Growth Hacking
Growth hacking is more of a mindset rather than a toolkit, it is the conviction to do more with less.
It is the idea of building enormous services from tiny, but incredibly explosive ideas with little budget. Traditional marketing usually begins few weeks before launch, but growth hacking starts from the development and design phase
Growth Hacking for Product Market Fit
Achieving Product-market fit is hard. Building a product that can achieve sustainable organic growth is well explained in Growth Hacker Marketing by Ryan Holiday.
One way to do this is by going back to the drawing board if you are not getting a good response from the market and spending significant time trying new iterations until you achieve Product-market fit.
Start by
- Putting everything you’ve done during product discovery on the table and re-evaluating.
- Being open to feedback from peers and the market, to iterate.
- Making decisions based on information and data.
Early Customer Feedback — Let’s say you want to write a book and assure that it is a book that your target segment likes. So, you can write articles based on few chapters of the book and post on social media or your blog to gather audience response in the form of likes and comments. If you get much positive activity on specific posts, you know you have to put similar content in my book. The articles with little to no activity don’t get included in your book at all. Your target reader’s feedback allows you to create a book that they would want enough to buy.
Similar principles can be applied to the product development process and here is an example of how Amazon does it.
Amazon press release is a great example of using the principles of growth hacking into the product developement lifecycle. Amazon does a press release document even before the product is built. It tells the team what excatly should be the output, which would be based on market and customer research. This helps the team to focus completely on the potential new product and what is so special about it.
Growth Hacking for Customer acquisition
In the initial years, focusing on acquisition more than on awareness leads to a better ROI
How to?
- Get the right people as your customers. Early adopters provide more value in the early stages of product building. It is important to ignore the urge to appeal to the mass market during the acquisition phase
- What matters is how many users you acquire rather than how many potential users hear about you. If handing out flyers on the street corner accomplishes that, then it is growth hacking
Dropbox: Dropbox identified that the best way to reach their target user base is through forums on the internet. They made a demo video themselves that they posted in the right places (Reddit) and it instantly became viral.
Growth Hacking for Virality
Virality is what gives a product organic growth boost in the market.
Viral coefficient — How many people does your customer invite * how many of the invites are accepted
Viral cycle — How long does it take for your customer to send that invite?
Make it worth spreading
It is important to not just tell them to spread the word but to incentivize them to do so.
Dropbox leveraged Facebook as a growth hacking tool to gain more customers. They gave away 150Mb of free storage to every user that linked their Facebook accounts.
Provide the tools to spread
It is essential for any company and product to think of virality in the product development process itself and not starting to think about virality after the product is developed.
Increase Visibility
- Integration with popular platforms provides free branding
- Integration of Paypal on eBay enabled both the companies to grow
Growth Hacking for Retention & Optimization
When the user base and inactive users are both high, to increase ROI focus on
- Internal optimization over lead generation
- Retention over Acquisition
A 5% increase in customer retention can mean a 30 % increase in profitability for the company. — Bain & Company
The probability of selling to an existing customer is 60–70%, while to a new prospect it’s just 5–20 %. — Market Metrics
When Twitter started allowing users to manually select five to ten accounts to “follow” or “friend” on the first day, the user was significantly more likely to stick around the platform, hence increasing retention.
Growth Hacking for startups
- Eliminate the need to spend a lot of money on marketing and non-impactful development.
- Identify your ideal customers and not just any customers.
- Retention trumps acquisition when it comes to achieving Product-Market fit.
Thanks to Mahendra B
Source: Growth Hacker Marketing: A Primer on the Future of PR, Marketing, and Advertising by Ryan Holiday
