• How Growth Hackers See Growth Differently

    Thu, 22 Oct 2015, in Business

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    How Growth Hackers See Growth Differently

    Wait… What is this “growth hacking” anyway?

    Growth hackers are a brand of marketing professionals that are solely driven by finding new, unexplored and unconventional ways to target their customers. Although it does involve marketing techniques, it’s also a job description that’s mired with constraints imposed by resources, time, scale and the unknown.

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    At their core, growth hackers and marketers are just way too different from one another. I like to think of growth hackers akin to planners and builders of America’s railways. The planner’s goal was to connect large areas of population and effectively cross barriers between them. The railroad was ultimately responsible for the settlement of the West – at the expense of our bison population, no less.

    If the railway did not get built our settlement patterns, demographics and our way of life would have been very different. The same can be said about the work of growth hackers and how they alter the traditional marketing pathways we experience and concentrate on – some more so than others.

    While marketers have a very specific job (usually tried, tested and true methods to increase traffic and conversions), growth hackers are there to follow a different path. A growth hacker’s job is to study these patterns, find holes within the system as well as pinpoint friction in customer behavior that inhibit growth. This uncovers previously unused strategies you can use to grow yous SaaS business, for example.

    Growth hackers don’t act like traditional marketers in the sense that they revolve around growth as justification for most if not all of their marketing decisions. This naturally places growth hackers at odds with various business structures. Here’s how growth hackers differ from their traditional counterparts:

    They aren’t afraid to experiment

    When we think of company resources, we imagine staffing, materials and equipment. Corporate structures and management styles rarely make it to the mix.

    Large corporations by default have a set of hierarchies that must be involved in the decision making process. As a result, they pass down a strict set of rules to their marketers and it becomes clear that a growth hacker will not be able to quickly implement a desired approach in accomplishing that same goal.

    Stewart Butterfield, the co-founder of Slack used a hypothetical saddle riding company with a loosely defined product and market to explain their marketing strategy. From 2014 to 2015, they’ve grown from 15,000 to 500,000 active daily users.

    Being successful at selling horseback riding means they grow the market for their product while giving the perfect context for talking about their saddles. It lets them position themselves as the leader and affords them different kinds of marketing and promotion opportunities (e.g., sponsoring school programs to promote riding to kids, working on land conservation or trail maps).

    Butterfield didn’t let his product and market constrain him, just the opposite: he altered them to resonate with his customers. Instead of selling the tool which people didn’t quite understand the need for (team chat) he was able to sell the experience of productive teams and happy workplaces.

    Or as in the example above, selling the experience of horseback riding instead of the physical object – the saddle.

    Time isn’t on their side

    Startups are constrained by time to validate their product and are more open to unconventional ways to gain access to their user base. The growth hacker shares this line of thinking. Since no business is exactly alike, growth hackers are free to apply unproven strategies or combine new and previously used methods to reach their goals.

    When Basecamp tried to attract new users they were able to experiment early on by advertising many different products to the same user base. Basecamp knew it was impossible to develop their entire product line, so by leveraging one user base for many products they greatly compressed their time to market.

    Although somewhat obvious, this strategy is underutilized. In Basecamp’s example, it allowed the company to quickly leverage their user base for beta testing before committing all of their resources on one tool.

    They’re about being scalable

    The SaaS software market is growing 5 times faster than the traditional software market.

    Growth hackers find themselves most valued in companies that are more interested in growth above all else. The SaaS market is ideal for a growth hacker, because unlimited scalability opens up a lot of metrics that a traditional marketer may not think of.

    Consider that a SaaS business needs to not only think about increasing sales and signups, but also maintain an engaged user base to stay profitable. Lincoln Murphy, a SaaS marketing specialist, defines customer engagement much differently than an active user:

    Engagement is when your customer is realizing value from your SaaS. Instead of thinking about engagement as a “product” issue, you can see that it is actually a customer issue.

    Murphy demonstrates that a user can be actively using a SaaS product but not necessarily be engaged. That means the user may be performing all the correct actions such as logging in numerous times and actively using the software during the trial period. Separately these actions may be interpreted as growth, but combined they do nothing for realizing any value for that customer – which is what engagement is.

    How can you tell if your customer isn’t engaged? Because the customer left after the trial was up. Better get a growth hacker to look into that.

    They’re not afraid of the unknown

    We’re always scared of the unknown, but a good growth hacker’s got steadfast belief in the power of numbers and data. Yes, there’s a lot of data out there (and even more waiting to be discovered) but that’s what makes undiscovered data so interesting to the growth hacker.

    For example, Udemy realized that some users are more valuable than others – precisely those that score higher on their NPS or net promoter score. It drastically changed which users Udemy decided to engage with the most. Another metric that doesn’t get much attention is monthly active users. While most companies follow the revenue trail, keeping track of monthly active users can uncover churn rates, friction in onboarding, or opportunities for upselling.

    They embrace their constraints

    When businesses face a spike in demand they are always constrained by lack of staff, resources or time.  For example, a company’s reluctance to hire additional representatives during a new product launch may drive a number of customers to shop elsewhere. A good manager would make cuts elsewhere (as opposed to laying off staff) since taking a gamble on customer service is more detrimental to business growth than anything else.

    That’s where a dedicated professional is needed. A growth hacker is an envelope-pushing, product-focused marketer that’s only judged by his or her results. A growth hacker will invariably be mired by constraints in all but one thing: growth. Do you want to limit growth? Of course not. So you must practice and constantly change how you approach the problem. Your tactics must change as the market changes from underneath your feet.

    Try to take a long hard look at what works and doesn’t for your business, while keeping in mind what your customers want to see. And always remember: there are no constraints when it comes to growth.

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