Growth Hacking, what? That is exactly the reaction I get from many entrepreneurs when I talk about growth hacking.
If you don’t fully understand the concept of what growth hacking actually is – you are in the right place. I will dig deeper into the concept of growth hacking and how startups can use it to achieve fast and sustainable growth.
Growth hacking is not really a new thing
Although the term is relatively new, the concept of growth hacking is not. Long before the term was institutionalised by Sean Ellis in 2010, many Internet startups in the US such as Facebook, already focused on running experiments to drive continuous growth for their ventures.
The term simply hadn’t been born yet.
Today, more and more startups in the Asian market are looking to grow their ventures rapidly at minimal costs. With startups such as Luxola achieving tremendous growth by applying creative and unconventional tactics combined with a strong focus on experimentation, analytics and data-informed decision making, growth hacking is gradually gaining popularity in Asia.
Growth hacking marketing goals, however uses different tactics
Growth Hacking is a highly effective digital marketing technique that combines creativity and product engineering with analytical insights.
Successful growth hackers find unique ways to use both their own products as well as existing distribution channels and online tools in order to maximize exposure and achieve rapid growth. At the center of the growth hacking concept lies a rigorous experimentation process. Growth hackers brainstorm a set of tactics they believe could help them achieve growth, prioritise them, tests them and based on the results, continue or discontinue them.
It is through this ongoing process of running experiments, focusing on the best performing tactics and channels while discontinuing those that don’t perform that growth hackers build what we call a “Growth Engine”.
Luxola’s CMO Adrien highlights the importance of data and analytics – “Data is fuelling your company. The more data you have the better because the better you can get to know your customers. (Growth Hacking Asia)”
The infamous growth hacking funnel
Growth Hackers have the goal to optimise each step of the so-called growth hacking funnel:
The goal is to have customers transition as smoothly as possible between the different stages.
User Acquisition: Many startups have great products, however struggle to get new users on board. This is where an effective user acquisition strategy comes into play. This stage of the funnel centers on getting new users; finding ways, such as forum marketing and content marketing, to drive traffic to your website or app at low cost.
Activation: Once you successfully attracted visitors to your page, what’s next? The goal of the activation stage is to convert these visitors into active customers. Through conversion-optimised user experience (UX) and an optimised onboarding process, you can guide visitors to complete desired tasks, such as completing a purchase. Once a visitor completes a specific task, they have been converted to a customer.
Twitter, for example, is notorious for its remarkable onboarding process. Have a look at how they do it.
Retention: According to Alex Schulz, VP of Growth at Facebook, “Retention is the single most important thing for growth (Popcorn Metrics).” Once you have converted a visitor into a customer, you want to make sure they continue to use your product or service. You already know that they like or need what you have to offer, so why would you risk losing them? Especially since the cost of acquiring new users is five to seven times higher than retaining current ones. The question is: how can you do this? Essentially, you need to give them a reason to become habitual users. This can be done through email marketing, gamification, retargeting or simply having an awesome product.
Referral: In the referral stage your goal is to turn current users into brand ambassadors. You want to satisfy your current users so they share your product or service with their friends by inviting them to join. This can be done through incentive programs or simply having a kickass product that people want to tell the world about.
According to Referral SaaSaquatch: “Marketers rank referral marketing ahead of events and email as the most effective way to acquire new leads.” Dropbox probably has one of the most well-known referral programs. Their refer-a-friend program resulted in 3900% growth within 15 months (Referral SaaSquatch). This is extremely remarkable result was mastered by no one less than the father of growth hacking himself – Sean Ellis.
Revenue: The final stage of the funnel is considered the most significant one by many, as this is where a startup essentially makes its money. During this stage, monetisation behavior, such as a sale or subscription, takes place. Prior to the revenue stage, engagement between the startup and customer are purely non-financial.
It is extremely valuable to understand, measure and analyse the lifetime value of a customer. This will dictate how much you can spend to acquire users while being profitable. According to Aliisa from Mixpanel, “when you know who your most valuable customers are, you know who to focus on and where to focus development efforts. In a nutshell, you can optimize your product and your marketing around the most important metric of all – dollars (Mixpanel).”
What skills do Growth Hackers have?
Some people say that growth hackers are simply the new VPs of Marketing, and to an extent this is correct. However, a growth hacker has a very unique mindset that enables him or her to find creative solutions to growth problems through online marketing techniques, channels and program engineering. This however does not mean that a growth hacker has to be able to code – although it can be very beneficial.
Growth hacking is actually much of a team effort as you need a variety of skills to grow your startup rapidly but sustainably at the same time. The key (as with most things) is to have a great team with a wide skillset, such as marketers, developers, and data analysts, as well as creativity and drive.
A match made in heaven: growth hacking and startups
Growth hacking has become the key to success for start-ups, as well as some established companies. Startups often struggle to promote their business ideas, acquire new customers in an efficient, low-cost and sustainable way and retain existing customers for long term success.
This is precisely where growth hacking comes into play – it helps startups to grow quickly and succeed in the long run. This is essentially what every startup dreams of, so it really is a match made in heaven.
Interested to learn more about how Facebook, Linkedin and Co. did it? Check out the top 10 most successful growth hacking success stories.
So, what’s next?
Many start-ups underestimate the importance of kicking off user acquisition activities before the official launch of the product or service. Doing this allows them to achieve 2 things:
- Validate their product – is it actually something people want?
- Building an early user base they can launch their validated product to
The author is the Social media and Trainings Programs Manager at Growth Hacking Asia, a platform that helps startups in Asia optimise their digital marketing strategy.
The views expressed here are of the author, and e27 may not necessarily subscribe to them.e27 invites members from Asia’s tech industry and startup community to share their honest opinions and expert knowledge with our readers. If you are interested to share your point of view, please send us an email to writers[at]e27[dot]co
Image credit: Forbes