Sean Ellis On The Backbone Of Successful Growth Teams & The North Star Metric

The way we look at marketing and growth has changed over the years. Recently, the focus shifted from customer acquisition to a more holistic approach, that looks at the whole funnel, and gives retention it’s rightful place. In the end, all the customer acquisition strategies are nothing but dust, unless retention happens, right?

Growth Marketing & Growth Hacking – What About It?

Growth marketing and growth hacking have been buzzwords for several years now, but, what’s the difference?

Growth marketing happens when you focus all of your business efforts on growing an audience, in a sustainable manner in an uncertain environment within a limited budget. In their book Hacking Growth, Sean Ellis and Morgan Brown define growth hacking as “a rigorous approach to fueling rapid market growth through high-speed, cross-functional experimentation.”

Growth marketing is more strategic and focuses on long-term sustainable growth, while growth hacking is about getting clients fast. The tip here is to go for the low hanging fruits with growth hacking when you haven’t figured out a product/market fit yet or you’re a hungry startup. On the other hand, when the market and demand are clear, a more strategic approach should come in handy – growth marketing.

Sean Ellis On Growth Teams & The North Star Metric

That’s right, the one and only Sean Ellis, who coined the term “growth hacking” and is a co-author of Hacking Growth! He agreed on an interview with us on how to build successful growth teams. So, let’s roll!

Sean, what is your definition of growth teams?

A growth team is a cross-functional team that has the skills and authority to run growth experiments anywhere in the customer journey to accelerate the growth of the company’s North Star Metric. This customer journey ranges from acquiring and activating new customers to improving engagement and referral rates from existing customers.

Often the growth team needs to collaborate with other teams such as product and engineering to run experiments in areas of the customer journey controlled by those teams. Ideally, this team has strong analytical skills to identify high leverage opportunities for accelerating the growth of the North Star Metric and helps everyone focus on a high tempo of experimentation around these opportunities.

How would you structure a growth team?

In my workshops, I generally advise companies to organize an autonomous team with a growth lead and gradually add resources needed to accelerate the rate of experimentation. For example, if the team is often delayed in launching an experiment because they are waiting for a designer, then I would recommend adding a dedicated designer to the team.

What is your team’s main goal?

There are two main goals:

• The Outcome goal is to accelerate the growth of the North Star Metric
• The Output Goal is to accelerate the rate of experimentation

How should a minimum viable growth team look like in terms of people and their responsibilities?

A minimal viable growth team could start with a single growth lead who coordinates experiments with different functional teams across the organization using the resources from those teams to execute the experiments. They are essentially helping teams understand their role in moving the North Star Metric and the importance of experimenting to accelerate growth. As mentioned earlier, they can begin to add dedicated resources such as design, engineering, copywriting, analysis, to address the bottlenecks that slow down experimentation.

I recommend kicking off this approach with an all-day workshop for teams to become aligned around why and how they will introduce a cross-functional growth process.

How do growth teams change depending on the phase of the business: from startup to mature?

In a very early stage company, a growth team generally doesn’t make sense because that company is trying to find product/market fit. Once the company has reached its product/market fit, a growth process can start with a single dedicated head of growth who is looking at all growth levers to determine what is most critical for accelerating growth.

Eventually, a growth team can become very large with squads specializing in different parts of the customer journey, but it is essential that they still take a holistic view of the entire customer journey and focus resources on the highest leverage growth opportunities.

How do you retain and engage the team members?

The more that team members are passionate about the mission of the business, and are confident that the business will succeed in their mission, the easier it is to keep them engaged. It is also helpful to run shorter-term campaigns around focused objectives (such as improve the signup to usage rate from X to Y in 60 days). This helps prevent burnout and keeps the challenges fresh.

Growth, product, marketing. How do they overlap, how do they differ?

The growth team differs from the product team in that they are trying to fulfill the product/market fit potential created by the efforts of the product team. So the product team creates potential and the growth team fulfills it.

Marketing tends to differ with a lot of companies. Sometimes the growth team replaces the marketing function. And sometimes the marketing function does things like brand and PR, while the growth team handles more quantifiable customer acquisition and conversion efforts.

Is there a workflow you use, a certain methodology? Agile, Scrum?

I prefer weekly agile sprints where there is no long-term roadmap of experiments, but instead, experiments are decided in a weekly meeting based on the backlog of ideas, available resources and learning from past experiments.

This is also a meeting to review the growth of the overall North Star Metric and progress against key objective metrics. The North Star Metric should remain consistent over the long term and relate to progress against the overall company mission and cumulative value delivered to customers. Companies should also understand what the growth engine of the business looks like that moves the North Star Metric and which of those sub metrics has the most potential for improvement.

Summing Up

So, experimentation, analysis, and a North Star Metric are at the epicenter of the A-team of growth marketing, according to Sean Ellis.

The growth team needs to have a holistic view of the business, from product development, until conversion and retention, this is why collaboration among different teams is a must. Alignment towards the North Star metric is the fuel of growth. When everyone knows the end goal and experimenting a lot in order to achieve it, then success is close.

So, go ahead and pick your North Star Metric and start working your arse off!

If you need more inspiration on how to do the hard work, check the MAN Digital blog!

 

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