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Growth Hacking 101: How to Apply Growth Hacking Strategies to Your Business

Growth Hacking, a term coined by Sean Ellis, the founder, and CEO of GrowthHackers, in 2010, generally means any creative and low-cost strategy related to the growth of a business. This term is widely used relating to startups that need to grow significantly, acquiring a large number of loyal customers, with a low budget and within a short time.

Contrary to traditional marketing, growth hacking takes an interdisciplinary approach to growth and marketing. It is a rigorous method of rapid and cross-functional experimentation.

A growth hacker needs to be creative to come up with the right and effective growth strategies. Growth hacking is a continuous cycle where a growth hacker tries out different ideas, analyzes them, and generates new ideas based on the analysis.

The Prerequisites Before Taking Off 

According to Sean Ellis, the writer of the book ‘Hacking Growth’, there must be 3 pre-requisites:

1. Building The Growth Team

To achieve growth, a company needs to find the right people and unite them to work together. Only hiring people with marketing expertise is not a very effective strategy. Because it is the joint effort of different areas of a company that plays a role in the growth of a company. It is important to link marketing experts with managers, engineers, designers and forming a multidisciplinary team to accelerate growth. A growth team needs the following people in it:

  • The leader: Whether it's a soccer team or a growth team, every team requires a leader who can manage the whole team and lead the team towards the right direction. In a growth team, the responsibilities of a leader are leading the growth strategy, participating in idea generation, setting specific goals and defining the directions for the team members. A growth leader needs to have a complete understanding of the customer funnel and company’s ultimate goal to lead the team.
  • Product Manager: A product manager is the person who supervises the product design and other respective resources. A product manager of a growth team needs to have the experience of contacting customers to optimize the results of experiments and data analysis.
  • Developers: In the growth team, the responsibilities of the developers are to develop the websites, applications and in case of the digital products, product code and so on. Growth hacking involves meaningful use of technologies which necessitates participation of at least one technical resource in the team.
  • Marketing Specialist: A growth team must need a marketing specialist for the product dissemination and figure out the perfect marketing strategy.
  • Data Analyst: In a growth team, a data analyst is needed to gather, organize and analyse the data collected from the customers to get insight of the customers’ needs and ideas for further experimentation.
  • Designer: Lastly, a growth team requires a product designer to design the product layout and specifications. A unique design is important to attract customers. The colorful design of iMac helped Apple to get a huge amount of traction.

2. The “Must-Have” For Growth

All companies are working to build something useful for their customers. But there are some products that become a necessary part of our life. Growth requires a company to build a product that people will love and consider to be a “Must-have” item in their daily life. 

According to Sean Ellis”, a company should ask their customers the question "If product X was no longer produced, how would you feel?”, with the following options:

(a) Very disappointed

(b) A little disappointed

(c) would not be disappointed (this product is not useful)

(d) N/A (I have never used this product)

If 40% or more respondents are disappointed then the product should be categorized as the “Must-Have”.

This small survey gives the growth team an insight of the customer's mind and makes it easier for them to take the decision of whether they should invest in a product or move on.

3. Finding The Growth Levers

In simple terms, growth levers are activities a company can run to achieve growth and make progress. At any given time, a company can try a limitless number of strategies aka growth levers in order to improve their business. But everything a company does will not bring the expected result.

To that end, finding the right growth lever, one action/strategy/tactic that would move the ball, and then exploiting it is necessary for achieving meaningful growth. The general approach is that once you have exploited and saturated one growth lever, you should find a new growth lever to drive another round of growth.  

Take, for example, PayPal. In the beginning, PayPal offered a $20 incentive to each new user. As a result, the number of PayPal users started to grow 7%-10% a day. The payment later dropped to $5. Also, the users would get $40 for referring someone. The company spent around $70M on this strategy and it paid off. PayPal quickly gained traction and managed to become one of the most successful tech companies. Paying your customers to use your product is a growth lever, one tactic that you could use to gain users.

Today, almost every technology startup uses this strategy, paying their customers in some form. For example, ecommerce companies offering cashback and hefty discounts are an example of this strategy. 

Now there are caveats to it. All companies need not spend huge amounts of money to acquire customers and accelerate growth. Moreover, paying customers is expensive and most companies can’t afford it. The task of the growth team, to that end, is to find more powerful low-cost strategies. There are many more examples of growth levers and strategies. For example, Dropbox used a famous referral strategy to achieve growth in the early days. 

Instagram offers another interesting example. The company made its features so easy to use that people embraced them. To take the thing to a next level, the company let people use Instagram prior to the launching, turning these early users into brand advocates. As a result, Instagram was a huge success out of the gate. Within the first hour of launch, Instagram had about 10K users.

Each company has its own unique formula of growth depending on its product or service. 

Growth levers are the core inputs that determine the growth of a company. It’s the responsibility of the growth team to find the unique and right strategy a.k.a growth levers that will help them to achieve rapid growth. 

The Growth Hacking Framework

Growth hacking is an iterative process. In an interview with Future Startup, Mahmudul Hasan Sohag, the co-founder and chairman of Onnorokom Group, said, “We have been adventurous in every way possible. We tried and continue to try new things every once in a while.” and he considers it to be one of the main reasons behind Rokomari’s success.

At the core of growth hacking is a process of consistent experimentation. You generate ideas, prioritize which idea to implement first, run experiments and tests, analyze to see which idea works and what does not, double down on the ones that work, and then start again from step one. 

To streamline this entire process, Sean Ellis has developed a model, which he called High Tempo Testing in his book  “Hacking Growth”.In simple terms, the high tempo testing framework is how basically you implement growth hacking ideas in your company. The framework has four steps and it is cycle and loop. 

  1. Ideation: The growth hacking team generates ideas for experiments. Everyone is encouraged to generate ideas without worrying much about the merit of the ideas. The purpose of this stage is to generate as many diverse ideas as possible for achieving the growth target. 
  1. Prioritization: Prioritization is the stage where you judge ideas and pick the ones that you want to try. Sean Ellis suggests a score he named ICE score for selecting ideas. ICE stands for impact, cost/confidence, and ease of implementation. 
  1. Test: In this stage, you implement the ideas you prioritized in the earlier stage. 
  1. Capture learning: Analyze the experiments, prepare reports, and learn to use them in future experiments, and generate more ideas. This step leads to the first step which is idea generation. The growth team usually uses the learning from the past experiments for idea generation and better testing. 

Many experts suggest, the cycle of growth hacking starts with the “Analysis”, where the data collected from the customers are analyzed to understand their mindset. Based on the insights accumulated from the analysis the team needs to brainstorm to generate as many ideas as possible. Experts suggest spending at least four days in the “Ideation” phase and generating as many ideas as possible within this time frame. While ideation appears to be something simple and easy, it is often difficult to generate a large number of useful ideas. Usually, growth hacking teams take a team approach to idea generation and create a system to encourage company-wide idea generation. 

After generating ideas separate them based on prioritization. A useful method for this, which is also recommended by experts is ICE (Impact. Confidence & Ease). The impact is the expected positive change in the growth of a company an idea can generate. Confidence is the possibility (backed by data) of how well an idea will work and lastly ease the time and other resources to execute the idea.

After “Prioritization”, comes the last stage of the cycle which is the “Test”, where ideas selected based on prioritization are tested to evaluate their effectiveness and the cross-functional nature of the growth team makes it easier to test ideas. The cycle is repeated until the right strategy is found.

The Growth Hacking Playbook: Using Growth Hacks Across Your Company Funnels

“Getting more customers is undoubtedly important for any company. However, if for that the company spends more than it expects to earn, we would say that there is a problem.” - Sean Ellis (Hacking Growth: How Today's Fastest-Growing Companies Drive Breakout Success)

There is a critical difference between a growth hacking mindset where you understand the basics of growth hacking and actually getting down to the work. The next step in your growth hacking journey is to understand your funnel stages and design strategies for each stage. Sean Ellis used four metrics to navigate this stage in his book Hacking Growth: 

  1. Acquisition: In this stage, you build awareness about your product and get people to know you.
  2. Activation: You ensure you offer a good experience to your customers so that they engage with you.
  3. Retention: You find ways to ensure they return and keep using your product.
  4. Monetization: You find ways to make money from your customers 
Growth Hacking 101: How to Apply Growth Hacking Strategies to Your Business

The Growth Funnel (Image: weDevs)

  1. Acquisition: There are many ways to hack acquisition where you build awareness of your products and encourage people to take the first taste of your product. 

Sean Ellis suggests three ideas for customer acquisition in his  “Hacking Growth” book:

  • Right Language: In Upworthy, an online news platform, the staff writer creates 25+ headlines for a single story and 7-8 of them are selected by the curator. Lastly, the managing editor makes the final decision. Lastly, the growth team selects two similar markets and creates trackable links for each possible headline. Then shares the article via trackable links in both markets, and determines the winning headline from its tracking of clicks and shares.

Using the right language to describe the product and its function is crucial to attracting the target customer segment. So refining your marketing language beforehand is an important stage. Using the language of the target customer segment is an effective way to reach them.

  • Right Channel: According to Peter Thiel, the co-founder of PayPal, poor distribution – not product – is the number one cause of failure. If you can get even a single distribution channel to work, you have a great business. If you try for several but don’t nail one, you’re finished.

Finding the right channel to reach people is also important regarding customer acquisition. While choosing a channel the cost, the activity of the target audience, the time required to get the expected result, and the amount of exposure the channel will provide should also be kept in mind.

  • Customer Loops: Also known as the “Customer Referral Program” is another way of acquiring customers. According to the growth hacking experts, there are two aspects that should be kept in mind while utilizing the customer loop: the incentive and language must be on-brand and marketers should increase the perceived value of the incentive as much as possible. Thus, Dropbox’s formula of awarding users with extra storage after referring it to a friend is a great initiative rather than using money.

Case study: weDevs CEO Nizam Uddin shares how the company hack acquisition: 

“In the Acquisition phase, we do a number of activities to bring the users to our site. In this phase, we do these tasks:

  • We connect with bloggers, influencers like youtuber, and/or influencers from different parts of the world and try to get users or traffic through them. 
  • We publish PRs in different presses.
  • We partner with associations in different countries, related products or services, agencies, course instructors, various popular tools, payment gateways, etc.
  • We do video marketing and Reddit, Quora, Medium, Instagram marketing, etc.
  • We do a lot of branding related work 
  • We do keyword analysis and SEO 
  • We sponsor and attend international events
  • We regularly use growth hack to come up with acquisition ideas, test them, and put them into work

2. Activation

After customer acquisition comes the activation stage where a company keeps the customers engaged using growth hacking strategy. A user activity funnel is a great way to identify any area or aspect of the service or product because of which the user number is decreasing.

HubSpot developed ‘Sidekick’ for tracking the effectiveness of email marketing and found that users who signed up with their work email ID were more active than others who provided a personal email account. Thus HubSpot told their users to use work email for signing up on this platform and this small step changed the level of activity of users dramatically.

Case study: weDevs CEO Nizam Uddin shares how weDevs uses growth hack to activate users: 

“In the Activation phase, we try to persuade our users in performing any activity on our sites. The special tasks of this phase are:

  • We make viral content, quizzes, contests, and giveaways.
  • We create articles, ebooks, press releases, white papers, infographics, guides/tutorials, and masterclasses to educate users.
  • We make informative articles for Influencer, community-related articles, activity in forums, events, Shared Value Marketing, Interactive content, Webinars, Case studies /Customer stories to inspire and convince users.
  • Based on user activity, we try to find out AHA moments and WOW Factors
  • We work with WordPress.org reviews, Facebook reviews, Google My Business reviews, TrustPilot reviews, TrustRadius reviews, G2Crowd reviews, Capterra reviews, FinanceOnlines reviews, GetApp reviews and Collect testimonial for our site to inspire users and increase their buying confidence.
  • Activation is a critical phase. Apart from these activities, we also do a lot of other activities with an ambition to engage our users with our products and services.”

3. Retention

A company will not be able to make profits if it can’t keep its customers after acquiring them. Having a loyal customer base means lower cost for customer acquisition and more revenue. Besides loyal customers help to gain new customers through referral. 

For convenience the “Retention” strategy should be divided into three stages: initial, medium, and long-term retention. The initial stage is more like the “Activation” stage where users are kept engaged for a short term. For medium-term retention, the product or service needs to be part of the users’ daily life. For long term retention, a company needs to upgrade or modify the product or service with more attractive features. The growth team should experiment with different ideas to find the right strategy to keep customer retention rate high. 

A good example of customer retention is the subscription service of Amazon, Amazon Prime, that provides the users various facilities including streaming movies and music and among the people who take the free trial, 73% become subscribers, 91% renew for the second year and 96% for the third year.

Case study: weDevs uses the following strategy for retention. weDevs CEO Nizam Uddin: 

“The purpose of the Retention phase is basically to bring our users or customers to the site or product and make them our recurring customers. Customer retention is a difficult task. Some of the things that we do in this phase: 

  • We try to find out the NPS score and do different activities accordingly.
  • We provide feature suggestions from the marketing team by analyzing the data that we keep when the customer leaves, analyzing the market, and competitors.
  • We don’t think the work should be done just by software. We have seen that about 60% of the users do not renew their subscriptions the next year because they close the business for various reasons. If we talk about Dokan, the Marketplace is huge, so to run it fully, you need funds as well as the capacity to make strategies and execute. We are now creating resources for the customer to do everything from business plans to executions so that a business gets good guidance and can run the business smoothly and renew every year. We do all this work in this phase.
  • In addition to our clean and detailed documentation and tutorials, we regularly send them tips and tricks via newsletter.
  • We also have a community group on Facebook where we connect everyone who helps with retention.
  • We also do the work of translating in different languages ​​in this phase. 

Apart from all these activities, there are also many other activities we do.”

4. Monetization

Based on the data derived from the monetization, LinkedIn focused on optimizing their homepage encouraging users to subscribe for better business networking, rather than email marketing, which helped LinkedIn to drive more growth.

The “purchase funnel” should be monitored to identify the points that are responsible for losing customers and to find new ways of generating revenue. Understanding your customers and knowing their characteristics is an important part of the growth of the company, as it helps the growth team to figure out the right strategies for maintaining continuous growth.

Caste study: how weDevs use growth hacking for revenue generation.

From weDevs CEO Nizam Uddin: 

"In the Revenue phase, we do various activities for the users to buy our products. E.g.

  • We collect emails from free users and send them a series of emails to convert to paid versions.
  • We do a variety of email marketing including Fail Order, Abandon Cart Email, etc.
  • We offer special offers on various occasions including Black Friday, Cyber ​​Monday which helps us generate a good amount of revenue.
  • Now we do Google Search Ad, Display Ad, Video Ad Campaigns, Bing Ads, LinkedIn Ads, Facebook Ads, Twitter Ads.
  • We retarget custom audiences aggressively.

We also do a lot more, including how to reduce customer acquisition costs and increase customer lifetime value."

Final thoughts

Growth hacking requires a lot of effort and time. It is normal for one to ask “Why growth hacking is crucial?. Before answering this question here are some statistical data:

20% of the startups can not make it to the end of the first year.

A study by SalesForce showed that 79% of marketing leads are never converted to sales.

The right growth hacking strategy can help a company to overcome these issues avoiding waste of money and effort. The big names we know today such as Facebook, Airbnb, Microsoft. Adobe, Tesla, etc, have all followed their own growth hacking strategy to accelerate their growth, rather than implementing the conventional marketing strategies.

Airbnb is one of the finest examples of growth hacking. Before reaching their current stage, they had to create a loyal customer base and reputation. When they saw that many travelers search on Craigslist for alternative accommodations, Airbnb provided its accommodation providers with an option to post a copy of their listings on Craigslist and this simple solution helped Airbnb to reach a large number of people.

Another excellent example of a growth hacking strategy is Dropbox. Dropbox offered 125MB more free storage for the users who would link their Dropbox ID with their social media accounts and for referring a friend to Dropbox users can get 16GB more free storage. This referral program of Dropbox helped it to grow 3900% within just a time span of 15 months! In September 2008 the number of Dropbox users was 100k, which grew upto 4M by the end of 2009! Dropbox is considered to be a good example of referral marketing.

An effective growth hacking strategy can be simple and low cost, but innovative. Job board Proven is a good example regarding that. They introduced a strategy called “Mission Week” where the employees would get points for improving an existing piece of content on their website. All of Proven’s employees participated in this and this resulted in improving the search result of many contents ultimately helping Proven to get an organic traffic boost. 

Growth hacking is a dynamic and iterative process that brings together resources from across operations such as technology, engineering, and marketing.  Any company, regardless of its budget, can implement growth hacking making the best possible use of its available resources. The difference between growth hacking and the conventional approach is that growth hacking takes a low-cost and battle-tested approach to growth instead of throwing money at problems.

Finally, growth hacking is a mindset where you take a continuous ‘testing and integration’ approach to run your operation across the organization to find the best approaches to doing things. While idea like the high tempo framework is dedicatedly used for growth, it can equally be used in every aspect of operations in a company. 

Tithi Chowdhury is an undergraduate student majoring in Botany at the University of Dhaka. She is a Trainee Analyst at Future Startup and looks after our Collective Knowledge initiative where she prepares interviews and writes articles on interesting topics. She is a voracious reader and loves listening to podcasts in her spare time.

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