Growth hacking has made its way from Silicon Valley entrepreneurs to professionals in major enterprise companies.
Many specialists in the tech industry who deal with startups are familiar with the concept, but others typically struggle with understanding growth hacking. Let’s dive into the terminology further and discuss why this marketing technique is used widely among thought-leaders and other industry experts alike.
The term “growth hacking” was coined by Sean Ellis. Ellis has helped many Silicon Valley startups to achieve incredible growth despite the fact that a few of them had initial public offering (IPO). Eventually, Sean Ellis became known in the valley as the go-to guy if you need to grow your user base. Ellis’ method was unprecedented and fundamentally different from any other marketing strategy. The secret ingredient to his approach was the exclusive focus on growth and growth only.
The growth hacking approach does not favor building and managing marketing teams or establishing a strategic marketing plan to achieve the main corporate objectives. Instead, growth hacking revolves around making decisions informed by growth.
So, what exactly is growth hacking? Growth hacking refers to the methods, tools, and practices used solely to grow the customer base. Because the concept originated in Silicon Valley with its rich startup culture, these methods are typically low-cost, analytical, inexpensive, and creative.
The concept of growth hacking gave birth to a unique type of specialist - a growth hacker. At the same, it brought forth new professions and businesses, such as SaaS consultants and growth hacking agencies. To really understand the role of a growth hacker, let’s dive deeper into what it means to be a successful growth hacker.
Ellis notes that a growth hacker is “a person whose true north is growth”.
A growth hacker is an expert – not necessarily a marketer – who focuses solely on strategies related to growing a business. A successful growth hacker can be a project engineer as much an entrepreneur or a marketer can.
What is the mindset of a growth hacker? Every decision a growth hacker makes is informed by growth and aimed to grow the business. Growth hackers typically ignore expenses, budgets, and conversions. Growth is the main objective and metric they care about.
The job of a growth hacker is to brainstorm innovative growth strategies. Besides, growth hackers' responsibilities include the following:
There are three levels of growth hacker skills: fundamental, generalistic, and specialist. Let’s take a closer look at each of the levels to understand what makes an outstanding growth hacker.
By now you may be wondering what is the difference between traditional marketing and growth hacking. While both categories aim to boost the overall growth of the company, some key distinctions should be underlined.
First of all, traditional marketing generally relies on offline strategies and channels, including snail mail, direct sales, print advertising, radio, and television. On the contrary, growth hacking majorly relies on a broad spectrum of low-cost online activities. These four characteristics will help you understand what diversifies growth hacking from traditional marketing or any other category of marketing.
Unlike traditional marketing or brand marketing, growth hacking focuses on a few key growth-drivers, known as AARRR, and ignores everything else.
In 2007, Dave McClure, a Silicon Valley-based entrepreneur, angel investor, and a former marketing director at PayPal, created the AARRR framework: acquisition, activation, retention, referral, and revenue.
AARRR is a way to measure startup growth by tracking key performance indicators (KPIs) outlined by five funnel stages. After McClure proposed the idea, users nicknamed the AARRR framework as “pirate metrics”.
Here's how the AARRR framework works. To monitor the performance of your growth hacking marketing efforts, you can pick a few KPIs for each stage of the sales funnel. For example, if you want to understand how well your acquisition channels work, you can monitor and analyze the number of site/landing page/widget visits.
The technical background required to enable growth is another distinctive feature of growth hacking. In addition to identifying problems and finding solutions, growth hackers, unlike traditional marketing experts, must have the tech skills required to implement these solutions without the help of the tech team.
Here are some examples of the technical background growth hackers must have:
Another distinctive feature of growth hacking is its data-driven nature. David McKinley, a marketing director at Ivory Research, tells a story of how they used GIFs in email marketing to grow their customer base. They created engaging email copies, backed them up with relevant CTAs, and embedded trending GIFs. Everyone in the marketing team predicted the email campaign to be extremely successful as they thought it matched the target audience perfectly.
When the numbers came in, it turned out that they had fewer new clients than before the GIF email campaign launch. As a result, the email campaign was quickly dumped, and all future email campaigns were A/B tested before aired.
There are many takeaways from David’s story, but the most important one is the power of analytics, which leads right to my point. Growth hackers are extremely analytical and use data to inform every step. Every marketing decision, every solution, and every experiment made revolve around data and growth.
Unlike traditional marketers, growth hackers focus on and measure their performance using something that’s called one metric that matters (OMTM). OMTM is a single metric that growth marketers care about during different stages of a startup.
Technologies, and particularly the internet, have given the world a new type of products: software products. For hundreds and thousands of years, a product has been a physical object worth exchanging or paying for. Now, customers deal with non-physical products all the time. Banking apps, streaming services, and music subscription platforms are all as much products as groceries, apparel, and cars are.
This transformation of goods from physical to digital requires a completely different way of thinking, the one distinctive to growth hackers. Unlike traditional marketers, growth hackers understand the potential of digital products and the role they can play in their own adoption. Thus, growth hacking enables strategies where product-oriented methods, like referrals, are central.
Now, as you know more about growth hacking, its history, key distinctive features, and skills required to be a good growth hacker, it’s time for you to learn a few growth hacking tips. This section explains 10 ways you can employ growth hacking in your marketing strategy.
By focusing on the smaller subgoals that are SMART (instead of more general goals), you can attain the overall growth of your business. The SMART goals framework suggests setting goals that are specific, measurable, attainable, relevant, and time-bound.
If you’re looking for the growth hacks used by many successful companies, most of them started out by finding a place where their target audience hangs out online. For example, you can market to the members of particular Facebook groups with a messaging that will engage them.
The freemium model has become the dominant business model used by startupers. By allowing users to try out the premium version of your product before they decide if it’s right for them, you can expand your user base, and as a result, grow your business.
Referral programs, and other reward-based programs, are a great way to scale business growth. Develop a referral program that benefits both the referrer and the new customer. This way, you’ll create a win-win situation that will benefit your customers and stimulate growth.
Social media optimization, and particularly leveraging the influencer market, is another way to scale growth. Before pursuing a partnership with influencers, ensure the influencer of your choice is aligned with your brand’s values, target audience, and product.
By implementing the invite-only signup system, you can leverage the fear of missing out (FOMO) that will prompt users to sign up for your service. For instance, you can allow each service user to invite up to five friends who can then invite up to five friends, and so on.
Content hacking is another way to scale growth. Wait, what exactly is content hacking? Basically, it's a combination of growth hacking and content marketing efforts. By improving your content marketing game, you can increase the traffic to your website, and as a result, grow your user base.
Gamifying the user experience is another way to boost growth. With gamification, every interaction will feel like an achievement, and your customers will actually enjoy engaging with your products. This Ben & Jerry’s collaboration with Netflix is a great example of gamification done right:
Collaboration is what drives the growth hacking process. Different departments of your organization need to be working together and to do rapid experimentations to enable growth.
The growth hacking method was innovative at a time, and now hundreds of professionals employ it to enable growth. It took a creative (and analytical) mindset to come up with such a concept. Turning your creative ideas into experiments is the essence of the growth hacking process.
Now, as you know what growth hacking is and how to enable it, let’s take a look at the big-name companies that have done it right!
Dropbox is a perfect growth hacking case study. They used growth hacking practices to implement an automated referral program that operated on the following idea - the more friends you refer, the more free space you get. This growth hacking method has helped Dropbox to become a multi-billion dollar company with more than 14 million users.
Growth hacking put another giant, Airbnb, on the map. The founders of Airbnb initially used Craigslist, a platform with millions of users, to market to people searching for affordable accommodation. This growth hacking strategy succeeded as Airbnb skyrocketed into becoming the number one app for affordable accommodation with an estimated net worth of about $38 billion.
In 2010, following three months of its original launch, Pinterest had acquired only 3,000 users. To scale growth, the founders started the “Pin It Forward” campaign in which users would make a pinboard and get more invites by getting other users to create their pinboards. The campaign resulted in Pinterest’s rapid take-off, and now the platform has over 360 million monthly active users and is among the most used social media networks.
The bottom line is that growth hacking is not a fixed strategy. Continual brainstorming, analysis, testing, and experimenting is what makes a good growth hacking system that can help your business skyrocket. Following the growth hacking tips will help you put more users at the top of the conversion funnel and stimulate growth. Still, growth hacking is all about a specific mindset cultivated by the entrepreneurial spirit of Silicon Valley.
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