If your business is at the point where you’re researching marketing strategies, like growth marketing and performance marketing—you’ve hit a major milestone. Just getting a new business off the ground is no easy feat. You have to create a product or service that resonates with buyers and consistently turn them into happy customers. Now that you’ve tackled that, you’re on to the next big challenge: Growth.
Or, as we like to call it: scaling profitable customer acquisition.
More often than not, this puts the pressure on your marketing efforts to perform. You need more leads, more customers, more revenue. Right?
But scaling your marketing efforts isn’t so simple either. Which channels and tactics should you invest in? Which strategies will pay off? Who can you hire to help?
In this article, we’ll answer these questions and more by comparing growth marketing vs. performance marketing, two strategies employed by many high-growth brands. You’ll learn how to determine which is the best option for your business, and if you’ll benefit from a combination of both.
How are Growth Marketing and Performance Marketing Similar?
Performance marketing and growth marketing are two common strategies that businesses employ to expand their reach and grow revenue. Both models empower businesses by using scalable, repeatable processes and share some other characteristics. For example, both growth and performance marketing rely heavily on data to generate a continuous feedback loop, track progress, and drive important decisions.
Both growth marketing and performance marketing also employ smart goal-setting to generate positive outcomes. Understanding your audience and setting key performance indicators (KPIs) that target growth and revenue are critical to the execution of both strategies.
However, despite these similarities, the two marketing frameworks aren’t the same—not by a long shot.
Growth Marketing vs Performance Marketing: How are they different?
One of the key differences between growth and performance marketing is scope. Performance marketing is a narrowly defined segment of marketing strategy focused solely on online marketing and advertising, for which payment is made based on the completion of a predetermined action. Pay per click (PPC) is among the most recognizable types of performance marketing. But the category also includes native or sponsored advertising, paid social media and search engine marketing, and affiliate marketing.
Payment for performance is the distinguishing characteristic of a performance marketing strategy. Businesses only pay for marketing activities when they generate impressions, clicks, sign-ups or other pre-defined actions.
Performance marketing enables businesses to link marketing activities directly to results and track the effectiveness of different channels. While this may help a growing business manage its costs, this level of control comes with a price. Every action costs the business money and once the performance campaign ends, so does its impact on growth.
Employing performance marketing to feed your brand’s growth is like ordering a meal at a restaurant when you are hungry. You’ll get quick, convenient satisfaction, but it doesn’t last—and can be expensive.
So, how is growth marketing different?
Growth marketing is a more holistic and sustainable approach than performance marketing. Growth marketing is channel and tactic agnostic. Instead of selecting from a limited menu of tactics, growth marketing chooses from a full cornucopia of methods for building awareness and converting strangers into loyal customers.
The tactics a growth marketing agency employs will vary depending on which stage of the buyer’s journey (or funnel) represents the greatest opportunity at a given point in time. Growth marketers rely on key performance indicators (KPIs) across the customer acquisition pipeline to identify areas with the most potential, so they can prioritize the right activities, create the most impact, and eliminate guesswork.
In contrast to performance marketing KPIs that are campaign-specific and narrowly focused (the number of clicks, impressions, etc.), growth marketing KPIs are linked to big picture revenue goals. Did a campaign impact quarter-over-quarter (QoQ) growth rate, or contribute to revenue by lowering customer acquisition costs or reducing churn?
Growth marketing is like a carefully planned and cultivated garden, designed to produce sustainable results—in the form of profitable, repeatable revenue growth.
Can your business grow by using growth and performance marketing tactics?
Combining tactics from growth and performance marketing can help your business get the best out of both. Performance marketing can provide much needed short-term results while you're building a growth marketing foundation for long-term, revenue growth.
Customers may cost more to acquire with performance marketing, but you'll be able to test your marketing and sales pipeline faster. You'll have enough volume in the form of website traffic and leads to measure and improve your messaging strategy, offers, email nurtures, and more. Your sales process can be fine tuned. Your business model can even be validated. It can all happen sooner with performance marketing, while a gradual shift that favors growth marketing will reduce costs and support sustainable, organic growth when the timing is right.
As an outsourced growth team, Brand Theory employs a full range of tactics to build a sustainable growth model for your organization. Learn how you can use performance marketing and growth marketing to scale your customer acquisition pipeline by scheduling a no-pressure, one-on-one SmartGrowth Session today.
You’ll get a free growth game plan customized to your goals and a clear roadmap to results. It’s time to grow smarter. Take the first step now.