4 Reasons You Need Growth Hacking for Your Startup
So you’ve launched your startup and your products successfully. What next? Of course, you need to start getting customers, if you haven’t already. But this is easier said than done. This is perhaps the hardest phase in the life of a startup.
Enters growth hacking…
Although the terms was first coined by Sean Ellis, the concept is nothing new. If you have been using SEO for improving your ranking on SERPs, you have already implemented growth hacking. But what is “growth hacking?”
The best definition of growth hacking probably comes from Aaron Ginn who defines it as:
“One whose passion and focus is pushing a metric through use of a testable and scalable methodology.”
According to Sean Ellis, “A growth hacker is a person whose true north is growth.” He further explains that everything growth hackers do must have a potential impact on your scalable growth and it must “connect your target market with your must have solution.” Sean also stressed on factors like discipline to follow the process of prioritizing ideas and creativity to figure out innovative ways to driving growth that are essential for implementing growth hacking.
Although we said earlier that you have probably implemented growth hacking already if you have been using SEO, you need to understand that there is a subtle difference between growth hacking and marketing.
Difference between Growth Hacking and Marketing
The concept of growth hacking is a hybrid of marketing and coding. In order to get customers, a growth hacker uses a number of tools such as viral and paid acquisition, landing pages, A/B tests, Open Graph, content marketing, email deliverability, call centers/sales teams, and SEO etc.
Although growth hackers implement certain components of direct marketing, the focus mainly remains on database queries, quantitative measurement, and scenario modelling through spreadsheets. They embed virality at the core of your product to make sure your startup is market fit. They also help you test the product, based on what is already working in your niche.
Unlike traditional marketing, where a product is marketed through a distribution channel, growth hacking use the product as a distribution channel. Besides, the concept of growth hacking is analytical, data-driven and T-shaped whereas tradition marketing is data-informed, uses traditional ways to find growth solutions, and most decisions are based on hierarchy or opinion as teams hardly have complete overview of business or product. This infographic clearly explains the difference between growth hacking and traditional marketing.
Basically, a growth hacker thinks outside the box, breaks the status quo and disregards the rules to find new, innovative ways to solve pain points. And it requires a perfect combination of a creative and analytical mind.
In today’s marketing landscape, this person plays the most significant role as he/she is responsible for graduating a company from a startup to a long-term business.
Why Implement Growth Hacking in Startups
Simply put, you need to be a growth hacker to be successful in business today. Even Mark Zuckerberg has long employed the ideology “The Hacker Way” at Facebook to break the status quo, encourage new ideas, and of course to have a positive impact on the world.
Just like every other concept and ideology, growth hacking begins with a shift in culture and perspective. Startups are already known for breaking the status quo while encouraging new, innovative ideas that are changing the world as we know it, albeit in a good way. From Instagram, Pinterest, Twitter, AirBnB and Foursquare to the more recent startups like Uber, these companies are changing the age-old business models and at the same time creating new markets. Growth hacking therefore becomes an inevitable choice for them, something which is already there at the core of their business goals.
Moreover, a startup requires all its employees to wear multiple hats. They need to excel on every front for the ultimate growth of the organization. As a result, they need to have a technical understanding of the product, be analytical, data-driven and T-shaped and at the same time have a creative mind to think out-of-the-box. In short, they all need to be growth hackers.
If you are still wondering why you need to implement growth hacking for your startup, consider the following factors:
1. People may not Buy Your Product
Although it sounds upfront, there is no guarantee that your product will sell. Even if people are using your product and seem to like it a lot, you will need more number of customers to be successful. And just because some people are using and probably also liking your product, there is again no guarantee that they will share it with others to increase your market reach via word-of-mouth marketing. Even traditional marketing channels do not guarantee to help you reach your audience successfully and economically.
What you need do is create a process for scalable customer acquisition. Andrei Marinescu, Hulu’s head of customer acquisition, for example, said that when the company required to convert its free version with 25M uniques into premium subscribers, they started advertising for the same within Hulu during commercials as well as throughout the product experience that are relevant to user behaviors instead of showing the premium feature as separate links and waiting for people to click it and pay for the update.
In addition, Hulu co-marketed the message by OEM partners through free trails as well as got their landing pages optimized for this purpose to encourage visitors to download the app and/or upgrade into a Hulu Plus member. Andrei and his team also leveraged SEM and affiliate marketing to reach the 3million+ paid subscribers’ target with a whopping $500 million run rate.
If a company like Hulu with 25 million uniques had to implement growth hacking to convert paid users, a startup should definitely consider it.
2. Go Viral
In this age of connectivity, you have no options other than being viral. In fact, virality is one of the most significant elements of growth a.k.a. growth hacking that plays a vital role in new user acquisition.
When an existing user refers your product to a friend, you know that it’s a testament to your ability. And social media create the perfect environment for it as it urge users to share and refer things (or products) that they find interesting or valuable.
Unfortunately, not many businesses can leverage this opportunity. These businesses are mostly busy pushing their products to a user and once he/she moves through the sales funnel and converts, they think the job is done. In reality, it is only the beginning of what should follow next. As a startup, you need to think how to motivate that user/customer to spread the words.
Amazon has been doing it quite successfully. Apart from their Refer and Earn Program, where users can invite a friend and receive a redeemable gift card for every friend they successfully refer, the online shopping portal allows buyers to share their recent purchase(s) socially on their timelines. While this allows the users to speak about their recent purchases, Amazon is smartly expanding its market reach via social shares, which is another form of personal recommendation.
3. Make People Your Loyal Followers
Growth hacking, done right, can help you get customers who are hooked to your brand as if your product is an addictive stimulant to them. In other words, they cannot live with you (your product).
Getting a sales now and again is easy. But to be in the business for long-term, you need to be in people’s mind constantly. They must be reminded about your existence until they become your loyal customers. And you can do that by means of growth hacking. Target different user behaviors within the product or on the site through targeted emails, retargeted ads and personalized content on their social media feed. Focus on lifecycle marketing to drive customer retention and get back the churned customers.
But none of these are possible without data, analytics, triggers and viral loops.
In fact, the last two components need to be built into the product if you want your customers to come back to you for more. Growth hacking combines user experience and marketing to boost the whole conversion flow.
4. You Need More Creative Geniuses in the Team
As mentioned, growth hackers have the right balance of creative and analytical mind. They are the out-of-the-box thinkers and risk takers whose prime focus lies on “growth.” For the startup community, they are the renegades who bend traditional thinking, break status quo and approach growth strategies in such a way which is often beyond the imagination of many people.
In today’s world, it is essential for marketing and advertising people to be receptive to change as these two disciplines are changing all the time. Therefore, startups need people who are always ready to react to such changes within the marketing and product functions.
The issue with traditional marketers is that they are too busy focusing on traditional channels and failed to get creative with distribution. Worst still, they totally disregard the automated paths to conversion. Growth hackers, on the other hand, are dynamic and have the ability to identify new channels and opportunities for distribution.
A Few Points to Remember
However, it is essential to ensure that you don’t become the victim of unrealistic expectations when implementing growth hacking. This is where most companies using growth hackers go wrong and then blames the concept to be ineffective in practice. They think that some growth driven individual can help them become viral and gain superstar status overnight. Growth hacking is not a magic potion; you need to apply strategic methods over a period of time to boost your “growth.”
Moreover, it is a great launching point, which means startups are in the best position to reap the benefits of growth hacking. Let’s consider the example of LinkedIn. Unlike Facebook, Google+ or Twitter that have a more mass appeal, this professional networking site focused on high end corporate networks within the business world. Reid Hoffman, the founder of LinkedIn, pushed interest of the people by leveraging exclusive minority where only professionals were invited to the site.
Another thing you need to remember is that growth hacking is anything but a long term strategy. You need to change your growth strategy based on the changing needs of your users as well as the needs of your brands.
A Wrap Up
If you think growth hacking is just another passing fad, you cannot be more wrong. Rather, it is a powerful and effective way to reach your ROI. It not only focuses on your strong points, but also allows you to address the more challenging aspects of your brand. It allows you to be flexible to changes as and when the situation demands.
However, the reason many startups fail in their attempt to growth hacking is usually attributed to the lack of understanding of why they need it in the first place and how to implement it in order to address those requirement(s). But if you can identify the ‘hack’ and use it to your benefit, there is nothing stopping you from achieving a burst of initial growth, by a number that’s sure to amaze you.