Rapid growth on a shoestring budget: possible? Yes, with Growth Hacking. If you have a startup or want to launch one, you can’t miss this particular approach that, in the past, made the fortune of many startups and that, nowadays, is also adopted by other types of companies, in every sector.
But is it really all gold that glitters? It should be made clear from the outset that Growth Hacking is one of the most controversial and discussed topics in business and, for this reason, it is a subject that necessarily needs to be thoroughly understood. This guide will help you understand how Growth Hacking, through innovative strategies and precise measurements, is able to accelerate the growth of your startup.
What is Growth Hacking?
The meaning of Growth Hacking immediately introduces the first problem: there is no definition that can contain within it all the elements and all the characteristics of this particular approach.
What is meant by Growth Hacking?
Generally, the origin of the concept of “Growth Hacking” can be traced back to 2010 and is traced to Sean Ellis, founder and CEO of GrowthHackers.
The goal of this approach is to be able to win as many customers as possible while spending as little as possible.
Easy to say, but practice is, of course, another matter. In more concrete terms, Growth Hacking translates into the ability to experiment, measure and analyze what works well and why, so that you can replicate the conditions most conducive to business growth.
Some definitions of Growth Hacking focus especially on the fast and sequential experimentation that characterizes this particular approach, while others prefer to shine a special spotlight on the absence of a solid background and specific budget in marketing. In order to understand what distinguishes Growth Hacking from traditional marketing, however, additional aspects need to be explored as well.
Growth Hacking vs. traditional marketing
To know the difference between traditional marketing and Growth Hacking, you need to know that those who resort to this particular approach do not use the old and traditional tools adopted in marketing (or, at least, not only) and combine skills in this field with more technical skills, such as those, for example, developed in the field of programming, engineering, data analysis or content management. It is no coincidence that Growth Hacking is also often considered a kind of link between marketing, programming, and data analysis.
The role of the growth hacker in modern business
As just outlined, Growth Hacking is an approach that combines elements from multiple disciplines to identify the most effective strategies to grow a business quickly and cheaply. Even within this diverse field, however, it is possible to find some fixed points regarding the skills and expertise needed to do the delicate work of a Growth Hacker.
Growth Hacker: skills and competencies needed
One of the characteristics that most distinguishes a Growth Hacker is his or her creativity: indeed, such a professional figure finds creative and innovative solutions. This, in modern business, also means, for example, knowing how to use Artificial Intelligence to unearth new growth opportunities.
In addition to being creative, however, the Growth Hacker is also analytical: he carefully and precisely measures and analyzes to see what works and what doesn’t, hypothesizes, prioritizes, and experiments with strategies to find the best path to success.
Growth hacker: a multidisciplinary role
It must be clear to you by now, but it bears repeating: a Growth Hacker possesses deep knowledge in marketing (especially in the digital field) but is a cross-cutting figure capable of employing notions and tools from other subjects as well.
More than a discipline, Growth Hacking is, therefore, a cross-cutting approach that “embraces” multiple disciplines. To explain this concept even better, we quote the words of expert Dani Hart:
“Growth Hacking is a mindset.”
How much does a Growth hacker earn
The ability to combine within it skills and expertise from different subjects is what makes the figure of the Growth Hacker highly sought after these days. Obviously, however, earnings vary according to skills and experience. Generally speaking, in the United States of America, the compensation of an experienced Growth Hacker can touch (and, in some cases, exceed) $150,000. In Europe and, specifically, in Italy, fees are lower on average, although this professional figure is growing rapidly.
Effective Growth Hacking techniques
The time has come to learn about the most effective Growth Hacking techniques. Growth Hackers, in order to find the best way to grow a business quickly and with little expense, are used to implement a (continuous) ideation-verification-modification process, following a lean approach, which consists of several steps, summarized in the so-called “Pirate Funnel” or “AAARRR Funnel” framework.
Awareness
The initial stage of the AAARRR journey is that of Awareness, the point at which a person first discovers our product or service. This moment is when an individual moves from total ignorance to knowledge of our existence.
This stage is often the shallowest in terms of data analysis, including so-called “vanity metrics.” These data, while not providing concrete feedback on the progress of our business, tend to create a positive feeling upon observation.
However, the superficial nature of these metrics should not lead us to neglect them. On the contrary, by monitoring them closely, we can detect early signs of problems and act accordingly.
Acquisition
The next step in the AAARRR journey is Acquisition, which is when an individual actually becomes a user. This occurs only when a person provides us with his or her contact information, such as an e-mail address or phone number.
It is not enough to have 1,000 visitors to our website to claim to have 1,000 users or 1,000 emails. This underscores how the importance of metrics collected in the earlier stages of the funnel diminishes as we get deeper into the process.
If in the awareness phase having 1,000 visitors to the site seemed like a positive result, this number loses relevance when we consider how many of these visitors have turned into active users, that is, how many we can identify and contact directly.
Activation
Of course, not everyone who signs up for a service actually uses it; similarly, not everyone who subscribes to a newsletter reads it, and not everyone who downloads an application ends up using it.
For this reason, the AAARRR funnel includes a specific phase for those users who decide to become active, i.e., to go beyond simple enrollment, namely the Activation phase.
As seen in the previous steps, many of the metrics initially considered lose importance when we focus on how many users have actually become active.
This stage is generally identified by an action (or series of actions) that demonstrates that the user has actually experienced the product, thus understanding its potential and the value we promised in the initial stages.
Revenues
The fourth stage of the AAARRR funnel concerns users who make a payment, the moment when we can officially consider them as customers.
Just as we could not call them users until we obtained a unique contact, similarly we cannot label them as customers until they make an initial purchase. To increase Revenues, it is important to push customers to take certain actions, such as downloading an app (for a fee).
It is only at this stage that we begin to monitor data specifically related to turnover, making it a particularly critical stage where companies generally have ample room for detailed analysis and experimentation.
Retention
The next step is Loyalty or Retention: this is a particularly delicate stage because this is when, by continuing to satisfy the customer and encouraging them to return, you can transform them from an occasional customer to a loyal customer, ready to buy and use your products or services again in the future.
Referral
Remember that a satisfied customer will not only return to buy your products or services, but will also recommend them within his or her circle of friends and family. At the Referral stage you must encourage your customers to become Brand Ambassadors, thus generating a positive domino effect on sales.
Benefits of Growth Hacking for businesses
The marketing benefits secured by Growth Hacking are many, but you should know that most of them are concentrated in 3 macro areas: Content Marketing, Product Marketing and Advertising. The application of Growth Hacking in these areas (and more) is aimed at improving business performance and, more specifically, increasing growth faster by optimizing costs and available resources. What should be clear to you is that marketing activities are the same: what changes and makes the difference is how they are selected and carried out.
Rapid increase in growth
From the very first lines of this guide we have made it clear that Growth Hacking is an important resource especially for startups. The reason is obvious: such companies often do not yet have a finished product or service, have yet to accurately identify their customers. have not particularly large funds and, in order to avoid being cut off from the market (and, therefore, to survive), need to grow very quickly. The advanced and fast experimentation processes that characterize Growth Hacking allow for rapid growth without the need to take too many risks.
Cost and resource optimization
As just pointed out, Growth Hacking is particularly suitable for those with limited resources: the analytical approach behind Growth Hacking allows for cost optimization, because it allows you to quickly figure out what works and what does not, thus avoiding investing in the least effective solutions. The experiments conducted are small, fast and sequential and have a relatively low risk margin.
Growth Hacking success stories
Growth Hacking has made the success of many startups and companies that you are surely familiar with. To better understand the benefits this approach can ensure, it is useful to dwell on some virtuous examples.
Examples of winning strategies
Three of the best-known cases of particularly successful Growth Hacking strategies are Dropbox, Hotspot, and Airbnb.
To increase its user base, Dropbox has decided to reward its users for inviting new users to the platform by granting them additional storage space over and above what they have already opted for.
The founders of Hotspot, on the other hand, decided to develop a referral program to launch the web mail system on the market: by adding the message “P.S. I love you. Get your free e-mail at Hotmail” they won millions of new users with minimal effort.
Finally, Airbnb, in its start-up phase, took advantage of the popularity of Craiglist (a platform designed for users looking for a home): as users filled out forms to add their accommodation on the site, they were given the opportunity to share the listing on Craiglist as well, which greatly increased Brand Awareness.
Lessons to be learned from industry bigwigs
The case histories cited earlier provide valuable lessons for those who, like you, are considering leveraging Growth Hacking to accelerate the growth of a startup. The case of Dropbox and, even more so, that of Hotspot teach, for example, that the most used and established strategy is not always also the most effective one: experimenting with innovative techniques can bring better results and in a shorter time, with minimal effort and low risk margins.
The Airbnb example, on the other hand, is proof that those who do Growth Hacking have not only traditional marketing skills, but also programming skills: in fact, Craiglist, when Airbnb put this strategy in place, did not include a public API for that particular operation.
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