What is growth marketing? How it differs from growth hacking

What is growth marketing?

Growth marketing is a marketing approach that treats a business's growth not as the success of a single channel or campaign, but as the whole journey from a customer's first encounter with the brand to becoming a loyal customer. Its core idea is simple: direct effort to whichever step limits growth the most, and find out what works through controlled experiments rather than guesswork.

In this approach the marketing team deals not only with advertising and content but also with product experience, how prices are presented, email and notifications, and even customer service. Because keeping the customers who arrive and getting them to buy again shapes growth just as much as bringing in new ones.

How does growth marketing relate to performance marketing?

Performance marketing is the discipline of planning and managing the advertising budget around measurable business outcomes, and it is the most visible part of growth marketing. The difference lies in scope. Performance marketing mostly focuses on the acquisition stage, that is, winning new customers at a reasonable cost. Growth marketing carries the same measurement and testing mindset into the later stages of the funnel as well.

In practice these disciplines should not be treated separately. If the first experience of a customer who arrives through advertising is weak, growth will not last, however good the acquisition cost looks. That is why in our performance marketing work we connect measurement, landing pages and retention data to advertising decisions.

What are the stages of the growth funnel?

The framework commonly used in growth marketing divides the customer journey into the stages below. Because of the initials of the English terms it is also known as AARRR, or pirate metrics.

• Acquisition: The stage where a person encounters the brand for the first time and arrives at the site, app or shop. Advertising, SEO, content and referrals feed this stage.
• Activation: The moment a person first experiences the product's value. In e-commerce it may be the first order, in software the first meaningful use, in a service the first meeting.
• Retention: The customer coming back, continuing to use the product or buying again.
• Revenue: The value the customer brings to the business; basket size, subscription renewal or upgrading to a higher plan.
• Referral: A satisfied customer recommending the brand to others, writing a review or sending an invitation.

Each stage has its own indicator, and growth is usually limited by the weakest stage. Adding budget to acquisition does not grow a product with weak activation; it only leads more people to give up at the same point.

How does the experiment cycle work?

What sets growth marketing apart from ordinary campaign management is that the work is run through a regular experiment cycle. The cycle works like this:

1. 1.Examine the data: Find the step in the funnel where drop-off is most pronounced and its likely causes.
2. 2.Write a hypothesis: State in a single sentence what you will change, what result you expect and why.
3. 3.Prioritise: Compare the likely impact, ease of implementation and your confidence in the finding, then set the order.
4. 4.Run the experiment: Where possible, run it with a control group, a single success metric and a predetermined duration.
5. 5.Record the learning: Log winners and losers alike; a losing experiment also helps you understand the customer better.

We explain the method behind on-site experiments on our CRO and analytics service page. The same logic can be applied to ad creatives, email flows and price presentation. What matters is that experiments do not remain scattered ideas across individual campaigns, but build up in a shared log that grows the team's knowledge of the customer.

Which metrics are tracked in growth marketing?

The aim is not to track lots of indicators but to assign a main indicator to each stage and connect them. The most commonly used are:

• Customer acquisition cost (CAC): The total marketing and sales cost spent to win a new customer.
• Customer lifetime value (LTV): The total profit a customer leaves the business over the relationship.
• Conversion rate: The share of people who move from one step of the funnel to the next; tracked separately for each step, not as a single rate.
• Retention rate: The share of customers won in a given period who remain active in later periods. Grouping customers by the period in which they were won (cohorts) reveals changes that the overall average hides.

The real value of these indicators emerges when they are read together. A business whose lifetime value sits comfortably above its acquisition cost can invest more in acquisition; if the gap is closing, it needs to look at the retention and revenue stages first.

What is a north star metric?

Some teams choose a north star metric to point all stages in the same direction. This indicator reflects both the value the customer gets from the product and the business's long-term revenue: for an e-commerce brand, the number of customers who order again; for software, the teams that use the product regularly. A well-chosen north star stops teams from harming each other while improving their own indicators.

What is growth hacking, and what are its limits?

Growth hacking is a term that emerged to describe an approach that looks for creative, low-cost and often unconventional ways to grow quickly. It is associated with early-stage technology start-ups; referral programmes, sharing mechanisms built into the product and rapid experiments are well-known examples of the approach.

The term's strength is its culture of experimentation and speed. Its limits are these: one-off tactics do not build a repeatable growth system, and the search for shortcuts sometimes pushes against platform rules and data protection law, which can damage brand trust. That is why many teams today prefer the term growth marketing, which uses the same experimental mindset within a sustainable framework, over growth hacking.

What is product-led growth (PLG)?

Product-led growth is a model in which customer acquisition, activation and expansion happen largely through the product itself. Mechanisms such as a free trial or free version, in-product guidance and inviting teammates partly replace the sales call. It is common among software companies, but it does not suit every product. For products that require complex set-up or a long approval process, the sales team's role continues.

How does growth marketing differ between B2B and B2C?

In selling to consumers, decisions are quick, the funnel is short and enough traffic for experiments builds up relatively easily. This means creative, landing page and price presentation tests can be run often; on the retention side, email, notifications and loyalty programmes come to the fore.

In selling to businesses, a group makes the buying decision, the sales cycle is long and conversion volume is low. Experiments take longer, and success is measured not by the number of forms but by opportunities in the sales pipeline. We describe our approach in this area on our B2B lead generation service page.

Growth marketing: in-house team or agency?

Because growth marketing requires constant collaboration between product, data and marketing, it is not work that can be fully outsourced. Someone inside the business needs to own product changes and retention work. An agency, on the other hand, can quickly put paid acquisition channels, measurement infrastructure, creative tests and site experiments in place.

Before starting, you need to be sure the product has found a response in the market. If customers do not come back after trying the product, it is better to look for the problem in the product itself or in the target audience rather than in marketing experiments. In that situation, increasing the acquisition budget only raises the cost of learning.

In businesses that have not yet built their own team, a common set-up is to write the strategy and experiment roadmap together with the agency, share execution and hand over responsibilities as the in-house team grows. You can see our approach to social advertising on our Meta platform page, and to discuss your growth goals, get in touch via our contact page.