You’d think all the marketing strategies plus access to information make it dead-easy to advertise a company today.
But 41 percent of small business owners are unaware of how to market their company. That’s almost half!
Sometimes, it seems B2B businesses have just given up on a good marketing strategy.
Hang on… Maybe, it’s this abundance of digital marketing approaches and marketing agencies that puzzles them.
I mean, take growth marketing (or growth hacking) and performance marketing. A B2B business owner may be wondering what’s the difference between them, what their benefits are, and which will work better for their business. Maybe both?
Okay, I hear you. No more overwhelming loads of marketing gibberish. Let’s start small and focus on the growth marketing vs. performance marketing distinction for now.
In this article, I’ve gathered some popular questions about growth marketing and performance marketing that are going to help you understand which of these traditional marketing strategies is right for your business.
Nope. Growth marketing is about building long-term growth. It aims at retaining and bringing new customers to your business, experimenting with new approaches, and failing fast to quickly zero in on what works.
Performance marketing, on the other hand, is a short-term strategy where you pay for quick, measurable results. Unlike in growth marketing, you only pay when a specific action (sale, lead, click) is achieved.
Okay, once we have the basic growth strategies figured out, let’s get a little more in-depth.
Performance marketing is a targeted marketing strategy that delivers a performance-based return on investment (ROI). This way, it lets you know the marketing budget was well spent since you’ve paid for the actions that led to conversions.
All performance marketing is paid performance marketing. Take ads. Performance marketing knows where to put them and how to shape them to make sure the money invested in ads returns (and multiplies) in the number of sales.
Performance marketing channels
You’ve probably heard of them and have definitely fallen for them as a user. Here are the top performance marketing channels and tactics.
When a company pays a commission for promoting its products, that’s affiliate marketing. Websites and influencers are now obliged to tell readers that the links they’re asking you to click aren’t ordinary links — they’re affiliates.
Remember those “The Best Father’s Day Gift Ideas” posts Buzzfeed shares so often? When you click on the links they include in these posts and buy the products they recommend, Buzzfeed gets a commission from that purchase because you’re a referral.
Or, you know, when you’re watching your favorite YouTube blogger, and at some point, they slip in the “…link in the description below.” That’s usually an affiliate link, too.
Social media advertising
Performance marketers love social media. Not just because it helps them dissociate (amen!) but also because social media advertising instantly reaches potential customers and calls them to action. This is done with ad campaigns via sponsored posts that show up in a user’s feed or timeline.
Digital performance marketing and social media advertising go hand in hand. So make sure to partner up with a savvy social media marketer or skilled targeting specialist if you’re considering this tactic.
Search engine marketing
You know, when you type the name of the company you’re interested in and see that the first four results are its competitors? You can be that annoying competitor!
Search engine marketing (SEM) is when you use paid advertising to make sure your business's products or services are displayed at the top of the first search engine results page (SERPs).
But there’s a catch: while ad spend instantly boosts your company's visibility on search results, organic search results drive more traffic than paid. Some studies even suggest that people filter out 70-80 percent of paid ads. Let’s just say we humans are inherently suspicious.
Who hasn’t seen a banner ad in their internet lifetime? We all know them: the irritating images that distract you from enjoying the content of the page. On the flip side, they can be barely noticeable, and users might not even glance at them.
You can run these ads on websites popular with your company’s target audience. But there’s a reason people pay for ad blockers — we don’t want banner ads distracting us from the main purpose of visiting a page. So think twice before using them as your primary performance marketing tactic because I suspect you don’t want people associating your business with pesky ads.
Native advertising is when a paid ad looks cohesive with the content of the page it’s being displayed on. If it matches the look and feel of the webpage you’re reading, it doesn’t evoke negative emotions.
Here’s an example: you’ve just read an article, and at the end of the page, you clicked on a suggested article. This brought you to a blog about a company that sells something related to the article title. Turns out the suggested “article” was a native ad, and you didn’t even notice that.
Native advertising allows your sponsored content to live in harmony next to other kinds of organic content. They don’t attack you or disrupt the user experience. Excellent.
Right. Now, how do you know if these types of performance marketing work?
Performance marketing metrics
Thanks to the valuable insights metrics give us, we can make informed decisions regarding the active and future performance marketing campaigns. The results of these metrics also show marketers the effectiveness of each channel. So monitor them to make sure you’re on the right track.
Impressions and clicks
Impressions tell you what facial expressions people have when they see your app. Just kidding — they show you how many times your ad was shown on a particular website or app.
The easiest way to measure ad engagement, though, is through clicks, meaning how many times people have clicked on your ad. There’s a lot of ad clicking fraud going around these days, but it’s still an important metric as tracking clicks let you understand if your ad appeals to the people who see it.
It’s also important to understand as PPC (pay-per-click) is often the way pricing works for ad traffic.
Click-through rate (CTR)
Wait a second… So there are clicks and the click-through rate? Aren’t they the same metric?
The click-through rate, or CTR if you're into abbreviations, is a metric that involves math. Essentially, you take the users who clicked on your ad and divide that by the total number of people who have viewed the page it was on. Without this metric, you won't know how often the people who see your ad end up clicking it.
So instead of simply calculating the number of clicks, CTR measures how well your ads are performing.
Since performance marketing focuses on quickly returning and multiplying the money invested in the campaigns, many of its metrics revolve around cost:
Cost per click (CPC): the money paid every time a person clicks on your ad.
Cost per lead (CPL): how much money it takes to attract a lead.
Cost per sale (CPS): used to measure the efficiency of affiliate links.
Cost Per Mille (CPM) or Cost Per Thousand (CPT): the cost you pay for 1,000 impressions of your ad.
Cost Per Action (CPA): the money you pay when the target audience achieves a target action.
As you can see, these and many more performance marketing metrics target measurable results.
Now, let’s see when you should use performance marketing and for what purposes.
Performance marketing goals
Why are we investing all this marketing budget into performance marketing? Because we need tangible results now — financial results. Performance marketing efforts are about ROI, so its goals are to:
Drive more traffic to the website. If there’s a landing page you want your audience to visit, it’s easy to do with performance marketing. And it will also be easy to measure the efficiency of this approach thanks to CPA.
Generate more leads and convert them into customers. This is generally the job of your engagement team, but a little help from performance marketing channels will be much appreciated.
Make more sales. Yes, ultimately, the goal of any business is to make a profit, which is faster to do with performance marketing than with growth marketing. No hard feelings, just business.
Moving on to why you should (and shouldn’t) go for this marketing approach.
What are the pros and cons of performance marketing?
One of the biggest advantages of performance marketing is that your marketing spending is trackable. And you know how important accurately measuring ROI is for a business.
Plus, it increases your advertising reach and advances the entire advertising process: thousands of people will see your ads in a matter of days — as opposed to nurturing potential clients for months to slip in that one selling link.
But don’t rush to spend all your marketing budget on performance marketing.
One, some affiliates and bloggers may not be trustworthy. If you see that your performance marketing partner acts shady, doesn’t show you previous results with other clients, or changes cooperation details on the go, better call it off. I don’t know which one is worse: getting scammed or losing your reputation. Nope, the second is worse, yeah…
Two, the so-called vanity metrics, like the number of followers or views, might look great, but they don’t have a meaningful impact on your business’s bottom line.
Finally, when you focus on performance marketing alone, you may forget about long-term brand goals that get neglected when you’re high on quick results. That’s why you also have to consider growth marketing.
Growth marketing focuses on long-term growth by generating organic traffic and increasing awareness of your brand. It’s a comprehensive approach that attracts, engages, and retains customers.
You see, the B2B buyer journey has changed. To grow in B2B, you have to focus on building your brand and creating quality marketing content that solves problems. So marketers invest in growth campaigns to build relationships with users through specific channels.
Growth marketing channels
Growth marketing grows on you. Sorry for the pun (which was very much intended), but it’s true: growth marketers try to form a connection with you, a dialog, and give you something in return for your affection. So their tactics and channels are not your usual flashy banners and earworm jingles.
Okay, hear me out. I know you're sick of emails piling up in your inbox. But think about the emails you actually look forward to receiving. I know I'll delete ten emails, but when I see the title that grabs my attention from the company that has sent me ten helpful emails, I'm going to open the eleventh one.
So it's not like emails are bad; it's the lousy writing that makes them bad. Think about that before discarding this time-proven growth marketing channel or sending another “Hello [name].”
Search engine optimization
Love it or hate it, SEO optimization is an indispensable part of your growth marketing strategy. Over the years, people have been trying to crack the code and discover the secrets of tricking Google's crawler into propelling your website to the top.
But there's no secret: find a skilled SEO expert, use keywords wisely, and keep producing awesome content. That’s all it takes to increase organic traffic and keep your website visible to your audience.
If you’re reading this, it means Leadfeeder’s content marketing is working. So why not try it yourself? B2B companies can choose among many content marketing tactics:
BTW, the Content Marketing Institute issues B2B Content Marketing Insights every year. And the 2022 report is an excellent illustration of what works for B2B companies content-wise — empathy. Emphatic content, regardless of the type, builds trust and improves the customer experience.
So remember: content should not be promotional. It’s copy that sells, but content educates, generates interest, adds value, or helps solve your audience’s problems. Consider that when you’re crafting your own B2B content marketing strategy.
Online and offline events
Back to the report (yes, it’s really that good). It looks like events, both online, offline, and hybrid, are the top B2B tactic. Perhaps, that’s because events combine several growth marketing goals (more on them in the next chapter) and loads of benefits for the audience.
They’re helpful tips and fun experiences wrapped up in quality networking. B2B people also love hanging out, so 58 percent of businesses are betting on this growth marketing tactic in 2022. I suggest you be one of them.
Social media marketing
The nurturing kind of SMM used for growth marketing is very different from the aggressive performance marketing approaches.
Because your audience is right there, social media marketing is an effective way of building relations with them. 39 percent of B2B companies expect to invest in building a community through social media in 2022. And that includes not only the white-collar LinkedIn but also the fun Instagram and the playful TikTok (no, you don’t have to be 15 to register).
Sidenote: Growth marketing automation can help you with some of these approaches. Leadfeeder can definitely vouch for that.
I believe that by now, you have a pretty nice understanding of what growth marketing is. But how do you measure it?
Growth marketing metrics
Growth marketing calculates the attention it attracts and the response from the audience. Some of its metrics include.
Website traffic volume. The traffic is generated through SEO, emails, social media, and direct visits.
Repeat purchase rate. The percentage of repeat purchases of your goods or services by loyal clients.
Churn rate. The number of clients you lost over a set period.
All in all, your growth marketing metrics should be focusing on client acquisition, engagement, and retention. Here are several — but not the only ones! — you should track.
Customer acquisition cost
Customer acquisition cost (CAC) measures how much your company spends to get a new customer. This metric is calculated by dividing your total marketing spend by your total number of new customers. See, and you thought learning math would never come in handy.
Lifetime value (LTV)
Basically, by calculating your LTV, you get the entire revenue your company receives from a single client throughout your cooperation (until the person drops you). Although calculating lifetime value isn’t easy (there’s a whole formula with other abbreviations), this is a nice metric for seeing which of your clients are the most loyal and maybe being even friendlier toward them.
By the way, if your LTV is high, you might want to consider account-based marketing. Just a heads-up.
Customer retention rate
The customer retention rate shows the percentage of customers who continue using your company’s services over a particular period (usually annually, but if your team decides to measure it quarterly or weekly, they probably know what they’re doing).
If your retention rate is high, that could mean two things: either your clients love what you’re offering, or it’s too hard to unsubscribe.
Jokes aside, acquiring a new client is five times more expensive than keeping an existing one. This infographic describes it beautifully. Old but gold!
Growth marketing goals
Let me get back to the B2B marketing report just one more time to illustrate the top ten goals B2B companies have achieved in the last 12 months thanks to growth marketing approaches:
Creating brand awareness
Educating the audience
Building loyalty with existing clients
Driving attendance to virtual events
Supporting the launch of a new product
Building a subscribed audience
Did you notice that “Generate sales/revenue” is only number 8? That’s because growth marketing is not a sales strategy. So quit demanding fast results from your growth marketing team. Relationships take time and care, even if it’s a relationship one business has with another.
What are the pros and cons of growth marketing?
Glad you asked.
Growth marketing lets you understand your audience better and deliver exactly what it needs. People tend to stick to the things they like — this includes following your hairdresser to another hair salon. So when you see an opportunity to form a connection with your audience, don’t mess it up.
Over time, steady growth marketing will also boost your SEO. 72 percent of marketers say producing content that really resonates with your audience is the most effective SEO tactic. So consistent experiments and analysis will show you what content attracts the search engine — and clients.
But perhaps the biggest advantage of growth marketing is that you build your own brand. When you’re selling services that vaguely differ from your competitors, the brand, its voice, and its values make all the difference for clients.
On the downside, this is not a set-and-forget marketing strategy. Demand generation requires ongoing effort and investment.
On top of that, growth marketing isn’t something just anyone can do: finding people who can embrace your company’s tone and become your company’s voice may be a challenge. But I believe in you.
Okay, now let’s summarize the major differences between growth marketing and performance marketing just to make sure you got everything right.
The two approaches probably have fewer things in common than a dog and a cat (if you ask me, I say growth marketing is the cat). But let me narrow their differences down for you.
Growth marketing is all about optimizing your marketing strategy to achieve long-term, meaningful connections. Performance marketing focuses on fast-to-deploy campaigns and short-term results.
Performance marketing success means particular key performance indicators are met. Growth marketing aims for sustained business growth and building real relationships with customers to foster loyalty.
Performance marketing is based on tried-and-true methods that bring tangible results. Growth marketing takes proven techniques and adds layers of personalization, empathy, and care to ensure the client is satisfied.
Now, there’s only one more question you have to answer:
I know this article was a lot, so let me be brief here.
If your business is a startup or SMB, the best form of marketing is to go for a more comprehensive, sustainable, long-term growth marketing strategy. This will allow you to build a solid client base. Plus, it covers a wide range of marketing channels in the marketing funnel.
If your business is a well-established brand in B2B, then performance marketing is the way to go. It requires a bigger budget for ads, social media campaigns, affiliate marketing, and more. But it’s better suited for one-off, targeted marketing campaigns for multi-scale companies.
Note: Leadfeeder has you covered with tracking website visitors, helping you build an effective growth marketing strategy.
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