Teach yourself growth marketing: Which metrics really matter?

Without customers, there can be no business. So how do you drive new customers to your startup and keep existing customers engaged? The answer is simple: Growth marketing.

As a growth marketer who has honed this craft for the past decade, I’ve been exposed to countless courses, and I can confidently attest that doing the work is the best way to learn the skills to excel in this profession.

I am not saying you need to immediately join a Series A startup or land a growth marketing role at a large corporation. Instead, I have broken down how you can teach yourself growth marketing in five easy steps:

1. Setting up a landing page.
2. Launching a paid acquisition channel.
3. Booting up an email marketing campaign.
4. A/B test growth experimentation.
5. Deciding which metrics matter most for your startup.

In this last part of my five-part series, we’ll cover how to determine which metrics matter for your startup. For the entirety of this series, we will assume we are working on a direct-to-consumer (DTC) athletic supplement brand.

First, I’ll discuss what metrics mattered the most while I was with Uber and Coinbase, an example of metric analysis, and why it’s important to pivot metrics when necessary.

Uber and Coinbase

Many people will assume that the most important metrics for growth teams at companies like Uber and Coinbase will be new riders and traders. They would be wrong. While those metrics do matter, when I was with both companies, we focused primarily on much deeper metrics that could tell us how valuable various users were.

On the rider growth team at Uber, we measured the performance of each growth channel individually and segmented by city. When we looked at each growth channel and city combination, our guiding metrics were ROAS (return on ad spend) and pLTV (predictive lifetime value). While there were many calculations happening in the background to compute these metrics, they helped us understand how much revenue each rider would ultimately bring to the company.

Similarly, at Coinbase, we weren’t only concerned with how much it cost to acquire a trader, but instead, on the quality of each trader we acquired. The ROAS was calculated by using a rolling average of how much volume each user was trading based on the channel they were acquired from.

Acquisition metrics

It’s very easy to get lost if you assume upper-funnel metrics are the most crucial for your startup. Don’t fall into this trap.

Instead, think about the ideal user of your startup. For our athletic supplement brand, it would be far from ideal if consumers only purchased a one-month initial supply and then never ordered again. At Postmates, we called users “whales” when they consistently ordered a certain number of times every month. We would prioritize acquiring users from channels that net us the highest quality users and as many “whales” as possible.

Here’s a simple exercise you can do to understand which acquisition channel is best for your startup:

Image Credits: Jonathan Martinez

In this example, assuming average order value (AOV) is consistent across growth channels, Google and TikTok are best with the highest lifetime value (LTV). If we only looked at customer acquisition cost (CAC), we would think that YouTube is the best channel, but consumers acquired from there only purchased twice, making their LTV the worst.

Activation and retention metrics

Facebook famously found that it needed to get users to seven friends within their first 10 days to keep them returning to the platform. Its early growth team, led by Chamath Palihapitiya, learned that if users didn’t get to seven friends early enough, they would churn and never come back. This spurred the product and growth teams to create features that would drive a new user to add more friends as soon as they signed up.

How do you find the right metric to optimize for your startup? If you’re starting an e-commerce store, the metrics you want won’t be like those at a platform like Facebook, but the same principles apply.

Below are two simple steps to help you understand what keeps your users or consumers coming back:

1. Slice user/consumer data by different data points.
2. Analyze these segments by your guiding metrics.

For our athletic supplement brand, we could slice the data by the supplements that were purchased or by the reasons consumers have for buying the supplement. What if we discover that consumers who buy Athletic Supplement X for high energy continue to buy it more frequently than those who buy Athletic Supplement Y for weight loss? This could help us steer our acquisition messaging to consumers interested in more energy throughout their days before attempting to cross-sell them other products.

Find the reasons that make your product or service “sticky” and you will save a lot of time.

Pivoting strategies

When we launched the NFT marketplace at Coinbase to compete with marketplaces like OpenSea, I was on the growth team tasked with crafting our primary market strategy. Being in the cryptocurrency vertical, a portion of the messaging and budget was inherently spent on customer education due to how unfamiliar non-fungible tokens still were to most of the population.

I hypothesized that it would be more expensive to acquire users for the new NFT marketplace via advertising than to get users to “buy cryptocurrency” on Coinbase. Buying Bitcoin was becoming much more widely accepted in comparison to NFTs, which consumers understood far less. So instead of focusing our acquisition on the NFT marketplace, it made the most sense to onboard users to a lower-friction product like our exchange and eventually educate them about NFTs and the marketplace we had built.

You should always be ready and willing to challenge the status quo, especially as metrics change over time. They won’t change as frequently for a mature business like Uber, but most startups must constantly adjust the metrics that matter most.

In our DTC example, if we find that consumers bought our athletic supplement more frequently if they received a free e-book with their order, we’ve learned that education is an important factor for consumers to purchase more. Our strategy here could adjust to include offering consumers stuck in the funnel more educational content and utilizing consumer education as a metric. For example, we could send these consumers five pieces of educational content in the first two weeks since their visit or order.

To teach yourself growth marketing, learn your metrics and what makes some metrics more important than others.