The purpose of marketing is to make a business grow. There are different marketing strategies required according to the nature of the company. The two most notable types of marketing are growth marketing and performance marketing.
This article will talk about growth and performance marketing, their similarities, and, significantly, their differences. It will help the reader to figure out the suitable type of marketing that their organization should focus on.
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Growth Marketing
Growth marketing, as a term, gained its meaning about a decade ago in the business sector. Growth marketing denotes a series of activities solely focused on the user. It encourages conventional techniques such as SEO, interesting blog content, data-backed campaigns, A/B testing, etc.
It teaches a brand to experiment continuously, quickly learn from errors, and modify itself to improve. It uses traditional marketing tools such as billboards, radio, TV, print, etc. Their concern shifts gradually from “How to attract more customers?” to “How to engage customers longer?” Growth marketing concentrates on data-driven advancement that lasts for a long time.
The goal of growth marketing is to evaluate certified sales leads and marketing-qualified leads. The email metrics are clicks and opens. Growth marketing can also denote SEO factors such as the website’s domain authorization and how specific keywords are highly ranked. Growth marketing also evaluates retention stats, such as the number of cross-sells, upsells, and churn rate.
Performance Marketing
Performance marketing involves marketing programs or online advertising where the advertisers pay only after a target action takes place. The action may be the sale of some products, clicking on an article, user-driven lead, and so on.
The goal is the same as growth marketing: attracting more customers, but the techniques are different. Performance marketing runs on leads, clicks, and impressions.
Other things that boost growth through performance marketing are referrals, retention, and revenue.
It follows the “set an action and forget about it” method. It will continue to function and run the ads if the investor provides steady money. Performance marketing is reckoned to be the best as a one-time campaign.
The goal of performance marketing is to evaluate some measurements that can tell a lot about the achievement of the business. It includes returns on ad spend, returns on investment, cost per impression, cost per click, cost per conversion, cost per sale, and cost per acquisition.
The Similarities between Growth Marketing & Performance Marketing
Apart from being common marketing strategies that companies employ to expand themselves and grow more revenue, there are other resemblances between the two.
Both marketing techniques boost the business models with their highly repeatable and scalable processes. For instance, both performance and growth marketing rely primarily on data to acquire a feedback loop, trace progress and initiate vital decisions.
The purpose of both is to set smart goals to produce optimal outcomes. Both strategies require identifying target customers and fixing the key performance indicators to enhance growth.
These are some common similarities between the two, but in reality, the differences between them are even broader and apparent.
The Differences between Growth Marketing and Performance Marketing
The availability of scope is the significant difference between performance and growth marketing.
Performance marketing follows a narrow path of marketing strategy that implies online advertising and marketing. The payment is made after the completion of a target action. PPC, or pay-per-click, is a well-known type of performance marketing. It also includes paid social platform marketing, search engine optimization, affiliate marketing, and sponsored advertising.
Performance marketing strategy follows the notion of payment for performance. Businesses only do payments after predetermined activities such as signups, clicks, or impressions are generated. Performance marketing creates a linkage between the company and the market activities. These help to directly track its effectiveness. Every action will cost some money to the business, and after the campaign, the impacts on the growth can be comprehended.
It is an exemplary process for rapid, short-term growth but is pretty expensive simultaneously.
So, how is performance marketing different from growth marketing?
The conventional form of marketing, growth marketing strategy, is more sustainable and reliable than performance marketing. Without limiting itself to a fixed set of tactics, growth marketing utilizes a plethora of methods to create customer awareness and earn loyalty.
The business funnel at which the company withstands at present indicates the tactics of growth marketing. The key performance indicators along the customer acquisition pipeline will convey the message of how the company can make the maximum impact.
The KPIs of performance marketing is formulated in an inflexible way (impressions, clicks, etc.) that focuses only on the objectives of the campaign. In contrast, the KPIs of growth marketing can showcase broader and more ambitious revenue goals.
Growth marketing does a wonderful and highly impactful job for the company in the long term. It can be compared to a slowly grown garden that will produce ample fruits in the future. For quick and temporary growth, performance growth is the best. Growth marketing, on the other hand, is much more sustainable.
Which Marketing Strategy Performs Better?
A company’s objectives decide on the marketing ploy that will suit them. For example, a company wants to sell 2,000 products by the end of this month, or they want 500 new signups on their platform. In this scenario, performance marketing is the most promising technique.
On the other hand, if the company aims for slow and steady overall growth, then growth marketing should be their choice. It is wonderful to grow a company’s audience without paying much attention to meeting certain sales goals.
Both of these marketing plans can turn a business from rags to riches. But the proper knowledge, the right choice, and the right opportunity make a huge difference.
Can a Business Both Growth & Performance Marketing Together?
Combining the appropriate tactics from both marketing techniques can give a company the exact boost it requires. The balance between quick and spontaneous short-term results and conventional long-term growth can be flawlessly crafted by juxtaposing growth and performance marketing.
Performance marketing may be costly, but there is no better way to test the marketing and sales pipeline. The website traffic can quickly reveal the areas of improvement. And with growth marketing, the company enjoys a long-term, sustainable growth theory.
However, it is also true that in some business models, only one marketing method out of the two can be imposed. Evaluating the correct utilization of marketing strategies plays the most significant role in a company’s likelihood of success.
Conclusion
So, these are the description, goals, similarities, and distinctions of the two giants of marketing techniques: growth marketing and performance marketing. It entirely depends on the nature and characteristics of a company to determine the suitable form of marketing out of the two.
A growth marketing strategy is best for achieving new customers, while performance marketing specifically focuses on the sale of the product.