B2B Growth Marketing vs B2B Marketing – What’s the Difference?
The difference between B2B marketing and B2B growth marketing is anything but trivial.
On the surface, the big difference may sound superficial.
But if you dig deep, it's actually quite profound.
Growth marketing is about engineering the kind of coveted, massive growth that leads to billion-dollar valuations and insanely high trading multiples investors crave.
Growth marketing is just not about branding or PR or thought leadership or getting ratings and reviews.
That's not to say these activities aren't useful when applied selectively to support growth at the right stage of a startup's evolution.
But B2B growth marketing is much more intentional.
What is a Growth Marketer?
If you're looking for a definition, I'd say growth marketers optimize owned, shared, earned and paid digital media for relentless growth through organic virality, sometimes at the expense of profitability.
Growth marketing is about driving growth at all costs.
In their startup days, Paypal lost money at the per-transaction level.
Zappos — one of many lean startups that put speed to market before efficiency — lost money on shoe sales.
And Amazon's competitive pricing strategy deliberately puts market share before gross profits. They'll lose money on ecommerce sales in order to grow their customer base.
Instead of vanity metrics like traffic, session duration, and bounce rate, growth marketers use growth as the key performance indicator.
It could be user growth, subscriber growth, revenue growth, or product utilization growth. Bu growth marketing is always about growth.
But it's typically not just about lead generation. After all, what's the true value of a marketing-qualified lead that never closes?
Or web traffic that doesn't convert?
Regarding B2B growth marketing vs B2C growth marketing, the former involves longer sales cycles and more decision-making, so it's typically more educational.
B2C growth marketers are focused on selling to individuals who make up their minds themselves, usually quicker. B2C SEO and B2B SEO have similar distinctions too.
I wrote the book.
The difference with B2B growth marketers is they gravitate to tools with closed-loop reporting that can measure revenue attribution rather than hunches or opinions.
Instead of trying to boil the ocean and do everything simultaneously, growth marketers optimize digital media against analytics to drive growth.
When you can track activity back to revenue, you can test, improve, and optimize based on performance.
Growth Marketing Case Study- Uber
The best book I've read about growth marketing is Blitzscaling by Reid Hoffman and Chris Yeh.
Yeh is a New York Times reporter, so it's well written. And Hoffman has privileged access to all kinds of inside information about how Silicon Valley startups drive growth.
Here's a short excerpt of a case study from the book that makes the business case for putting growth before profits:
“Uber often uses heavy subsidies on both sides of the marketplace when it launches in a new city, lowering fares to attract riders and boosting payments to attract drivers. By paying out more than it takes in on those early trips, Uber is able to reach critical scale faster than a more conservative competitor. Given the winner-take-most nature of the ride-sharing market, that wasteful spending has helped Uber achieve a dominant market position in the cities in which it operates.”What is Blitzscaling, Pg. 47
It's worth pointing out that software companies have an easier time driving growth than manufacturers. For example, Tesla Motors lacks the infrastructure to meet the demand for its vehicles, so it would be pointless for them to invest in growth marketing.
So far, Elon Musk has been unable to bypass those growth limitations.
Growth Hacking Strategy
“If you look at sales and marketing as a revenue engine or a system, it affects the way you make business decisions. You don't make siloed decisions. You make decisions that help the system,” says sales and marketing alignment expert Jeff Davis in a recent episode of his Alignment Podcast.
The basic argument is that when cross functional disciplines come together — like sales and marketing — in service of revenue growth, the outcome is always going to better, because they're focused on company, rather than departmental growth.
For a growth marketing strategy to be successful, folks from marketing, sales and customer success have to operate as one system, and be accountable to common KPIs.
“You cannot look at data in department silos. You cannot say marketing has a handoff to sales. That is fundamentally flawed. That concept of a handoff implies a silo. Your data cannot be separate. You have to look at the entire customer life cycle,” says InsideSales.com CEO Dave Elkington.
That means everyone has to work together. “Reps are the people closest to the customer and their group knowledge around what prospects want is invaluable,” writes Outreach.io CEO Manny Medina et al in their new book Sales Engagement: How the World's Fastest Companies are Modernizing Sales through Humanization at Scale.
It's doesn't matter who's right. What matters is what's profitable.
Growth marketers trade their ego for insights and vanity for revenue-oriented metrics. Growth marketers are less interested in things like sessions and bounce rates than they are in whether those activities generate revenue.
Product Led Growth Marketing
One way startups drive growth is by releasing free products or services designed to build market share.
This approach involves releasing a stripped-down version of the product to get a broader user base in place that can be upgraded to a premium version with more bells and whistles.
Product-Led Growth is a go-to-market strategy that relies on using your product as the main vehicle to acquire, activate, and retain customers. If you’ve used Slack or Dropbox, you’ve witnessed this first-hand-you didn’t read a lengthy whitepaper on the benefits of strong internal communication or cloud-based file sharing. You wanted to see the damn product in action!Wes Brown, author of “Product-Led Growth: How to Build a Product That Sells Itself“
Product led growth is a natural approach for services that rely on a network effect to drive value for customers, since the value customers get is directly related to the number of other people using the service.
And venture capitalist Sean Fanning (of Napster fame) maintains a list of product-led growth companies, including Shopify, Atlassian, Zoom, Twilio and Slack, which rely heavily on growth marketing strategies to outperform their competitors.
Fanning “continue[s] to believe that the valuation gap between public product led growth businesses and the rest of the public SaaS landscape will widen…”
Compared to his SaaS Index, gross revenues and enterprise value-to-revenue (EV/R) multiples at product-led growth (PLG) are roughly double.
And they're not afraid to spend more (as a percentage of revenue) on sales and marketing as well as research and development to drive growth.
If you're intrigued by the notion of adopting a growth marketing strategy as an SMB, you're not the only one.
Growth marketing is not the exclusive domain of venture-backed startups and high flying public companies
Data Driven Insights
The science of growth marketing is steeped in data analysis. Growth marketers measure everything and optimize their sales outreach sequences based on the data.
But in order to understand the journey their customers take from awareness to renewal and develop replicable, repeatable omni channel sequences that sales development reps can use to accelerate lead acquisition and qualification, you have to start with clean data.
“More than 80% of the people that we work with are trying to get a better understanding of their customer journey map but there are all these integration and data hygiene issues that need to be addressed first before they can even get to a place where they trust their data,” says John Wall, partner at Trust Insights, a leading predictive analytics firm.
“To be able to accurately measure today's sophisticated marketing campaigns, you need a modern tech stack that integrates from the top of your funnel to the bottom” writes Medina.
Once you've got clean data, it must be maintained and that means you need to record every customer interaction and that weighs heavily into the tools that growth marketers adopt.
Growth Marketing Software
“Marketing Tech Stacks” refer to specific software tools b2b growth marketers integrate into one cohesive application and Medina's book covers many of the current offerings out there, including, of course, his own Outreach.io, which has emerged the leading contender.
“But what if you aren't seeing your retention rates and lifetime value improve as a result of those increased click-throughs?
Worse, what of you can't even know what happened beyond the click?
This is why you have to bypass pure activity and top-of-funnel metrics in favor of true revenue attribution,” says Jessica Cross, a demand generation manager at a prominent high-growth AdTech company.
Matches Made on Revenue Heaven: Perfect Pairings for Revenue AttributionA contribution by Jessica Cross to the book Sales Engagement: How the World's Fastest Growing Companies are Modernizing Sales through Humanization at Scale, Page 152
1. visual website optimizer + Heap Analytics
2. Segment + Customer.io
3. Outreach + Bizible
4. Marketo + Salesforce
5. Quickbooks + Revel
“Never choose a product that can't truly tie to dollars earned — it's not worth the price of admission,” says Cross.
Why Growth Matters
“Profitability is not the be all end all for startups. It might be as important — or even more important — to grow your customer base and grab market share first, while you're still disrupting the existing market,” says Andy Sack of Lighter Capital, a revenue based financier, in his ebook The 8 SaaS Metrics that Matter: What Investors Look for When Funding Tech Companies.
Stay tuned for more as I continue to share my research for an upcoming book I'm writing on Growth Marketing.