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24 minutes | Strategy | 05.09.19

Growth Hacking vs. Growth Marketing: definitions, differences & use cases

By Pinja Virtanen

A bunch of clever people I look up to use the terms growth hacking and growth marketing interchangeably. Just look at Julian Shapiro's epic growth marketing handbook to see what I mean.

Having said that, I’m going to do something slightly controversial here. 😬 As the big and scary title up there suggests, I’m about to argue that growth marketing and growth hacking are actually two very different things with a couple of important parallels. 

But before I get to that, let’s take a moment to define the two terms.

1. What is growth hacking? 🚀

In their seminal book Hacking Growth, Sean Ellis and Morgan Brown define growth hacking as “a rigorous approach to fueling rapid market growth through high-speed, cross-functional experimentation.”

According to Ellis and Brown, the core elements of growth hacking are:

👯‍♀️ A cross-functional team that combines marketing and technical product development skills.

🧮 The use of qualitative and quantitative data to gain insights on user behavior and preferences.

🏇🏻 High-tempo testing and the use of rigorous metrics to evaluate and act on the results.

Contrary to popular belief (and other competing definitions), Ellis and Brown highlight that growth hacking is not only about customer acquisition but also about customer activation, retention, and monetization.

It’s also worth mentioning here that while many people have come to associate growth hacking with specific tactics like Google Ads and A/B testing, the original definition would suggest that any experiment that results in rapid and attributable revenue growth can be considered a growth hack.

Finally, Ellis and Brown suggest that companies of all sizes across all verticals can benefit from growth hacking. And while I violently disagree, I’ll get to that later.

2. What is growth marketing? 🎈

Growth marketing is a systematic process that combines strategic brand marketing with tactical performance marketing to acquire good-fit customers and help them become so successful they’ll buy again, buy more, and tell others.

Boy, is that a mouthful.

But breaking it up a bit, growth marketing boils down to:

⚖️ A combination of strategic brand marketing (think positioning and differentiation) and tactical performance marketing (think content marketing and paid acquisition).

⏱ A systematic process that builds on agile development principles and growth hacking practices. The process follows a cyclical sprint model where tactics are prioritized based on their perceived long-term impact.

🎈 The pursuit towards sustainable revenue growth not only through new customer acquisition but also through customer activation, retention, and monetization.

👨‍❤️‍👨 Serving good-fit customers aka companies that match your ideal customer profile — and not just anyone with a heartbeat.

Psst! For a more comprehensive definition and practical examples, read our ultimate guide to growth marketing.

3. What are the similarities between growth hacking and growth marketing?

As the definitions suggest, growth hacking and growth marketing share these four fundamental similarities:

🥅 Goal. The goal of both approaches is to drive revenue growth not only through new customer acquisition but also through customer activation, retention, and monetization.

📈 Data. Just like growth hacking, the success of growth marketing relies on access to both qualitative and quantitative data.

♻️ Process. Both approaches rely on an agile sprint model, which encourages experimentation, data-informed decision-making, and the pursuit towards constant improvement.

🎁 Product. Growth marketing and growth hacking share a reasonable prerequisite: The product itself must be good enough for either of the approaches to work.

However, that’s pretty much where the similarities end. And as for the differences, well… you'll want to read on.

via GIPHY

4. What’s the difference between growth hacking and growth marketing? 🤔

The way I see it, there are four major differences between growth hacking and growth marketing.

I. Growth hacking has nothing to do with brand, growth marketing has everything to do with brand

The most fundamental difference between growth hacking and growth marketing boils down to the two practices’ opposing views on brand. Simply put, growth hackers don’t care for brand, whereas growth marketers live for it.

But let's get one thing straight right off the bat: Growth hackers are brand averse for good reason. And that reason is that they prefer tactics and channels that guarantee perfect attribution. Why? Because knowing exactly where a lead/customer came from makes it possible for them to rapidly decide whether or not a new experiment was successful, and whether it should be scrapped or scaled up.

The problem with brand marketing is that it's poorly attributable. After all, its ultimate goal is to build a consistent (and obviously positive) experience to people who get exposed to the brand. Therefore the business impact of a single tactic (think: replying to a tweet, sending out swag, or publishing a new podcast episode) is difficult to measure. 

Yet, growth marketers are happy to bake these poorly attributable tactics into their playbook, because they know that just because something can’t be directly measured, doesn’t mean it won’t eventually pay off (in real money, too).

If you don’t believe me, just take a look at this graph from a 2018 ProfitWell pricing study, which suggests that B2B customers are more willing to pay for brands they like. Who would’ve thought? 🙄

ProfitWell-brand

Source: ProfitWell

And if the scientific proof wasn’t enough, let me walk you through a more concrete example.

Now let's say your laptop got stolen at a café over the weekend and you desperately need a new one.

You basically have two ways to go about it: You can either march straight into the nearest Apple store and buy the model you like the best (that beautiful dark grey MacBook Pro, anyone?). Or you can start researching and comparing for alternatives based on their price, size, display type, and a bunch of other features.

If you would’ve skipped the comparison step, you’re like me — and about a 200 billion other people who’d rather spend their time on doing literally anything other than comparing laptops.

But how did I know I wanted a Mac? The answer is simple: The brand. I am both aware of it and loyal to it. I know that it costs more than pretty much anything else, and I really don’t care.

What I’m trying to say is this:

1️⃣ There are a total of zero iconic brands that were born out of growth hacking alone. After all, Steve Jobs was a lot of things but growth hacker isn’t one of them. 

2️⃣ Growth marketing grows Apples, growth hacking grows, well... all the other PC brands out there. (And now, let’s all venture a guess on who has the highest profit margins 🤷🏻‍♀️)

3️⃣ Brand marketing is poorly attributable but totally worth it.

II. Growth hackers aim for rapid growth, growth marketers aim for sustainable growth

The other critical difference between growth hackers and growth marketers is the type of growth they’re primarily after. In a perfect world both groups would, of course, strive for rapid and sustainable growth. But I think we all know that’s not always possible.

And when they’re forced to pick one, growth hackers will opt for moving fast. Why? Because they usually work in startup enveronments where they simply don’t have a lot of historical evidence to rely on or the runway to wait for compounding returns.

In practice, though, this usually means that a growth marketer and a growth hacker would approach the same problem from two different angles.

Let’s take the unglamorous task of increasing website conversions as an example.

When growth hackers find themselves in a situation where they have to increase website conversions, they’ll start with all the right steps. They’ll look at historical data and realize that since the conversion rate is already quite high, the fastest way to grow the number of conversions is by increasing traffic. That’s cool. Flawless logic so far.

via GIPHY

But their next decision is less about what’s good for the business in the long run, and more about what will get them results yesterday. And so instead of making the strategic decision to build a steady stream of organic traffic to the highest converting pages of the website, they’ll turn to paid acquisition channels like Google Ads, LinkedIn, and Facebook.

Why? Because they need to see immediate results. (In fact, they're probably in such a rush that by the time you stop reading this sentence, their first ad campaign is already up and running. 🤷🏻‍♀️)

Growth marketers, on the other hand, would realize that it’s okay to spend a few weeks conducting customer interviews and using those inputs to build an SEO strategy that favors high-intent keywords and helps the company rank organically for the same keywords growth hackers will forever be paying for.

Where growth marketers see compounding growth as a long-term investment, growth hacker is forever looking to patch up a fresh cut with a band-aid.

III. Growth hacking is sexy, growth marketing is just hard work without all the hustle

All the stories we hear about growth hacking are well… pretty damn sexy. Like that one guy from Airbnb who hacked into the backend of Craigslist to display Airbnb’s listings for free? Sexy.

Or back when Sean Ellis created Dropbox’s famous referral loop promising free cloud storage to consumers who invited their friends? Damn attractive.

Or when Hotmail added that legendary “P.S. Get your free Hotmail account” snippet to the end of each outbound email? Hot. Hot. Hot. 🔥 (Pun very much intended.)

You get the point.

These epic stories are a big part of why growth hackers are forever looking for these simple yet revolutionary one-off hacks that will skyrocket their business out of this universe.

And then we have growth marketers. The kind of people and teams that approach marketing problems business goals (and realities) first, spend time on getting to know their audience, and are happy to invest some serious time and money in something like brand or content marketing because they know it'll start paying dividends.

Growth marketers are happy to put in the work to target hundreds of competitive long-tail keywords with original content. They're happy to reply to each individual tweet they get. And they're happy to spend hours cross-linking their blog posts and optimizing their URLs.

This is to say, that while growth hacking is usually done in a high-tempo, crazy, creative environment, growth marketing is mostly just a bunch of hard work delivered consistently over time. 

Sure, you’ll want the people in your growth marketing team to be up for trying new channels, tactics, and ideas but you’ll also need them to deliver high quality time and time again — even if the chosen tactic isn’t exactly glamorous, new, or particularly sexy.

IV. Growth hackers have a bias toward technology, growth marketers have a bias toward business and people

By now we know that growth hackers are a hybrid species between a marketer and a full-stack developer. 

Or the way Andrew Chen phrased it in his famous piece on growth hackers as the new VPs of marketing: “Rather than a VP of Marketing with a bunch of non-technical marketers reporting to them, growth hackers are engineers leading teams of engineers.” And to add fuel to the fire: “Business development is now API-centric, not people-centric.”

But where growth hackers rely on technical skills, growth marketers are first and foremost customer-obsessed business strategists. Sure, some of them may know their way around basic HTML, CSS, and JavaScript, but by no means do they have to know how to hack into the backend of Craigslist. 

Instead, growth marketers are the people who can help you solve difficult business problems. Things like who your best customers are, which category your product should belong to, and how to differentiate the product from its market alternatives.

But perhaps even more importantly, the best growth marketers are wizards in conducting, analyzing, and using qualitative customer research. They know that the best marketing isn't a happy accident, but a result of knowing your ideal customers so well that they'd be foolish not to work with you.

Because at the end of the day, the best hacks aren’t really hacks at all

5. How to choose between growth hacking and growth marketing?

While I'd love to sit here and pretend that growth marketing is this amazing one-size-fits-all type of approach that will magically help any kind of a company grow, I’d be lying if I said that.

In fact, in many cases, you’re better off with growth hacking. Here’s how to tell which one of these practices is right for your business.

1. Have you found product/market fit?

Growth hacking is commonly associated with Silicon Valley internet startups (that’s the likes of Hotmail, Dropbox, and Airbnb) — and there’s a good reason for that.

In fact, Sean Ellis thinks that startups are “too desperate and disadvantaged to adapt to the old rules of marketing. [...] If they don’t figure it out quickly, they will go out of business.” And that’s truly where growth hacking comes in handy.

As Ellis admits, the unpopular truth is that growth hacking works for startups because they don’t have a choice. They are characterized by a short runway, high expenses, and everything to prove. And in that situation it makes all kinds of sense to experiment with the product, pricing, and different audiences.

However, as soon as you have a bunch of happy customers who bring in more money than they cost to acquire and serve, you can — and should — adopt a more strategic marketing model.

Because when you have good-fit customers that have a high lifetime value, it is in your best interest to build a scalable engine for acquiring, retaining, and growing similar accounts.

The hard and fast rule #1: If you don’t have product/market fit yet, go for growth hacking. If there’s a clear market and demand for your product, choose growth marketing.

2. Can you achieve product-based virality?

The examples that keep popping up in growth hacking literature are not only internet companies but also consumer-facing internet companies. Yep, I’m talking about Hotmail, Dropbox, Facebook, Airbnb, and PayPal.

And while I would be the last person to discredit the awesomeness of these hacks (because I truly think they’re badass), I would like to challenge you to pull the same thing off with a specialized B2B software for procurement, accounts payable, or cloud storage. 

Because in these industries, you’re simply never going to benefit from “This invoice was made with Invoicr.io”. And that doesn’t mean that your (less-than-cleverly named) company is doomed.

Growth hacking is therefore great for cheap (or better yet, free) consumer-facing companies whose ideal customer is everyone. Think social media sites, mobile games, and productivity apps. 

Additionally, the approach can work for consumer electronics with a longer lifespan and some social features — think wearable tech, gaming consoles, or smartphones. 

Why? Because all these products have one thing in common: they have high potential for virality. I.e. you'll be able to build a neat little referral loop.

Growth marketing, on the other hand, will work for “boring”, expensive, and niche products that are characterized with longer sales cycles, zero product-based virality potential, and higher customer lifetime value.

The hard and fast rule #2: If there’s any potential for product-based virality, hack at it (teehee). But if you’re more like Invoicr.io and don't have a snowball's chance in hell to become a viral wonder, don’t despair. Growth marketing will get you where you need to be.

3. How saturated is your market?

Now the other funny thing about Dropbox, Facebook, Airbnb and the like is that when they entered the market, they literally had no direct competitors. In fact, they all represented a new and better way of getting an old job done.

In those market conditions, the Field of Dreams cliché rings true: You build it and they will, in fact, come.

But fast-forward a few years, and you’ll actually need a serious portion of brand marketing to get your growth hacks of the ground.

Take Drift for an example. When they entered the marketing software landscape in 2014, there were more than 5,000 competitors vying for the same customers’ attention. Have they become one of the world’s fastest growing SaaS companies thanks to the “⚡️ by Drift” icon at the bottom of their chatbot windows alone?

Hell no. Because David Cancel, the founder and CEO of Drift knew that his company had no business entering such a saturated market without a strong brand.

And if you’re in a similar situation, I would strongly advise you to do the same.

The hard and fast rule #3: If you have a clearly superior product but don’t have a ton of competitors yet, feel free to lay low on the brand business for now. However, as soon as competitors (direct or indirect) start showing up, you better make sure that you won’t let them push your price down the gutter. Because that’s what usually happens when you don’t have a strong brand to protect you. And how do you get a strong brand? With growth marketing. Duh.

6. TL;DR

I'm sorry Julian, but growth hacking and growth marketing are two very different things.

Also, neither of them is this one-size-fits-all silver bullet that will work for any kind of a business. Crazy, right?

via GIPHY

Long story short, if you have a pre-product/market fit startup with a short runway (be it from investors' or customers' money), a product with some built-in virality, and/or little to no serious competition, growth hacking might just be the right approach for you.

But remember, as soon as you're out of the woods and you have a handful of happy customers, it's time to start playing the long game with fewer hacks and more strategy. That, my friend, is called growth marketing.

And psst! If you’re interested in getting some help in growing the crap out of your B2B tech or subscription business, you know what to do.

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