How to Use Growth Hacking to Increase Revenue 20x in Just 12 Months
Between January 2015 and January 2016, we grew our platform Slidebean from $1K to $20K in monthly recurring revenue. I’m going to go over the approach that we followed and the most successful growth tactics that we implemented during this period.
If you’re interested in figuring out how you can growth hack your way to success, keep reading!
Just for reference, Slidebean is a SaaS presentation software where users can add content, and a finished presentation is designed automatically.
Getting the first tracks of revenue is one of the toughest processes of building a startup. The chicken-egg issue of getting customers to your platform while you don’t have any money to spare is a puzzle that many companies are unable to figure out at all.
If you’re building a startup, you’re likely to be in one of these two situations:
- Launching and selling a new product that nobody’s ever heard about, and probably don’t even know they need, or…
- Improving an existing product or service, which means that you’re going head on against someone with more traction, people, and money than you.
We call growth hacking the process of figuring out this extremely complex puzzle of selling a product better and faster than anyone else. If you can’t do that, then someone is going to outgrow you sooner or later.
In this article, I’ll go through the steps and the strategy we followed to achieve this and successfully solve this maze.
Picking the right team
One of the most commons problems I see with startups that I’ve come across is the lack of a “growth team.”
Let’s face it, working on the product is awesome — seeing it evolve, figuring out new features, and witnessing them as they come alive. Selling a product is a tough process, full of “no’s,” whether they come on the phone with a prospect or as a low conversion rate on your landing page.
I strongly believe that the first few hires of a startup should belong to the growth department, whether they’re marketers, community managers, or salespeople (selling your product is the best way to learn how to improve it).
This is what our hiring landscape looked like over the past year:
Pre-2015, we hired three founders:
- 1x hustler in charge of strategic growth hacking
- 1x hacker in charge of product/development
- 1x hipster working with both product and growth
Then, in 2015, this is who we added to the team:
- Jan-15: Head of Customer Success (growth team)
- Apr-15: Head of Marketing (growth team)
- Jun-15: Community Manager (growth team)
- Aug-15: Head of Sales (growth team)
- Nov-15: Graphic Designer (growth/product)
- Dec-15: Developer (product team)
We spent a year building a solid sales and growth team before we even expanded our product team. My best advice here would be to ensure that the people you hire are able (and willing) to handle a large number of different tasks, that might be far from their original job description.
The reality of growth hacking is that it’s a trial and error process. The faster your try and measure the effectiveness of a growth idea, the faster you’ll make it or break it and be able to move to the next one.
We approach our growth tactics with a monthly brainstorm session with all the growth team. No idea is bad — we write them all on a blackboard and then select the ones we like best. Our budget for most experiments is $500 to $1K, and we try to run two experiments per month. These may range from joining an affiliate marketing platform to trying new Google AdWords keywords.
This is when metrics come into play. Your customer acquisition cost and lifetime value are the two magical numbers you need to calculate for each one of your campaigns. The cornerstone of any business is that LTV > CAC.
Cost of Acquisition (CAC): The total cost of acquiring a user through a given channel. This includes ads, team costs (fraction of your weekly work hours invested), and any other effort required.
Customer Lifetime Value (LTV): The potential revenue that you’ll be receiving from a given user. In a SaaS business, this is calculated based on churn. For ecommerce, this is based on transaction size, commission, and chances of the user returning.
If you are measuring these two correctly, you can make simple rules/decisions based on your results:
- If the CAC is over twice the LTV don’t even bother — this channel is likely not going to work.
- If the CAC is above the LTV, but not too much — there’s some potential in this channel. Assign some budget for the next period and keep experimenting.
- If the CAC is equal to or under the LTV, there’s big potential here. Most campaigns can be optimized to increase conversion rates and lower costs. Increase budget for the next period.
Using this approach, we’ve been able to identify a number of profitable customer acquisition channels for Slidebean. Once a channel is identified, we increase its budget by approximately 50 percent each month, until the channel is “depleted.” We call a channel “depleted” when we can no longer get more users from it, or when increasing budget results in an unsustainable LTV-CAC ratio.
There are a number of other variables here like virality (the chances of a user referring another user), but I don’t want to overcomplicate things.
Successful and failed experiments
I’ll be going over some of the tests we did and our results. This is clearly our data, and it might or might not apply to your company. Hopefully, however, it will serve as a guide to planning and budgeting your own tactics.
I’ve also added a note about the potential cost of each campaign, which should help determine if it makes sense for your company.
1. Users who love your product (cheap or free)
It’s no joke that your users are your best advertisers. From day one, your focus needs to be on creating a product that people will love using. People love products that save them a tremendous amount of time or money. They also love beautifully crafted design, or even exclusivity.
We’ve invested a lot in making our users feel like they are our friends. From small details like a friendly and casual tone in all our messaging, to large strategic investments like hosting live 24/7 support, our customers feel like they know us personally, and that gets them to create a deeper connection with our product.
Perhaps the best example of this effort is the care package each of our clients receives when the subscribe: we send them a hand-signed postcard by the team, and a set of stickers. We’ve shipped hundreds of letters around the world and we’ve found that users that received a card churn 50 percent less.
Especially in the early stages, keeping a relationship with your customers can be paid off exponentially, not only in overall engagement but with extremely valuable word of mouth marketing.
2. Masterful onboarding (cheap)
If there’s something that we’re really proud of in Slidebean, it’s our onboarding emails. We’ve been working Intercom for over a year now and they have been key to our success.
Intercom allows you to build drip email campaigns based on specific actions users take on your site. As you evolve your user base, you can get down to tiny details and email users based on very specific actions, which makes them feel you are reaching out to them personally rather than automatically.
For instance, we target users based on their language, the type of customer they are (startups, marketers, consultants, academic) and based on the actions they take on their site. Thanks to Intercom’s powerful tracking and automatic emails, we know when a startup founder finished and shared a deck. We can then email them at the right time to take an action or upgrade their account with a message that is so specifically crafted that they often assume it was only sent to them.
Our onboarding consists of over 200 different emails based on our audiences, and we continue to improve it every week. This optimization results in emails with an open rate greater than 60 percent and a click through rate greater than 20 percent — an unimaginable metric if we were just sending emails blindly.
3. Big press (cheap or free)
While it’s not a sustainable growth channel because you simply can’t get featured every week, kicking off with a major tech press publication definitely helps. While it has a direct impact on traffic it also helps with overall SEO, brand recognition, and it allows you to brag on your website and on your ads, which improves conversion rates.
Nailing an article in a major tech blog is a hit or miss, but I’ve successfully managed to get two of our product launches featured in Techcrunch and TheNextWeb. Getting published is a combination of luck, creativity, and most importantly, relationships.
I keep a spreadsheet of all the reporters I’ve met, emailed, tweeted or had any contact with in any way, and I make it a priority to stay in touch with them every other month or so. The truth is that you can’t simply pitch a reporter over email and expect to be picked up. While it’s worked for me a couple times, you can’t rely on them getting your email or even getting back to you.
For the launch of Slidebean, we came up with a concept to get reporters’ attention through Twitter or Instagram first, and once we were able to interact with them through those channels, we sent them an email. Luckily, we had our team spread across the world and were able to get these (real) shots without spending a fortune:
We selected a few reporters that wrote about our space (had expertise in it) and started shooting pictures through their social networks. Instagram felt like a good idea at first since many of them don’t have a lot of followers and activity, but in the end Twitter gave us better results.
With a nice “Can I email you about Slidebean?” tweet we got a great response rate and moved our conversation to email. The outcome of this? Two major publications on the launch of our platform:
- DreamIt Ventures’ Slidebeam Hopes to Be Instagram for Presentations
- Slidebeam Launches to Give Prezi a Run for Its Money
The press buzz around the launch nailed us about 8,000 signups on the platform in the course of a week and that was all referral traffic from these articles.
One important thing to consider is that these are very targeted audiences: startups, VC’s, and so on. If you are not focused on serving those users, then you might not get a lot of value out of this effort. Also, many of them will just sign up to look around and not come back ever but hey, it’s free traffic!
4. Small press (cheap or free)
It’s significantly easier to get a press mention from smaller bloggers or internet evangelists (Youtube, Scoop.it). They’re usually on the lookout for great content to share on their websites, and it’s easy to get them to feature you if you have a product they like.
Don’t underestimate small blogs! While their communities are much smaller, the engagement rate is significantly higher and they will continue to bring you valuable traffic as time moves on.
5. Google AdWords or SEM (expensive)
We avoided investing in Google AdWords for months because of how expensive it is. Still, it’s become one of our most profitable acquisition channels, and more importantly an excellent way to test new customer verticals and target markets.
Search ads are expensive, however. Be prepared to pay at least $1 per click for any decent keyword in the U.S. (this drops by $0.30-$0.50 in other countries). This means that you need to convert customers very efficiently if you want to get positive unit economics out of it. We found that the best performance we could get out of a landing page was about 40 percent conversion to (free) sign up, which means that a sign-up can’t cost less than about $2.50.
The best way to optimize in Google Adwords is to be extremely specific with your targeting. Build a profile of your ideal customer (Where do they work? How old are they? What do they do? What would they type in a Google search?). In other words, get in your customer’s head and figure out what they’d be looking for.
For example, “presentation software” is an extremely broad keyword phrase that anyone from students to employees of large businesses could enter in Google. On the other hand, we identified that phrases like “pitch deck” that are significantly more specific about their audience: startup founders looking to pitch investors.
Identifying keywords like “pitch deck template” allowed us not only to find positive unit economics in SEM, but to focus our SEO efforts accordingly.
6. Display ads (cheap)
You’ll find that display ads are much cheaper than search ads, and the main reason is the moment of intent. If a person runs a search for “digital cameras,” they’ve already made the decision to purchase one, and it’s just a matter of which one and where to buy it. The moment of intent is clear and the customer is further down the acquisition funnel.
With display ads, you are targeting the customer further away in the acquisition funnel, and at a moment when they are not particularly interested in making a purchase or trying a new product out.
Display ads for sign ups: Fail
We started experimenting with Facebook Ads, which felt significantly cheaper than Google AdWords. We created a set of beautiful designs with a “Sign Up” call to action, only to find that the click through rate never went above 0.5 percent (with Facebook you should aim for at least 1 percent).
This resulted in a $10 cost per sign up, and lower than average activation rates. The reason was simple: We were targeting people while they were procrastinating on Facebook, a terrible time to ask them to go through an onboarding process. We saw similar results with Twitter, LinkedIn, and Reddit ads, and moved on.
Video ads: Fail
We also tried running some Facebook and Youtube video campaigns and saw little success. While the cost per video impression is usually around the $0.05 (and you only get charged if a user sees more than 30 seconds), we saw very little conversion rate from the video to the landing page.
Display ads for content promotion: Success
Eventually, we figured that promoting content through display ads gave us significantly better click through rates, up to three percent or even five percent for some audiences. The reason is clear, while hanging around on social media sites, users are actually consuming content, so it feels more natural to click and read through a piece of content that seems interesting.
Promoting content does not necessarily result in sign ups, so the measure of the success of a content campaign is rather different. It relates to content shares, brand awareness, and even position in search engines, so measuring CAC here can be a whole different challenge.
Retargeting through display and video ads: Success
We also found that running retargeting campaigns was extremely cheap. For the past few months, we’ve been running retargeting ads with a budget of about $500 a month and getting around 750,000 ad impressions in return.
While conversion rates and cost of acquisition through retargeting is not particularly outstanding, we like to think that there’s an underlying, unmeasurable added value of brand exposure that is achieved through retargeting. Honestly, there is no way for us to know that users are converting better because they get to see our ads everywhere, but we’re willing to allocate a fraction of our marketing budget to this cause.
7. Blog or content marketing (cheap or free)
If I could go back in time to when we first launched our product, one of the first things I’d do differently is run a blog from day one. At this point, the Slidebean blog gets around 20,000 visitors per month, and we’ve found that users that convert from the blog are more engaged and stay much longer, resulting in the highest LTV from our current acquisition channels.
Once you have an ideal profile of your customer, it becomes simple and rather obvious to blog about topics that are interesting to those audiences. It gets your brand in front of them; if the content is good it will be organically shared to their peers, and sooner or later users will end up knowing you.
Onboarding and converting blog readers is a much longer process, but by using a combination of retargeting ads with well-crafted email drip campaigns, you can start improving this process. On our blog, we are using SumoMe to aggressively collect emails who we then target with Mailchimp.
8. Reddit (cheap or free)
If you don’t know Reddit, it’s about time you start getting familiar. Reddit is a content sharing community that gets short of 20 million visitors each month. With thousands of sections about specific topics (called subreddits), Reddit is an ideal place to find and engage with target customers.
I’ve never seen a sense of community similar to the one you can find on Reddit, and this is why you’ll need to spend a few weeks getting familiar with the language, tone, and type of publications that get shared and spread in the community. If you’re able to get a hang of it, however, it can become a strong and close to free distribution channel for your product or service.
We “hacked” Reddit by sharing our blog content in the startups, entrepreneurs, and small business subreddits, and making sure it got high visibility. If your content is truly good, you’re looking at a few thousand reads from ideal customer prospects, not to mention the SEO benefit.
9. Twitter and Quora conversations (free)
Twitter and Quora are two great places to find conversations relevant to the problem you’re solving (as a matter of fact if you can’t find any questions or discussions, then you really should reconsider the way you’re positioning your product or service).
Get used to monitoring Twitter conversations around your vertical and try to engage with as many as you can. Make sure to sound interested and casual and avoid just selling your product or pointing people to your landing page. Sometimes it’s better to promote content that you’ve published and only share your product’s homepage when they are explicitly looking for what you have to offer.
A similar situation occurs in Quora. Lurk around the site for any topics that relate to you and jump in to answer as soon as you find something. Also, get your team to upvote and comment on your posts to make sure they get some extra visibility.
10. Instagram and Twitter automation (cheap)
When it comes to community building, you might want to start outside of Facebook. Facebook has become so competitive (and therefore expensive) that your organic reach in the platform is practically zero percent.
We’ve seen great success by hacking Twitter using Buzzsumo andHootsuite. Buzzsumo lets you find and export a list of Twitter handles that have shared a specific article, and then Hootsuite lets you automatically tweet them a personalized message based on their actions.
For example, we find users who have recently tweeted articles about a specific topic; say, pitch deck design. We export that list as a CSV and then create a spreadsheet with automatic tweets that look something like this:
“@user, noticed you shared that article on pitch deck design. We just published one that you might like as well: link”
With that tweet content, the reader assumes that you actually follow them and are aware of the content they share, and they are significantly more likely to click, favorite, love, or even retweet your post. We then upload the spreadsheet to Hootsuite and batch-post it, 350 tweets at a time.
We do something a little different with Instagram using a tool called Instagress, which allows you to automatically follow, like, or comment on photos with specific hashtags or from specific locations. If you bring Instamole into the mix, you can even automate responses to people who follow specific pages (like your competitors).
This way, you can grow your Instagram user base significantly with only a few bucks, and expose your brand to a network that has literally a 100 percent organic reach. You can find some more details about this hack here.
What growth comes down to
In the end, the success or failure of your marketing campaigns and your startup depends on how fast you can iterate over your growth tactics, and how quick you are to identify the good and the bad channels.
Following this “scientific” approach when testing new growth channels is what allowed us to pick the right campaigns and scale them accordingly. Whether you are on a tight budget or not, the key to growth is identifying these profitable acquisition channels as soon as possible, and being on top of the numbers at all times.
In the end, your metrics will give you the answer. Make it a rule of thumb across your team to keep a tight control on the time they’re spending in each channel and the amount and quality of the traffic you’re getting.
Keep experimenting and keep brainstorming — you are literally in a race to figuring this out before you run out of money, or before your competitor outranks you.