Freight forwarders and third-party logistics companies are usually sophisticated in the approach to operations. The right logistics company has the ability to improve supply chain management, streamline operations, and boost ROI.
Unfortunately, much of this sophistication hasn’t reached the growth part of the business, leading to challenges in creating sustainable growth.
What is Growth Marketing?
Growth marketing is a type of marketing that uses scientific principles to design, experiment, and optimize the results in specific metrics or target areas. These may include:
- Designing experiments to optimize processes
- Choosing areas to test and improve
- Experimenting to see where improvements could happen
- Analyzing the results and conducting future experiments
Because growth marketing is analytically focused, it includes more of the data side of marketing than the creative. Experiments are used to improve processes to drive growth and produce the desired results.
Why Logistics Companies Need to Implement Growth Marketing Plans
Logistics companies face numerous challenges with the changing post-pandemic market and issues with global supply chains. Despite this, growth marketing offers an opportunity for logistics companies to improve business models and processes, expand services, and enter new markets.
Growth marketing focuses on:
- Core business growth
- Global market expansion
- Value-chain expansion
- Shifts to adjacent industries
With growth marketing, logistics companies focus on the development of core business and global market expansion by developing a tech stack, improving operational efficiency, and enhancing existing skills.
Growth Marketing Framework
Marketing can be used to grow a business significantly without much impact to the marketing spend. Growth marketing optimizes lead gains at minimal costs.
Growth marketing framework provides insights into improving approaches to broad marketing efforts. Leads are gained quickly and cheaply, because the brand is put in front of the right audiences.
How to Build a Growth Marketing Framework
Each business will create a growth marketing framework differently, but the approach is mostly the same.
- Define objectives and results: The framework is based on the current position of the company and its goal. It outlines the marketing efforts and the expected results.
- Data analysis: Growth marketing is about data, so all relevant data needs to be gathered and analyzed to identify areas to work on, such as mitigating growth factors and inefficient processes.
- Idea prioritization: Data collection and analysis shows areas to achieve objectives with interventions like new technologies. The ideas that are most likely to produce positive results are the most valuable and must be prioritized.
- Testing: Ideas should be tested throughout the whole process. Testing is done with a hypothesis and qualitative, quantitative, and supporting information.
- Implement the top ideas: After testing, the top ideas should be implemented and tested. The experimentation process should take about 30 to 90 days, which is enough time to reveal weaknesses or other areas of improvement.
- Analyze changes: Once solutions have been implemented, the results should be analyzed to see if alternative options should be considered.
- Systemize processes: Framework is a strategy that includes a step-by-step process. This should be repeatable, so it can be used for future marketing efforts.
5 Steps to Get Started with Growth Marketing
1. Understand Growth Framework
Growth marketing framework gives you a systemized structure to develop goals and outcomes, prioritize ideas and experiments, and apply data insights to continue to improve.
You can try any number of framework models, but the AARRR! Framework model uses the customer journey. It’s a great choice for any business to start with a growth framework.
- Acquisition: Determine the channels where new customers discover your product.
- Activation: Identify which actions customers take when they visit your site.
- Retention: Calculate churn rate to see how effective your marketing efforts are.
- Revenue: Explore revenue streams to see how money flows into the company.
- Referral: Consider referrals and evaluate ways to enhance your referral program to gain new customers from word of mouth.
2. Know the Conversion Goals for Growth
In growth marketing, most of the conversion goals center around attracting new prospects or leads and turning them into customers. Some of these goals may be:
- Using video to attract new customers
- Increasing trial or free-to-paid conversions
- Converting blog readers into subscribers
- Achieving viral growth for content
- Increasing product stickiness
- Achieving negative churn
3. Develop a Growth Marketing Strategy
Designed to fuel growth, a growth marketing strategy is about growing different areas of your business. You should have an end goal in mind and a set timeframe for achieving it. Keep in mind that different areas of your business may have different timeframes and goals for growth.
Once you have your goals in place, map out the strategy and determine the key metrics. Value proposition is a valuable metric for sustainable growth, but you have plenty more to choose from to get a “big-picture” view of your performance.
4. Use Growth Software Tools
Third-party tools are a boon for logistics companies and streamline the business processes. The same is true for marketing tools, such as:
- A/B testing tools to choose the most effective features, messaging, or graphics
- Social listening tools to gain insights into customers
- Landing page tools to boost conversions
- Analytics tools to collect customer data
- Retention tools to analyze churn metrics
- Engagement tools to improve the customer experience
- Referral tools to build word-of-mouth promotion
5. Leverage Experts
Growth marketing is within reach for every business, but you can achieve better results in a shorter time frame with guidance from an expert. Experienced growth marketers can develop growth marketing frameworks and build a strong foundation for future marketing strategies.
Types of Growth Strategies Logistics Companies Can Use in Their Growth Plans
- Use customer personas to get insights into your audience and their interactions at each stage of the customer journey.
- Pick the channels that have the majority of your audience. Focus your marketing efforts on these channels.
- Keep up with digital trends to gain an edge over the competition.
- Focus on quantitative results and benchmarks to evaluate your marketing efforts.
Growth Marketing Metrics for Logistics Companies
Much like subscription providers, logistics companies rely on customer retention and long-term relationships to earn profits. Here are five metrics that logistics companies should look at:
- Customer Lifetime Value (CLV): This is a measure of the average revenue that’s gained from a customer. Shippers tend to stay with the same logistics companies, so CLV is incredibly valuable.
- Customer Acquisition Costs (CAC): This is the cost to attract and onboard new customers, which includes the costs of lead generation, sales interactions, and more. Using comprehensive costs, CAC shows you how to maximize your efforts and focus on the low-cost customers.
- Cost Per Lead (CPL): This is how much it costs to capture a lead. Not every lead makes it to a sale, so CPL shows you how many leads were valuable.
- Average Recurring Revenue (ARR): This determines how much one customer is worth on average for recurring revenue. Logistics companies rely on volume density for profits, so ARR can show you how big the accounts should be to predict the number of customers needed to reach goals.
There are plenty of additional metrics that logistics companies should use, but these are the most important and valuable metrics to determine marketing efforts, growth potential, and profits.
Fuel Logistics Growth
From the pandemic to the global supply chain challenges, logistics companies have a lot to overcome to stay ahead. Growth marketing strategy helps companies grow different areas of the business and develops long-term strategies to optimize performance.