Tips & Guides — 26 Oct 2020
Partnerships in Growth Marketing
As they say, look before you leap. Growth marketing is based on rapid experimentation principles to identify the most efficient ways to grow your business. In this case, there are no quick hacks that everyone would immediately apply. Ultimately, however, growth marketing leads to results that outperform traditional marketing approaches.
Partner marketing provides values similar to growth marketing. Therefore, partnerships’ influence on marketing strategy is increasing. 2020 IDG Partner Marketing research says that organizations spend on partner marketing 37% of overall marketing budget, and 68% of interviewed expect this number to increase in the next two years.
We offer to explore more in-depth how the role of partnerships in growth marketing strategy is evolving. So, let’s first define what exactly growth marketing is.
Growth Marketing is a data-driven method that uses tests and new technologies to achieve optimum results. It exists by rule – failure is the stepping stone for success. If something works, then growth marketers rely on it. Otherwise, they conduct additional tests. Growth marketing adds new layers to traditional marketing models such as A/B testing, SEO optimization, AI and automation, user experience, dynamics ads, etc.
A deep understanding of who the customer is can guide the growth marketing strategy to better address its goals. That’s why the most significant difference in growth marketing lies in the marketing funnel that goes beyond awareness and acquisition. The general objectives of growth marketing are:
Customer Retention is perhaps one of the top priorities in growth marketing. Retention of current customers not only leads to their satisfaction and keeps them around for a long term, but can also bring in new clients through word-of-mouth marketing. That’s why growth marketers start focusing on customer retention and only then scale the rest of the budget on customer acquisition.
At this stage, the main task is to reach new customers and convince them to purchase. You need to clearly see the possible customer journey to be visible within the marketplace. Where are people looking for a solution to their problem, and at what stage of this search will customers land on your product?
The right balance between retention and acquisition leads to a sustainable strategy that will be profitable. If the cost of customer acquisition exceeds the lifetime value of the customer, then this business model is doomed to fail. With the right approach, customer retention will exceed churn and lead to increased customer lifetime value.
That’s where partnerships come in handy. Partner marketing is based on the same principles to achieve the same goals as growth marketing. So, let’s take a closer look at the similarities and differences between these two marketing types.
Understanding how modern partnerships work is wise for any business.
Partner marketing allows you to promote your business on a broader range. You create new ways to advertise your product with each new partnership. Of course, your partners’ methods may not match all the principles of growth marketing, but partner marketing itself means collaborating with reliable and productive partners.
Partner marketing is data-driven and all about automation, just like growth marketing. Both pivot around growth with a strong bias towards lifetime values. Both are devoted to delivering results and sustainable revenue growth. So, what’s the difference between growth marketing and partner marketing?
Aside from how much growth marketing relies on an open-minded approach, ad campaigns are still more under your control and responsibility compared to partner marketing strategy. Moreover, it can negatively affect results if you set too many firm boundaries for your partners in their approaches to promotion. However, it’s noteworthy that in partner marketing, the financial risks can practically be reduced to zero. For example, according to how affiliate marketing works, you can pay commissions to your affiliates only upon installs or sales.
Partner marketing can also use the principles of experimentation to select the best strategy, but the metrics will be slightly different from growth marketing. That not only means tracking partner’s contributions and ROI, but also negotiating mutually beneficial payout terms, choosing the best marketing campaigns, promotional materials, and more.
Partnerships require special communication skills from marketers. The ability to establish equal and long-lasting business relationships is a priority. They are just slightly different languages, but the overall goals are the same.
So, what’s the place for partnerships in growth marketing?
In the past couple of years, the Chief Growth Officer (CGO) position in the marketing team has become commonplace along with the CMO. CGO focuses heavily on customer experience and relies on marketing technology. Its mission is to ensure business growth, brand awareness, and support. Evolution of partner marketing role and value in digital marketing makes it one of the priorities for growth strategy.
Partnerships fit well into the growth plan without requiring a radically different skill set or KPIs. With that, we’ve barely scratched the surface of partnerships’ great potential to reach wider audiences. Partnership programs may include affiliates, influencers, media agencies, ad networks, mobile app developers, and any other kind of third-party capable of delivering profitable results.
If we compare the benefits of growth marketing and partnerships, we get the same picture. It’s cost-efficient, data-driven, fast & automated, solves your customer acquisition problems, and prioritizes lifetime values. It doesn’t matter what kind of job title you have, CGO or CMO. If your business development is about profitability, partnerships should be an integral part of your marketing ecosystem.
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