As a term, growth hacking has been around since 2010, when Sean Ellis of Dropbox fame bemoaned the fact that he cannot easily find a suitable successor when he moves on from a project since there was no way to succinctly formulate the requirements of the job.
However, as a practice, growth hacking has been around for much longer than that, usually performed by creative marketers or business owners who were dedicated to growth beyond anything else and who had the skills and daring to think outside of what generally constitutes out of the box thinking, so yeah, out of the out of the box thinking. If, somehow, this isn’t enough of an explanation of what growth hacking actually entails, how it is different from marketing, and what are the skills that you need to become a successful growth hacker, do read on.
What is Growth Hacking And Why Isn’t It Called Marketing?
Because calling it marketing would be both too broad and too specific at the same time. While a growth hacker needs intimate knowledge of different areas of marketing, and most of the successful hackers started in marketing, you need to go beyond the teachings of conventional marketing and the formulaic approach that it sometimes prescribes. Most of the tactics that a growth hacker uses have been used in marketing, especially online marketing, but it would be remiss to equate this discipline with its progenitor.
Basically, growth hacking is a scientific method that requires a full-stack approach to growth — total marketing, engineering, and product integration.
~ Bronson Taylor
A growth hacker is not only solely devoted to growth, but also takes a much more involved role in the product development and distribution than a traditional marketer would. This is why you will often find engineers and coders successfully working as growth hackers. It is also why you’ll often find this kind of professionals in tech companies that are dealing with products that are much different than what used to be a typical product, i.e. something tangible that you need a truck to transport and a marketer to market. Redefining the product as a software commodity, a platform for distribution or development, or basically anything from Twitter and Facebook to SaaS solutions allowed for this hands-on approach to making the product market itself, which is exactly what growth hackers are there to facilitate.
For the full image click here
While a marketer will rarely have any kind of constructive cooperation with the development team, a growth hacker turns to product tweaking as one of the most important weapons in his or her arsenal. This reliance on technical skills and knowledge is what makes a growth hacker much more versatile than a marketer when it comes to the promotion of certain types of products.
AirBnB and their stunt with promoting their business on Craig’s List is one of the famous examples of growth hacking and one that does a great job of illustrating where growth hacking differs from marketing and where it has an upper hand.
In case you are too enchanted with this article to click away and read the story, AirBnB provides a service that connects would be lodgers with people who have spare bedrooms to rent. Growth hacking team in the company found a way to automatically post user’s ads on Craig’s List through API integration. This is known as LOBA, or Leveraging Other People’s Audience, and is similar to what happens when you write a guest post or place an ad on a relevant site. However, the genius behind this is found in the fact that nothing similar has been done before, that Craig’s List didn’t offer an easy way to do this (they made sure to prevent it after a while, as a matter of fact) and that growth hackers in AirBnB managed to come up with the idea and pull it off, despite the lack of precedent. This is not something that a marketer with no technical background would be able to conceive of, or to successfully put into action.
What Does a Growth Hacker Do?
Everything that can help you grow, that’s it, next question. What, you don’t like the short version? OK, I’ll elaborate.
Apart from knowing how to modify and market your product so that it is as growth focused as possible, a growth hacker will track every bit of data on the product and campaign performance that they can get their hands on, perform multivariate testing, take part in everything from writing copy to modifying page design, find different avenues for promotion, not necessarily only online based ones, dabble with information architecture and try to find the leverage unique to your business that can propel you into nobscurity (that’s the opposite from obscurity, right?).
Another thing that recommends them for startups, that are in most dire need of growth anyway, is the fact that a lot of tactics that a growth hacker might want to use don’t require significant investments. Sure, a growth hacker will have all the skills to run a PPC campaign, and will decide to do so if it turns out to be profitable, but if you don’t have a large marketing budget, they’ll find other ways of bringing the customers to you.
How Do They Do It?
While the beauty and the challenge of growth hacking are found in the fact that it is not formulaic and that your success will often come from something never tried before, there are parts of the process that are common to all growth hacking campaigns.
When finding a way to promote you and your product a growth hacker will follow a particular pattern that consists of:
- Assessing the current state of your product and marketing, finding the leverage that they can use to boost your visibility, retention ratios, authority, or anything else that will help you grow, and finally, narrowly defining the actionable goals that have the best effort to yield ratio.
- Carefully tracking your progress via various types of analytics (niche, custom, general…) to determine the effectiveness of the changes they’ve made.
- Performing experiments (A/B multivariate testing is to a growth hacker what a hammer is to a blacksmith or skillful truth reinterpretation to a politician, but there are other types of tests out there), analyze the result, and then, if necessary, modify the experiment to take new findings into account.
Finding the leverage, or creating one is where a growth hacker gets to excel and really push the business forward. However, growth hacking is not about blindly stumbling into opportunities, it is about scaling growth, and finding ways to iterate on the past successes in new environments and under new conditions. Even though you’ll hear stories about how one successful attempt at growth hacking managed to completely change the course of a company’s development, more often than not, success is a result of dozens or hundreds of little changes in the business model, product and marketing that build up and complement each other.
The Funnel
Even though the funnel proposed by Dave McClure is perhaps more popular, we’ll rely on the funnel model found in The Definitive Guide to Growth Hacking, a great resource on the subject written by Neil Patel and Bronson Taylor, and heavily referenced in this article. The funnel is a great way to describe how visitors are led from viewing your website to becoming customers. Basically, they’ve split the funnel into three sections:
- Getting new visitors
- Activating members
- Retaining users
Each of the stages in the process is equally important, and demands different skill sets. Attracting new visitors can often be achieved through inbound marketing methods, but it can also be done through other means (just remember the AirBnB example), but on its own, it does almost nothing to help your growth if it’s not followed by user activation and retention. That’s why a growth hacker will know whether to invest time and effort into attracting new customers, or would it be more beneficial to find ways to engage the ones that are already there. We’ll try and cover each of the segments of the funnel individually, along with proposing some techniques that have proven to be effective.
Visitor Acquisition
This is the first, broadest part of the funnel, and one that the majority of online marketers is most heavily focused on. Basically, it’s about getting people to visit your website. There are numerous ways to do this, often divided into pull and push strategies, i.e. attracting the visitors in subtle ways, or giving them a less delicate nudge towards your website.
Without going into too much detail, pull tactics include publishing infographics, guest posts, podcasts, eBooks, slideshows, webinars, or any other kind of content that can set you up as an industry authority and leverage other people’s audience; as well as investing in SEO or social media campaigns making use of deal websites, organizing contests or conferences and so on. Pull tactics are sometimes preferable to push tactics as they are less intrusive, and more often than not, either practically free, or just cheaper, but you won’t find a growth hacker out there who would be willing to limit him or herself on just one approach.
If executed properly, with the focus on the right demographics and channels of distributions, push tactics can create amazing results. Most common push tactics include buying ads, dealing with affiliates and different kinds of promo swaps where you basically enter into a kind of cooperation with similarly oriented, non-competing companies. Before investing into a campaign of this type, you first have to know what the user’s lifetime customer value (LCV) is, and what would cost per conversion (CPC) be, as you don’t want to be paying more to attract and retain a customer than they will end up paying you.
While these two strategies have been used by marketers for quite a while now, growth hackers have another option at their disposal, namely, product oriented tactics. Unlike traditional marketers, growth hackers are quite capable of cooperating with the development department and getting the product to promote itself. Whether this is achieved through the gathering consumer info through the product (Facebook, for instance), API integration, allowing social sharing through the product (think various fitness apps that allow you to post your results on social networks), or by simply inserting a backlink into the product (Hotmail is the most popular example, but WordPress also comes to mind, as do many others), product based tactics can do wonders for your exposure, and can also be leveraged to help with the activation and retention parts of the process.
Activation
Once you have a stream of visitors to your website, it’s time to reap some benefits. Activating visitors means making them take an action on your website, that will either improve the chances of retention, or benefit you in some other way. This can include getting them to sign up, make a comment, create some content, complete a survey, or do anything else along those lines. The actions you’ll want them to take will depend on the type of your product and your growth strategy, but generally, you can’t go about trying to retain users before first activating them.
There are numerous ways to activate users, most of which revolve around landing page optimization, when it comes to copy and design alike, as well as creating a direct and clear cut call to action. Gamification is one of the more interesting ways to do this, where websites get you to increase your involvement by awarding you points for each action you take, creating leaderboards, and generally appealing to our need for instant achievement.
Retention
While the quality of your product is mostly responsible for the retention rates, there are other things you can do to make sure that the people you’ve activated become steady customers and stay with you. This includes drip email campaigns, event notifications, and generally, keeping in touch with your customers. While you shouldn’t be too intrusive, you should make sure to get as much feedback on your services as possible. The advantage of growth hacking is that it is much more flexible than typical marketing when it comes to modifying the product according to the desires of the customers. The users need your product to have a certain feature? No problem. They find it needlessly complicated? Ok, it can be fixed. A/B testing is essential in this part of the funnel as it is in the other parts, but if you have the chance of getting the info directly from your customers, you should definitely take it.
A business exists to create a customer.
~ Peter F Drucker
A great example of user activation and retention is found in the tutorial that Twitter has created. They managed to increase the retention rates by identifying the coveted AHA moment, which is a moment at which the customer begins to understand the value of your product. When it comes to Twitter, this moment usually comes once a user is following enough people to make the experience interesting. That’s why, as a part of setting up your profile for the first time, you are prompted to follow a certain number of people. The retention rates soared after this approach was introduced, which helped make Twitter the force it is today.
This example also says a lot about the power of retention and its importance. While Twitter already had great exposure before adding this step, and hordes of people already knew about it, they simply couldn’t get them to stick. People would come, create an account, and simply leave once they got bored. However, once properly incentivized, they realized the potential of the platform, and started becoming constant users.
If you retain a user for long enough, there is a chance of them becoming an evangelist, which is to say someone that will honestly and organically promote your product and refer you to their friends. Naturally, for this to happen you have to have a great product and a good product market fit.
Final Note
Tactics and duties mentioned here are just the tip of the iceberg when it comes to growth hacking. Each client is different, and each growth hacker might decide to tackle the same problem from different angles, which is exactly what makes this job so interesting and challenging. In order to excel at growth hacking you need to have both your analytical and creative engines running, you need to be willing to constantly expand your knowledge and skill set, and capable of enduring countless failures before making a significant breakthrough, but when you strike gold for the first time, you won’t be able to even think about doing anything else.
Additional resources:
http://blog.kissmetrics.com/lessons-from-growth-hackers/
http://yongfook.com/actionable-growth-hacking-tactics.html
http://www.growhack.com/
http://www.quora.com/Growth-Hacking/What-are-the-Top-10-Consumer-Internet-Growth-Hacks-that-have-been-A-B-tested
http://techcrunch.com/2012/12/08/defining-a-growth-hacker-6-myths-about-growth-hackers/
http://www.adambreckler.com/top-10-growth-hacks-of-all-time
You can connect with Radomir on his website Four Dots or trough social channels:Twitter or Google+.