In a previous post, I talked about the 5 Key Metrics for a Lean Startup and how viral reach is a critical measure of growth. In this post, I’ll introduce the concept of growth hacking, so you can determine if your startup or business could benefit from hiring a growth hacker or developing a growth hacking strategy.
What is a Growth Hacker?
Don't worry – we're not talking about unauthorized entry or attack on a computer system! The growth hacker's job is to figure out what stage users are at, and how to accelerate them to the next stage of growth. The growth hacker is essentially hacking into the mindset of the user at different stages of a startup's development. For example, he can advise the startup when the optimum time is to move from free products to monetization. Once growth is underway, the growth hacker is not satisfied to wait idly by and marvel at his work. He continues to look at every regular business process as an opportunity to accelerate growth by activating users and continually building buzz about brands and a strong system of referrals.
Growth hackers focus on conversion rates at every step of the process and aren't afraid to experiment with a myriad of landing pages, email marketing messages and social media campaigns. Rather than slowly and carefully implement the plan step by step, the growth hacker runs many different schemes at the same time and compares their rates of customer conversion. What's the result? You don't waste a lot of time and money getting down to the root of the problem with your product.
Growth Hacking and Viral Growth
At the heart of growth hacking is the principle of viral growth. The concept is that the analytics on the wide variety of marketing strategies help to grow the number of customers exponentially. Social media is a cornerstone of this strategy, which helps create buzz about your brand, gets people excited and ties into their emotional state of feeling good about the product.
Using Analytics to Sustain Growth
While rapid viral growth can kick-start a business and catapult it into relevance, it’s not enough to just obtain large volumes of customers over a short period of time. It’s important to retain active users in order to maintain steady, sustainable growth. One way to achieve sustainable growth is to use the proper analytics. Monitor metrics like number of daily active users, monthly active users and repeat visits.
Signs Your Start-Up Needs Growth Hacking
1. Nobody New is Trying Your Product – The number of new users is minimal or stagnant. Even if your current users are turning you a profit, you need to keep an eye on customer acquisition rate, and if it trends downward, consider growth hacking.
2. Paid Advertising is Killing Your Bottom Line – If your paid advertising budget is so large your ROI is declining, you could benefit from infusion of growth hacking.
3. Brand Buzz Decline – Either people have stopped talking about your brand online, or it’s all buzz but no “buy” – then it’s time for some growth hacking!
4. New Subscriptions Don't Sustain Business – Even with new product purchases or service subscriptions, you can’t maintain a profit margin – monitor your profits, and if they are trending downward, you need to obtain an increasing volume of new customers to remain viable – implementing a good growth hacking strategy can bring on those new customers.
Strategies for Incorporating Growth Hacking
Your strategy for when and how to use growth hacking will depend on your startup’s unique situation. Let's look at two strategies used by growth hackers that you can start using today:
- Stop Adding Features – Take away one feature at a time and keep track of which feature users complain the most about being removed. That's the feature you need to monetize.
- Go For Emotion – Find out the thing that most people identify with about your product and develop it further.
Do you think growth hacking has a place in your startup's marketing strategy? Which one of the concepts introduced today can you see yourself using?