After having enjoyed steady growth of your brand over the years, are you now noticing a troubling trend?
Your sales, customer acquisition, and profits have plateaued !? 🙁
While this is extremely frustrating and confusing, know that you’re not alone in this.
Brands with a performance-oriented mindset, whether they are big enterprise names, startups, or SMEs, they’re all unfortunately going through the same fate and having a hard time grappling with it.
The good news is there are ways to break through this growth barrier and reignite your brand’s success.
(Hint: The only thing hindering your growth is the performance mindset.)
In this article, we’ve talked about the five essential steps you must take to jumpstart your brand’s growth and overcome the plateau.
But first, let’s understand:
What exactly is the Performance Plateau?
Performance Plateau is a point in a brand’s growth where its efforts to improve performance and growth get stalled.
Despite continued efforts, the brand sees little or almost no improvement in its performance metrics.
The story often goes like this.
A brand’s initial growth halts – maybe after a few months.
The ROAS, or Return on Advertising Spend, have skyrocketed, and the previously good returns have fallen.
Everything has become inefficient, and you’re still determining how to attract more leads, aka customers and generate revenue.
The direct link between paid advertising, or “Performance Marketing” as it’s called now, seems to have weakened, and the marketing team has no clue what to do next.
The founders and investors have started questioning everything, but you’ve got no answers, despite asking yourself a hundred times – “What the heck has suddenly gone wrong?”
Interestingly, brands of different sizes and across various categories – both B2B and B2C have been affected.
Speaking of, we recently saw Airbnb and Asos admitting to relying overly on performance marketing, and when it showed sluggish growth, they subsequently shifted to organic brand-building activities.
Why does the Performance Plateau occur?
Brands have started falling prey to the performance plateau and are having difficulty tackling it for a couple of reasons. And they are:
- Maxed out ad spending so much that there’s nothing more you can do to improve your results
- A highly saturated market with intense competition that leads to an increased cost per click or conversion
- Lack of skills, experience, people and partners to leverage the full-funnel marketing approach
How to overcome the Performance Plateau?
While every brand struggling with Performance Plateau (or even otherwise) requires a custom growth strategy, certain fundamentals would help you navigate it.
One of the most important is understanding how marketing and advertising go hand in hand and how both pave the way for a brand’s long-term success.
1. Unlearn and Learn
We cannot emphasize enough on the importance of unlearning the “performance mindset” and learning about the growth strategies that work like magic and the significance of brand communication and building the build organically.
This would require deep-dive analysis and some introspection. And most importantly, the approval of the leadership because unless they’re on the same page as you and want to get on the journey of building their brand organically, it’d be pointless.
To give you a headstart: Read up on the proven strategies that accelerated brands’ growth and make them a part of your all-new growth strategy.
2. Know where your audience is at
Brands (especially D2C brands) are under the impression that they know their audience and its demographics inside out, owing to the massive chunk of data they have.
However, that’s not sufficient. You must clearly understand all the category buyers – those who love your product, those who are light users and non-users.
It’s crucial to get in front of the latter, create awareness about your brand and product, and drive consideration.
That’s where online communities come in!
You can scour through millions of conversations across FB groups, Reddit and Discord, understand what people say about your brand and products, and identify your brand ambassadors, enthusiasts, light users, and non-users.
Convosight enables you to tap into the previously inaccessible online communities and even market in them.
Brands like Amazon, Sunsilk, Dove, Nestle, and Samsung, to name a few, are leveraging community marketing to achieve their different objectives.
Learn how Samsung generated awareness and consideration for its all-new Galaxy Watch 4 through Community Marketing.
3. Create a GROWTH Model
Let’s take the example of Airbnb (a brand that needs no introduction), which reported the third quarter of 2022 as the most profitable quarter, reaching $1.2 Bn in net income.
The holiday homes rental brand even posted its highest quarterly adjusted EBITDA ever at $1.5 Bn, a 32% YOY increase.
Citing its reason, CFO Dave Stephenson highlighted their efficient marketing approach to spending and focus on brand building over performance.
In 2019, Airbnb shifted its marketing strategy to more PR-led, brand-driven, and less dependent on search engine and performance marketing. The brand now uses marketing to “educate” customers rather than “buy” them.
“We’re really pleased with our approach to the marketing strategy that we’ve had,” Stephenson said. “Our brand marketing results are delivering excellent results overall with a strong rate of return.”
Time for you to follow the same approach that will ensure your brand’s growth in the long run.
4. Leverage the power of “Online Communities”
Since we’re on the topic of organic brand building, I would like to point out that word-of-mouth plays a crucial role.
According to Nielsen, 92% of consumers trust recommendations from friends and family above all forms of marketing, and 77% of consumers are more likely to buy a new product when learning about it from friends and family.
Did you know over 2 Billion people are ‘talking’ in online communities across multiple platforms and discussing their pain points, passion, and everything in between?
In these online communities, people also constantly share and seek product recommendations. Look at this user conversation where a member suggests a liquid soap for babies.
While this is just one example, think of being able to analyze millions of such conversations from real users and the impact you can create.
With Convosight, you can:
- Tap into millions of user conversations relevant to your brand and category
- Derive actionable insights from these conversations
- Market in these communities and create awareness, drive consideration, influence purchase intent, and drive word-of-mouth advocacy for your brand and product, among other things.
5. Let Performance Marketing take a BACKSEAT
By now, you must have realized that performance marketing solely would help achieve your short-term goals ONLY and would stall growth after a point in time.
Hence, having a full-funnel approach is how to approach your brand marketing. You target and engage with potential customers at every stage of the buyer journey, from awareness to purchase and beyond, by creating tailored messaging and experience.
The full-funnel approach typically includes these three stages:
- Top of the funnel (TOFU): At the top of the funnel, the goal is to generate awareness and interest in your brand. This can be done through social media marketing, content marketing, and paid advertising. The focus is on reaching a wide audience and creating engaging and shareable content.
- Middle of the funnel (MOFU): In the middle of the funnel, the goal is to nurture leads and move them towards a purchase decision. You can do that through tactics like email marketing, lead magnets, and webinars.
The focus is building trust and establishing your brand as a trusted authority in your industry.
- Bottom of the funnel (BOFU): At the bottom of the funnel, the goal is to convert leads into customers. This is typically done through retargeting ads, personalized offers, and free trials/sampling. The focus is on creating a sense of urgency and providing a clear path to purchase.
By focusing on the full funnel, as brand marketers, you can create a cohesive strategy that guides customers towards a purchase and builds long-term relationships, which is only possible with performance marketing.
While Performance Marketing can be incredibly effective in the short term, it’s important to remember its limitations.
By focusing solely on short-term results, you risk hitting a plateau and becoming overly reliant on paid advertising. As is, there’s only so much you can do with performance marketing; sooner or later, you’d be maxed on growth.
Speaking of, having a solid growth strategy that focuses on organically building the brand combined with performance marketing is ideal in the long run.
Doing this will create a strong foundation for your brand that will be difficult for competitors to replicate, and you’ll be less vulnerable to changes in ad algorithms or rising ad costs.
Remember, it’s all about balancing the two approaches that are best for your brand.
Creating value in the lives of others with my content, little by little.✨
Working at Convosight, I do more than just wrangle commas. I’m passionate about innovating new ways to create super valuable and actionable content about Communities and Community Marketing at large, and sharing it with the right audience.
I also happen to manage a global community of power admins on Facebook, and that’s where most of my learnings come from.
Do check out my latest blogs and feel free to share them! 💛