How to define your first growth lever
Get closer to your North Star Metric
Hi there,
Experimentation can get messy.
You might feel like you need to test everything at once. But it’s important to not spread yourself too thin, and instead focus on documenting consistently on one to two areas where you can make a bigger impact..
These areas are your growth levers. You growth lever is the area of your business you’re looking to improve. It’ll help to get you towards your North Star Metric.
In this newsletter, I’ll run you through how to decide on your chosen growth lever and how to set it up.
What is a growth lever?
As mentioned, a growth lever is an area of the business you’re looking to improve through your experimentation.
You can have multiple growth levers, but avoid spreading yourself too thin. It’s better to have several experiments focused on one or maximum two growth levers, and strengthen that area of business. Then you can move on to the next one.
These will usually relate back to your Quarterly Goals to ensure the whole organisation is focused on the same priorities to drive growth:
Using growth levers to focus efforts is a learned skill. For most teams, it will take a few cycles before you build the discipline and habits to realise its full impact. But it works.
Focus makes the chaos of growth less daunting, improves your ability to move the North Star Metric, and helps each person on the team connect their work to a specific and valuable outcome.
How should I decide on my growth lever?
I can’t tell you what your growth levers should be - even if you ask really, really nicely. But what I can do is give you some more inspiration and guidance to get you thinking in the right direction.
If we look at the customer journey, there are various key metrics per stage:
These are all potential starting points for growth levers. Let’s take acquisition as an example.
You might decide you want to focus this quarter on your Meta Ads acquisition. The starting place for this is traffic, CTR, conversions and conversion rate.
Now, if your website is converting well, you might choose traffic or conversions as the goal. The risk with traffic is quality, as we don’t want bad traffic for the sake of it. So we might focus on engaged sessions from paid, or say a certain number of conversions through paid. My preference is usually the latter: it encourages better behaviour, e.g. not driving traffic for the sake of it or through clickbait content.
I would also get more specific:
Which platform do we use to measure the conversions?
Will you count only conversions from prospect campaigns or also retargeting?
What is the max cost of acquisition?
What is the max discount allowed?
Does that mean traffic is a bad lever? No, maybe less ideal for paid, but for organic growth it could be a great measure, the number of engaged sessions through organic. Again, it’s important to get specific:
What is the definition of engaged?
Will you look at branded and non-branded?
Is it blog traffic or the whole website?
Are there rules on the type of content to ensure it is relevant?
As you can see, I try to be really critical of what drives good behaviour and clarity. As much as we have the best intentions, we don’t want the pressure to tempt people to ‘game’ the metrics.
How to setup your growth lever
Before starting the experiment, ensure you’ve defined the following for your growth levers:
A clear overall KPI to be working on and the goal
A measure of success - When have we improved it to the point we need to? What do we need to achieve to call this a ‘success’?
A goal by X date - Set a deadline to ensure it has enough impact to reach the goal by then.
At least 30+ ideas in the backlog - Fill up your backlog and then prioritise the ideas so that you’re only doing the best ones. At this phase, we aren’t working with a backlog or prioritisation system (this will be added in Stage 4).
What are the themes we are testing? - Consider the bigger picture this experiment contributes to, but more on this to come.
Experiments running - Keep on top of all of your experiments, and ensure none of them are conflicting.
A clear owner - It’s a team effort, but someone needs the final say and responsibility.
Make sure to clearly document the above in a spreadsheet or other template like a notion board. It might feel like a drag, but documentation is key to getting the most out of your experiments.
Recommendation
In every edition of Growth Waves, I also share a related book, individual or newsletter to check out related to the week's topic.
If you want to learn more about growth levers, I recommend checking out Matt Lerner’s book, Growth Levers and How to Find Them.
He takes a deep dive into how to map out your growth model to identify these key areas of leverage to focus on to maximise the impact of your experiments.
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Smaller brands might opt to use the overarching KPIs listed above as their focus.
But most of the time, it’s worth getting more specific to drive focus to the root cause of the issue and the outcome you’d like to achieve. Ask critical questions to ensure there is no way to game the metric or have a lack of clarity about what ‘better’ looks like.
The content in this newsletter was taken from my online course, Building an Impactful Experimentation Process. If you want access to my 5-stage process to build more focus and structure in your startup, click here.
Chat soon,
Daphne.