Definition of Growth Hacking and How It Differs from Traditional Marketing
To put it simply, a growth hacker is basically a marketer employed through an Internet start-up company as opposed to a traditional production or service company. In other words, growth hacking is “the art and science of creating awareness, traction, adoption, and advocacy using unorthodox and surprising means. It’s quite literally a hack for traditional processes to accelerate business.” There are, however, several significant differences between a growth hacker and a marketer, including but not limited to the following:
- High Marketing and Sales Targets Met in a Relatively Short Period of Time
Marketers often operate on a developed and saturated market with a high degree of penetration. For that reason, their goals usually include growth by single percentage points or sustaining their market shares at a minimum. In the meantime, a successful start-up is designed for aggressive growth, measured in double digits or more at the least. That’s because corporations can allow temporary financial under performance, while a start-up needs dramatic increases in revenue in order to break even, bring profits, and ultimately become truly successful, which is the goal of any new company.
- Limited Resources
A growth hacker is usually challenged by low marketing budgets and limited access to external data and paid research. This amplifies two major results. Firstly, effective growth hacking requires a high level of creativity and open-mindedness. It means constantly searching for new and efficient, low-cost methods of expanding and maintaining business. Secondly, it creates the need for constant data gathering, measurement and analysis, conducted internally on a regular basis. Since you can’t really outsource data collection and analysis, you need to become an expert yourself. The well-being of your start-up depends on your ability to draw valuable conclusions and gather enriching business insights from the data you have access to, so it is critical to learn to find resources that suit your needs.
- Strong Focus on Innovation
Growth hacking can also be defined as working within a highly innovative company environment. It demands interdisciplinary and high-tech knowledge and expertise in areas such as search engine optimization, digital marketing strategies, content management tools, technical writing, webmastering and even many forms of web/Internet coding.
- Fast Pace and High Risk
Agility and the ability to adjust and respond to a fast changing environment is crucial for a successful growth master. His role is to challenge the status quo, to evangelize change and constantly search for business opportunities. It is included in his responsibilities to make risky, intuitive decisions, often while also facing uncertain circumstances.
- Specific KPIs
Working for an Internet start-up means targeting characteristic KPIs, which most commonly include, among others:
- increasing traffic
- gaining leads
- acquiring new customers and engaging said clientele
- conversion rates
In summary, one can say that these KPIs are linked to building and further accelerating a sales funnel. It’s worth mentioning that Customer Relationship Management is also an important part of the funnel. An effective growth hacker needs to assure his clients’ satisfaction to encourage them to come back and therefore potentially profit from word of mouth recommendations.
Growth Hacking Tactics and Tools
The main tools incorporated and utilized by growth hackers:
1. Leveraging Your Blog
It is a no brainer that a well-maintained blog is a valuable asset for a growth hacker. It can be a hub of your inbound marketing strategy, attracting users to your company website and product via creating high quality, in-depth content. Blogging is not a new online marketing technique and the question is not whether to blog but how to make it even more effective. One of the most tested and efficient methods is guest posting. Writing for other blogs allows you to interact with members of the blogosphere. You can share your expertise, receive inbound links to your blog, and gain exposure to a new and far broader potential audience. It goes both ways, so inviting an influential author to post on your blog may also bring advantages in terms of reach and traffic.
2. Social Media Utilization
Social media is an entire area of expertise within the digital marketing industry. It brings undeniable and nearly unlimited profit potential. Building online communities allows for winning more traffic and conversions as well as creating buzz and igniting viral marketing. Social media campaigns involve two-way communication with the viewers, which creates an opportunity for gaining precious input and feedback and may become a useful CRM tool as well. Due to a wide variety of social platforms and their own respective specifics, you would need a separate article (or, more likely, a set of articles) to receive a thorough look into the subject. Nevertheless, there is no doubt that social media expertise is a must for a successful growth hacker in today’s market.
3. Marketing Automation Tools
Marketing automation techniques essentially focuses on moving users down your sales funnel from the top to the bottom, from prospects to customers, by the use of messaging, e-mail marketing and social platforms. When creating a sales funnel, a growth hacker plans the entire automatic communication at every stage in order to optimize the process.
4. Ongoing Optimization Tools
Effective search engine optimization requires incorporating tracking and analyzing online statistics into your everyday tasks. It may be challenging for a beginner growth hacker due to several reasons:
- The measurements have to be reliable and accurate.
- There are multiple sources of information that must be analyzed and integrated into overall actionable insights.
- Tracking and data gathering must be conducted on regular basis.
- The conclusions should be translatable into actions.
This may be overwhelming and time consuming, but analysis allows a growth hacker to assess the results of his online marketing efforts. It is crucial to identify the channels that bring the most traffic, and the content that generates the most links and site views. Furthermore, it’s essential to distinguish valuable traffic and what brings the highest conversion rate and ultimately accelerates your sales funnel. Only then is it possible to optimize actions and investments.
It is a smart solution to make use of existing SEO tools, which provide accurate and up-to-date measurements for keyword positions, traffic trends, and conversion rates for specific keywords. Moreover, with these tools you measure and rate the quality of your inbound links so that you know exactly who is writing about your product and what they say. These tools also track your competitors’ SEO—they automatically reveal, analyze, and help you outrank your business competitors’ websites. Thanks to this, you can have all the necessary data in one place, presented in an intelligible and user-friendly way.
5. A/B Testing
This is the area where a growth hacker actually has an advantage over “traditional marketers”. It has been said that a fast pace and need for quick reactions are essential to growth hacking. At the same time, it’s important that a growth hacker can actually react quickly. Comparing to e.g. a manufacturing corporation, testing and launching a new communication campaign or a new products takes moths of consumer and market testing, legal and/or quality alignments, as well as bureaucracy and costs. In the case of a start-up business, you can conduct A/B testing on almost every aspect of your communication, whether it’s your landing page, logotype, e-mail messaging, or display campaign. It takes relatively little time and allows you to improve your effectiveness almost overnight. To achieve this goal:
It’s crucial to keep in mind that every stage of the sales funnel has separate KPIs and different objectives. The graphic below is a good example of this case. It reflects the variety of goals at each step of the funnel. Funnel optimization requires analyzing each of the stages separately while not losing sight of the ultimate objective—the sale.
Inspiring Example – A Growth Hacking Case Study From Mint.com
The case of mint.com) is an interesting example of successful growth hacking. Mint, an online tool for managing personal finances and budgeting, is a website that gained over 1.5 million users without any paid customer acquisition channels. According to its founders and employees, the sources of its success were mostly:
The product itself brought undeniable, instant value to the user; it is clear and self-explanatory, allowing the user to see a full financial profile and ways to increase money within the first few minutes of using it.
A polished, professional landing page design; according to Mint’s employees it helped build trust among potential users and increased conversion rate for sign-up. At the same time, Mint underlined the attention paid to the security of data the user provided.
A content-rich personal finance blog, promoted on popular bookmarking websites such as Reddit and Digg (source: http://www.mint.com/blog/).
Extensive SEO strategy; As stated by Jason Putorki, one of Mint’s employees “For every popular finance query on Google, we had a page and content for it, and iterated landing pages to optimize conversion.” (source: http://www.quora.com/How-did-Mint-acquire-1-0m%2B-users-without-a-high-viral-coefficient-scalable-SEO-strategy-or-paid-customer-acquisition-channel)
Content partnerships – e.g. with a multimedia financial-services company like Motley Fool. (http://www.fool.com/)
Consumer advocacy e-mailing through high quality e-mail notification and newsletters that provided financial tips and updates, which assured customer retention.
Balanced Facebook and Twitter channels, which included conversations with customers, contests, finance tips and high-quality shareable content.
Distribution deals – creating iPhone and Yahoo apps brought a significant increase in sign-ups to the Mint website.
Building authority in the finance community; to achieve this goal, the founders reached out to influential finance personalities, went to industry events, and entered chats and conversations prior to launching the website. Thanks to networking, they managed to invite finance authorities to guest post on their blog and further develop Mint’s image.
For more information regarding Mint’s case, visit: http://okdork.com/2010/10/14/how-mint-beat-wesabe/ or http://www.quora.com/How-did-Mint-acquire-1-0m%2B-users-without-a-high-viral-coefficient-scalable-SEO-strategy-or-paid-customer-acquisition-channel.
Is Growth Hacking Gaining Importance?
According to a 2013 State of Marketing Measurement Survey, released by a voice-based marketing automation Ifbyphone, the role of growth hackers is increasing in importance across marketing teams in various businesses. A study conducted online among 400 respondents in the U.S. responsible for marketing within their company showed that every third company claimed to employ a marketing technologist and every fourth had a growth hacker in their marketing team. In this case, a marketing technologist was defined as “a marketer with significant IT skills,” whereas a growth hacker definition was “a marketer who combined marketing knowledge with a strong technical background to drive growth.”
Since growth hacking itself is a relatively new term (the creation of seems to date back to 2010), it is striking how popular it became during a short period of time. It appears in multiple job descriptions and even goes beyond SAAS and the start-up environment. The fact that one quarter of companies claimed to have a growth hacker on their team proves that the trend continues to grow and the role of growth hackers is more and more appreciated. As terminology evolves with reality, time will tell what the future will bring to growth hacking.