Growth drivers

I want to explain the term 'growth drivers' in simple terms. As a Head of Growth, this is how I often explain it to my students and the people I work with.

So, what do I mean when I talk about 'Growth Drivers'?

Simply put, growth drivers are the main, fundamental things that actually cause your business to grow. They aren't just any activity you do; they are the core factors or specific activities that lead directly to significant results like getting more customers, increasing the money you make (revenue), keeping customers loyal for longer, or improving your position in the market.

Think of it like baking a cake. You have lots of ingredients and steps, but the key things that make the cake rise and taste good – perhaps the flour, eggs, and sugar working together with the oven's heat – are the 'drivers' of a successful cake. In business, your growth drivers are the essential ingredients and processes that reliably produce growth. It’s crucial to understand that these drivers are often specific to each business. What drives growth for a huge online shop will be very different from what drives growth for a local accounting firm or a specialised software company.

Understanding your specific growth drivers isn't just an interesting academic exercise; it's incredibly important for practical reasons. In my experience, focusing on your actual drivers is the key to using your limited time, money, and energy effectively.

Focus and Prioritisation

Knowing your growth drivers tells you where to aim your efforts. Instead of trying to do everything or chasing the latest trend, you can concentrate on the activities that give you the biggest bang for your buck. It helps you answer the question: "Out of all the things we could do, what should we do right now?"

Example: Marketing Agency

If an agency realises its key growth driver is ‘Retaining and growing large client accounts’, it matters because they should prioritise investing in top-notch account management, client relationship building, and services that encourage longer contracts, rather than spending excessively on acquiring lots of small, short-term projects.

Example: Management Consultancy

If their driver is ‘Building a reputation for expertise in a specific niche (like sustainable practices) that attracts high-value inbound leads’, it matters because their focus should be on creating insightful reports, speaking at industry events, and publishing case studies in that niche – not generic advertising.

Better Decision Making

When you understand what truly fuels your growth, you can make smarter strategic decisions about everything from developing new services or products to entering new markets or hiring new people.

Example: B2B SaaS Company

If a software company identifies ‘Successful user onboarding leading to free-to-paid conversion’ as a primary driver, it matters deeply. They need to constantly analyse and improve the first few interactions a user has with the software, potentially investing more in tutorials, in-app guides, or customer success managers focused on new users. This is likely more important than adding obscure features few people will use.

Example: Corporate Training Provider

If their driver is ‘Partnerships with HR departments in large organisations’, it matters because their sales and marketing strategy should revolve around building relationships with HR leaders and attending HR conferences, rather than trying to sell individual courses to the general public.

Effective Measurement

Identifying your drivers helps you figure out what you actually need to measure to track progress. Instead of drowning in data, you can focus on the Key Performance Indicators (KPIs) that directly reflect the health of your growth drivers.

Example: Specialist Logistics Firm

If a key driver is ‘On-time delivery rate leading to client retention and referrals’, it matters because they must obsessively track delivery performance, customer satisfaction scores related to delivery, and the source of new business (specifically asking if it was a referral). Website traffic might be less critical than these operational metrics.

Example: Accounting Firm

If their main driver is ‘Cross-selling additional advisory services (like tax planning) to existing compliance clients’, it matters because they need to track the percentage of clients using multiple services and the revenue generated from these add-on services, not just the total number of clients.

Without understanding your drivers, you risk spreading your resources too thinly, making poor strategic choices, and measuring things that don’t truly reflect the health of your business growth.

Okay, so growth drivers are important. But how do you figure out what they are for your business or the business you work for, especially if you're just starting out in marketing or growth? It's not always obvious, but here’s a practical approach I recommend, telling the story of how you might uncover and use them.

Dig Into Your Data (Be a Detective)

The first step is always to look at the evidence you already have. Where has growth genuinely come from in the past? You need to act like a detective and investigate your business numbers. Look closely at your sales figures: which services or products generate the most revenue or have the best profit margins? Which are growing fastest? Then examine your customer data: who are your most valuable customers – those who stay longest or spend the most over time? Where did they originally come from? Look for patterns. For instance, a B2B SaaS company might analyse user behaviour and discover that customers who integrate their software with another specific tool (like Salesforce) within the first month are far more likely to become long-term paying subscribers. This points towards 'Successful Integration Adoption' as a potential key driver. Also, analyse your marketing performance – which channels have historically brought in not just leads, but profitable, long-term customers?

Talk to People (Get Out of the Office)

Data reveals what happened, but you need conversations to understand why. Make a real effort to talk to different groups. Speak with your customers; ask new ones why they chose you over competitors, and ask loyal ones why they continue to stay. If possible, even ask former customers why they left – this can be incredibly insightful. Understand their goals, their challenges, and how your service fits into their world. Equally important is talking to your internal teams. Your sales team knows firsthand what arguments convince prospects and what objections constantly arise. Your customer service or account management teams understand what makes clients happy, what frustrates them, and what additional help they often request. For example, a consultancy might learn directly from client interviews that their highly detailed, customised proposals were the deciding factor for several major contract wins, suggesting 'Proposal Quality and Customisation' could be a vital driver.

Look Around (Analyse Your Market and Competitors)

No business operates in a vacuum. You need to understand the broader context. Pay attention to what seems to be working for your direct competitors – not necessarily to copy them blindly, but to understand their strategies and apparent focus. Are they successfully growing by targeting a niche you're ignoring? Also, keep an eye on wider market trends. Are there new technologies, regulations, or shifts in customer behaviour that are changing how companies in your sector grow? These shifts can create new opportunities or make old drivers less effective. An agency, for instance, might observe competitors successfully winning clients by offering specialised 'video marketing packages'. This observation could prompt them to investigate whether 'Offering In-Demand Specialised Service Packages' might be a potential growth driver for their own business too.

Formulate Hypotheses (Make Educated Guesses)

Armed with insights from your data, conversations, and market analysis, you can start making educated guesses – or hypotheses – about your key growth drivers. Frame these clearly, ideally in a way that you can test. Avoid vague statements like "marketing is important." Instead, be specific: "We believe increasing qualified leads from organic search by 20% will drive a 10% increase in new client revenue," or "Improving our client retention rate from 80% to 85% by enhancing our onboarding process is a key driver of overall revenue growth." These specific hypotheses give you something concrete to focus on and measure against.

Test and Measure (Run Experiments)

This is where the rubber meets the road. A hypothesis is just a guess until you test it. You need to focus specific actions and allocate resources based on your hypothesized drivers, and then rigorously measure the results. If you hypothesise that 'Referrals from existing clients' is a driver, don't just hope for referrals – launch a formal referral programme, actively encourage your team to ask satisfied clients for referrals, track exactly how many you get, where they came from, and crucially, measure the conversion rate and long-term value of these referred clients. Compare the results during this focused effort to periods without it. Use simple tools like a 'Growth Scorecard' to keep track of the specific metrics tied to your driver hypotheses. For example, the logistics firm suspecting 'Offering Real-Time Tracking' is a driver might pilot the feature with a select group of customers. They would then need to measure the satisfaction levels and retention rates of this group compared to a similar group without the feature, to see if it genuinely drives positive business outcomes.

Refine and Repeat (It’s a Continuous Cycle)

Finally, understand that identifying and leveraging growth drivers is not a one-off project; it's an ongoing process. Markets evolve, customer needs shift, competitors react, and your own business changes. What drives growth today might not be the primary driver next year. Therefore, you need to build a rhythm of continuously reviewing your data, regularly talking to customers and your team, staying aware of market shifts, testing new hypotheses based on fresh insights, and being prepared to adapt your strategy and focus as needed. This continuous cycle of learning and refinement is the essence of effectively using growth drivers.

Understanding and focusing on your growth drivers is, in my view, one of the most powerful things any business, especially B2B service and software companies, can do. It brings clarity to the often chaotic world of business growth. It allows you to move beyond just being busy and focus on activities that create real, sustainable results.

For those of you starting your careers in marketing or growth, or trying to make sense of these concepts later in your career, I hope this explanation helps. Don't worry about getting it perfect immediately. Start by asking the questions, looking at the data, talking to people, and forming your own hypotheses. The process of searching for and testing your growth drivers is where much of the learning and eventual success comes from. Good luck!