Product

Just What Is Growth Hacking And Why Is It Important?

You know it’s a buzzword when you hear it all the time but you’re not sure just what it means.

Or if it means anything at all.

Growth hacking.

We hear this term pop up when startups are looking to gain their first 1,000 Twitter followers. When small businesses can’t afford to purchase a pricey ad placement in a magazine. We’ve even heard that Growth Hackers are the new VP of Marketing.

But how is growth hacking different from traditional marketing. Is it only relevant to businesses at a certain stage of growth? Or can enterprises, entrepreneurs, and startups alike all get value from growth hacking strategies?

Let’s explore the “why” and the “how,” but first, we’ll start with the “what”.  

Let’s Start With Webster

Growth hacking is the act of experimenting with marketing channels and product development to grow a business.

But this could mean virtually anything. To really get to the bottom of it, we have to go back to 2009.

In 2009 Sean Ellis, now founder of Growthhackers.com, was trying to write up a job description to find his replacement at a company he was consulting with. He first posted the role as “marketer”, but the candidates that came back just didn’t seem to fit the bill. It turns out that Sean had helped this startup reach accelerated growth, but his methods didn’t fit into the traditional marketing mold.

He was looking for someone who was scrappy, creative, analytical… “whose true north was growth.”

Sean changed the title of the opening to “Growth Hacker.” Thus, the term was born.

Out With The Old, In With The New

Traditional marketing is about driving awareness. It’s about getting your customer to know and like your brand.

Growth hacking is all about stickiness. Do people want the product? Are they coming back for more? Growth hackers know the market and think often about product/market fit. A growth hacker is a jack-of-all-trades. They use a mix of marketing channels (like social and email), product, and engineering, to drive adoption and traction.

In a landscape where users’ attention spans continue to decrease, where it’s harder to build loyalty and win trust, it’s all the more important to think about this kind of cross-channel customer experience.

Americans now own four devices on average, and the average U.S. consumer spends 60 hours a week consuming content across devices. Every touchpoint a customer has with your product or service matters.

As Andrew Chen says, “Projects like email deliverability, page-load times, and Facebook sign-in are no longer technical or design decisions – instead they are offensive weapons to win in the market.”

Beyond winning the market, growth hacking is important because it can:

– Reveal new market opportunities through testing (i.e. A/B testing email subject lines shows that one drives 30% more opens and 50% more conversions than another).

– Help you get more value out of your budget or drive growth with a small budget since you’re thinking out of the box and looking at a wider set of tools to work with.

– Promote more cross-team collaboration between marketing, product, and engineering since you need to think both creatively and analytically.

– Achieve greater results in half the time. Groupon had the largest IPO since Google, and became the fastest-growing company in history all within three years. They accomplished this through a series of growth hacks.

– It sets your product up for scalability. Thinking about virality and new user acquisition ensures that you are building something users will come back for time and time again.

Growth hacking isn’t just for startups with shoestring budget. It’s a new way of thinking that gives any business a competitive edge in this busy ecosystem while putting conversion front and center. It’s about incremental testing to build measurable steps that drive users down the funnel.

Every click, swipe, and tap matters.

Growth Hacking In The Wild

Let’s take a look at some companies who have found success with growth hacking.

1) Dropbox

Dropbox built the large user base it has today through its ‘Refer a Friend’ offer.

 

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The startup tapped into the power of social proof, knowing people would be more motivated to sign up if the invite came from a friend. Dropbox then made the offer even sweeter by rewarding both parties with free storage space. Today, Dropbox is a $4 billion company. One billion files are saved to Dropbox every 24 hours.

2) Gmail

When Gmail first launched, they leveraged the power of exclusivity. They kept the early adopter list rather small, and only gave each individual a handful of invites to share with friends and family. This really hyped up the status of owning an @gmail.com address. And as we all know, the rest is history.

 

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3) Squidoo

Startup Squidoo found traction by gamifying the experience. They made it easy for users to create pages without any coding knowledge. They also encouraged engagement by giving away badges and rewards for each activity, and allowing users to earn revenue through affiliate marketing.


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Up, Up, And Always To The Right

Growth hacking is a unique mix of data, curiosity, and experimentation. While we wish we could condense growth hacking for you into a list of fail-proof strategies, what works well for one company may not work for another. And what works well for you the first time, may not replicate well the second.

The best way to get users, traffic, or revenue fast is to always keep testing. Keep a pulse on what your audience is engaging with, how they’re engaging, and keep asking questions.

Growth is for everyone, not just startups and marketers.

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Denise Chan @denisechan26
Senior Content & Community Marketing Manager