You have a product that the team is passionate about. The group wants to start spreading the word and building up a stable clientele. However, they are unsure whether to use a traditional or growth marketing strategy. And the band admits they’re confused about the differences between the two.
While there may be some overlap, the differences between traditional marketing and growth marketing are easier to spot when looking at the end goals. Each approach relies on strategies that focus on distinct timeframes, sales funnel stages, and ways to generate revenue. The two marketing methods also use different decision-making processes, with one focusing more on opinions and the other on data. Here’s how you can spot the differences between traditional marketing and growth marketing.
By knowing the focal points
Both traditional and growth marketing strategies have the goal of increasing revenue in mind. However, companies that implement product or service-oriented marketing plans to generate revenue use traditional tactics. Advertising campaigns aim to stimulate purchases of specific products or services. Sure, a company can run multiple product campaigns at the same time, but the goal is to get consumers to buy those particular products.
Companies that implement growth marketing do not necessarily focus on increasing revenue through the individual sale of products and services. Instead, growth marketers focus on the customer. They are interested in developing this base, retaining the customers who are part of it and building a reputable brand. With a growth marketing approach, sales increase through a personalized approach to prospects, current customers and referrals.
As part of a growth marketing strategy, the entire sales funnel is brought into focus. Marketing efforts and campaigns are not limited to raising awareness of products and stimulating customer acquisition. While these steps are important for increasing revenue, others may be more profitable. After all, acquiring new customers can cost five times more than retaining the ones you already have. And those who are loyal to your brand will spend up to 57% more.
By understanding the delay
When decision makers are looking to increase sales through products and services, they often want to see results fast. Therefore, businesses that thrive on quick turnarounds, instant sales, and trends tend to use traditional marketing. Ads may highlight low prices or limited-time promotions on new product launches. The goal is to temporarily boost sales of these items, create initial awareness, and acquire additional customers.
With traditional marketing tactics like these, the customer is often forgotten after the initial sale. This is why long-term customers tend to get upset when they see a better deal on the same product or service. While new customers are eligible for this award, existing customers are left behind. So, some of them turn to a competitor to get the prices they want.
A few companies are now reacting to this problem by offering the same promotions to new and existing customers. However, this is still considered traditional marketing. Growth marketing seeks to build long-term relationships with customers after the initial sale. Companies that thrive on these relationships find ways to meet unique needs. Companies that use growth marketing also offer added value beyond a single sale or promotion of a product.
By revising the strategy
A characteristic of traditional marketing is that its strategies tend to be set in stone. Once you have a plan in place, you need to let things take their course. You can have print ads scheduled for two months and a 30-second TV spot airing for 12 weeks. If the campaign is performing poorly, you have to wait to get back to the drawing board.
But with growth marketing strategies, you don’t have to sacrifice time and results. There is more flexibility built into the planning and execution phases. As data comes in, you can change what you’re doing.
Say the online video content you posted last week is getting poor engagement and not converting. In response, you revise the main message and modify the call to action. If the results improve, you continue to operate it. But if they don’t, you post something else.
Unlike traditional marketing methods, growth marketing strategies leverage real-time, continuous data. A conventional marketer might decide to launch a campaign based on experience, intuition, and opinion. In contrast, a growth marketer will avoid making decisions based on instinct. Instead, they will collect and evaluate data from multiple sources, be it sales results, online traffic, customer surveys, or industry reports.
Looking at the budget
Since traditional marketing strategies are relatively fixed, conventional marketing budgets tend to be larger and less flexible. Companies that allocate marketing dollars to proven channels such as TV and radio may have higher costs. Running print ads in magazines or newspapers can cost between $2,000 and $160,000. A business using traditional marketing incurs these expenses without knowing whether measurable results will be achieved.
Growth marketing budgets tend to be more flexible and often allocate dollars across marketing channels. A month, additional money can be spent on email campaigns targeting existing customers. Next month, email costs will decrease while more of the budget will be spent on events and social media. Since growth marketers are constantly experimenting with different ways to reach their audience, budgets aren’t as set.
Compared to traditional marketing, growth marketing also tends to use less rigidly defined marketing channels. Influencers, social media livestreams, and online forums are some examples. Companies that implement growth marketing strategies may spend money on outreach activities and platforms that were not intended for this purpose. As growth marketers experiment, they help redefine what campaigns and promotional spend look like.
The decision to go the traditional route or embrace growth marketing is easier when you are aware of the differences between them. Conventional marketing strategies are more likely to focus on revenue through sales of individual products and services. Traditional methods produce quick results but have less flexibility.
Growth marketing seeks to increase sales throughout the funnel by creating personalized customer experiences. Growth marketing also tends to rely more on data and experimentation. Both approaches can be effective, but you’ll need to choose the one that best fits your business goals and outlook.