Growth Hacking is a buzzword that has circulated many tech companies in the last few years. It is a concept that has floated around to highlight a company’s focus on achieving different forms of growth for a business. But what else is there behind “growth hacking” strategies? How has it transformed the way businesses grow? Here’s the rundown of the term.
“Growth hacking” is a term coined by Sean Ellis back in 2010, during his time as a tech consultant. While summing up the necessary components to help startups achieve accelerated growth, he wanted to maintain the same level of growth within the business after the job was finished. Growth hackers focus on analytical, inexpensive, creative, and innovative methods to exponentially grow their business. They establish precise, actionable goals that feed towards overall growth and run simple tests against any of their experiments, adjusting their performance based on analytics and research.
Difference Between Growth Hacking and Marketing
Growth hacking is not a separate method of digital marketing. Instead, the two work together in creative ways to accomplish goals related to business growth and development. The biggest difference between the two depends on two factors: the size of the company, and the scope of the business goals.
- Most early startups carry more uncertainty and risk while having fewer resources in early stages of development. However, this also means that a startup can experience rapid peaks of growth. Larger companies already have foundations set, complete with larger teams that seek to maintain consistent levels of growth and scale the overall business further.
- Growth hacking and marketing share the same fundamental principles and are even measured with almost similar metrics such as engagement, conversion, and retention. However, the course of action they take depends on the size of the goal they aim to accomplish. For example, marketers can use metrics analyze their goal of building overall brand awareness. Growth hackers would use the same metrics to target specific things such as increase social sharing by a 50%.
Growth Hacking Funnel
Many growth hackers build strategies around customer acquisition and scaling the business while focusing on a few metrics that are part of the growth hacking funnel:
- Acquisition: getting new customers
- Activation: persuading customers to use the product
- Retention: keeping customers
- Revenue: generating profits
- Referral: getting other people to refer new customers
How Growth Hacking Benefits Businesses
As companies move through an increasingly competitive digital landscape, new and often experimental approaches are needed to help build an audience, retain a customer base, and save businesses money on all fronts. Growth hackers are known for finding the strategies to accomplish such feats in a quick period of time.
- When Slack launched in mid-2013, only few thousand users were using it regularly. By February of 2015, the app boasted over 500,000 daily active users. Following the growth hacking mindset, over time the Slack team defined their market space and nailed a product experience that catered to solve their users’ frustrations. Their use of a freemium model also fueled bottom-up word of mouth growth for the business.
Linkedin is another company that grew from 2 million to 200 million thanks to a simple growth hack – making profiles public, instead of requiring a login. With public profiles, Google’s search engine provided indexing for the site, allowing LinkedIn results to rise organically to the front page upon searching, which drove massive awareness and user registrations.