Growth Marketing Experiments: How to Test, Learn, and Optimize for Growth in D2C startups
The Concept of Growth Marketing Experiments
Growth marketing is a current approach focused on steadily growing a business by using data and trying out different methods. It’s different from old-school marketing, which often concentrates on making people more aware of your brand or increasing sales right away. Growth marketing, on the other hand, considers the whole customer experience from when you first attract new customers to making sure they stick around.
Growth marketing experiments help companies, especially the newer ones that sell directly to customers, to quickly change with what customers want and what’s popular in the market. By testing things out, these companies can try new ways of doing things, see what works best, and get better at marketing to increase customer interest and create lasting loyalty.
Start With Product-Market Fit (PMF)
For a D2C startup, achieving product market fit refers to ensuring that there is a perfect match between the product you are creating and the problem or need faced by the customer.
Getting to this point is super important because it really increases your chances of doing well. Studies have found that D2C startups that nail their PMF are 3.6 times more likely to grow than those that don’t.
Using Growth Marketing Experiments is a great way to test PMF by trying out different approaches and getting real customer feedback. This lets startups figure out if their product hits the mark with their target audience and how it can be better.
How do you know there is a Product Market Fit ? My father, being a SMB owner, once told me “In earlier days, if a business would achieve a revenue of 1 lac rupees per month, we would consider the business to be at a good scale and that the business will survive. However, in today’s scenario, if a business has achieved a total of 1 Crore rupees in revenue, we can consider that the business is safe and will survive and thrive.”
A lot of experts in the west take 1 million dollars ARR (Annual Recurring Revenue) to be the milestone for a business to be considered as having reached the PMF.
But there is a catch. This 1 million ARR is not supposed to be coming from different categories or different products. It has to come from the same category or product. It also implies that you are getting more of the repeat purchases in the business and the customers keep coming back to you !
The Growth Marketing Experiments Framework
The Growth Marketing Experiments framework is a step-by-step approach that helps companies grow steadily by concentrating on trying out and tweaking their strategies. It has four key phases: Research, Ideation, Experimentation, and Optimization.
Research is when companies gather info about who they’re selling to, what’s popular in the market, and how customers act.
Ideation is when teams throw out wild ideas for tests based on what they found out. It gets everyone thinking outside the box to come up with better solutions for what customers want.
Experimentation is when these new ideas get tested out in real life. Companies use this step to see what works and what doesn’t.
Optimization is when you look over the results of the experiments to make your marketing strategies better. This ongoing work helps companies tweak their approach using what they learned from their data.
The Role of Research
For Growth Marketing Experiments you need research that is all about gathering info on who your customers are, what’s popular in the market, and how people act when buying stuff. By getting what customers want and like, new businesses can find chances to grow and make their marketing plans work better.
Research indicates that companies which rely on data can make their marketing efforts 30% more effective.
The Ideation Phase
To come up with testable ideas, start by looking over the latest info and what customers like and how they act. A good idea should be easy to understand, easy to discuss in terms of goals and objectives or results, and founded on assumptions that are testable.
For example, a strategy might be: ‘If I offer a 20% discount for first-time buyers, I will get 15% more first-time buyers in a month.’ Another example could be: ‘If I include actual customer reviews in the product descriptions, I will obtain 10% increased sales.
Designing and Implementing Experiments
First, ensure that the Growth Marketing Experiments goal is well defined and aligns with the goal of the business that you are in. Then, create a specific list of all the test objectives, the target audiences, the time frame, and all the equipment and resources required.
It is always advisable to allow the necessary time in each of these steps and on average it will take around 4 to 6 weeks to get a good result in any test. As always be sure to include how they would know whether their test is working based on the number of sign ups or the amount of engagement they get.
Analysis indicates that businesses that have a precise idea of targeting are 30% more likely to achieve desired growth rates.
Optimizing for Continuous Growth
To keep growing in their marketing, companies should plan smartly based on what they’ve learned from before. By looking at how they did, they can make their plan better, sticking to what works and throwing away what doesn’t.
The step-by-step journey of growing marketing shows how key it is to keep trying new things. Companies that often try out new stuff can see their growth jump up by 20% more than those that don’t.
Also, using marketing tools that do some of the work for you can help you sell more stuff, making your team’s productivity go up by 14.5%.
Case Studies and Real-World Applications
Glossier: Leveraging Community Feedback
Glossier, a beauty brand selling directly to customers, really listened to what its fans had to say and used that info to make its product range better. They got to know what people liked by chatting online and sending out surveys, and this smart move helped them sell 600% more stuff in just three years. The main lesson is that getting customers involved in making products means those products fit better with what shoppers want.
Dollar Shave Club: Viral Marketing Experiment
One other example of Growth Marketing Experiments is that Dollar Shave Club put out a funny video ad that quickly went viral, bringing in more than 12,000 new members in just one day. This test shows how eye-catching content can really help bring in new customers. But, the company had a tough time keeping up with the sudden spike in orders. The main takeaway is that even though going viral can get you quick gains, companies need to be prepared to handle a lot more customers coming in.
Warby Parker: Home Try-On Program
Warby Parker started a home try-on program where you could try on glasses before you buy them. This move really boosted their sales, with some reports saying they saw a 50% jump in sales among customers who tried it out. The main lesson here is that giving customers a chance to try products without any risk can make them trust you more and help you sell more, especially when you’re selling directly to customers.
Casper: A/B Testing for Website Optimization
Casper, a mattress brand, tried out different website designs and buttons to make shopping easier for users. They played around with layouts and buttons until they hit on one that made sales go up by 30%. This example shows how important it is to keep tweaking and testing your website to keep customers interested and increase sales.
Allbirds: Sustainability Messaging
Last example of Growth Marketing Experiments is that Allbirds focused its ads on being eco-friendly, trying out various ways to talk about it to see what people liked most. Their tests showed that talking up their green materials made 25% more people interested. This shows that when ads match up with the main values of a brand, it can really pull in and keep customers in the direct-to-consumer world.
These examples highlight how trying out different Growth Marketing Experiments strategies can help D2C startups do well. By checking out these tests, startups can figure out how important it is to get customers involved, use powerful messages, and keep getting better at what they do.
In my experience…
If you are a company which is yet to achieve product market fit, experimentation is still possible but at a micro level. What I mean is in the early stages, it becomes very critical for startups to listen to the customer feedback. Implementing feedback loops is something that will take you far in your startup journey. This will become the micro level experimentation that I am talking about. And if you are still unsure about whether to go for Growth Marketing or Performance Marketing, check out my other post here.
References
Product-Market Fit Insights. Retrieved from Amura Tech
The Role of A/B Test Experiments in Growth Marketing. Retrieved from BrillMark
Where to find high quality growth experiment ideas. Retrieved from Growth Method
What Is Growth Marketing for Startups? A Comprehensive Guide. Retrieved from Growth Division .
Growth Mentor. Growth Marketing: From Framework To Experimentation in 90 Days. Retrieved from Growth Mentor .