In today’s digital marketing landscape, the term “Growth Hacking” has become increasingly familiar. While some may dismiss it as just another passing trend, others have delved into its concepts and discovered its immense value. Coined by Sean Ellis, growth hacking is a system that leverages cutting-edge tools to promote a company’s product or service, acquire customers, and rapidly scale growth. But how can you achieve such remarkable results? Like any challenging endeavor, you need a framework or methodology to hit the ground running.
In this article, we will guide you through a series of simple steps to implement growth hacking successfully, bridging the gap between strategy and execution.
Why the Hype Around Growth Hacking?
If you’re as curious as I am, you’ve probably conducted extensive online research and stumbled upon excellent resources like such Neil Patel’s guide to growth hacking or Sean Ellis’ Growthhackers.com. The wealth of information available can be overwhelming.
At this point, I want to demystify the notion that growth hacking is merely a collection of tactics that can magically propel your online business to infinite success. After years of practicing the growth hacking methodology, I want to contribute to the community by sharing my perspective, which has helped companies achieve significant scalability using Sean Ellis’ framework.
Understanding the Goals of Growth Hacking
Growth hacking is a comprehensive framework that encompasses various departments within a company, including marketing, product management, engineering, and data science. It intersects with these areas to achieve its main objective: discovering and delivering the core value that a company offers, while minimizing the time required for customers to experience it. The ultimate goal is to scale the delivery of this value.
Consider the following questions:
- Do you have a clear vision of why your product or service will be a game-changer in the market?
- Would customers be disappointed if your product or service were no longer available?
- Have you achieved product-market fit, where customers actively seek the solution you provide?
- If you couldn’t answer “yes” to all three questions, you may still be struggling with achieving product-market fit, which is a topic for another discussion. Growth hacking might not be suitable for you at this stage. However, if you did answer “yes” to all three, congratulations!
Growth hacking is the system you want to deploy to deliver your solution’s core value repeatedly, maximizing the value created for your customers. It encompasses all aspects of growth, from customer acquisition to revenue generation and customer retention. Think of growth hacking as a framework that propels you forward, constantly identifying areas to fine-tune and optimize, making the path to revenue as seamless as possible.
These are the company areas that a growth team intersects.
The Basics of the Growth Hacking Methodology
Start with Customer Journey Metrics
The foundation of growth metrics lies in something called Pirate Metrics, also known as AARRR metrics. It covers the entire customer journey, from initial brand awareness to becoming an enthusiastic advocate. Unlike vanity metrics, these AARRR metrics focus on what truly drives value creation.
This stage involves acquiring visitors to your website and other lead generation assets. Which channels are you utilizing to promote your product or service?
The “a-ha!” moment occurs when a potential customer understands your offering and experiences the core value you deliver. Focusing on activation helps convert more visitors into active users.
Keeping potential customers engaged and coming back for additional value is crucial for your product’s success. Working on increasing retention is a highly valuable investment.
This stage involves monetizing your customer base and reaping the benefits of the value you have created.
Building a virtuous cycle, referrals contribute to the top of your funnel by creating a feedback loop.
It’s worth noting that some variations of these metrics include an additional “A” for awareness at the beginning. However, awareness is often considered part of the acquisition phase, and measuring it can be challenging. Therefore, it’s more practical to focus on the core AARRR metrics.
Analytics tools play a crucial role in the growth hacking process. Utilize platforms such as Mixpanel, Amplitude, Google Analytics, or the analytics sections of your social media platforms to gain data-driven insights.
As management guru Peter Drucker once said, “If you can’t measure it, you can’t manage it.” Collecting analytics data allows you to establish metrics that provide a clear view of the state of acquisition, activation, retention, revenue, and referral.
These metrics not only serve as indicators of the health of each area but also provide a comprehensive analytical view of how your funnel performs when sequenced effectively. By measuring the AARRR areas, you can identify what is functioning optimally and, more importantly, pinpoint the bottlenecks in your funnel that require attention and improvement.
Calculate conversion ratios from one step of the funnel to the next, as this reveals where users or customers drop off the most and guides you on where to focus your growth optimization efforts. The frequency of measuring conversion rates across your funnel depends on your product’s usage cycle and the number of users progressing from one stage to the next. Avoid measuring too frequently, as it may introduce biases and prevent the identification of statistically significant trends. This, in turn, hinders your ability to assess the impact of specific growth initiatives accurately.
Collect Growth Experiments to Hack Each Funnel Stage
This aspect of the growth hacking framework may sound familiar and intuitive. It involves gathering growth initiatives or experiments aimed at improving the AARRR metrics.
A classic example is Airbnb’s decision to cross-post room bookings on Craigslist, which proved instrumental in boosting their customer acquisition and propelling their startup’s growth.
To generate ideas for growth experiments, resources like Growthhackers.com provide a wealth of inspiration. Experiments can range from minor changes like relocating a button on a webpage to significant endeavors like creating an onboarding process for your application. Each experiment should focus on improving a specific metric within the AARRR funnel.
Adopting the scientific method is invaluable in this process. State your hypothesis for the expected outcome of the experiment, define the metric that will change, determine the expected improvement magnitude, and set a duration for the experiment to run. After the designated time frame, analyze the results and compare them against your initial expectations. This evaluation allows you to determine whether the experiment succeeded and should be continued or improved, or if it failed and should be rolled back. Take the time to understand the reasons behind the outcome, as it enhances the effectiveness of future experiments.
These insights are crucial to share during regular growth meetings.
Regular Growth Meetings
Once you have identified the functions of your product or service that align with each stage of the AARRR metrics, determined the metrics to collect, and established how to gather them, it’s time to adapt your team’s routine to ensure everything keeps progressing.
Regular growth meetings provide the perfect opportunity for this.
The frequency of these meetings depends on your team’s size and velocity, but weekly gatherings are typically ideal for synchronization. More frequent but shorter meetings help ensure everyone remains aligned.
Growth meetings serve the following purposes:
- Sharing results of owned experiments
- Sharing insights extracted from metrics, contributing to the collective knowledge base
- Reaching a consensus on which experiments to prioritize and roll out next, assigning experiment owners
- Discussing and sharing newly discovered tools or resources
A growth master, the person responsible for driving the growth process, facilitates these meetings. They collect insights, steer the discussions, and maintain a focus on keeping the process moving forward. Their role is to ensure the growth team never runs out of experiments to try, that timeframes are respected, and that each experiment owner keeps track of their experiments.
Weekly growth meetings typically last around one hour and follow this structure:
- 15 minutes: Review and update key performance indicators (KPIs) and focus areas.
- 10 minutes: Review the previous week’s testing sprint and its outcomes.
- 15 minutes: Share key lessons learned from analyzed tests.
- 15 minutes: Select tests for the upcoming week’s sprint.
- 5 minutes: Check the backlog of growth ideas.
Testing Drives Growth
The growth rate of high-growth companies is closely correlated with the number of experiments conducted each week. It is crucial to maintain a constant stream of experiments.
Avoid fixating on finding a single “silver bullet” solution. Growth hacking is an ongoing and iterative process. Each experiment should be thoroughly researched to ensure that you are not randomly trying different approaches.
Start with Quick Wins to Set the Rhythm
If you’re unsure where to start, focus on quick wins. These initial successes help establish a rhythm and habit of rolling out experiments, measuring their impact, and collecting new ideas for future experiments.
During the first few months, maintain a consistent rhythm and pace with your growth team. As positive results start to appear, you can consider expanding the team to increase the experimentation rate.
Summary of the Growth Hacking Methodology
To summarize, here’s the growth hacking methodology you can employ to maintain continuous growth:
- Start with AARRR metrics and map out the customer journey using relevant KPIs.
- Measure everything regularly, updating your funnel statistics. Use analytics tools to gain insights.
- Collect growth experiment initiatives to improve each stage of the AARRR funnel, following the scientific method.
- Conduct regular growth meetings to track progress, share insights, and decide on the next experiments.
- Maintain a constant stream of experiments to drive growth.
- Begin with quick wins to establish a rhythm and habit of experimentation.
- As results improve, scale up the team and process while keeping the pace consistent.
Wishing you the best of luck and fruitful experiments in your growth hacking journey.