Growth Marketing: what it is and how it works in practice
Growth Marketing: what it is and how it works in practice
Growth Marketing is an approach to growth that replaces isolated campaigns with a continuous cycle of testing, data, and optimization at all stages of the funnel, from the first contact to customer retention, with a clear focus on bottom-line results and not just traffic volume or reach.
Moisés Schwan Bach
Operations Manager · First Brazil
Operations Manager
Introduction
A large portion of companies still treat marketing as a sequence of isolated campaigns: they launch an ad, measure the reach, change the creative, and move on to the next. This model works when the goal is visibility, but fails when the goal is sustained growth, because there is no learning cycle between one action and the next.
Growth marketing was born as a response to this problem. Instead of optimizing only the top of the funnel (attraction), the approach treats each stage of the customer journey, from first contact to repurchase, as a testable variable. Each growth hypothesis is validated with data before receiving a larger budget.
This article explains what characterizes growth marketing, how it differs from traditional marketing, how the AAARRR funnel (also called the pirate funnel) works, and what steps a company needs to take to implement this approach.
Introduction
A large portion of companies still treat marketing as a sequence of isolated campaigns: they launch an ad, measure the reach, change the creative, and move on to the next. This model works when the goal is visibility, but fails when the goal is sustained growth, because there is no learning cycle between one action and the next.
Growth marketing was born as a response to this problem. Instead of optimizing only the top of the funnel (attraction), the approach treats each stage of the customer journey, from first contact to repurchase, as a testable variable. Each growth hypothesis is validated with data before receiving a larger budget.
This article explains what characterizes growth marketing, how it differs from traditional marketing, how the AAARRR funnel (also called the pirate funnel) works, and what steps a company needs to take to implement this approach.
Introduction
A large portion of companies still treat marketing as a sequence of isolated campaigns: they launch an ad, measure the reach, change the creative, and move on to the next. This model works when the goal is visibility, but fails when the goal is sustained growth, because there is no learning cycle between one action and the next.
Growth marketing was born as a response to this problem. Instead of optimizing only the top of the funnel (attraction), the approach treats each stage of the customer journey, from first contact to repurchase, as a testable variable. Each growth hypothesis is validated with data before receiving a larger budget.
This article explains what characterizes growth marketing, how it differs from traditional marketing, how the AAARRR funnel (also called the pirate funnel) works, and what steps a company needs to take to implement this approach.
How growth marketing works in practice
Growth marketing works as a repeated cycle of hypothesis, testing, measurement, and decision-making, applied to any stage of the funnel that offers potential for growth. Instead of approving a campaign and waiting for the final result, the growth team defines a target metric, tests a variation in a controlled manner, and decides, based on the collected data, whether that action should be scaled, adjusted, or discarded.
This cycle usually follows four steps:
Hypothesis: what specific change should generate what result (e.g., "reducing the form from 8 to 3 fields increases the lead conversion rate")
Test: the hypothesis is validated in a controlled sample, usually via A/B testing
Measurement: the result is read in a business metric, not just a vanity metric (clicks, likes)
Decision: with the result in hand, the action is scaled, iterated, or stopped
Unlike a one-off campaign, this cycle does not have a fixed end date. It repeats continuously, and each test feeds the next one with more historical data. According to data compiled by Ronny Kohavi (former Microsoft, former Airbnb) and published by GrowthBook (2026), the success rate varies by company — from 8% on Airbnb Search to 33% at Microsoft —, with the industry median hovering around 10% of experiments actually improving the metric they set out to move.
Growth teams tend to be multidisciplinary, bringing together marketing, product, data, and, in some cases, sales, because a large part of growth friction points lies in the transition between areas, not within a single isolated area.
How growth marketing works in practice
Growth marketing works as a repeated cycle of hypothesis, testing, measurement, and decision-making, applied to any stage of the funnel that offers potential for growth. Instead of approving a campaign and waiting for the final result, the growth team defines a target metric, tests a variation in a controlled manner, and decides, based on the collected data, whether that action should be scaled, adjusted, or discarded.
This cycle usually follows four steps:
Hypothesis: what specific change should generate what result (e.g., "reducing the form from 8 to 3 fields increases the lead conversion rate")
Test: the hypothesis is validated in a controlled sample, usually via A/B testing
Measurement: the result is read in a business metric, not just a vanity metric (clicks, likes)
Decision: with the result in hand, the action is scaled, iterated, or stopped
Unlike a one-off campaign, this cycle does not have a fixed end date. It repeats continuously, and each test feeds the next one with more historical data. According to data compiled by Ronny Kohavi (former Microsoft, former Airbnb) and published by GrowthBook (2026), the success rate varies by company — from 8% on Airbnb Search to 33% at Microsoft —, with the industry median hovering around 10% of experiments actually improving the metric they set out to move.
Growth teams tend to be multidisciplinary, bringing together marketing, product, data, and, in some cases, sales, because a large part of growth friction points lies in the transition between areas, not within a single isolated area.
How growth marketing works in practice
Growth marketing works as a repeated cycle of hypothesis, testing, measurement, and decision-making, applied to any stage of the funnel that offers potential for growth. Instead of approving a campaign and waiting for the final result, the growth team defines a target metric, tests a variation in a controlled manner, and decides, based on the collected data, whether that action should be scaled, adjusted, or discarded.
This cycle usually follows four steps:
Hypothesis: what specific change should generate what result (e.g., "reducing the form from 8 to 3 fields increases the lead conversion rate")
Test: the hypothesis is validated in a controlled sample, usually via A/B testing
Measurement: the result is read in a business metric, not just a vanity metric (clicks, likes)
Decision: with the result in hand, the action is scaled, iterated, or stopped
Unlike a one-off campaign, this cycle does not have a fixed end date. It repeats continuously, and each test feeds the next one with more historical data. According to data compiled by Ronny Kohavi (former Microsoft, former Airbnb) and published by GrowthBook (2026), the success rate varies by company — from 8% on Airbnb Search to 33% at Microsoft —, with the industry median hovering around 10% of experiments actually improving the metric they set out to move.
Growth teams tend to be multidisciplinary, bringing together marketing, product, data, and, in some cases, sales, because a large part of growth friction points lies in the transition between areas, not within a single isolated area.
What is the difference between growth marketing and traditional marketing
The core difference lies in the scope of action and the decision criteria: traditional marketing concentrates effort on acquisition and measures reach, while growth marketing operates across the entire funnel and measures impact on business metrics, such as revenue and retention.
Criterion | Traditional marketing | Growth marketing |
|---|---|---|
Scope | Focus on top of the funnel (acquisition, awareness) | Operates across all stages: acquisition, activation, retention, revenue, referral |
Primary metric | Reach, clicks, impressions | CAC, LTV, activation rate, retention rate |
Decision pace | Campaigns with defined start and end dates | Continuous cycles of testing and iteration |
Team structure | Isolated marketing | Multidisciplinary team (marketing, product, data, [[Transform customer relationships using a CRM |
Budget | Allocated per campaign, approved before results | Allocated per validated experiment, scaled after data |
This does not mean that traditional marketing has ceased to be useful. A branding campaign, for example, remains the right tool when the goal is brand awareness, not immediate conversion. Growth marketing is the recommended approach when the stated objective is measurable growth of an existing funnel.
What is the difference between growth marketing and traditional marketing
The core difference lies in the scope of action and the decision criteria: traditional marketing concentrates effort on acquisition and measures reach, while growth marketing operates across the entire funnel and measures impact on business metrics, such as revenue and retention.
Criterion | Traditional marketing | Growth marketing |
|---|---|---|
Scope | Focus on top of the funnel (acquisition, awareness) | Operates across all stages: acquisition, activation, retention, revenue, referral |
Primary metric | Reach, clicks, impressions | CAC, LTV, activation rate, retention rate |
Decision pace | Campaigns with defined start and end dates | Continuous cycles of testing and iteration |
Team structure | Isolated marketing | Multidisciplinary team (marketing, product, data, [[Transform customer relationships using a CRM |
Budget | Allocated per campaign, approved before results | Allocated per validated experiment, scaled after data |
This does not mean that traditional marketing has ceased to be useful. A branding campaign, for example, remains the right tool when the goal is brand awareness, not immediate conversion. Growth marketing is the recommended approach when the stated objective is measurable growth of an existing funnel.
What is the difference between growth marketing and traditional marketing
The core difference lies in the scope of action and the decision criteria: traditional marketing concentrates effort on acquisition and measures reach, while growth marketing operates across the entire funnel and measures impact on business metrics, such as revenue and retention.
Criterion | Traditional marketing | Growth marketing |
|---|---|---|
Scope | Focus on top of the funnel (acquisition, awareness) | Operates across all stages: acquisition, activation, retention, revenue, referral |
Primary metric | Reach, clicks, impressions | CAC, LTV, activation rate, retention rate |
Decision pace | Campaigns with defined start and end dates | Continuous cycles of testing and iteration |
Team structure | Isolated marketing | Multidisciplinary team (marketing, product, data, [[Transform customer relationships using a CRM |
Budget | Allocated per campaign, approved before results | Allocated per validated experiment, scaled after data |
This does not mean that traditional marketing has ceased to be useful. A branding campaign, for example, remains the right tool when the goal is brand awareness, not immediate conversion. Growth marketing is the recommended approach when the stated objective is measurable growth of an existing funnel.
What is the AAARRR funnel in growth marketing
The AAARRR funnel, also called the pirate funnel because of its acronym, organizes the customer journey into six measurable stages: Awareness, Acquisition, Activation, Retention, Revenue, and Referral. Each stage has its own metric, which allows for identifying exactly where the funnel is losing customers.
Stage | Name in English | What it measures |
|---|---|---|
Awareness | Awareness | How many people discover the brand |
Acquisition | Acquisition | How many of these people become a lead or qualified visitor |
Activation | Activation | How many leads have their first positive experience with the product/service |
Retention | Retention | How many customers remain active after a period |
Revenue | Revenue | How much revenue each customer generates |
Referral | Referral | How many customers refer new customers |
The practical value of the AAARRR funnel lies in isolating the problem. A company can have excellent acquisition and terrible activation, for example, which means the problem is not in generating leads, but in the first experience that the lead has with the product or service. Without this stage-by-stage breakdown, it is common to invest more in the top of the funnel when the actual leak is in the middle.
What is the AAARRR funnel in growth marketing
The AAARRR funnel, also called the pirate funnel because of its acronym, organizes the customer journey into six measurable stages: Awareness, Acquisition, Activation, Retention, Revenue, and Referral. Each stage has its own metric, which allows for identifying exactly where the funnel is losing customers.
Stage | Name in English | What it measures |
|---|---|---|
Awareness | Awareness | How many people discover the brand |
Acquisition | Acquisition | How many of these people become a lead or qualified visitor |
Activation | Activation | How many leads have their first positive experience with the product/service |
Retention | Retention | How many customers remain active after a period |
Revenue | Revenue | How much revenue each customer generates |
Referral | Referral | How many customers refer new customers |
The practical value of the AAARRR funnel lies in isolating the problem. A company can have excellent acquisition and terrible activation, for example, which means the problem is not in generating leads, but in the first experience that the lead has with the product or service. Without this stage-by-stage breakdown, it is common to invest more in the top of the funnel when the actual leak is in the middle.
What is the AAARRR funnel in growth marketing
The AAARRR funnel, also called the pirate funnel because of its acronym, organizes the customer journey into six measurable stages: Awareness, Acquisition, Activation, Retention, Revenue, and Referral. Each stage has its own metric, which allows for identifying exactly where the funnel is losing customers.
Stage | Name in English | What it measures |
|---|---|---|
Awareness | Awareness | How many people discover the brand |
Acquisition | Acquisition | How many of these people become a lead or qualified visitor |
Activation | Activation | How many leads have their first positive experience with the product/service |
Retention | Retention | How many customers remain active after a period |
Revenue | Revenue | How much revenue each customer generates |
Referral | Referral | How many customers refer new customers |
The practical value of the AAARRR funnel lies in isolating the problem. A company can have excellent acquisition and terrible activation, for example, which means the problem is not in generating leads, but in the first experience that the lead has with the product or service. Without this stage-by-stage breakdown, it is common to invest more in the top of the funnel when the actual leak is in the middle.
Which metrics does growth marketing prioritize
Growth marketing prioritizes business metrics, such as CAC and LTV, instead of vanity metrics like reach and likes, because these business metrics show whether the growth is profitable and sustainable over time.
The most commonly used metrics in growth programs are:
CAC (Customer Acquisition Cost): how much it costs, on average, to convert a new customer
LTV (Lifetime Value): how much revenue each customer generates during the entire relationship with the company
LTV/CAC Ratio: health indicator of the growth model; below 1 means the company loses money with each new customer
Activation rate: percentage of leads who reach their first positive experience with the product or service
Retention rate: percentage of customers who remain active after a defined period (30, 90, 365 days)
Viral coefficient: how many new customers each current customer refers, on average
North Star Metric is the term used for the single metric that summarizes, for the entire team, whether growth is healthy. It must reflect the real value delivered to the customer, not just a vanity number. According to Amplitude, the example varies by business segment: in marketplaces, a major benchmark retailer uses "number of mobile orders delivered"; in self-service B2B SaaS, the standard is "trial accounts with more than 3 active users in the first week"; in attention/streaming products, Spotify uses listening time and Netflix prioritizes number of subscribers (not total watch time); in lodging marketplaces, Airbnb uses nights booked; and in collaboration tools, Slack uses messages sent between teams.
Which metrics does growth marketing prioritize
Growth marketing prioritizes business metrics, such as CAC and LTV, instead of vanity metrics like reach and likes, because these business metrics show whether the growth is profitable and sustainable over time.
The most commonly used metrics in growth programs are:
CAC (Customer Acquisition Cost): how much it costs, on average, to convert a new customer
LTV (Lifetime Value): how much revenue each customer generates during the entire relationship with the company
LTV/CAC Ratio: health indicator of the growth model; below 1 means the company loses money with each new customer
Activation rate: percentage of leads who reach their first positive experience with the product or service
Retention rate: percentage of customers who remain active after a defined period (30, 90, 365 days)
Viral coefficient: how many new customers each current customer refers, on average
North Star Metric is the term used for the single metric that summarizes, for the entire team, whether growth is healthy. It must reflect the real value delivered to the customer, not just a vanity number. According to Amplitude, the example varies by business segment: in marketplaces, a major benchmark retailer uses "number of mobile orders delivered"; in self-service B2B SaaS, the standard is "trial accounts with more than 3 active users in the first week"; in attention/streaming products, Spotify uses listening time and Netflix prioritizes number of subscribers (not total watch time); in lodging marketplaces, Airbnb uses nights booked; and in collaboration tools, Slack uses messages sent between teams.
Which metrics does growth marketing prioritize
Growth marketing prioritizes business metrics, such as CAC and LTV, instead of vanity metrics like reach and likes, because these business metrics show whether the growth is profitable and sustainable over time.
The most commonly used metrics in growth programs are:
CAC (Customer Acquisition Cost): how much it costs, on average, to convert a new customer
LTV (Lifetime Value): how much revenue each customer generates during the entire relationship with the company
LTV/CAC Ratio: health indicator of the growth model; below 1 means the company loses money with each new customer
Activation rate: percentage of leads who reach their first positive experience with the product or service
Retention rate: percentage of customers who remain active after a defined period (30, 90, 365 days)
Viral coefficient: how many new customers each current customer refers, on average
North Star Metric is the term used for the single metric that summarizes, for the entire team, whether growth is healthy. It must reflect the real value delivered to the customer, not just a vanity number. According to Amplitude, the example varies by business segment: in marketplaces, a major benchmark retailer uses "number of mobile orders delivered"; in self-service B2B SaaS, the standard is "trial accounts with more than 3 active users in the first week"; in attention/streaming products, Spotify uses listening time and Netflix prioritizes number of subscribers (not total watch time); in lodging marketplaces, Airbnb uses nights booked; and in collaboration tools, Slack uses messages sent between teams.
How to implement growth marketing in a company
Implementing growth marketing requires building a multidisciplinary team, defining a North Star Metric, and running continuous experiments validated by data, rather than approving isolated actions based on intuition.
The practical steps are:
Build the team: assemble marketing, data, and, whenever possible, product and sales, so that the funnel can be analyzed from end to end
Define the North Star Metric: choose the metric that best represents the value delivered to the customer
Map the AAARR funnel: measure each stage separately to identify where the biggest leak is
Prioritize experiments: not every hypothesis is worth the same effort; frameworks like ICE (Impact, Confidence, Ease) help prioritize the testing backlog
Run the cycle continuously: test, measure, decide, and document the learning, even when the test fails, because the learning feeds the next cycle
Companies that try to apply growth marketing without this foundation often confuse the approach with a set of isolated tactics ("growth hacks"), which generates one-off gains without repetition. The difference between growth marketing and growth hacking lies precisely in the structure: the former is an institutionalized process; the latter, an isolated tactic without a learning cycle.
How to implement growth marketing in a company
Implementing growth marketing requires building a multidisciplinary team, defining a North Star Metric, and running continuous experiments validated by data, rather than approving isolated actions based on intuition.
The practical steps are:
Build the team: assemble marketing, data, and, whenever possible, product and sales, so that the funnel can be analyzed from end to end
Define the North Star Metric: choose the metric that best represents the value delivered to the customer
Map the AAARR funnel: measure each stage separately to identify where the biggest leak is
Prioritize experiments: not every hypothesis is worth the same effort; frameworks like ICE (Impact, Confidence, Ease) help prioritize the testing backlog
Run the cycle continuously: test, measure, decide, and document the learning, even when the test fails, because the learning feeds the next cycle
Companies that try to apply growth marketing without this foundation often confuse the approach with a set of isolated tactics ("growth hacks"), which generates one-off gains without repetition. The difference between growth marketing and growth hacking lies precisely in the structure: the former is an institutionalized process; the latter, an isolated tactic without a learning cycle.
How to implement growth marketing in a company
Implementing growth marketing requires building a multidisciplinary team, defining a North Star Metric, and running continuous experiments validated by data, rather than approving isolated actions based on intuition.
The practical steps are:
Build the team: assemble marketing, data, and, whenever possible, product and sales, so that the funnel can be analyzed from end to end
Define the North Star Metric: choose the metric that best represents the value delivered to the customer
Map the AAARR funnel: measure each stage separately to identify where the biggest leak is
Prioritize experiments: not every hypothesis is worth the same effort; frameworks like ICE (Impact, Confidence, Ease) help prioritize the testing backlog
Run the cycle continuously: test, measure, decide, and document the learning, even when the test fails, because the learning feeds the next cycle
Companies that try to apply growth marketing without this foundation often confuse the approach with a set of isolated tactics ("growth hacks"), which generates one-off gains without repetition. The difference between growth marketing and growth hacking lies precisely in the structure: the former is an institutionalized process; the latter, an isolated tactic without a learning cycle.
Frequently asked questions
Are growth marketing and growth hacking the same thing?
No. Growth hacking is an isolated, short-term tactic, usually without a repeatable structure. Growth marketing is an institutionalized process, with a continuous cycle of testing, business metrics, and multidisciplinary teams dedicated to sustaining growth over time.
Does growth marketing work for small businesses?
Yes. The size of the company is not a prerequisite; the prerequisite is having a measurable funnel and the willingness to test hypotheses before scaling the budget. Small companies usually gain speed precisely because they have fewer layers of approval between testing and decision-making.
What is the first step to applying growth marketing?
The first step is to map the current funnel by stage (3A3R) and identify where the biggest customer drop-off is occurring. Only after this diagnosis does it make sense to prioritize experiments, because investing in acquisition when the real issue is retention wastes budget.
Does growth marketing replace traditional marketing?
It does not replace; it complements. Branding and brand awareness actions remain necessary to build long-term trust. Growth marketing comes in to make what happens after the customer already knows the brand measurable and repeatable.
First Brazil
First Brazil
First Brazil is a growth agency with operations in Brazil and the United States, specializing in civil construction and real estate, integrating digital marketing, sales structuring, and AI automation. It builds acquisition systems that connect paid traffic, CRM, web development, and sales processes for builders, developers, and modular construction companies.
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