Is Your Marketing Driving Growth or Just Keeping the Lights On?
Executive Summary
Is your marketing team generating activity or driving genuine business growth? Many businesses struggle to answer this fundamental question. This assessment framework reveals whether your performance marketing is truly effective by comparing your growth against appropriate market benchmarks, evaluating channel performance, and identifying optimization opportunities.
The critical market growth test shows that seemingly positive results (like 6% customer growth) can actually represent market share loss if your market is growing faster (at 8%). Context matters—while matching market growth might be impressive for a dominant player with 40% market share, it indicates underperformance for smaller players who should outpace the market.
We show you how to determine if your marketing is simply maintaining market position or actively accelerating growth—and how to measure the difference in concrete business metrics like qualified leads, customer acquisition, and revenue. Even without industry reports, there are reliable methods to evaluate if your marketing investment is paying off and whether your agency is truly driving value beyond what market momentum would provide naturally.
The market growth test
The best test of marketing effectiveness is relatively easy to execute. If your business is growing at the same rate as your market, your marketing isn't driving growth—it's just helping you maintain position. Say your marketing drove 6% more new customers than last year. At face value that seems good, however, most agencies won’t compare that to the market because it’s a tougher hurdle. Take that same 6% and if the market is growing by 8% you’re actually worse off - you’re losing market share.
In some situations matching the market growth rate actually represent strong performance if your market share is large, say 40% or more. However, if you're a small player with 2% market share, you should expect to grow faster than the market average and therefore matching market growth rates constitute a loss.
When executing this market growth test there are a few key considerations.
Executing the market growth test effectively
Conducting a proper market growth test requires careful consideration of several factors. Don’t worry if you don’t have access to industry research, we have a workaround approach.
1. Define your relevant market precisely Your growth should be compared against the specific market segment you compete in, not the broader industry. A luxury retailer shouldn't benchmark against general retail growth, and a B2B SaaS company targeting mid-market manufacturing shouldn't use overall SaaS growth figures.
2. Use consistent metrics across comparisons Ensure you're comparing equivalent metrics. If industry reports measure year-over-year revenue growth, don't compare against your customer count growth. Similarly, if you're measuring new customer acquisition, benchmark against market new customer acquisition rates, not overall market revenue growth.
3. Account for your starting position Market share matters. If you're a small player with 2% market share, you should expect to grow faster than the market average. If you hold 40% market share, matching market growth might actually represent strong performance given the law of large numbers.
4. Watch for market definition blind spots Be careful about how you define competitors and market boundaries. The competitive landscape is constantly evolving, and traditional industry classifications may miss emerging threats or new market entrants that are capturing growth.
5. Consider market measurement frequency Markets don't grow linearly throughout the year. Seasonal factors, economic shifts, and competitive activity create natural variability. Monthly or quarterly comparisons need appropriate context rather than assuming a straight-line growth rate.
6. Look beyond aggregate numbers Overall growth numbers can mask segment-specific shifts. Your total growth might match the market, but you could be losing share in high-value segments while gaining in lower-value ones—a concerning trend that aggregate figures won't reveal.
7. No industry benchmarks? No problem Many businesses lack access to detailed industry growth reports or operate in niches where standardized data isn't readily available. In these cases, we can help construct reliable market proxies without traditional market reports.
Diagnosing The WHy of Marketing performance
1. Channel growth versus market growth
Compare each channel's performance against market benchmarks. If paid search conversions are up 8% while your market grew 6%, that's driving growth. If social traffic grew only 4%, it's underperforming relative to the potential.
2. Conversion quality by source
Measure quality, not just quantity. A campaign generating 50 high-value customers is outperforming one delivering 200 one-time buyers. Calculate customer acquisition cost against customer lifetime value for each channel.
3. Efficiency indicators
Watch for warning signs:
Diminishing returns: Increased spend no longer produces proportional results
Channel saturation: You've maximized audience reach but continue spending
Targeting misalignment: High click rates with low conversion rates
Poor keyword efficiency: Traffic without meaningful conversions
The metrics that actually matter
Forget vanity metrics like impressions and engagement rates. Focus on:
Conversion rate by channel (against industry and your benchmarks)
Customer acquisition cost (and trends over time)
Return on ad spend (by channel and campaign)
New customer growth rate (compared to market growth)
Customer value (initial and lifetime)
Where expertise makes the difference
The gap between mediocre and high-performing marketing comes down to pattern recognition. Seasoned marketers who have driven real business results can quickly identify:
Which channels will drive immediate growth
How to reallocate budget from underperformers to winners
When to adjust targeting versus creative
How to structure campaigns for meaningful measurement
Taking the next step
If your marketing isn't clearly driving growth beyond market rates, we can help with an objective assessment. Our team of senior experts has helped businesses across industries not just measure their marketing impact, but dramatically improve it.
We won't waste your time with unnecessary process or jargon. Just straight talk about driving real business growth through marketing that delivers bottom-line impact.
Want to learn if your performance marketing could be working harder? Let's talk about transforming your marketing from a cost center to a growth engine.
