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Most software companies shouldn’t build a capital product. Here's why:

Connect with Luke on LinkedIn to keep the conversation going.

Luke Voiles

Convenience has now become table stakes. 

In the past few years, especially since the onset of COVID, we’ve come to expect that what we need can be dropped on our doorstep with the click of a button. Those expectations go beyond our personal lives and carry over into how we run businesses, which is why embedded financing is growing so fast. 

For independent software vendors (ISVs), offering capital to their customers can be a powerful step up in the relationship. Putting capital in their hands when they need it helps ensure SMBs stay healthy and operating, and giving them access to that capital through your software platform increases stickiness and loyalty by letting them get everything they need in one place.

Small business owners want quick access to capital where they already spend time, in the software they use to run their business day to day. Add to that increasingly difficult access to traditional financing, and there’s an enormous opportunity for software companies. But in addition to the opportunity, it also presents a big challenge.

The challenge of building embedded capital 

To put it simply, building a capital product is incredibly hard. There are a lot of moving parts and hurdles you have to clear to make it sustainable. When you really break it down, there are five crucial requirements:

The trouble is, access to capital hinges on the successful execution of the previous four requirements. The increasing verticalization of software gives an advantage in two of these areas, but can software companies overcome the others? 

And when it comes to building in-house, should they even try?

The verticalization of payments and industry-specific software 

The verticalization of payments has been an ongoing trend, with comprehensive software tools that help business owners manage their operations seamlessly. This trend will only continue, leading to more end-to-end operating systems that simplify business management and payment processing. A prime example is Toast, a widely recognized platform that helps restaurateurs oversee just about everything.

Industry-specific software holds unique, accurate, real-time transaction data, which can be a solid foundation for a capital offering. It also provides a steady funnel of new customers, already engaged with the software and using it regularly. However, while vertical software can address the first two requirements of low CAC and consistent data, it falls short in underwriting expertise, operational efficiency, which limits access to external capital. 

These are formidable challenges that even many pure-play lenders struggle with, especially during tough economic cycles. Having had the opportunity to play a significant role in the growth of both QuickBooks Capital and Square Banking, I can say two things for sure: these are high hurdles to jump, even for companies with massive resources available to them, and they’re the kind of problems that Fintech was born to solve.

Integrating financial services within industry-specific software can provide a ton of value to business owners. But the greatest strength of these software companies lies in their specialization. They intensely focus on and understand their industry, and building a capital product in-house distracts from that focus in a way that would be catastrophic. The solution is to partner with someone whose strong suit is connecting businesses to capital through technology. 

Fintech has a significant role to play in making financing more accessible to small business owners, and embedded financial services make perfect sense. With domain expertise across finance and technology, the right Fintech partner can automate the underwriting process, getting accurate results from live data with as little as 3-6 months of history, whereas banks traditionally need two years of audited financials and tax returns. 

Along with operating efficiency and tech-driven underwriting, they can also build compliance and regulatory tools into their embedded offerings, creating a turnkey solution. This allows software companies to leverage their deep industry knowledge and data through an embedded solution as simple as an off-the-shelf product.   

At Pipe, we’ve built an embedded product, 

, that does exactly that. Vertical SaaS companies and payment processors can deliver a fast, frictionless capital experience to their customers, with a native look and feel, without building anything from scratch. Multiple integration options let them decide exactly how hands-on they want to be with the process, based on resources and priorities, and they can launch capital to their customers in as little as a few weeks. 

The rise of embedded finance presents an exciting opportunity for software companies to expand their offerings and empower small businesses. However, it's crucial to recognize the challenges inherent in building a sustainable capital product. Careful consideration, expertise, and strategic partnerships are essential for success in embedded finance. Vertical software solutions and Fintech can work together to create massive value and give small businesses a new level of financial access.

Building a capital product is no small task. Here are three reasons most software companies shouldn't even try.

Building an embedded capital product is no small task. Here are three reasons most software companies shouldn't even try.

Here's why most software companies shouldn’t build an embedded capital product. 

Here's why most software companies shouldn’t build a capital product. 

Will 2025 be the year of embedded finance for software companies?

Connect with Jon on LinkedIn to keep the conversation going. 

Jon Lear

Jon  Lear

The business world is no stranger to buzzwords, but embedded finance is more than a fleeting trend. It represents a profound shift in how software companies deliver value and generate revenue. By seamlessly integrating financial services like payments, lending, and payroll into their platforms, software companies can transform themselves into indispensable tools for their customers.

While embedded finance is growing rapidly, this article, like the growth trend itself, isn’t really about embedded finance; it’s about the software companies that will use it to take themselves to the next level, hitting their financial targets while serving their customers even better. It’s also about those customers, who gain the ability to do more of what they need in one place, as financial tools and capital access become an integral part of the software they use to run operations. 

Let’s look closer at launching embedded finance in 2025, how it can benefit you and your customers, and a few key strategies to make it a successful part of your roadmap and get a headstart on your revenue and EBITDA goals without stretching yourself thin.

What is Embedded Finance?: The Basics for Software Companies

embedded finance integrates financial services

—such as payments, lending, and payroll—directly into software platforms. This simplifies workflows, removes barriers, and meets customers right where they are so they can focus on operations.

For small and mid-sized businesses, this is a game-changer. Embedded finance eliminates the need to juggle multiple tools or visit external platforms to access critical financial services. Whether it’s securing funding, managing payroll, or streamlining payments, business owners can accomplish more within the software they already use every day. 

Ultimately, embedded finance bridges the gap between what SMBs need and what traditional financial services have offered. This evolution reflects a broader trend: software platforms no longer serve as standalone tools but as holistic ecosystems that solve multiple problems in one place. Success lies in aligning customer needs with seamless, integrated solutions.

The momentum around embedded finance has already begun, but 2025 will be the tipping point for software companies looking to leverage it for sustainable growth. Why? 

First, the software industry itself is experiencing significant evolution. As 

business owners continue to demand more from the platforms they use

, the need for all-in-one solutions is becoming non-negotiable. Companies that don’t meet this demand risk losing market share to competitors that can offer the financial capabilities their customers need. Embedded finance is no longer a luxury—it’s becoming a necessity.

businesses are struggling to access capital through traditional means

. The barriers posed by outdated lending systems, long approval processes, and limited access to credit are becoming increasingly apparent. As SMBs look for faster, more flexible solutions, software companies that embed financial services directly into their platforms will have a massive competitive edge. They‘ll not only provide more value but will also drive increased customer loyalty by meeting their customers’ needs in real-time.

Finally, the technology and infrastructure to support embedded finance are now more accessible than ever. Fintech solutions that integrate seamlessly with software platforms are maturing, offering easy-to-deploy tools that require little technical overhead. With the right partner, software companies can introduce embedded finance into their product offering quickly and efficiently, with minimal risk.

By embedding financial services, software companies can drive growth, meet market demand, and position themselves for long-term success. Those who wait will risk falling behind as competitors capitalize on the opportunity.

Key Benefits of Embedded Finance for Software Companies

Embedded finance can help software companies grow in several ways. Let’s explore how it can directly impact your revenue and EBITDA goals:

One of the most immediate benefits of embedded finance is the potential to unlock new revenue streams. By integrating financial services like capital directly into your platform, you can create a steady and recurring source of income. By partnering with a Fintech offering, you can launch with little to no engineering resources and can drive this revenue with minimal marketing budget.

2. Increased Customer Retention and Loyalty

When platforms integrate financial services, they tend to become more "sticky"—meaning customers are more likely to stay loyal to the platform because their operational needs (including financial management) are being met in one place. This reduces churn and increases customer lifetime value, as your platform becomes more essential to their business. Customers no longer need to switch between multiple tools and platforms to handle their business operations; they can do everything within your ecosystem, which enhances their overall experience and loyalty.

This stickiness also protects you against the roadmap of competitors. For example, if your customers process payments through your platform and you add an embedded capital offering, you protect yourself from the chance that the external capital provider they 

have used decides to launch a payment product of their own. 

One powerful aspect of embedded finance is that it’s fueled by your customers’ live data. Capital offers, for example, can be underwritten based on transaction history, eliminating much of the manual data collection that makes traditional loan applications so long. It can also provide access to data insights you previously didn’t have access to. 

For example, you may be limited to transaction data from processing customer payments. An embedded offering could provide insights into your share of wallet by comparing the revenue you process with your customer’s total revenue, or spend insights based on an embedded card. This data-driven approach strengthens customer relationships and opens up new opportunities for cross-selling and upselling. 

As more competitors adopt embedded finance, software companies that don't act will find themselves at a disadvantage. The ability to offer integrated financial services will become a key differentiator, especially for businesses in vertical markets. By offering this added value, you can position your platform as the go-to solution for customers in your niche, creating a significant competitive edge. 

Building a financial product in-house can take 6-12 months or longer, taking you away from your core focus. The right Fintech partner can help software companies scale embedded finance quickly and with minimal technical overhead. By leveraging pre-built solutions and APIs, you can embed financial services into your platform without investing significant resources into product development. Your partner can also help you expand the offering into new markets without starting from scratch, helping you maintain momentum as you grow.

In addition to increased LTV and the direct revenue potential of an embedded financial product, it’s also a powerful way to help your customers grow their own businesses and stay healthy. With access to financial services like working capital, your SMB customers can invest in their growth and their people, leading to increased GPV and LTV for your business and reduced churn from customers going out of business. 

In-House Development vs. Partnering with a Fintech: What’s Right for Your Business?

When deciding to launch embedded finance, one of the first decisions software companies face is whether to 

build the product in-house or partner with a Fintech provider

. Both approaches have their pros and cons, and the choice largely depends on your company’s resources, goals, and timeline.

Building an embedded finance solution internally gives you full control over the product, from design and functionality to customer experience. You can customize the offering to your exact specifications, ensuring it aligns perfectly with your platform and meets your customers’ unique needs. It also allows you to keep all revenue in-house and retain complete ownership of the technology.

However, building an embedded finance product in-house comes with significant challenges. First, it requires substantial technical expertise and a dedicated team, including engineering, product, risk, compliance, capital markets, GTM, and more. This can be resource-intensive and may divert focus from your core business operations. The development process can also take 6-12 months or longer, delaying your ability to capitalize on the embedded finance opportunity.

In addition, you’ll need to manage regulatory compliance, data security, and ongoing maintenance, which can become costly and complex. While you have control over every aspect of the product, the risk of failure is also higher without the experience of a Fintech partner.

2. Partnering with a Fintech: The Pros and Cons

Partnering with a Fintech provider like Pipe offers a faster, more efficient way to launch embedded finance. With ready-to-integrate solutions, you can get up and running quickly—often in a matter of weeks, not months. This approach dramatically reduces or even eliminates the need for in-house development and minimizes technical overhead.

A good Fintech partner brings industry expertise, robust infrastructure, and regulatory compliance to the table. They’ve already solved many of the challenges you’d face when building an embedded finance product, from underwriting to fraud detection. 

The downside is that you may have less flexibility and control over the product. However, Pipe offers a range of integration options and a fully themeable product experience that not only allows you to customize a product that feels native to your platform, but also gives you the time and focus to stay agile with your core offerings. 

The decision ultimately depends on your company’s priorities. If you have the internal resources, technical expertise, and time to build the product while maintaining full control, in-house development could be the best route. However, if you’re looking to launch quickly, minimize risk, and leverage existing Fintech expertise, working with a partner like Pipe can help you reach your goals faster and achieve better results.

Choosing the Right Fintech Partner for Embedded Finance

If you choose to go the partnership route, you’ll want to choose an embedded partner that not only brings the technical expertise and infrastructure to the table but also aligns with your business goals and understands your customer base. Here's how to choose the right fintech partner for your embedded finance strategy:

A key benefit of embedded finance is seamless integration. The Fintech partner you choose should offer pre-built solutions, APIs, or SDKs that easily integrate into your platform. This minimizes the amount of time and resources required to bring the financial services to market, reducing the technical burden on your team.

Pipe offers three integration options, from a hosted pilot to a fully-embedded API solution, giving you the perfect fit, whether your focus is a quick launch or a customizable user journey. You should also consider scalability—ensure that your partner’s solution can grow alongside your business, handling increases in transaction volume and expanding to new regions as you scale.

Financial services require robust risk management and compliance programs. When choosing a Fintech partner, ensure they have strong security measures in place and can meet the regulatory requirements of your target market. This includes not only data protection (such as GDPR or CCPA compliance) but also industry-specific regulations for financing payments, etc..

Consider the expertise of the team you partner with, as well as the technology they have in place to aid in risk management, fraud detection, and compliance in a scalable way. 

Embedded finance isn’t just about technology—it’s about the customer experience. Choose a Fintech partner that prioritizes delivering a seamless and intuitive user experience. The financial products should feel as integrated and natural as the rest of your platform, with no friction for customers in accessing or using them.

, helping you troubleshoot issues, optimize your capital offering, and ensure a smooth experience for your users. This level of partnership will enhance your ability to deliver high-quality service for your customers and outstanding metrics for you.

Predictions for Embedded Finance in 2025 and Beyond

As we look ahead to 2025, the direction of embedded finance points to rapid adoption and innovation. Software companies that integrate financial services will become leaders in their verticals, reshaping customer expectations and competitive dynamics. Here are some predictions for what’s next:

1. Embedded Finance Will Become the Industry Standard

Soon, embedded finance will no longer be a differentiator; it will be a baseline expectation for software platforms. Businesses of all sizes will seek out platforms that offer integrated financial services as part of a holistic, all-in-one solution. Software companies that don’t adapt risk being left behind as customers flock to platforms that offer greater convenience and value.

2. Vertical-Specific Solutions Will Dominate

The rise of industry-specific platforms, such as Toast for restaurants or ServiceTitan for contractors, will fuel the growth of tailored embedded finance solutions. These platforms will continue to evolve into comprehensive operating systems, seamlessly integrating payments, lending, payroll, and other financial tools to address the unique needs of their industries.

3. AI-Driven Financial Insights Will Transform SMB Decision-Making

With the power of artificial intelligence and live data, embedded finance will go beyond offering financial services to providing actionable insights. For example, predictive analytics will help SMBs anticipate cash flow challenges or identify growth opportunities, further embedding these platforms into the decision-making processes of their customers.

As embedded finance grows, regulatory oversight will increase. Software companies will need to navigate evolving compliance requirements, but this challenge will also drive innovation in risk management, fraud prevention, and secure financial integration. Those working with experienced partners will be at a huge advantage, with an expert managing the complexity on their behalf.

5. Partnerships Will Power the Next Wave of Innovation

The software marketplace will continue to emphasize collaboration. Partnerships between software platforms and Fintech providers will accelerate the development of embedded solutions, making it easier than ever for SMBs to access capital, manage payments, and scale their operations.

Conclusion: Seizing the Embedded Finance Opportunity

The rise of embedded finance is more than a trend; it’s a transformative opportunity for software companies. By integrating financial services into their platforms, businesses can unlock new revenue streams, enhance customer retention, and position themselves as indispensable tools in their customers' operations.

Whether you choose to build in-house or work with a Fintech partner like Pipe, the time to act is now. 2025 is poised to be a pivotal year for embedded finance, and those who embrace the opportunity will gain a competitive edge that defines the next chapter of their growth.

Embedded finance isn’t just about technology—it’s about creating a seamless, value-driven experience for your customers. By aligning your strategy with customer needs, industry trends, and the right partnerships, you can build a future-ready platform that stands out in a rapidly evolving market.

2025 could set the perfect conditions for vertical software companies to grow with embedded finance. Here's why...

See why 2025 could be a watershed year for vertical software companies and why embedded finance could be the catalyst.

5 spend management tools and strategies to improve your SMB’s profit margins

Pipe

Many SMBs face challenges managing their spending effectively, which has a direct impact on their profit margins. While larger corporations have access to spend management tools and have had processes in place for years, many of these resources have not been available or have been too cost-prohibitive for smaller businesses. Without proper controls in place, expenses can quickly spiral out of control, cutting into profitability. 

Here, we’ll outline five spend management tools and strategies SMBs can implement today to better control their spending and improve their bottom line. From leveraging 

 to implementing budgeting tools, these strategies can help you take control of spending and manage your expenses in the most profitable way possible.

A solid budget is the backbone of any business’s financial plan. Some business owners bristle against a budget, seeing it as a restrictive money diet that tells them how to spend their money. In reality, 

 and ensure resources are allocated toward initiatives that drive growth–putting those resources toward what you actually want to accomplish rather than whatever pops up as urgent at the moment.

Forecasting tools help SMBs predict future financial trends and adjust their budget accordingly, keeping their spending aligned with business goals. By forecasting future revenue, for example, you’ll know how much you can invest in growth and identify any shortfalls where you may need to secure working capital. 

A realistic budget should be based on historical data and projected revenues. Rather than starting from wishful thinking, determine how much you currently spend in each category, determine how future trends and growth will impact your available funds, and decide which areas of spending may need to increase or decrease. This exercise can be eye-opening, as you may be unaware of how much certain items are costing you or where your profits are leaking out if you haven’t had a visible budgeting process. 

You can create a budget with the tools built into your accounting system or a purpose-built tool like Float. Many vertical platforms–like 

 for restaurants–have built-in budgeting tools. 

Budgeting tools allow you to track actual performance against your budget, highlighting any deviations and helping you make informed adjustments. Staying within budget prevents overspending, while accurate forecasting helps avoid cash flow shortfalls. Both practices make you more aware of your financial position, helping you increase profit margins and improve cash flow.

2. Implement a clear expense approval process

Without a defined expense approval process, unnecessary spending can get out of control, particularly in growing businesses with multiple employees making purchasing decisions. This can lead to overspending, impacting the company's budget and profit margins. 

Keeping spending in check and ensuring that you stay on budget requires controls around who can spend money for the company, how much, and on what items. 

An example of these kinds of controls would be setting a dollar limit on travel expenses (which could vary by card depending on the needs of the individual employee) and requiring that expenses over a certain dollar amount require approval from the business owner. Clearly outlined policies prevent ambiguity, and consistent enforcement ensures that all expenses are properly vetted before being made.

A clear policy helps you stay within your budget by preventing unnecessary or unauthorized expenses. As your company grows–along with the number of employees who need to make purchases–this process prevents the owner or CEO from having to have a hand in every single transaction. This results in better cash flow management and improved financial oversight.

An integrated accounting system connects your spend management tools directly to your financial reporting. This not only offers a full financial picture but also saves time and reduces errors. With an accounting system like QuickBooks or Xero, business owners can automate the categorization of expenses, issue faster invoices, and streamline tax reporting.

By automating processes, businesses reduce the likelihood of mistakes that can lead to financial discrepancies. This accuracy helps identify cost-saving opportunities that might go unnoticed, such as overspending in certain categories or workflow inefficiencies.

Real-time reporting also provides insights into cash flow, enabling businesses to respond swiftly to challenges. With immediate access to accurate financial data, you can make informed decisions about spending and investments, which is crucial for maintaining healthy profit margins.

4. Leverage early payment discounts and flexible payment terms

Many vendors offer discounts if you pay their invoices early. For example, a 2% discount for payments made within ten days can significantly reduce the cost of goods over time.

Some vendors will also let you negotiate longer payment terms, 

 and providing financial relief. By extending the due date for payments, you can retain cash for longer periods, giving you more flexibility to cover other expenses or invest in growth opportunities.

Discounts and flexible terms help lower the cost of goods sold (COGS) and improve cash flow, enabling SMBs to free up capital for other strategic initiatives that increase profitability. While some vendors are happy to work with you on terms and offer discounts, there’s another way to gain these benefits, even when vendors aren’t offering them: business charge cards. 

5. Business charge cards for spend tracking and management

Many SMB owners lack access to working capital and rack up high interest payments using personal credit cards to fund growth. 

 are powerful financial tools designed to help businesses access working capital without costly interest while also tracking and managing expenses. Unlike credit cards, they’re paid in full each billing cycle, so no debt is accumulated, and no interest is paid. 

Charge cards clearly distinguish between personal and business expenses, making it easier to generate detailed spending reports for tax preparation and auditing purposes. Their built-in expense tracking capabilities allow businesses to see exactly where their money is going, ensuring greater transparency across the company.

Business charge cards offer rewards like cash back, flexible payment terms, and streamlined expense reconciliation. These features allow you to access working capital when you need it to smooth out bumpy cash flow, take advantage of early payment discounts and other time-sensitive offers, and create your own flexible payment terms with vendor bills.  

Effective spend management is critical for SMBs looking to boost their profit margins. By using tools like business charge cards, implementing budgets and approval processes, integrating accounting systems, and leveraging vendor discounts, you can improve your business’s financial health and better manage cash flow.

Learn five spend management strategies to help your small business reduce costs and improve profit margins.

5 Spend Management Strategies to Boost Your SMB’s Profit Margins

The Comprehensive Guide to Growth Marketing: Prioritizing, Automating, and Experimenting for Success

The age-old adage "adapt or perish" has never been more relevant. As businesses strive to carve their niche in the competitive market, a strategic approach is essential, and that's where growth marketing steps in.

You’ve probably come across the term a few times, but growth marketing isn't just another buzzword; it's a mindset that empowers businesses of all sizes to harness the power of data-driven strategies, innovative tools, and experiments to 

Whether you're a startup looking to make waves or an established company seeking fresh avenues, this guide will equip you with the knowledge and insights to navigate the exciting world of growth marketing. You could look at it as a mini crash course if you want. Let’s explore!

In the world of marketing, there's a time-tested playbook: create a message, broadcast it to a broad audience, and hope for the best (AKA, “spray and pray”). That's traditional marketing in a nutshell. But let’s be real – the world has changed.

Growth marketing takes that playbook and flips it on its head. Instead of casting a wide net and crossing your fingers, growth marketing hones in on specific segments of your audience with surgical precision.

Before we dive into the top techniques for supercharging your growth marketing strategy, let's start by laying out the basics of this marketing approach. Understanding the essence of growth marketing will equip you with the knowledge to make smarter, more impactful choices for your business.

At its core, growth marketing is about finding scalable and repeatable strategies that generate consistent growth for your business. This marketing approach focuses on harnessing the power of data and experimentation to drive business growth. Growth means different things for different people. It could imply generating new leads, increasing brand visibility, or increasing revenue.

Growth marketing changes the discussion from "How do we attract potential customers?" to "How do we keep our existing customers engaged for longer?". In growth marketing, the emphasis is not on reaching everyone but on reaching the right ones

the ones most likely to engage, convert, and become loyal advocates.

With growth marketing, the emphasis shifts from getting as many customers as possible to understanding your target audience and finding ways to attract and retain them.

It essentially gets you experimenting and testing to figure out what works best. This approach empowers marketers to rely on precise, well-calculated data rather than depending too heavily on intuition.

By looking at the numbers, you uncover the most effective avenues for connecting with your audience

whether that entails leveraging social media advertisements, collaborating with influencers, or employing content-driven marketing approaches.

The big idea behind growth marketing is simple: know what your customers want and give it to them. The point is to get more customers, keep them coming back, and make more money.

Growth marketing vs. traditional marketing

Traditional marketing often emphasizes creating brand awareness and generating interest in a product or service. The primary goal is to reach a wider audience and establish a recognizable brand presence.

On the other hand, growth marketing concerns itself with driving rapid and sustainable growth, often through data-driven strategies and experimentation. The primary goal here is to acquire and retain customers, emphasizing measurable results and ROI.

While there are certain tactics that both growth marketing and traditional marketing share, there are significant differences between the two. Traditional marketing centers on one-off campaigns or strategies, such as TV, radio, billboards, and print advertisements. This approach typically occupies the top of the marketing funnel with less emphasis on data-driven insights and analysis.

 that involves continuous testing and optimization of various marketing channels, messages, and strategies to identify the most effective ways to drive growth.

In summary, growth marketing adopts five core principles:

The importance of growth marketing in business

As a business owner, understanding and harnessing the potential of growth marketing is not just an advantage, it's a vital necessity.

Here are some reasons to consider growth marketing in your business:

To put it into perspective, let's imagine you're running an e-commerce store that sells organic skincare products. By analyzing customers' purchasing histories, browsing behaviors, and demographic information, you can personalize your marketing messages and recommend products that are most likely to resonate with each individual customer. This not only enhances the customer experience but also increases the likelihood of repeat purchases and referrals.

4 steps to start your growth marketing process

Here are four essential steps to initiate your growth marketing process:

Growth marketing frameworks are structured, repeatable strategies used by growth marketers to achieve profitable and sustainable business growth. They basically serve as a roadmap to organize, prioritize, and achieve your growth goals. Here are a few popular growth marketing frameworks:

The AARRR Framework, also known as Pirate Metrics (because “aarrrr” sounds like a pirate), outlines five key stages of the customer journey:

Businesses can use these metrics to analyze and improve their marketing strategies to drive growth and success.

2. ICE framework (Impact, Confidence, Ease)

ICE is a prioritization framework used to assess and prioritize various growth opportunities or ideas. Impact gauges the potential impact of a particular idea, Confidence rates the certainty that the idea will succeed, and Ease measures how easily the idea can be executed.  Ideas are typically scored based on these factors, and those with higher scores get priority. Let’s break it down a little more.

By assessing potential impact, growth marketers can spot efforts that might lead to substantial growth and notable outcomes.

They might do thorough research, gather user insights, or conduct small tests to boost their certainty. By assessing confidence, growth marketers focus on ideas with higher odds of success, reducing the risk of investing in uncertain endeavors.

They assess if it's doable given the circumstances and weigh the trade-offs between effort and expected impact. By looking at ease, growth marketers make sure they prioritize initiatives that are impactful and also doable within practical limits.

, is a dynamic 5-step loop popular among growth marketers.

Of course, there are many more growth marketing frameworks you could employ. The point is to identify your goal and align your actions to get the best results possible.

Embrace strategic prioritization: the key to effective growth marketing

A common pitfall in growth marketing is spreading efforts too thin across multiple initiatives. By zeroing in on a few key initiatives, growth marketers can allocate sufficient time and resources to execute them effectively. This targeted approach allows them to gather more accurate data and make informed decisions, resulting in better outcomes. 

Prioritization involves identifying your key growth objectives, understanding your target audience, and tailoring your strategies to make the most impact. How do you achieve this?

1. Defining clear growth objectives and goals

Before embarking on any growth marketing endeavor, it's important to define clear and quantifiable growth objectives. Are you aiming to increase revenue, expand your customer base, drive traffic to your site, improve engagement on your socials, or increase brand presence? Defining these goals provides a roadmap for your efforts and helps you measure success accurately.

Growth marketers also know that priorities can change over time, especially in the fast-paced world of digital marketing. That's why they constantly evaluate and reassess their priorities as they gather new data and insights.

2. Segmenting and targeting the right audience

Growth marketers understand that the gold is in the right targeting. Not all customers are created equal. Growth marketing thrives on precision, and that begins with audience segmentation. Break down your customer base into distinct segments based on demographics, behaviors, preferences, and buying patterns.

This segmentation allows you to create highly targeted campaigns that resonate deeply with specific groups. Personalizing your marketing messages cultivates a stronger emotional connection, driving engagement and conversions.

3. Embracing personalization and customer-centricity

Consumers are immersed in a sea of generic brand messages, each vying for their precious attention. This makes it more important than ever to build strong relationships with customers.

With so many brand messages out there, personalization is not just a way to stand out. It helps create lasting bonds with loyalty program members, encourages interaction between consumers and their favorite brands, and makes it easier to redeem rewards.

 more than 20 years ago, "If we want to have 20 million customers, then we want to have 20 million 'stores.' ... Our mission is to be the earth's most customer-centric company." By leveraging customer data, preferences, and behaviors, you can create hyper-targeted campaigns that deliver relevant content at the right time. 

Prioritization isn't a one-time decision; it's an ongoing process. Testing different strategies through A/B testing and experimentation helps you uncover what resonates best with your audience. By consistently analyzing results, you can refine your priorities and optimize your approach over time.

Resource optimization is another important aspect of setting priorities. While growth marketing offers a wide array of strategies, it's essential to consider the resources available to you. Prioritization means finding a balance between ambitious goals and the resources you actually have.

Growth marketers are smart about using what they've got—whether it's money, time, or team members. They weigh the potential of each idea, thinking about things like cost, scalability, and how well it fits with the big picture. This way, you avoid spreading yourself too thin and can really nail your strategies.

The customer journey is the series of stages people go through while purchasing a product or service. Understanding your customer's journey is paramount in prioritization.

Different strategies may be more effective at different stages of the customer journey—from awareness and consideration to conversion and retention. Tailoring your priorities to match these stages ensures consistent engagement throughout the funnel.

By continuously adjusting and optimizing their focus, growth marketers ensure their actions match their overall growth objectives. They recognize the ever-changing nature of digital marketing and know that what mattered yesterday might not be as relevant today. So, they remain alert, actively seeking new opportunities and emerging trends that can fuel growth.

Leveraging technology for effective growth marketing: automation and analytics

Thanks to technology, growth marketers can simplify their processes, improve their campaigns, and scale their operations by simply automating their workflow. What’s the whole point of marketing automation? Let’s get into it very quickly.

Marketing automation allows you to execute repetitive and time-consuming marketing activities more efficiently and effectively by leveraging software, algorithms, and data to manage, personalize, and optimize marketing efforts across multiple channels.

Imagine a growth marketer spending hours manually sending out emails to hundreds or even thousands of subscribers

an awfully time-consuming and monotonous process. With marketing automation, this tedious task can be easily automated.

The marketer can create an email campaign, set up triggers based on specific actions or time intervals, and let the automation software handle the rest. This not only saves time but also ensures consistent and timely communication with the target audience. By automating repetitive tasks, such as email campaigns or social media scheduling, growth marketers can focus on more strategic initiatives.

At its core, marketing automation empowers marketers to create targeted campaigns, nurture leads, engage customers, and measure results with minimal manual intervention. By establishing predefined rules, triggers, and workflows, you’re sure that the right messages and content are sent to the right audience at the right time.

Marketing automation can take several forms that help improve marketing efforts and simplify operations, including:

It's really about building relationships, not just bombarding them with sales pitches. By delivering helpful content, personalized recommendations, and gentle reminders, you guide leads through their journey, increasing their chances of evolving into loyal brand advocates.

For example, let's say someone signs up for your newsletter. With workflow automation, you can instantly send them a welcome email and add their info to your database. Plus, you can schedule reminders for your team to follow up on leads and ensure projects stay on track.

For instance, when you check out email open rates, you can see which subject lines or content styles people like best. This info helps you make your future email campaigns even better and keeps people more interested.

Curious about growth marketing? We've put together a guide with everything you need to know to start and improve your marketing efforts.

Curious about growth marketing? We've put together a guide with everything you need to know to start and improve your growth marketing efforts.

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Grow your Business

Will 2025 be the year of embedded finance for software companies?

5 spend management tools and strategies to improve your SMB’s profit margins

The Definitive Guide to Growth Marketing: Prioritizing, Automating, and Experimenting for Success

Business financial planning and budgeting to make the most of your capital

How to utilize business loans for expansion

Gross Margin vs contribution margin (with free simple calculators)

A new era of fintech collaboration: Pipe joins the Financial Technology Association

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