What is a growth model?
A growth model is a structured framework that articulates how a business will grow — what levers will drive growth, how they interact, and what the business needs to do to activate and accelerate them. It goes beyond simply setting a revenue target to explain the specific mechanisms that will generate that growth.
Growth models vary significantly across business types. A consumer app might grow primarily through viral referrals. A B2B software company might grow through outbound sales and content marketing. A professional services firm might grow through referrals and strategic partnerships. Understanding your growth model helps you invest in the right activities and measure the right metrics.
Types of growth models
Common growth models include the Viral Growth Model (growth driven by existing users referring new ones — used by social networks and consumer apps), the Sales-Led Growth Model (growth driven primarily by a sales team), the Product-Led Growth Model (growth driven by the product itself through free trials, freemium, or self-serve adoption), and the Channel or Partnership-Led Growth Model (growth driven through third-party channels and partners).
Most businesses use a combination of these models, with different models playing different roles at different stages of the business lifecycle.
Building a growth model
Building a growth model involves identifying the primary source of new customers, the key activities that drive acquisition, the conversion rates at each stage of the customer journey, the average customer value over time, and the cost of acquiring each customer.
A well-built growth model allows leaders to run scenarios: if we double our investment in this channel, what happens to growth? If our average customer value increases by 20%, how does that affect the economics of customer acquisition? This quantitative thinking makes growth strategy much more rigorous and actionable.
Growth model vs growth strategy
A growth model describes the mechanics of how growth happens. A growth strategy describes the choices the business makes about which markets to enter, which customers to pursue, and which products to develop. Both are important and complementary.
The growth model provides the framework for understanding growth dynamics. The growth strategy provides the direction and priorities for where to apply those dynamics.
How Empiraa supports growth planning
Empiraa helps organisations turn their growth model into an executable plan by connecting growth objectives to specific initiatives, metrics, and ownership. Tracking the key metrics of the growth model in real time allows leaders to see what is working, what is not, and where to adjust.
For advisors using Empiraa GPS, helping clients clarify and build their growth model is one of the most strategic and commercially valuable contributions they can make.