book.chapter Methodology for growth hacking

Growth hacking is a methodology that focuses on swift and continuous experimentation across various marketing channels and product development areas to find the most effective and efficient ways to expand a business. This approach often combines traditional marketing techniques with innovative experiments. Typically, companies have a sales funnel where marketing and sales teams concentrate on increasing customer awareness and attracting new people through branding and advertising. Meanwhile, product and engineering teams work on integrating features that will hopefully make users love the product. These teams usually operate in silos without much collaboration. When bittorrent introduced its app, the marketing team employed standard marketing tactics to raise awareness. However, they realized that significant growth opportunities were further down the sales funnel, particularly in maximizing the value of existing customers. They discovered that many customers were unaware of the paid pro version of the app, which offered additional features. By simply adding a button on the app's home screen to promote the upgrade, bittorrent experienced a 92% surge in revenue. Growth hacking is essentially a data-driven approach to business growth. It involves analyzing data to identify patterns, generating ideas for experiments to test hypotheses, prioritizing these experiments, and then conducting them. After reviewing the results, the team decides on the next steps, focusing on promising areas and discarding ineffective strategies. This creates a cycle of continuous improvement, where each iteration builds on the previous successes, leading to a cumulative effect of increased results over time, as described by sean ellis and morgan brown. Assembling growth teams To kickstart successful growth hacking, it's crucial to form a well-rounded team with a clear grasp of your strategy and goals. This team should include a savvy leader who manages, owns the product vision, and approaches tasks scientifically, tracking key metrics. A product manager should take charge as if they were the product's ceo, while software engineers develop features for testing. Marketing experts bring their extensive experience to the table, and data analysts delve into customer data for insights. Product designers are tasked with implementing changes and updates. An executive sponsor, preferably a high-ranking individual who can protect the team from red tape, is also essential. This person should ideally be the ceo or founder, or at least someone who reports directly to them. The growth team's position within the company structure is also important. They could report to the vp of product, which is a functional setup allowing for the management of multiple growth teams across various business segments. Alternatively, the team could be an independent entity reporting to a vp of growth, giving them the freedom to run experiments across all products and explore strategic growth opportunities. Growth teams often face internal pushback, especially from those who feel a sense of ownership over products. To navigate this, it's important to foster a culture that values data-driven decisions and experimentation. When data backs a growth hack, it's easier to address objections, and the tangible results of successful experiments can help overcome emotional attachments to existing strategies. Celebrating successes helps to build enthusiasm for the growth-focused approach company-wide. As the company evolves, it's vital to maintain or even expand the growth teams to embed a continuous improvement mindset. Without this, even the most innovative products can falter. Growth teams are the guardians against stagnation, ensuring that the pursuit of progress is a constant feature of the company's ethos. Creating an essential product The essence of growth hacking lies in creating a product that is so vital to customers that they cannot easily dismiss it. Companies that have achieved rapid growth have done so by offering products that customers deem essential. No matter how creative your marketing strategies are, they cannot compensate for a product that fails to excite. It's crucial to understand and establish your product's core value before attempting to scale; otherwise, you risk superficial growth or market rejection. A product must impress beyond an initial flashy launch, as not even high-budget advertising or celebrity endorsements can sustain growth if the product itself is not compelling. To craft an indispensable product, it's imperative to determine the "aha moment" when users grasp the true value of your product. This moment is pivotal in converting early adopters into enthusiastic advocates. Discovering this moment often involves surveying customers to gauge how much they would miss your product if it were gone. A high percentage of customers expressing they would be "very disappointed" without your product signals readiness for growth. Further inquiries about their alternative choices can reveal necessary improvements to make your product indispensable. Additionally, analyzing your product's retention rate compared to competitors can indicate its essential status. If your product meets these criteria, you can proceed with rapid experimentation to find growth drivers. If not, direct customer engagement is essential. Speak with customers, observe product usage, and solicit feedback. Offline interactions can provide invaluable insights into customer desires. Experiment with product changes and messaging, using community feedback to refine your product's appeal. Analyzing user data for patterns and insights can also guide growth strategies. By understanding how customers use your product, you can uncover unexpected applications to leverage. Through diligent experimentation and analysis, you aim to identify and enhance the aha moment your product provides. Knowing this, your growth team can focus on enabling more customers to experience this moment swiftly, setting the stage for sustainable growth. Identifying growth drivers Growth hacking emphasizes strategic experimentation to identify and optimize key growth levers, rather than indiscriminate testing. It involves understanding crucial metrics specific to your product, selecting a primary "north star" metric, engaging with users for insights, and making data easily accessible through clear, categorized dashboard reports. This approach aims to concentrate efforts on experiments most likely to significantly improve your company's growth. For instance, ebay focuses on the number of sellers, listed items, buyers, and successful transactions, while whatsapp's north star metric is the number of messages sent daily, and airbnb's is nights booked. By identifying actions leading to customer "aha moments" and simplifying the business to a basic formula for tracking metrics, companies can strategically drive growth. Supplementing data with user engagement and developing accessible reports are crucial for identifying growth levers. This methodical approach to growth hacking, as outlined by sean ellis and morgan brown, ensures that efforts are not wasted on unproductive experimentation, but rather directed towards areas with the highest potential for scalable growth. Establishing rapid-testing framework Fast-growing companies are characterized by their ability to learn rapidly through experimentation. The key to learning is conducting a high volume of experiments, as most do not yield the desired results. Some experiments may show promise but fail to provide conclusive evidence, while others may result in minor improvements rather than groundbreaking successes. However, it is through this process of trial and error that companies can achieve both small and significant wins, which, when compounded over time, can lead to major successes in growth hacking. Each incremental learning opportunity can lead to better performance and more effective test ideas, ultimately converting minor improvements into significant competitive advantages. To effectively conduct testing, many companies have adopted the practice of holding weekly growth team meetings. These meetings focus on analyzing the results of the previous week's experiments and planning the next set of tests. The agenda typically includes reviewing metrics and updates, discussing and analyzing the past week's tests, selecting the next experiments to conduct, and checking the pipeline. These meetings prioritize implementation and follow-up over brainstorming new ideas, which can be reserved for separate monthly sessions. Tuesday is often the preferred day for growth team meetings, as it allows monday to be used for reviewing experiments and preparing data. This preparation enables team members to come to the meeting ready to engage in informed discussions. The pace at which growth hacking can lead to significant improvements is impressive. A growth hack can evolve from an idea to a key growth driver in as little as two weeks, including the time spent on data analysis and the initial team meeting. One of the advantages of growth hacking is that even failed experiments can provide valuable insights in a very short timeframe.