Growth Marketing Vs Performance Marketing: Explained by 15+ experts
15+ Growth Experts Explain The Difference Between Growth Marketing & Performance Marketing In This Detailed Guide. This Also Features Metrics, JD Breakdowns & Much More To Deep Dive Into The Differences Between Both Roles!
Growth Marketing & Performance Marketing are used interchangeably within most organisations. Sometimes Growth marketers are just glorified performance marketers, while in some cases, performance marketers are true Growth marketers 😞
So what’s the difference?
We wanted to understand the same and as always we went to our community of 1500+ growth folks 🫂
We asked 15+ Growth & Performance marketers, one simple question - “What’s the difference between Growth marketing & Performance marketing?” ⏬
We collected all this data in a Google sheet and internalised it before we wrote this blog.
Some of the answers surprised us and may surprise you as well 🧠
If you want to understand the difference between Growth Marketing & Performance Marketing in detail read on 👇🏼
TL;DR: What is the difference between Performance Marketing & Growth Marketing?
Growth Marketing:
It is a discipline which focuses on improving the overall revenue metrics of the business. A growth marketer does this by focusing on all levers of a business including Acquisition, Onboarding, Engagement, Retention & Monetisation 💪🏼
Performance Marketing: It is a discipline focusing strictly on improving the Acquisition lever of the business. You can call it leads, visitors, signups or whatever. A performance marketer is truly focused on the Top Of The Funnel of your business 🚀
Here’s how this would look if you were to approach the AARRR funnel to this methodology 👇🏼
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At GrowthX, we’re a lot about analogies and examples to explain concepts. Tushar Sharma, Growth Consultant (GX6) explained Growth Marketing vs Performance Marketing with a beautiful analogy here 👇🏼
Growth Marketing:
“Growth marketing can be likened to planting a tree. The focus is on finding the right seed, soil mixture, and environment and nurturing it over time to foster growth. As the tree matures, it bears fruit, provides shade, and becomes an asset in its environment.”
Performance Marketing:
“Performance Marketing on the other hand is like throwing various stones at already ripe fruits and optimising to get the maximum output with the minimum time, effort & resources. To get the fruits, you'll have to continuously look for new trees and create a strategy to get the best out of that tree & then move to another tree.”
To skip to the longer version with all differences, click here
🧠
If you’re fascinated about growth and want to learn a structured approach to growth, our signature 8-week experience might be just for you. We teach you the A → Z of growth in a structured manner.
Our 8 week experience includes deep dives into the five levers of growth
→ Acquisition
→ Onboarding
→ Engagement & Retention
→ Monetisation
→ Building A Growth Team
You’ll wrap this up with an intense 3 week capstone experience, where you’ll build a Growth Strategy for a digital product, along with the top 1% of
→ Product Managers
→ Marketers
→ Founders
Join the top 1% of growth talent today 💥
What is performance marketing?
Performance marketing is a discipline where you focus paid marketing channels to improve one of the following metrics for your business
Increase the number of leads
Increase the number of purchases
Increase the number of website visits
Increase the number of app downloads
Increase the number of watches on a piece of content
Spread the reach of your message
Most commonly performance marketing is used to increase the number of leads generated for a business. But sometimes performance marketing can also be used as a channel to increase the reach of your brand or spread your message.
This advertisement is a good example of a Google Ad used to increase the number of leads to a business. ‘Email Marketing Tool’ is a highly transactional keyword, which means that the person searching for it has a high intent to buy.
A performance marketer would target keywords like these and create Google ads that would direct the traffic back to one of their landing pages.
Quite truly the performance marketer focuses on just this lever of your product/ business
1. What is the goal of a performance marketer?
While there are many goals for a performance marketer, the primary goal is to acquire new customers. Aditya Shankar(GX13), from xto10x summed it up pretty well
“Performance marketing solely focuses on bring high-intent leads into the top-of-funnel via ad platforms (Google, Linkedin, Insta, etc.) or affiliates”
2. What does the day to day look for a performance marketer?
The day to day responsibilities of a performance marketer can be divided into four steps
Understand business goals & budgets
Find the right ICPs for the business
Choose the right channels and targeting to reach these ICPs
Optimise the channels for the best ROI
Performance marketing is a discipline where testing is a key skill and feedback is something you can get almost instantaneously
Moulik Jain, a GX11 member explains what a performance marketer is expected to do.
“Performance Marketing is shorter term and more focused. This type of marketing is a great way to reach a specific goal quickly- like increasing sales, generating leads, or boosting conversions. Performance Marketing is highly measurable, which allows for quick optimisation and the ability to track the ROI of each campaign.”
With that context in mind, let’s look at an example
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Let’s say that you’re a performance marketer who needs to increase the revenue of cult.fit. Here’s what you would do on a day to day basis 👇🏼
Ask for your budget and get clarity on goals:
Since cult also has a lot of offerings, you’ll also get an idea of the offerings which you will be generating leads for.
Let’s assume that your boss has asked you to generate leads for the cult gym subscription in Indiranagar, Bangalore. You are supposed to increase memberships for a new offer they’re planning to run for the next two months
Look into the ICPs:
Since the cult gym in Indiranagar already has some subscriptions, you will look into them to understand their ICP. You will start with their demographic data like age, location, sex etc.
You might also look into their interests to improve your targeting efforts while running these ads. Sometimes you might also run surveys or get on customer calls to understand more about your customer’s in detail.
Choose the right channels and curate your offers:
Now that you have an idea of the ICP, you’ll start by targeting the channels they use frequently. It won’t be just one channel, but a mix of several channels.
For example, IG ads might be a cold channel where you reach out with an offer. Google ads might be a warm channel where you might rank for certain keywords.
Optimise your ads:
Now that you’ve started running your ads, you need to optimise them for high ROAS. You might tweak the titles, the creatives or even entire offers.
Your goal is to get as many gym subscriptions as you can while keeping the ROAS positive.
Collaboration with team members:
Since ad positioning is very important, you might partner with your product team to understand which users are the best and prioritise accordingly.
You will also need to collaborate with your creative team, copywriters for ad copies etc..
3. A look inside the JD of a performance marketer?
At GrowthX we have tons of performance marketers who join in to learn the ABC’s of Growth. We also get a lot of organisation looking to hire growth folks who are good at performance marketing.
So it’s safe to say that we know a thing or two about performance marketing as a craft.
After looking at tons of JDs, here are some things that really helped us understand what goes in the mind of a recruiter/ hiring manager/ founder for a Performance marketer.
For instance, let’s start with the junior or senior performance marketing role. Let’s take Jar’s JD for an example
NOTE: Jar is a fintech app in the early scaling stage
Some things that quickly stand out
→ Ability to run ads on multiple ad networks
→ Ability to accurately track the traffic from all these channels
→ Ability to deep dive on key metrics like ROAS, CAC, LTV on a channel by channel level
→ Ability to understand creatives, videos and optimise for better metrics
→. Ability to communicate with cross functional teams to improve your key metrics
Now let’s take a look at the Performance Marketing Manager JD from Entrepreneur India
NOTE: Entrepreneur India is a mature org with 300+ employees
While we have some common points with the Performance marketing role, there are a lot of things that immediately stand out
→ Ability to predict performance marketing efforts across multiple channels by creating growth models
→ Presenting the performance marketing strategy to cross functional teams and stakeholders
→ Create monthly, quarterly, yearly plans with definite targets for CAC, ROAS, LTV on a channel by channel basis
→ Collaborating closely with the Social Media, Product & Analytics team to transfer key learning and improve the entire strategy
4. What are the strengths of a performance marketer
As a performance marketer, there are some core strengths that are must have and a good to have. We’ll break them down here
→ Strengths for a Performance Marketer
Ability to run ads on multiple channels (Google, Meta, TikTok)
Ability to run experiments on ad copies, offers
Ability to look at data and understand the best perfoming ads
Ability to generate insights from the best ads
→ Strengths for a Performance Marketing Manager
Ability to collaborate with cross functional teams to build your performance marketing strategy from the bottom up
Understanding of different departments across the org and sub departments in marketing
Ability to create growth models for a channel by channel basis
Ability to determine budget & hiring plans for each quarter
Ability to manage other marketers and help them plan their career for success
5. What are some commonly used performance marketing channels?
Performance marketing channels can be divided into a number of different categories. We’ve highlighted the most commonly used channels in the infographic below
6. What are some common metrics used in performance marketing?
Performance marketers are measured on a set of very specific marketers. Here they are
The amount of money you spend to acquire one customer is called CAC. The best way to calculate CAC is to divide total advertising cost by the total number of customer acquired.
CAC = Total Ad Spend/ No of Customers Acquired
ROAS (Return On Ad Spend):
The amount of revenue generated with the ads you’ve run is called ROAS. It can be calculated by dividing ad costs/ total revenue generated
ROAS = Total Ad Costs/ Total Revenue Generated
CTR (Click Through Rate):
The amount of people clicking on your ad to visit one of your pages. It can be calculated by dividing total impressions/ no of clicks.
CTR = Total no of impressions/ Total no of clicks
PPC (Pay Per Click):
The amount of money you pay per click. It can be calculated by dividing total cost of ad spend by the amount of clicks.
PPC = Total Ad Costs/ No of clicks
Pay Per Lead (PPL):
The amount of money you spend to generate one lead is called Pay Per Lead. This metric comes incredibly helpful in B2B organisations which are sales heavy.
LTV helps you understand which type of customers are the best for your business. The customers who have a high Lifetime Value are the ones you should always be going after with your performance marketing campaigns
CLTV = Customer Value * Average Customer Lifespan
Payback period:
It is the time required to recoup the amount of money you’ve spent to acquire a customer. This metric is incredibly helpful with B2B companies where performance marketing on a PPL may be costly affair.
This metric will allow you to justify if a certain ad group is profitable in the long term, even in the PPL looks bad in the short term. This is a very important metric for profitable B2B businesses with a very long sales cycle.
2. What is growth marketing?
Growth marketing is the art of focusing on the entire user journey to improve core business metrics. Unlike performance marketing, which only focuses on the acquisition lever, this discipline focuses on all four levers to move the core business metrics.
“Performance marketing would deal with getting the most number of customers to the landing page/product at the lowest possible cost.
While growth marketing takes a deeper approach of not just getting a low CAC but also to study if the low CAC customers are actually the relevant ones for the product.
Performance marketing is a skill, growth marketing is the application of that skills aligned to the larger business goal”
GrowthX is all about analogies & examples to understand concepts & produce outputs. True to that, Shravan ended with a solid analogy
“To summarize - Performance marketing wouldn't mind a leaky bucket as long as the faucet is filling the bucket, but growth marketing will not just control the waterflow in the bucket but will also look for a sealant to mend the cracks in the bucket”
1. What is the goal of a growth marketer?
The core goals of a growth marketer surround on her ability to move core business metrics by working on different levers
For example: If a core business metric for this quarter is to increase the overall revenue by 25% , she could do one of the following things
Acquisition: Find ideal ICPs and double down on the top 3 marketing channels that have the lowest CAC
Onboarding: Write better copies & create automations to increase the number of people who activate their account after signing up.
Engagement & Retention: Create email sequences to improve product knowledge for customers. Maybe also help the CSM team help their customers with better data & support.
Monetisation: Create automated nudges that reaches out to users with high retention and enables them to buy a plan. Or test a new pricing strategy based on product usage data!
While the goal is simple, the ways to achieve it are simply numerous for a Growth marketer to achieve it. At the end of the day, it all boils down to budget, resource & time constraints.
2. What does the day to day look for a growth marketer?
Let’s assume that you are a Growth marketer assigned with the goal of increasing MRR by 10% each month. Let’s also assume that you are working on a consumer product with the following metrics
Pricing Plan - $10/ user
No of website visitors/ month - 1000
No of registrations/ month - 500
No of active users/ month - 250
No of subscriptions/ month - 50
Total new MRR/ month - 50 * 10 - $500
A 10% increase for the next 6 months would look like the following 👇🏼
The first step you will take is build your growth model to understand your goals for 3, 6 & 9 months. Then you will decide which levers you will play with to change these metrics
Let’s assume that you are going to focus on the acquisition and onboarding lever for the first 3 months.
Under Acquisition lever:
You are going to double down on two existing channels and experiment with two new channels.
The two existing channels are Google Ads & Facebook Ads.
Two newer channels could be SEO & Email Newsletter
Under Onboarding lever:
You are going to focus on two steps here
Reduce the friction for new signups
Create new templates for ICPs that already have high retention in your product
Now that we have an idea of the priorities, let’s look at how an ideal day could look like
Start with writing down your daily tasks and getting on your team’s standup call. This is where you clear your blockers and help your team with any blocker they might have.
Based on the size of your org, you might be reporting to Growth PM, Head of Growth, Head of Marketing or founder even
Once done with your standup, you take a quick break to play the keyboard or maybe even play ball with your dog 🐶
You look into your product data analytics tool to understand your best retaining customers. You do some research on them to understand which features they use frequently, what they value in your product
You might also research more about them by sending in a survey or setting up customer calls 🤘🏼
After you have a good set of pointers, you sit down with your performance marketing peer to share your learnings and understand which ads are best suited to get more of these ideal ICPs.
If you’re a smaller org, you might be the person who is running these ads to experiment with new ads and optimise budgets
For your new channels, like SEO you might talk to your SEO specialist to figure out the themes, keywords & volumes to reach these ideal ICPs.
Yet again, if you’re a smaller org, you might be the one doing keyword research for your SEO strategy
For newsletter too, depending on the size of the org, it could either be you or a fellow conte guy creating the strategy & copies for it 🧗🏼♂️
Then comes lunch break 🍽️
After lunch, you look at your onboarding flow and note down inefficiencies & drop off points. You set up a call with your PM, Designer, Dev and discuss how these can be improved.
You also discuss improvement points which can immediately improve the onboarding flow
You also dig into data to understand that folks who choose a template, rather than a blank page have a higher retention rate. So you speak with the design + content team to create new templates. You might also setup forms to help new users request templates. This will feed back into the template creation process later
As a growth marketer, there’s no chance you can do all this in a day. But as we mentioned at the start, it’s an ideal day 😜.
Most of your day will be spent looking at data, making decision, doing customer research & communicating with cross functional stakeholders!
But a lot of this depends on some important context like size of the org, stage of the org, team distribution, culture etc..
3. A look inside the JD of a growth marketer
We have a lot of members who joined our experience as marketers and became growth marketers.
We have also had members who were Growth marketers even as they joined GrowthX.
Finally, we’ve also helped companies hire Growth marketers, Growth marketing managers, Growth leaders & more.
So it’s safe to say that we’ve looked at our fair share of resumes & Job Description. Let’s breakdown some interesting JDs from our Job Board
As we mentioned earlier, the job of a growth marketer is highly dependant on the industry, the stage of the company & more.
Since chronicle is a SaaS startup, their two core focal points are product marketing & content.
Once the product gets a bit mature, they might also focus on paid marketing. But for now, these are the channels they’re focusing on ✅
Looking at the skills also gives you a pretty clear idea of how much culture & stage of company plays a role in your day to day responsibilities and expectation 😃
Since the product is built from first principles, they’re looking for someone who can also think like that. Their culture is heavy on remote work, which also is a main priority for Chronicle.
And since they’re building a radically differentiated product, they are looking for someone who has preferably been there and done something similar 🚀
Now let’s at a much senior level role on the same Job Board
True to the lead role, this requires you to manage teams more than building from scratch.
You will be responsible for setting growth goals, maintaining growth timeline improving collaboration between teams & also collecting key customer insights.
The skills also help you understand how the requirements change from a early stage SaaS startup to a Web3 startup
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Growth marketing is a beautiful discipline where the levers keep changing with respect to product, market, company philosophy & culture 🪄.
Before you apply for any Growth marketing role, this is something you truly need to internalise. Here are some clarifying questions you can ask yourself
Where is the product now and how will it evolve in the future?
What sort of skills are mandatory to win in this market?
Do I love learning about the industry, irrespective of the role?
What will my career ladder look like in the next 2 years?
etc..
On the contrary, if you’re looking to hire a Growth Marketer for your team, you can hire from GrowthX. The first step is to fill out this form 🚀.
4. The strengths of a growth marketer
→ For a Growth Marketer:
Ability to look at data and derive key business insights from it (You must love love love Data!)
Ability to run surveys to understand more about your core ICPs
Ability to context switch between multiple marketing channels and understand the nuances of Product - Channel fit, Market - Channel fit etc.
Ability to deeply understand the short term and long term second order effects of all decision
Ability to look at both qualitative and quantitative data to understand the tradeoff between decisions
All these tips get even more contextual when you choose an industry and a product.
For example, let’s assume CRED:
CRED is heavily dependant on Paid Ads and Advertising as a marketing channel. So if you’re joining them as a Growth marketers, you can be assured that it will be one of the basic expectations.
Let’s assume you’re joining Figma or any other collaborative SaaS tool:
Organic SEO and product loops can be one of the main marketing channels there. You will be required to have some level of mastery to even be considered for these roles.
→ For a Growth Marketing Manager/ Lead:
Ability to manage other growth marketers and help them plan their OKRs & Career progression ladder
Ability to collaborate with other department leads and get the job done (Trust us, you will need a lot of this)
Ability to think through complex problems with a framework (you need to learn to elimiate bias at all fronts)
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But the caveat is, it doesn’t matter if it’s a senior or junior role. Growth marketers must have these three strengths to succeed whatever the case
Ability to own key business metrics like Revenue, ARR, MRR, Net Retention etc..
Ability to understand insights from both qualitative and quantitative data
Empathy & communication skills to work with cross functional teams who might have different KPIs & motivations!
5. What are some channels used by growth marketer?
The channels used by growth marketers are plenty, dependant based on the goals, the industry and the resources at hand. Aditya Shankar(GX13) ,Growth & Marketing - xto10x explains a small subset of the different channel a Growth marketer could use 👇🏼
“Growth marketing cuts across the funnel which means you work with multiple aspects of marketing to influence revenue
Content marketing at all stages of funnel,
Sales enablement for bottom funnel leads,
Product marketing for freemium leads to convert
etc…”
Most of the channels mentioned above are acquisition channels. But some of these can also be used for other levers.
Fro example, email can be used for Engagement, Retention & Monetisation as well.
Content Loops can be really effective as a Onboarding, E&R loop lever 💪🏼.
More than the channels, the ethos of a Growth marketer is to find the channels which have the lowest acquisition costs for their best customers 🚀
6. What are some common metrics used in Growth marketing?
Since Growth marketing directly ties with business goals, most common metrics are also core business goals.
ARPU is the average amount of revenue generated by each customer or contact in their lifetime. ARPU is commonly calculated on a monthly basis, but it can also be calculated on daily, weekly, quarterly or yearly basis based on sales cycle of the product
It is the average revenue that will be generated by each customer during their lifetime with the business. There are multiple ways to calculate LTV
LTV = ARPU/ Churn Rate
LTV For a SaaS product = Average Customer Value * Customer lifespan (in months)
LTV For an E-commerce business = Average Customer Value * Purchase Frequency (in months) * Customer Lifespan (in years)
Conversion rate at each stage of the funnel:
As we saw in an an example above, you can play across multiple levers to reach your goal. Therefore it is your core job to understand the different drop off points in your product funnel. Here’s how it might look for different types of businesses
→ For a SaaS app:
Impressions
Web Visits
Signups
Activations
AHA moment
Use a Premium Feature
Use Trial
Trial Ended
Subscription
→ For an E-commerce app:
Impressions
Web Visits
Add To Wishlist
Add to cart
Checkout
While this is just a top down list, you could go even granular with your drop off points to break it down into a series of different conversion points.
Churn rate is the measure of customers you lose over a certain period of time. Churn rate can also be measured on a weekly, monthly, quarterly & yearly rate.
Churn can also broken down into product usage churn (for both free & paid users), revenue churn (for paid customers). As a growth marketer, you will usually be focusing on revenue churn.
Churn = (#Customers at the beginning of the period - #Customers at the end of the period)/ Customers at the beginning of the month
For example, here’s how the formula for Monthly churn would look like
Monthly Churn = (#Customer at start of month - #Customers at end of month)/ #Customers at start of month
This is a very important metric to solve as a Growth marketer. We’ll tell you why with an example as well.
Let’s assume that there are two products with 100 customers at the start of the year.
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Assumption #1: Let’s assume that they don’t add 10 new users every month with respective churn rates of 2.5% and 5%
The product with a 5% churn rate lost almost 2X the amount of customers in a matter of 12 months 🤯. Now that’s just with a difference of 2.5% in churn rate
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Assumption #2: Let’s assume that with this churn rate, each product adds 10 new users every month. Let’s see how the difference
Even after adding 10 new customers each month, the results are miles apart. The best part - apply this framework over the course of several years and you have the difference between a legendary one and an average one 🌌.
Retention Rate:
Retention rate can also be divided into two subsets - Product retention & revenue retention. We are just going to focus on revenue retention for this sub-section as that’s the end goal.
Revenue retention rate is the percentage of users who are paying compared to the last period
Retention Rate = (No of paying users in existing period/ no of customers in the previous period) * 100
It is a rating that will tell you how likely someone will recommend your product after they’ve tried it.
It is measured on a scale of 1 - 10 and here’s what the ratings generally mean
Score
Name
Info
0 - 6
Detractors
They are unhappy with your product and may not buy from you again 😨
7 - 8
Passives
They are satisfied with your product but might not share it with others 🥲
9 - 10
Promoters
Happy customers, who’ll keep promoting your products 😊
A growth marketer will also be measured by a number of other metrics based on their market, but the ones listed above are the most common ones 💪🏼.
🧠
If you’re fascinated about growth and want to learn a structured approach to growth, our signature 8-week experience might be just for you. We teach you the A → Z of growth in a structured manner.
Our 8 week experience includes deep dives into the five levers of growth
→ Acquisition
→ Onboarding
→ Engagement & Retention
→ Monetisation
→ Building A Growth Team
You’ll wrap this up with an intense 3 week capstone experience, where you’ll build a Growth Strategy for a digital product, along with the top 1% of
→ Product Managers
→ Marketers
→ Founders
Join the top 1% of growth talent today 💥
3. The major differences between Growth & performance marketing
Context
Growth Marketer
Performance Marketer
Level Of Funnel
Focuses on the entire funnel
Top of The Funnel only, with minimal support for Middle & Bottom Of The Funnel (BOFU)
Growth PM, Head of Product, Head of Marketing, Founder
Head of Marketing, Founder, Marketing Lead
Average Salary
Coming Soon!
Coming Soon!
Those were all the differences between Growth Marketing & Performance Marketing in detail 🚀
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Thanks for reading through this guide. If you have feedback, feel free to add them in the form here. Our goal is to help you become 10X better with Growth 🚀.
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Special Thanks to the GX members who contributed to this guide.