What exactly is growth hacking

by David Mannheim

posted on: January 27th 2017

MARKETING IS DYNAMIC, IS EXCITING, IS GROWTH HACKING
“Sustainable growth comes from understanding your best customers and how to find them”
- Sean Ellis

Growth hacking - a term that has taken the world by storm. So, what exactly is growth hacking?

Growth Hacking Trend
Growth Hacking Google Trend

WHAT IS ‘GROWTH HACKING’?
Growth hacking describes a process of acquiring, engaging, activating and retaining users, by combining traditional marketing, analytical/testing skills with unconventional (sneaky) methods.

The ‘growth hacking’ Wikipedia page will tell you it’s, ‘a process of rapid experimentation across marketing channels and product development to identify the most effective, efficient ways to grow a business’. Although, not an incorrect definition, growth hacking is so much more...

It’s a strategy. A skillset. A vision. An approach and ultimately, a mindset.
Traditional Marketing vs Growth Hacking
Now, growth hackers are no better at marketing than traditional marketers. We don’t have magical powers that Traditional Marketers can’t possess (sometimes, we think we do). In many ways, Traditional Marketing and Growth Hacking can be seen as twins. Both concepts are from the same place, wanting to achieve exponential growth, however, each take a very different route to achieve their success.

The infographic below from Direct Spark, identifies 4 key differences in Traditional Marketing vs Growth Hacking:

People
Approach
Channels
Process

One of the key differences, that plays a huge impact on growth for a product, is the approach taken by both the Traditional Marketer and the Growth Hacker. While Traditional Marketers focus on acquisition and activation, Growth Hackers focus on different metrics based on the stage and validation level of the product.
We see the term ‘growth hacking’ being the recognition and understanding of your users and how they discover and adopt your products, ultimately allowing you to build features into your product for acquisition and retention, rather than just spending marketing dollars.

Examples listed below

Growth Hacking Stories
DropBox
Achievement: Dropbox went from 100,000 to 4,000,000 users in 15 months
How’d they do it?: Dropbox was inspired by PayPal’s referral program, they built their referral program into their onboarding process. Dropbox framed the referral program as, ‘Invite Friends, Get more free space’, allowing users to gain an additional 16.25GB of storage by referring friends. Referrals don’t invent demand, they amplify it. 35% of Dropbox’s paid users come from this referral system.
YouTube
Achievement: Over a 4 million active users in the first year of launching
How’d they do it?: YouTube got its initial traction by filling gaps in the MySpace platform. In the early 2000s, MySpace was the most visited social networking site. In this era, video sharing on the web wasn’t user friendly and was it even harder to upload and put them on another site. Along came YouTube, who develped a simple and easy way to upload, share and embed video. The ability to embed videos from YouTube onto your MySpace profile allowed YouTube to grow rapidly, as users who clicked on these videos were direct backed to YouTube. Result? YouTube has over 1 Billion active users each month.
PayPal
Achievement: Turned 1million users into 5million in 3 months.
How’d they do it?: PayPal introduced a cash based referral program. ‘Sign-up, refer a friend and receive $20’ - simply, right? The referral program worked so well, PayPal was growing between 7 to 10%, daily! As their user base grew, PayPal cut the incentive from $20 to $10, then $10 to $5 and implemented more and more authentication steps, that PayPal have now stopped the referral based program. Quote from Elon Musk, ‘After the first month or so of the website being active, we had 100,00 customers’.
How does CRO and Growth Hacking work together?
Growth Hacking is a mixture of creative marketing, coding + automation, behavioural psychology and data + testing. When you mix behavioural psychology and data + testing together, you achieve conversion rate optimisation.
Let’s take a look at Dropbox’s referral program with a CRO framework:

Opportunities: Dropbox analysed their data to get gain insights to where conversion opportunities could be made on the site. In this case, Dropbox wanted to increase sign-ups and noticed an opportunity to increase conversion during the onboarding process.
Insights: By looking at the user behaviour and creating an experiment strategy, Dropbox developed the referral program. They developed a hypothesis to what they think will happen if they implement the referral program. As mentioned before, growth hackers make a product people want. What do people want on cloud storage? More storage.

Experiment: From the hypothesis, Dropbox got to work. They built and implemented a referral program for their users. Before pushing the referral program to 100% of users, Dropbox A/B tested, analysed, evaluated, iterated and finally improved the referral program. The result? An additional 3,900,000 users in 15 months.
I want to start doing growth hacking, what do I do now?
Develop your skills! Growth hackers have to have a wide and varied array of skills to successfully grow a product. Listed below are the top 3 skills we recommend obtaining first:

Analytics - Whether it be Google Analytics, Kissmetrics or Mixpanel, you need to know how to analyse and interpret data.
A/B Testing - Unlike the other skills, A/B testing skills come with practice. We recommend using Qubit, Optimizely and Google Optimise to conduct A/B tests. Not sure if you’re testing correctly? Read this article.
Usability Testing - Platforms such as UserTest.io and UserTesting offer remote usability testing solutions. These platforms will allow you to see and hear what the users think and do during your A/B test.

“We have entered a new era. An era, where walls between data analysis, coding and marketing have dissolved. An era, where large marketing campaigns have been replaced by a mindset of smaller experiments and incremental testing. An era, where marketers are much more technical and analytical and no longer depend on developers. Welcome to the age of Growth Hacking.” - David Arnoux

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David Mannheim

David is an experienced conversion optimiser and has worked across a series of core optimisation disciplines including web analytics, user experience and AB & MVT testing.

What exactly is growth hacking

by David Mannheim Time to read: 4 min