Master the Growth Funnel

This content is a short summary of the Skills21 Training session ‘Growth Funnel’ delivered by Wael Yahyaoui.

Growth hacking, a term coined by Sean Ellis in 2010, is an umbrella term for strategies focused solely on growth. It is usually used in relation to early-stage startups who need massive growth in a short time on small budgets.

The goal of growth hacking strategies is generally to acquire as many users or customers as possible while spending as little as possible.

Growth Pyramid

There are three milestones that must be cleared before you can a real growth.

1. Product Market Fit

The first is a product that people actually consider a “must-have.” In other terms, there is a verified need for the product. The latter solves a real pain point.

In the startup world, this is generally referred to as “product/market fit.”

2. Stacking the odds

Once you’ve validated product/market fit, it then becomes important to stack the odds for authentic growth. What this means is that you evaluate your business model from top to bottom. You tackle the major stuff like figuring out what your strengths are and how to play to them. You also address the more minor stuff, like implementing a solid conversion rate optimization plan.

Put it all together and you have a system that can lead to lasting growth that really matters: understand the must-have experience, then take care of optimizations. Growth hackers can’t succeed in their mission without this framework in place. Driving traffic and new signups for a product that doesn’t fulfill a real need doesn’t create lasting value, it creates inauthentic growth that ultimately kills the business.

3. Scale Growth: Team, Process & Organized Learnings

Now you’re finally ready to start accelerating growth, which is level three of the pyramid. In this stage, you should focus on building a growth team that can effectively execute a growth process.

The purpose of this growth process is to uncover better ways to accelerate growth in the business. Your goal here is just to build a rhythm and habit of testing. Every test you run will lead to additional learning — even if it doesn’t directly drive immediate improvement in growth. It’s important during this stage to catalog these learnings so that the team keeps getting smarter about how to accelerate growth.

AARRR Framework

The AARRR framework was created by Dave McClure in 2007. Since then, the framework has become a standard tool for marketers.

The AARRR framework is made of five phases a customer goes through, and each stage focuses on its own metric. Accordingly, these phases are:

• Acquisition
• Activation
• Retention
• Referral
• Revenue

Let’s take a closer look at each of those phases.

Acquisition

The first piece of your funnel: Acquisition.

During the acquisition phase, you should be wondering “How can I make potential customers find me?”.

You would typically create and deploy tactics designed to increase awareness and increase your traffic.

There are a lot of traction channels to put things into perspective. This phase is the first point of contact between you and your customer.

Activation

During the Activation phase, you should be wondering “How can I provide a good enough experience for my potential customers?”

This phase is all about the “Aha moment” you want to deliver to your visitor. This moment usually comes when people realize some of the value of your product or service has to offer.

Once you begin to interact with the interested lead, your goal should be to engage them. This kind of engagement can lead you to persuade (converting) them and turn them into a qualified lead, i.e. someone who, under specific circumstances, would become your customer.

Activation happens when a registered user becomes a qualified lead. Converting a person from a qualified lead to a buyer requires specific tactics that depend on your industry or offering, among other reasons.

Retention

During the Retention phase, you should be wondering “How can I keep potential customers coming back to me?”

This phase is about turning users into returning users. If a customer has subscribed to your product or service, how can they remain subscribed? If they don’t, this counts as a churn.

Your priority in Retention is to make the churn rate lower than your customer acquisition rate. Otherwise, growth can’t be achieved.

First, it’s a lot cheaper to retain an existing customer than to acquire a new one. So, don’t forget to keep in contact with your audience. Keep showing how your product or service is valuable for them and relevant to their lives.

Referral

During the Referral phase, you should be wondering “How can I get potential customers to talk about me in their circles?”

How does my customer become my evangelist? Surely enough, if “you are awesome”, people will want other people to know that you are.

Referral marketing can become a campaign on its own. Be it a friend-referral leaderboard giveaway, or spreading the word during the launch of your startup, any referral action is more likely to happen if you encourage it. Royalty programs can also be part of this phase.

Revenue

The final stage of the AARRR framework. During the Revenue phase, you should be wondering “How can I turn potential customers into paying customers”?

This is the real money question. Literally.

This stage is dedicated to measuring the amount of paying customers and the money you make.

However, for this phase to work, you have to make your potential customer understand your value proposition. And you have to have communicated your unique selling point in a way that convinces your potential customer. In this phase, will see if your business model holds up to its promise.

If you are interested in pursuing a sales career, Skills21 is the right solution for you. We help you, not only develop tech sales skills but join promising startups in the MENA and Africa. To get more details about us, please visit https://www.getskills21.com/