A beginner's guide to growth hacking
Growth hacking is a tried and tested technique for achieving rapid growth in start-ups and small businesses. It is the process of experimenting with innovative, low-cost alternatives to traditional marketing that force accelerated business growth.
Many famous brands including Dropbox, Twitter and Airbnb can attribute their ongoing success to the application of quick-result growth hacking techniques.
Growth hacking and marketing are intrinsically linked. They share the same fundamental principles of experimentation, creativity and measurement in order to achieve goals. They also use similar metrics including increased engagement, conversion or retention.
The main difference is that traditional marketing has a very broad focus on creating open-ended awareness whereas growth hacking involves setting highly defined goals in order to reach a specific singular outcome i.e. growth.
Another difference is that traditional marketing uses qualitative methods to measure success of building brand awareness whereas growth hacking uses qualitative and quantitative business metrics.
The job of a growth hacker is to grow the number of users for a specific product using innovative processes.
The term was coined by entrepreneur and start-up advisor Sean Ellis in 2010:
‘A growth hacker is a person whose true north is growth. Everything they do is scrutinised by its potential impact on scalable growth’.
In other words, every decision a growth hacker makes is informed by growth which becomes their singular goal. Their aim is to convince people to use your product and to inspire those people to promote your product.
Growth hackers need a creative mind to be able to identify and solve problems. They also need analytical skills to help them interpret data and identify which tested growth drivers to keep and which ones to cut.
Growth hacking techniques have resulted in exponential user growth for companies like Hotmail, Dropbox and Twitter.
One of the earliest and most famous growth hacks was developed in 1996 by Hotmail. They added the "PS I love you, get a free Hotmail account" tag to the bottom of every email sent through their service. The clever and highly lucrative tactic led to exponential growth of the company within a few hours. A year and a half after launching, Hotmail had 12 million users – all at no cost since the product itself was the promotion and distribution channel.
Dropbox implemented a referral programme which urges you to share the online storage service in return for some extra free storage space on your own account. This led to Dropbox gaining 4 million users in 15 months.
When Twitter first launched, it gained a lot of publicity and saw many users sign up. The interest was short lived however, with many users playing around with it for a few days then never logging in again. Following extensive user research and a system re-build, Twitter made users select 5-10 accounts as part of the sign-up process. Users were automatically fed updates from accounts that interested them which led to a dramatic decrease in Twitter's attrition rate.
Growth hacking is particularly popular with start-ups who can’t afford an all-encompassing marketing plan. The focus is purely on growth and growth hackers will explore every low-cost channel available in order to achieve it.
It lends itself to online software products which are easy to share and become viral. As such, it is best suited to e-commerce products, mobile apps, SaaS providers and B2B companies such as design agencies.
With years of experience in helping start-ups get their products online, we can advise on the right growth hacking strategy for your business. Get in touch for more information.