reviews and testimonials, and inviting friends to a service.
Exiting the funnel, entering the experiment
The Pirate Funnel gives growth marketers actionable data from each stage of the customer journey.
The next step then, in our growth marketing process, is to create ideas and implement them. To illustrate how best to do this, we’ll be using the experiment-driven process known as the G.R.O.W.S. process.
In the next section, we’ll break down this industry-leading framework, including each of the 5-steps and what they entail.
Growth Tribe’s G.R.O.W.S. Process
The G.R.O.W.S. process is a 5-step loop for running marketing experiments. Used widely by growth marketers and growth hackers, this process helps teams to gather, create and implement experiments.
The 5 steps are:
- Gather ideas
- Rank Ideas
- Outline experiments
- Work, work, work
- Study data
Now let’s look at each step in more detail.
1. Gather Ideas
Using the data collected from the Pirate Funnel, you’ll have a clearer understanding of what the business needs to do, so that it can overcome its growth problem.
This singular objective is called the ‘OMTM’ or ‘One Metric That Matters’. This will become the area of focus for your first run using the G.R.O.W.S. process.
Once we have our OMTM, it’s time to start gathering ideas. This task is not exclusive to only the marketing team either, for additional perspectives and to enhance the power of the collective mind, get as many people from as many departments as possible to share ideas.
Every proposed solution can be listed and compiled into your ‘backlog’. This way, you’ll have a go-to playbook of ideas for future experiments without having to take too much time away from the teams.
Think about these aspects when creating ideas for experiments:
- Competitor analysis and how they approach their marketing funnel
- Conduct user testing for customer feedback
- Use software tools such as Hotjar for heatmaps showing customer behaviour
2. Rank Ideas
Keeping in mind that growth marketing is a long-term strategy and often is tasked with getting results on a limited budget, you’ll want to sort through your idea list and rank them from best to worst.
We want to start with ideas that have the greatest chance of success. For ranking ideas, growth marketers use two frameworks:
- B.R.A.S.S. Framework - which stands for Blink, Relevance, Availability, Scalability and Score. This framework helps growth marketers see which acquisition channels they should test first.
- P.I.E. or I.C.E. Frameworks - respectively, these stand for Potential, Importance and Ease, and Impact, Confidence and Effort. These frameworks are suitable for retention, referral and conversion optimization.
The graphic above explains how ideas are measured and scored - whichever idea comes out top is the one to start with!
3. Outline Experiments
The outline phase of the process lets us map out how an experiment will play out.
When it comes to outlining your experiment, think about these sorts of things:
- What timescale will you allow for the experiment? Generally, this sits between 2 and 4 weeks in most cases. Think about what your goal is and the realistic amount of time you’ll need to implement it, track it and analyse the data.
- Check you can actually do it! Do you have the right tools for the job? Will you need additional software, a higher budget, or different skillsets beyond the scope of your team?
- Who needs to be involved? Will the experiment require approval from stakeholders or higher management? Or can you hit the ground running with minimal oversight?
For growth marketing to be at its most effective, you ideally want to have experiments that can be implemented quickly (a couple of days), won’t stretch your budget, that you already have the majority if not all of the tools ready, and that doesn’t involve long-winded approval processes.
4. Work, Work, Work
Gather the team and get to work!
One of the popular growth hacking methods, called ‘sprints’, speeds things up using short, incremental cycles to test ideas.
To keep things moving at a nice pace and so not to waste time, make sure the entire team knows who’s doing that and keep communication up. Constantly backtracking to repeat or explain things can needlessly slow down the experiment.
5. Study the Data
Check the experiment has worked! Collate all of the data from your experiment and get ready to compile it into presentable information. Visual tools like graphs and pie charts work well here as pretty much anyone will understand what you’re showing them.
If the data check out and the experiment has been a success, expect numerous pats on the back but if not, go back to step 1 and restart the process!
Wrapping up
So that’s it! We’ve covered how growth marketers identify and create problem-solving strategies using the Pirate Funnel and the G.R.O.W.S. process. All in the name of creating long-term and sustainable business growth.
For more on growth marketing head over to our blog page.
