Let's be very clear. There is no such thing as hacking growth. The most clever "hacks" you've heard of, are always derived from an original and well-thought strategy.
Take Dropbox for instance. They've created one of the most famous growth hacks with their viral referral technique.
What Sean and his team did at Dropbox is that they managed to systematise a strategy. Since they started their process by building a successful strategy, they've experienced a 3900% growth in 15 months.
If we had to summarise their strategic thinking, it could be in this 5-steps process:
- What’s the one metric we want to grow: organic new users
- How do we grow that metric today: word of mouth
- How can we enhance this process: give existing users an incentive to invite more (ie. win free credits)
- How to implement it at scale: have a dropbox link in our user's email signature + create a "invite your friends" button on the mac extension.
A "growth hack" is never as simple as it may look.
As interesting as it is to copy the winning tactics of other companies, each business is different. Each company has different clients who have different expectations.
In this article, we’ll explain how you can build your own winning strategy to best to accelerate your growth.
1 - A systemic approach to marketing strategies
Whenever someone speaks about modern marketing today, there's a strong chance you'll hear the term "growth hacking". This term was defined by Sean Ellis in a book holding the same name. He walks us through this methodology to build winning growth strategies based on his own experiences.
Growth marketing is a systematic approach of 5 steps; ideation, testing, analysis, iteration and scaling.
Throughout all of your growth marketing experiments, there's a clear way to test, budget and prioritise.
Today, we'll focus on the three main phases when launching a new product, a new feature or service:
- Ideation: which channels will be the most relevant to grow and why is that?
- Testing: launch a quick test on different channels with a small budget and get initial results. Depending on the results and the threshold you've fixed, this will tell you whether or not it's a channel worth investing in or not.
- Scaling: focus on a couple of channels and execute perfectly on it. Continue to iterate until you beat the market's benchmarks. Hire the right people to make it last in the long term.
But before starting some ground hands-on work, there are some foundations any company should have in place if they're marketing something to a market.
2 - Prerequisites to growth
As we explained previously, each company differs from another and that's the beauty of our world.
We think each company should embrace its unicity. Your unicity is why you will attract customers in the first and also why you'll retain them in the long term.
However, companies tend to spend too much time on product development or their technology. They are so thrilled with what they're building that they're convinced everybody else will feel the same way as they do once they discover the product.
As a result, these companies will tell you that "anyone who has a computer is a potential customer."
But unless you are Slack or Google, I strongly think that it's a big mistake. In fact, if you look at companies who've experience explosive growth, they all started in the same way, by solving a specific use-case for a specific type of people having specific demographic characteristics.
Expensify focused on the Bay Area startups to gain market share until they could solve issues for larger international businesses. In 2017, the number of clients worldwide was estimated at 5 million.
In the UK, how could we not talk about Monzo? They're one of the world's biggest neo-bank and they're still and only operating in the UK. More specifically, in their first years, they were exclusively targeting Millenials / Gen Z. They now have 4 million users.
We could go and on but in order to summarise our point, how confident are you today that you can answer these questions precisely?
- Who is your market?
- Who should your audience be within that market?
- Can you become a leader by solving a need for a specific industry or group?
Have you narrowed it down? Great! Now, it's time to answers the questions you should ask yourself as a leader (if you're not, rest assured, your investors will ask them to you):
- What are your revenue objectives for the next 6-12 months?
- What manpower and budget can you allocate to make it happen?
In fact, in order to build a realistic growth strategy, it is crucial to understand where you're starting and where you want to go. For instance, maybe you want to obtain 200 recurring customers because it will allow you to recruit a full-time team member.
And yes, gaining 10,000 customers for a bootstrapped business who doesn't have a marketing team or budget seems quite unlikely.
If you've worked on all of this, that's amazing! It means you're ready to work on a proper growth marketing strategy.
3 - The 3 phases to implement a growth strategy in details
Ideation phase: what's possible?
Make a hypothesis on every available traction channel and their outcome. You should come with at least one idea per channel.
You will make pure hypotheses here but the important thing is to eliminate channels at this point. For instance, if you're selling a service to entreprise companies, I wouldn't be too sure you'll gain much business from social media marketing on Instagram…unless you're selling an Instagram business. You get our point.
Testing phase: what's probable?
Once you've eliminated most channels, run cheap tractions tests in the most promising ones. You'll need to have more than one testing channel to make this phase relevant. Run several at the same time but don't lose your focus, it will lead you to mistakes.
How can you run tests? Well, you'll need to know what you're evaluating right.
- How much will it cost to acquire customers through this channel?
- How many customers are available through this channel?
- Are the customers you're getting through this channel, the kind of customers you want right now?
You're not looking to gain traction with these tests just yet. These are designed to help you understand which test/channels could make your startup move forward. Get data and get answers to your assumptions.
Scaling phase: what's working?
At the end of your testing phase, you should have clear winners. Your channel is a winner if it has the best ROI if it brings the most volume if your leads are the most qualified etc…
From now on, focus exclusively on the channel(s) that work. They are your core channels. Also, congratulations! You've hit the bullseye.
Conclusion on growth strategies
Your growth strategy will depend on the success of three pillars:
- Your understanding of the fit of your product with regards to your market
- The capacity to test your hypotheses rapidly on a given sample
- Your ability to invest smartly in channels which will bring you towards profitability.
Of course, it goes without saying that it is a long and thorough process because that's what strategies are. They will give you a sense of a roadmap and direction but the most amazing strategy you can build is the one that will evolve over time.