Back in the day, it was online marketing, then came guerrilla marketing and viral marketing. Today, the hot marketing word is “growth hacking.”
Growth hacking seems to push some companies to go from zero to a million users overnight. Airbnb, Uber, Slack and others — the growth of these companies can look magical.
But with all the fanfare and fuss around the term, you may be wondering: How can I use it for my business? Is growth hacking only useful for tech startups in Silicon Valley, with access to millions in VC funding?
Let’s find out.
What’s growth hacking?
The most popular definition of growth-hacking is “the process that focuses on growing a company at all costs.”
For me, it is quite a vague definition that adds nothing fundamentally new to our understanding of how to grow business.
Let me rephrase it as:
Growth marketing is data-driven full funnel marketing in which we conduct rapid experiments with acquisition channels, sales techniques and develop the most efficient ways of growing the business.
In fact, growth is about a consistent process of improving key product metrics (activation, retention, monetization), developing current acquisition channels, and exploring new ways of customer attraction.
The main difference between traditional marketing and growth marketing is that, whereas a marketer focuses on bringing new prospects and clients, a growth marketer focuses on the full customer journey.
How to create a growth hacking strategy
Step 1: Collect the data
Traditionally, marketers start to develop a strategy by making a list of the ideas they plan to implement. Growth marketers’ first step is collecting all the data needed to have a full understanding of how users interact with their product. That includes:
- How often they use the app
- The features they use
- The average session duration
- The acquisition channels (Google Adwords, Facebook, referral, etc.)
- The devices they use
You must also understand the reasons people stop using the product. For that, you should know:
- The pages that have the highest exit rates
- The actions they don’t they take that your power users do
- What prevents them from taking a particular action
Step 2: Create hypotheses
What you shouldn’t do is to look at the data, make immediate changes, and hope they work. You need to create hypotheses, test them, and only those that win can be implemented.
There are four main sources you can use to build high-quality hypotheses:
- Customers’ feedback. The best way to gain valuable knowledge that will help you generate hypotheses is to get feedback from users. In-depth interviews, polls, and support requests are fertile ground for new ideas.
- Analytics. By analyzing current product data and tracking the correlations between metrics, you can create a lot of hypotheses.
- Frameworks, theories, canvases. All sorts of new frameworks, theories, and canvases can help you focus on current issues and look at the product and business from a new angle. Tools like Value Proposition Canvas, Jobs To Be Done framework, or Hook Model provides a good influx of ideas.
- Other companies’ case studies. Studying what competitors and industry leaders are doing may give you thorough insights. Learn their case studies, examples of successful solutions, posts and blogs — this is also material for hypotheses. It is important to remember that your product and business are unique and blind copying of other people’s approaches does not guarantee results.
Step 3: Prioritize experiments
The ideas you generated in the previous step will look exciting and you will probably be tempted to start testing them right away. Stop right there.
Before testing any ideas, you should prioritize them. In the other case, you may end up testing hypotheses that have no real impact on your bottom line and thus waste resources.
The most common prioritization frameworks are PIE and ICE frameworks. The idea behind these frameworks is to rate each hypothesis on a 10-point scale, according to the following criteria:
- PIE: potential, importance, ease;
- ICE: impact, confidence, ease.
At the end of this step, you will know exactly what tests to run and how much they should affect the metrics related to them.
The more tests your run, the better idea you will have of the impact they can have, as well as the confidence you should assign them, and the resources needed to implement them.
Step 4: Run the experiments
The last step is the actual hypothesis testing. Finally, it’s time to hack!
There are three common ways to test your product idea:
- A/B testing. This type of hypothesis testing is used to compare two versions of something to see which one performs better.
- Multivariate testing. Each variable should be tested separately so as to conclusively attribute changes. However, such an approach can be very slow, especially when there are several versions to test.
- Before/after testing. Sometimes, it is not possible to split the users in half or into multiple variants. In such cases, you can compare the results before and after the change to arrive at a conclusion.
The results and conclusions you obtain will help you create a more comprehensive strategy to meet your goal and then determine the next steps in growing your business.
Growth hacking has transformed the marketing and tech world by mixing the analytical mindset of engineers with the creativity of marketers and designers.
What you need to understand is that growth marketing is not a magic pill that will make your companies go from zero to a million users overnight. It won’t make an average product great. Growth marketing can definitely change the way you operate your own business.
If created correctly and thoroughly, the growth hacking strategy can help you improve key product metrics and develop new ways of acquiring and retaining customers to your product.
Let your business grow!
Anna Grechko is a marketing enthusiast and knows the field inside out. She is the marketing specialist at Smart IT. Sharing knowledge is a big part of her career, so Anna actively seeks to spread good vibes, and collaborates with the great tech and marketing minds of the world.