What's in a Growth Stack, and How to Build One Successfully
What is a Growth Stack?
When we started Stackmatix, one of the key principles that we established was that we should seek to serve clients as growth partners and not just marketing partners or sales partners. As Stackmatix has continued to evolve, the language we use to describe what we do has also changed, and we now regularly tell clients that we “Engineer Your Growth Stack”. Internally, we describe a growth stack as, “The sum of the people, platforms, and processes your business leverages for sales and marketing throughout the entirety of the customer journey.” An example of a typical growth stack for a B2B client would look as follows:
For clients we work with, we will help them to map out their current growth stack, help them to understand where the biggest levers for growth are, and leverage our skillset to apply the optimal solution, whether it’s organic social media management, affiliate/influencer engagements, paid ads management, landing page development, sales consulting, analytics consulting, CRM setup and optimization, or some combination of the above.
Traditionally, the assumption has been that it is optimal for the startup founder or VP of Marketing to map out and own the entire growth stack then contract out or hire the best specialists as needed to hit their goals. This might involve a founder recognizing that they need to tune up their marketing funnels and later hiring a funnel expert as a consultant. Another scenario might involve bringing in a sales consultant to help solve for inefficiencies or missed opportunities for a tighter sales process.
We believe that the Stackmatix approach, which involves starting with a high-level growth stack consultation and then implementing a holistic solution to be superior to those mentioned above, for a few reasons:
#1 - A Clear Alignment of Incentives
When you’re attempting to cobble together a solution by contracting out different pieces of your operation to specialists, it’s very common that your end result will be suboptimal, since each specialist is likely to only understand their area of expertise and to only act based on their own incentives.
For example, if you hire a paid ads agency to drive leads for you, and to minimize your risk, you pay them on a cost-per-lead basis, they’re likely to focus on aggressively maximizing lead volume without considering the quality of the leads. They might find they can drive leads from a foreign country at 1/10th the Cost Per Acquisition, even if these leads only convert to paying customers at 1/100th the rate of local leads. Alternatively, they may choose to use bombastic language in your ad copy (e.g. “the cheapest solution on the market! Try it free and quit if you’re not satisfied!”), attracting flaky customers who have no intention of putting a credit card down or will have a higher chance of churning.
On the sales side, if you’re incentivizing your team based on the total revenue for deals they close, they’re likely to do everything they can to push sales over the goal line without considering how strong the sale is and whether that sale is likely to stick around for more than 1-2 months.
Conversely, our approach at Stackmatix ensures we hold ourselves accountable for growing your business both quickly and sustainably, and we do so by driving not only the maximum number of sales for your business, but the most relevant customers who will have the highest Customer Lifetime Value.
#2 - Oversight of Each Piece in the Process
By outsourcing to specialists, there are likely to be pieces in the process that don’t have a clear owner and ultimately get lost in the shuffle. For example, let’s say you hire a paid ads agency and a creative agency to rebrand your website. Which of these two vendors is going to notice that the page load speed time on your product pages is 4 seconds, and if you just shrunk the size of your files, you could drop it to 2.5 seconds, resulting in 50% more people making it to the checkout page and a 30% increase in sales? Neither, because there’s a diffusion of focus and responsibility.
Let’s say you hire a paid ads agency and a sales agency. Who is going to identify that if you sent every lead who filled out your landing page form an automatic text message after form completion, that you’d get 40% more of them picking up the phone when your sales team calls, resulting in a 20% increase in closed deals? Likely neither, since each is focused on their area of expertise, rather than the transition between the two.
Recommended by LinkedIn
In each scenario, these intermediate steps are almost never considered or actively managed by either party. With Stackmatix, you get to work with a team that has extensive experience mapping out client growth stacks, understanding each element, and tweaking and optimizing the transitions between each so that your business can scale.
#3 - The Devil is in the Details
Many entrepreneurs pride themselves on being big picture, strategic thinkers, and they believe they can pull in people as needed to implement their grand visions. The issue when it comes to growth is that unless you have hands-on experience in each stage of the process, there are bound to be seemingly insignificant details that will undoubtedly trip you up and derail the whole project.
One example of this was a client of ours, who is a textbook visionary, insisted that he should be the one to construct the entire marketing funnel and to pull in Stackmatix to run paid ads. Everything was going fine until a few months into our work together, he asked us what was the Customer Lifetime Value for Facebook Ads versus Google Ads. Unfortunately, he had set up his marketing funnel in such a way that when the user navigated from one page to the next, a redirect occurred, stripping the tracking parameters and making it impossible to identify the source of the leads that his sales team ultimately closed. Luckily, we were able to work together to fix this and help him get the data he needed to grow his business, but this roadblock could have easily been avoided if the correct foresight was in place from the onset.
Another example was a client of ours who was an exceptionally well funded startup and had a whole marketing team devoted to putting together complex, intricate marketing plans. Given their team’s experience on the big picture marketing strategy, they told us that they just wanted to leverage Stackmatix to implement the game plan that their team had decided upon. About a year into our relationship their senior management tasked them with driving 50 Marketing Qualified Leads for the quarter, an incredibly ambitious goal.
In their initial proposal to us, they suggested that we allocate 50% of their $100k budget toward LinkedIn Ads, which they claimed had historically driven a lot of leads for them and had a ton of relevant data with which they could target their audience. However, when we poked through their CRM and crunched the numbers, we uncovered that although LinkedIn Ads looked great on the surface, it had only truely driven 2 MQLs on $80k in spend, for a cost-per-MQL of $40k. With this knowledge at our disposal, we instead recommended that they opt for a simpler strategy focused heavily on Google Search, which had historically driven a $500 cost-per-MQL, providing them with an 80x improvement on the initial LinkedIn Ads strategic recommendation.
#4 - It’s Expensive to Re-Create From Scratch:
The Stackmatix team is composed of a number of individuals who have the experience of generalists (e.g. 1-2 years of practice in each of a few different areas) as well as a deep speciality (7-10 years of practice in a single area). In addition, by working with Stackmatix, you get access to experts in a variety of areas, whether it be paid ads, CRM setup and management, organic social media management, analytics consulting, or sales strategy, who you can pull in as needed, all for an affordable price.
In comparison, if you wanted to bring everything in-house, you would typically need the following talent to attempt to build out a similar type of situation from scratch, which can get expensive, fast:
Thus, a quality in-house team to ideate, implement, and scale a bespoke growth stack will amount to ~$500k, quite the commitment and a quick way to burn through your runway before verifying that any of these hires or growth strategies they put forth are profitable for your startup.
Stackmatix pricing, compared to the alternative above, is far more reasonable and offers more flexible terms, enabling you to test out various strategies, identify profitable growth channels, and scale them without the substantial initial investment of an internal team.
In summary, the promise of a growth stack sounds great, but the options out there can be paralyzing. Never before have there been so many choices between software and solutions available to businesses. Having a trusted partner like Stackmatix to help you audit your existing growth stack and analyze opportunities turns chaos into control. If you're interested in a free growth stack audit, contact us at sales@stackmatix.com , and we'd be excited to discuss how we can help you to grow your business.