A Guide to Revenue Marketing vs. Growth Marketing

What is revenue marketing?

Revenue marketing is a marketing approach that focuses on driving short-term successes like sales and revenue.

What is growth marketing?

Growth marketing is a marketing approach that focuses on driving long-term results like brand awareness and reputation management.

Marketing may only be one facet of your business, but it’s a big umbrella unto itself. There are a lot of marketing types, and plenty of different strategies within those types. Two types of marketing you may have heard about are revenue marketing and growth marketing.

Maybe you’re confused about the difference between these two terms. Or maybe you’re trying to figure out which one your business should use to promote itself online. Either way, you’re in the right place. 

On this page, we’ll break down the basics of revenue marketing vs. growth marketing, including the following topics:

• What is revenue marketing?
• What is growth marketing?
• Revenue marketing KPIs
• Growth marketing KPIs
• Revenue marketing vs. growth marketing: Which one should you use?

Here’s a summary of how the two types of marketing compare:

What is revenue marketing?

Revenue marketing is a type of marketing that aims to drive sales. It’s focused mainly on the short term, with the goal of acquiring new customers or clients by getting people to buy your products or services. Though revenue marketing can have long-term goals as well, those goals are still built around driving sales and revenue.

🎥 Video: What is revenue marketing?

What is growth marketing?

Growth marketing is a type of marketing with a focus on long-term strategy. Rather than trying to drive specific sales, it aims to increase brand awareness and build up a better reputation for your business throughout your whole market. It also involves boosting loyalty and retention among your existing customers.

Though this approach doesn’t focus directly on sales, it still helps you earn revenue — it just does it in a less direct way. The more people know about your company and have a positive view of it, and the more your existing customers keep coming back, the more revenue you’ll end up driving.

Revenue marketing KPIs

Growth marketing and revenue marketing are mainly distinguished by their goals. In the case of revenue marketing, its goals are based mainly on driving sales-based results in the short term. The question is, how do you measure those goals? What can you use to quantify the success of your revenue marketing?

Here are some of the best key performance indicators (KPIs) to use when managing a revenue marketing strategy:

• Return on investment (ROI): A measure of how much you earn from a particular marketing campaign relative to how much you spend on it. The formula is [(total earnings – total spending) / total spending x 100].
• Average sales cycle length: A measure of how long it takes for the average customer to go through the entire sales funnel. The formula is [sum of all sales cycle lengths / total number of customers].
• Conversion rate: The percentage of people who convert in response to a particular marketing campaign (relative to the total number of people who interacted with that campaign). The formula is [total conversions / total interactions x 100].

Each of these KPIs focuses on measurable goals related directly to conversions, sales, and revenue.

Growth marketing KPIs

Where revenue marketing uses KPIs that connect straight to the sales funnel, growth marketing is broader and more focused on the way people perceive and engage with your business in the long term. Some of the best growth marketing KPIs include:

• Customer lifetime value (CLV): The amount of revenue you earn from a particular customer over the duration of your relationship with them (mostly applicable to businesses that work with ongoing clients rather than single-purchase customers). The formula is [(average annual revenue from customer x total years customer stays with you) – cost of acquiring customer].
• Customer retention rate: The percentage of customers who stay with your business for the entirety of a particular period (the length of that period is up to you). The formula is [(total customers at end of period – total new customers acquired during period) / total customers at beginning of period x 100].
• Net promoter score (NPS): The percentage of your customers who are likely to recommend your business to others. To determine NPS, you’ll have to survey customers on that very question using a scale of 1 to 10. Responses of 9 and 10 are promoters, while 6 and below are detractors. The formula is [percentage of promoters – percentage of detractors].

All of these KPIs address customer loyalty to your business.

Revenue marketing vs. growth marketing: Which one should you use?

The short answer: Both.

Revenue marketing is essential for driving sales, which is ultimately what keeps your business going. It’s how you drive a profit. Growth marketing, meanwhile, is better for keeping customers around longer and expanding your market. If you have plans for your business to expand, that’s where growth marketing comes into play.

In that sense, you could say that revenue marketing is a must-have approach, and growth marketing is a nice-to-have approach. Your business won’t really grow or expand without growth marketing, but without revenue marketing, it won’t survive at all.

Harness both revenue marketing and growth marketing with WebFX

Regardless of whether your priority is revenue marketing or growth marketing, you’re in for a lot of work. Marketing drives results, but it takes time and effort to get right. It also takes expertise. If you feel that you have all those things in abundance, then you’re all set. But if not, it might be a good idea to partner with a professional agency like WebFX.

With over 29 years of experience, we specialize in both growth marketing and revenue marketing. When you partner with us, we’ll handle all the work of your campaigns, but you’ll still be in full control of everything. Our services cover a wide range of digital marketing strategies for you to choose from.

Ready to boost your bottom line with a revenue marketing agency? Just call us at 888-601-5359 or contact us online today!