There is a “disconnect” or “dysfunction” that I kept hearing about in B2B Saas related to alignment on what to measure across product, marketing, and other GTM (Go-to-market) teams. I wanted to dig in and understand what’s causing that sentiment and what’s out there to help solve for it.
I talked to Product, Customer Success, and Sales leaders, and here’s what I found out.
There are 3 common challenges causing a cross-functional disconnect:
▶ Lack of Common Revenue KPIs across Product, Marketing, and Customer Success
▶ Disconnected Digital Analytics - ex. product uses one analytics program, and marketing uses another, preventing them from tying their data insights together.
▶ Poor Data-driven decision-making across teams - or lack of self-serve analytics culture.
The first challenge - Lack of Common Revenue KPIs is the one that led me to write this blog.
I want to put a spotlight on Growth Loops as I believe that a well-thought-out Growth Loop model does help with stronger alignment across teams.
Intro to Growth Loops
The growth loop model - a cyclical model - is ultimately a compounding growth strategy. The model has become a dominant framework for sustainable growth in B2B Saas.
Growth Loops helps you understand how the outcome of one cohort of users feeds into another cohort of users, creating a compounding growth effect. There is usually an input (new user) that comes in the loop. That same user then takes a certain action that generates output. That same output can be re-invested in the input step. (Reforge)
In a Funnel model - a linear model - a marketeer will focus most of their time on the conversion steps from one funnel step to another. Funnels, by nature, are company-focused and built around value capture for the company. They are useful for understanding internal team alignment but can overlook the customer experience and can mislead expected customer growth.
The growth loop has been widely adopted by Product and Growth teams. These teams are focused on optimising the customer experience. Similarly, a Customer Success team will also be interested in the steps customers take in product to help improve onboarding and overall retention.
What about Marketing?
B2B marketers have plenty of KPIs to worry about in a funnel view - web traffic, Marketing Qualified Leads (MQLs), conversion %, including other metrics such as cost of acquisition (CAC), campaign return on investment (ROI), and sales lead times. However, none of these metrics can truly predict growth, and certainly, these metrics don’t align with Product, Growth, and Customer Success priorities.
Hence, my recommendation for B2B Marketing to get close to Growth Loops.
Growth Loops in Practice 🤗
When Marketing adopts the growth loop methodology, they have the opportunity to transform not only how they align internally but also start asking better-informed customer-focused questions as they design messaging and strategy.
Here is an example of applying a growth loop to a marketing program and how we would measure success from a funnel vs. growth loop perspective.
At Amplitude, we built a hands-on workshop experience called AmpliTour. Users would join the event (which could be digital or live), and they would sign up for the free version of the product to run simulated digital analytics scenarios.
In the Funnel view, the program’s success will be measured in terms of conversion from one funnel step to the next, or how many Registrants turned into MQLs and how many MQLs will turn into opportunities.
In a growth loop, we would focus on improving conversion steps in the customer experience.
The growth loop for this particular program should be focused on learning about the experience of the user in the product and how to improve it so that we get to a healthy benchmark for conversion in each step.
Between Step 1 (new user joins AmpliTour) and Step 2 (same new user signs into the product), we would focus on qualitative and quantitative feedback to improve the experience of getting customers from Step 1 to Step 2. Here are some examples of the discovery and optimization process within a growth loop.
ICP and getting them to “Aha” moment
General vs. industry-focused use cases in the workshop
AmpliTour event format
Instructor Expertise
AmpliTour Lifecycle marketing
Peer-to-peer networking opportunities
I now think of the entire marketing strategy as an overlay of growth loops. That helps me stay close to revenue teams and product teams.
In summary, here’s what marketing leaders can do better with the help of growth loops:
📈 Connect a marketing investment strategy to acquisition and retention
💰 Build value-creation metrics that tie strong customer experience to monetization
🤗 Test and build out high-performing marketing campaigns that fuel growth loops
🤝 Be strong partners to their product and revenue teams to drive growth
Where to start your learning on growth loops?
If you are new to growth loops and interested in learning more, you can start by signing up for courses related to Growth, including growth marketing, growth leadership, PLG, and product strategies courses. Good news - there are a ton of thought leadership, frameworks, and really smart people out there who share their journey around growth loops. (Reforge, Amplitude, Leah Tharin).
B2B Marketing Unveiled