17 Apr 2022
Growth loops: The ultimate way to run your Growth Strategy
Growth loops are one of the most innovative and effective marketing strategies available today; a great customer acquisition tool. It is the best way to attract new audiences, retain old ones and succeed on multiple levels (for example, positive reviews on social media, steady customers, growing new consumers, and increasing sales).
What exactly is a growth strategy?
You'll always need a growth strategy, no matter how good your product is. A growth strategy is a company's blueprint for overcoming current and future obstacles to achieve its expansion goals. Rising market share and income, gaining investments, and enhancing product growth exemplify growth strategy objectives. Here are 10 ways to improve your growth strategy!
The most popular way to run your growth strategy is through marketing funnels. Especially in previous years, all marketers and many businesses preferred funnels. The funnels are based on the model of Dave McClure's, the aarrr funnel framework. But, nowadays, more and more marketers use growth loops.
Marketing Funnels / Sales Funnels
Marketing Funnel describes a unique way to attract new customers by employing various marketing strategies based on where a customer is in the purchasing process. This is not a linear growth process because your future customers are unlikely to be on the same page.
As a result, successful companies must use a variety of funnels to reach all of their customers to expand their market development.
Every customer follows specific steps before finally making a purchase, that is, before turning from just a consumer to a customer. The same content in the same media will not be available to those in the early stages of the market and those in the late stages.
Each customer team requires a different level of service. Each team is one cohort and has a unique set of requirements to progress.
Marketers target people at different buying stages with other tactics to push them to continue the "buying journey." This tactic is called a funnel because the further you go through the buying stages, the more you "lose" consumers.
Start thinking about this. For instance, if you start with 100 customers at the top of the funnel, only a tiny portion of them will eventually reach the final stage and make a purchase. So, instead of converting every customer into a buyer, your goal should be to improve the process to yield more results.
This should not discourage you. This is the natural course of the market share as it stands today. Your company is not doing anything wrong. Try to focus on how to improve your techniques to lose as few customers as possible. It is impossible for your company not to lose customers at all.
Stages in a Sales Funnel are as follows:
The sales/marketing funnel begins from the moment a potential customer learns about your brand to the point at which they make their first purchase with you—and possibly subsequent ones—sales/marketing funnel begins. Depending on the buyer personas you've created, your target market, and the products and services, this shopping experience can vary from person to person.
Before creating a marketing strategy and a sales funnel, your organization must have a clear business purpose, develop a specific marketing strategy, and establish a common goal. For example, increasing the revenue of a particular product or the e-store may be one of your objectives.
A traditional funnel consists of four primary stages:
1st stage: Awareness
During this early stage, you attract the attention of your potential customer. This can happen due to a tweet you upload or an organic search on Google. Potential customers consider your business and what you have to offer during the awareness stage.
At this stage, your goal should be to attract leads to your website and familiarize them with your business. So do not forget to use tools like important metrics in search engines and your site to check out the network. Aim to draw in visitors to your website and educate them about your company at this stage.
2nd Stage: Interest
Once they've reached this point in the sales funnel, users begin to look into their options, checking out prices and other offers. This is the perfect opportunity to provide them with data that will impress them and assist them in solving their problem, all while avoiding the temptation to try to sell them anything.
Use tools like your content marketing or digital advertising; For SEO and PPC to make an impact.
3rd stage: Decision
The customer is now in charge of making the final purchase decision. They have narrowed their options down to a few and maybe considering two or three. If you're involved in other businesses, it's time to reach out to them via the newsletter or advertising campaign and offer them a free subscription and an "exclusive discount." It distinguishes you from the rest of the companies and convinces them to choose you.
4th Stage: Action
Customers' action is at the bottom of our funnel at this point. Purchase one of your products or services to become a part of your company, and the best is to speak for you and recommend us to our family or friends.
Just because a customer has reached the end of the sales funnel does not mean that the process has ended. The consumer and you are both affected by the action stage. Therefore, you must always look for ways to expand your business and increase profits.
As a result, you must put more effort into keeping your customers. Users who have already purchased from you and are pleased with their purchases are an example. All you need to do is keep your current customers happy and turn them into brand ambassadors.
No one can increase your revenue more effectively than your existing customers through the powerful influence of word of mouth.
You must assist your users with their product-related issues and questions to keep them happy, or you have to upload relevant content as they adore. In other words, you want them to remain loyal to your brand and its offerings to increase your user base.
The Problem With Using Just Funnels
Even though funnels can be helpful in their own right, they force you to create strategic and functional communication gaps when applied to Growth Strategies.
In most companies, marketing is in charge of raising awareness at the top of the funnel, product management is in demand in the middle, and sales are in order at the bottom of the funnel.
If marketers are generating limited leads, then the project managers will be unable to expand the market, and the sales team will be unable to satisfy their conversion targets.
There must be synergy between product distribution channels and monetization methods for compounding growth. Because of their interdependence, all three must be viewed as closed systems as they do not follow one direction.
Although the funnel framework has its flaws, the notion of growth loops can help you overcome them.
Growth Strategy examples
Other examples of growth strategy are:
- Customer Experience or customer acquisition
- In-person outreach
- Growth loops (or viral loops)
Growth Loops and new users
Growth loops are also a customer acquisition strategy known as "milestone referral or viral loop." More and more companies gain from growth loops every day.
A great example of growth loops is this: Once your clients have had the opportunity to try out your product, they may agree to share it with their social media followers or close friends if they receive a substantial reward for doing so.
Every time a user informs a friend about the service, they get a free gift. To increase the number of potential users, the process is repeated indefinitely. As a result, the vast majority of social media saw sustainable growth.
The visual representation of a continuous process is growth loops. The actions result in the creation of a new user. Another example of growth loops is when inputs lead to increased output in the form of data that can be paid back. Returning or new users, defense, and effectiveness are growth loops that lead to different outcomes.
Growth Loops Examples
Word-of-mouth can create growth loops, and in our case, both existing customers and newcomers who download the app, share it with their contacts, or make a purchase are rewarded. Pop culture is a constant source of growth loops, and we see them all the time. But, most of the time, those growth loops do not have rewards.
For example, someone has watched a film in the cinema. A short review of this show on Twitter or another social media platform indicates whether or not he is satisfied. As a result, another user sees this post and decides to watch and review the same program. The trends are established and defined in this manner.
Another example of growth loops is when a coffee shop offers its customers free cookies in addition to their coffee. The client, who took her coffee from this shop, goes to work and discusses it. Most likely, her coworkers will return the following day, buy coffee and leave a positive review on Google or social media.
Let's look at an example that's even more specific; LinkedIn. LinkedIn's growth loops are impressive. Its users have grown from 37 million to 660 million over the past decade, making it the most popular company platform globally. Many testing in the early days led to growth loops based on encouraging more users to invite their connections on LinkedIn, which proved essential to LinkedIn's long-term growth.
Advantages of Growth loops
Loops help you figure out how to invest the money or the output of one cycle into the next cycle and get even more outcomes out of the process. Rather than producing a single, linear result, the compounding effect of a loop is achieved, which is critical for long-term development.
Each stage in the loop should have the following three components:
- What is the loop's action or activity?
- Who is the user (business, customer, supplier, etc.)
- What is the reason or motivation for doing this?
Understanding the user persona, goals, and habits is the first step in developing a growth model. You can start adding metrics to each stage and building a growth model from the ground up once you've compiled a list of these.
Comprehending the loops, how to map them to your product, and how to measure them are just two steps in the process. You can use it to rethink your approach to product development.
However, it is difficult to represent all personal levers and their impact on your metrics in a single graph. You must restate your loops into a numerical growth model to interact, optimize, make significant investments, achieve objectives, and push your metrics roadmap.
Different metrics, objectives, and preferences will result from different perspectives on how your product grows. A growth strategy brings all interested parties together and allows them to work as a cohesive unit, knowing precisely what they do and why.
Do not hesitate to contact us if you want to boost your business performance and learn all the secrets of the marketing world. Our approved team is here to assist you with anything you require!