Investing in growth management systems is the top priority for organizations

Success Rate for — Growth Service provided by growth service category

47% of acquisition activities have a success rate of 10 to 50%. Comparatively, this is higher than the average 10% or less success rate for retention and growth activities.

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Around 30% of respondents in a study conducted by Databox agreed that 3.1% to 5% is a reasonable funnel conversion rate.

Background

Failure rates, in general, are high across all three service categories (acquisition, retention, and growth). Organizations that run their growth units have indicated that 51% of challenges in growth activities are in the growth process itself. If the procedure governing the outcomes is not stable, the failure rate will naturally be high. Roughly 34% of growth experiments have a 25 to 50% success rate. Those experiments are not the final results, just part of the process of implementing growth hacks, as scaling and turning them into full-scale operations is still not accounted for.

Context

No more than 8% of all growth activities will yield a 75% or more success rate across all three categories of growth activities (acquisition, retention, and growth). Better growth processes are needed to manage the growth process to yield higher success rates. This is a direct input vs. output relationship.

Takeaway

Investing in developing growth processes to manage growth is the top priority for organizations to gain control of their growth, yield better outcomes, lower acquisition costs, and increase customer lifetime value.

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EXPERT OPINION

“It’s usually a lack of systems that hinders a company’s growth because acquiring the client is merely the beginning” — Matt Gottesman — Founder @ Systems Over Hustle; Permissionless; Matthew Gottesman LLC

A lot of people and companies spend money on the acquisition of clients and customers, but often they forget that it’s the customer’s entire life cycle with you that’s most important. It’s usually a lack of systems that hinders a company’s growth because acquiring the client is merely the beginning. How are they nurturing them for every other step of the process?

Additionally, if there was an increase in the prioritization of systems within the organization, the people fulfilling the services would be able to maximize their output, which in turn favors the retention of current clients without the hindrance of welcoming new ones. There’s a delicate balance between the people who work in an organization and the ones that serve, so it’s imperative to consider how systems affect the entire operation.

There’s nothing wrong with focusing heavily on new business, but it’s what an organization does after it acquires new business that defines more predictable and consistent growth.

The future belongs to the companies that are already actively implementing systems way beyond acquisition if it’s to see consistency and long-term sustainability.

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GROWTH HACKING SERVICE BUYER BEHAVIOR REPORT

A new study conducted by Growth Thinking, which analyzed 2,150 growth service buyers across 10 industries, found that 86% of growth agencies are — in fact — not growing.

These buyers, which represent $350 million in annual spending power, were surveyed over a period of 24 months. Some key findings in the study include:

• The top issue among those 86% not growing is talent;
• The average cost to switch from in-house to external providers is $48,241; and
• 55% of first-time services used are from freelancers.

The study takes a deep look into spending behaviors, the type of growth hacking services in most demand, and switching costs and reasoning.

Read the Growth Hacking Service Buyer Report by clicking here

ABOUT — Growth Thinking

Growth Thinking is a design methodology for growth hacking by the bestselling author of Ready Set Growth Hack, Nader Sabry. It has been applied as a book and a $1 million challenge known as the 10-day growth hacking challenge, which has generated $138m in revenue. This methodology has been adopted by universities like Harvard and Stanford, fortune 500s (Google/Microsoft), and unicorns.