Maintaining sustainable long-term growth requires companies to craft and continuously improve their framework for growth.

While every company is aware they need a plan for growth, including targets, a combination of marketing channels and a set of experiments, these aren’t enough. An effective framework relies on getting three aspects right: choosing the right metrics for growth, setting the right targets, and then building the right combination of marketing channels.

I will give an overview of this entire recipe for building the foundation of lasting growth, by going through each of the three elements one by one. They are best done in this sequence of metrics, targets and channel combination because each builds on the previous one. This recipe applies to companies at any stage of development, whether they’re just launching, introducing a new product or service, or trying to set their growth on a more stable footing. New businesses need to be very strict on choosing appropriate metrics and targets before they make external commitments to investors or partners. And established companies might have to do an honest review of their existing targets and then get into more detail in crafting their combination of marketing channels. 

Choosing metrics for growth

A solid growth framework needs to start with selecting the metrics that determine the success of your business, rather than what’s easy to measure or what people outside your company would like to see. Many companies are too focused on measuring things that seem most relevant to the business, such as number of new customers, CPA and conversion rates. Whilst they’re important to keep track of, businesses need to focus on things they can directly influence, such as customer loyalty, brand strength and the effectiveness of their growth framework. This latter set are the leading metrics that a company should primarily focus on, and they also need to keep track of a set of lagging metrics (such as revenue, customer numbers, conversion rates) to check their progress.

The best set of metrics will vary by industry, product type and company culture, and it will likely change over time. But going through this process of determining the best metrics already has a positive impact on a business, as it gives the team a better insight into what really matters for the success of their business.

Setting growth targets

Every company knows they need to have a set of targets and goals for their business, its growth and its operations. But without the right approach to deciding on them, many companies put themselves at risk. It’s common to be influenced by external factors when setting goals, such as investor expectations, media coverage of other successful competitors, or a drive to be the largest player in a market. 

Instead of external factors, a company needs to review its internal motivations, capabilities and culture to come up with targets that are ambitious but realistic. Those internal factors should include the ability of the company to acquire new customers, the number of customers it can serve well at one time and the minimum scale of sales or customers that’s necessary to keep the lights on. Finally, the motivations and attitudes of the founding team need to be taken into consideration, to make sure they can continue working on their goals over the long term. This will be the only way to set their business up for long-term success, by building the right foundations.

There are many tools or approaches to setting targets, such as the commonly used OKRs. Many of them will be very useful and we don’t have a strong preference, but in any case it’s crucial to use internal rather than external factors when setting those objectives.

Crafting the right combination of marketing channels

With the right set of metrics and targets, the final step of building the growth framework is to craft the best combination of marketing channels for the business. Marketing channels can include paid advertising (digital or traditional), but crucially need to also include non-paid channels such as email, content, referral schemes and search. 

The three key principles to keep in mind when crafting a channel combination are a continuous process of improvement, a relentless focus on customer journeys, and enough time to reach cost-effectiveness before scaling.

The three key principles to keep in mind when crafting a channel combination are a continuous process of improvement, a relentless focus on customer journeys, and enough time to reach cost-effectiveness before scaling.

  • Continuous process: There can be no single fixed combination of marketing channels that works for a business, but instead it needs to be continuously built over many months or sometimes years for it to work effectively. It’s very good practice to take 2-6 weeks to draft an initial combination of channels and first test plan, but the most successful companies review and improve that combination on a monthly basis for as long as they are looking to grow. Even if they’ve found an effective combination, they need to keep refreshing their content and messaging because their target audiences will evolve over time.
  • Focus on customer journeys: Companies need to continuously think about and understand how their customers decide to buy their product. Planning their marketing channels and content around those journeys will lead to much higher return on investment, more relevant customers and hence higher retention. It’s very rare that people go straight to buying or signing up for a product after seeing one piece of content or ad. Instead, they’ll likely want to do some research, check out competitors, or simply have to move on with their day and plan to return later. To guide people through this journey, companies need to use a combination of paid and non-paid channels (paid advertising, landing pages, email automation, content on-site and with PR partners etc). If companies have research into how their customers make decisions, that’ll be useful, but it shouldn’t hold them back from using their knowledge and intuitive understanding to make a start with the journeys.
  • Taking the necessary time to build an effective framework: Many companies, especially startups, use too much external funding to invest in marketing and growth too early. Instead, the key to building a massively successful company is to build a growth framework that is cost-effective on a relatively small scale, and then raise funding to power this machine. Companies need to commit to an attitude of ‘Slow Growth thinking’, meaning they take the necessary time to build a growth framework that is profitable and repeatable before looking to scale. Once they’ve got a clear brand, compelling product and initial set of loyal customers, they should allocate somewhere around £5-20k per month, and a period of 6-12 months to craft this framework. Thanks to strong organic growth and customer relationships, and a knowledge of customer journeys, they can then amplify this by investing additional resources. This creates a massive potential for profitable growth, large scale and resilience.

Every company with an ambition to grow into a resilient, profitable and high-impact business needs to craft the right growth framework, continuously throughout its lifetime. It’s important to start by identifying the metrics that will really make the business successful, rather than those that are easy to measure. Growth targets need to be based strictly on factors internal to the business, rather than external expectations or benchmarks. And finally, building the right combination of channels needs to be done on a relatively small scale, and through regular monthly improvements. It should be centered around non-paid growth channels and an understanding of customer journeys, before using additional capital to amplify this through paid advertising channels. Buying into this long-term vision for growth, what we call Slow Growth thinking, is the fastest way to progress a business even in the short-term and creates the most profitable, resilient and impactful businesses.