Book Summary of Hacking Growth by Sean Ellis and Morgan Brown

“Hacking Growth” is a book by Sean Ellis and Morgan Brown that offers a unique approach to growing your business. Dubbed “growth hacking,” it involves rapid experimentation to continuously optimize your business for growth.

By tailoring your product and presentation to meet customer needs, you can increase revenue and grow your business. According to the authors, growth hacking is the only growth strategy that remains effective in today’s competitive marketplace. The book is a playbook for this approach and is written by two leading proponents of growth hacking, Sean Ellis and Morgan Brown.

Our guide to the authors’ method is divided into three parts: preparation, execution, and implementation. Their strategies are primarily applicable to online businesses such as ecommerce, software-as-a-service, retail, and others.

Part 1: Setting Up Your Growth Hacking Basics

Before driving your company’s growth, you need an indispensable product, a growth team, and data analytics. However, having a great product alone is not enough to attract and retain customers. Creative efforts are necessary to grow your business.

Step 1: Ensure Customers Can’t Go Without Your Product

Your product should be essential and provide an “aha” moment for your target market. Determine its indispensability by asking users how they would feel without it, with at least 40% indicating “very disappointed” for an indispensable product.

Step 2: Build Your Growth Team

To grow your business, the authors recommend building a dedicated growth team. This team should focus on finding and capitalizing on growth opportunities, as growth is critical to success in today’s competitive and fast-paced business environment. The authors suggest identifying key roles for your team, determining its focus, and identifying key growth metrics.

Growth Teams Are Interdisciplinary

The authors suggest that growth hacking involves modifying various aspects of your business, and therefore requires an interdisciplinary growth team consisting of multiple departmental members. The team should include a growth lead, an analyst for data-based insights, a product manager to align with product and branding, a marketer for consumer psychology and messaging, and an engineer for technical implementation.

Each role offers unique skills and perspectives to drive innovation and deliver an exceptional user experience.

Step 3: Set Up Your Data and Analytics

Data analysis is key to growth hacking success, helping you understand user preferences, acquisition channels, and sign-up rates. To avoid wasting resources on ineffective strategies, the authors advise making small, data-driven changes and iterating quickly. They stress that advertising campaigns should be supported by empirical data, as traditional big-budget advertising is no longer effective.

Set Up Your Instrumentation

To utilize data, set up instrumentation and track user behavior throughout their product experience. Collect both quantitative and qualitative data on a continuous basis to make informed decisions. Combining data analysis with customer outreach can help improve your product and boost growth. For instance, reaching out to users who don’t use a feature can help improve engagement and lead to growth.

Pick Your Key Metrics

After setting up your data instrumentation, focus on measuring the few metrics that impact your business the most. These are your core “growth levers,” which can be identified by looking at what correlates best with your product’s core value.

For example, if your SaaS product’s core value comes from providing excellent recommendations, your key metric could be the open rate for weekly recommendation emails, and secondary growth levers might include click-through rates and social media sharing.

Part 2: Growth Hacking in Practice

Now that you have set up your product, growth team, and data, it’s time to start growth hacking. The core practice of growth hacking is high-tempo testing in a continuous cycle. This involves finding insights in your data, generating potential hacks, selecting the best ones, and testing them. In this section, we will guide you through this process and show you how to repeat the cycle to keep moving forward.

The Growth Hacking Cycle

Growth hacking involves analyzing your product, generating growth hack ideas, experimenting with the best ideas, and repeating the process. This allows you to quickly learn about your product and users, find changes that work, and stay flexible.

The process thrives on creative solutions to tough problems, encouraging you to think outside the box. By testing rapidly, you can compound small wins into huge successes, much like compound interest. To start, aim for at least two tests per week and gradually increase the tempo over time. The growth hacking cycle consists of several phases, which we will explain below.

Step #1: Generate Insights

The growth lead and data analyst should analyze user patterns to gain insights and find opportunities for product tweaks that drive growth. Look at where you lose customers in your sales funnel, page duration, and marketing email open rates. Meanwhile, conduct user surveys to gather demographic and behavioral information, which can help you target tests on specific user segments.

Step #2: Gather Ideas

The authors recommend a constant flow of unconventional ideas for successful growth hacking. A project management tool can be used to gather ideas from the interdisciplinary team, with each idea following a template and targeting a key metric. Encouraging brainstorming and considering all ideas can lead to creative and resourceful solutions, like Dollar Shave Club’s viral video.

Step #3: Determine the Best Ideas

Team members should evaluate their ideas using the ICE criteria (Impact, Confidence, Ease) before submitting them. Impact measures the potential for significant change, Confidence gauges the team member’s certainty of success, and Ease evaluates the difficulty of implementation. The scores should be seen as a general guide rather than a definitive score. Each week, team members should nominate three ideas for discussion, and the growth lead should adjust the ratings based on their judgment during meetings.

Step #4: Run the Experiment

Assign the chosen idea to relevant team members and start working on the experiment. Collaborate with other specialties to make necessary product changes, and notify the company before implementing changes. If test results are unclear or inconclusive, assume it didn’t work well enough to pursue further and avoid wasting time on unpromising ideas.

Repeat the Cycle

Analyze the test results to identify successes and areas for improvement. The growth lead and data analyst should create a report on the test’s details, impact on key metrics, and hypothesis accuracy. Keep a team knowledge base to record and retain test results to avoid repeating mistakes.

How to Run Weekly Meetings

Growth team meetings are crucial for checking progress and strategizing for growth. Before the meeting, review completed tests and gather takeaways to discuss. The growth lead should also assess the team’s performance and bring relevant data to the meeting.

Part 3: Apply Growth Hacking to Four Areas of Growth

Growth team meetings are crucial for checking progress and strategizing for growth. Before the meeting, review completed tests and gather takeaways to discuss. The growth lead should also assess the team’s performance and bring relevant data to the meeting.

Signing Up: Hack Your Marketing

The initial step in company growth hacking is to focus on customer acquisition. This comprises of two steps:

  1. Determine your language and market fit by creating compelling marketing material that entices people to try your product.
  2. Determine your channel and product fit by identifying the most effective marketing channel for your product and optimizing it for growth.

Language and Market Fit

Craft concise, compelling language that immediately communicates how your product improves the user’s life since users’ attention spans are only eight seconds. A/B testing is a simple way to refine your language to appeal to your target market. Create two versions of a page component, such as the header, to test language, fonts, colors, graphics, and page design. Use these tests throughout your product and marketing materials to optimize your language/market fit.

Channel and Product Fit

A channel is a method (or location) of reaching consumers with your goods, such as trade exhibitions, Facebook adverts, Google search results, and YouTube sponsorships. The authors recommend selecting one channel that’s most relevant to your business. To do this, decide which marketing channels are appropriate for your company and select just one. For instance, a SaaS business should think about paid Google search advertisements, Facebook ads, email marketing, and content marketing if it wants to attract youthful, online clients. Conversely, a B2B hardware company may prioritize conferences and trade shows.

Sticking Around: Hack Your User Experience

To retain customers, the authors suggest making it easy for them to experience your product’s core value. Follow these three steps: 1) map the steps to the click moment, 2) measure how far people get toward that moment, and 3) survey your users. You may ease friction and make the procedure more straightforward to help more consumers get to the core value of your product by studying the data and survey replies.

The authors suggest two key strategies to improve user engagement:

Strategy #1: Optimize your new user experience (NUX) by running growth hack experiments to eliminate friction and improve landing page, language, aesthetics, and sign-up process. Try single sign-on and free trials that highlight core product value.

Strategy #2: Use triggers like push notifications, emails, and calls to action to keep users engaged and remind them of the product’s value. Use triggers to form a habit of using the product, but be careful not to overdo it and come off as annoying or sleazy.

Staying Loyal: Hack Your Retention

To keep your business profitable, the authors advise focusing on customer retention. To retain users, you should analyze the factors that cause them to leave and optimize accordingly. To start, break down users into cohorts based on shared traits, such as the month they joined. This allows you to track retention patterns and identify behaviors that cause users to leave.

There are three areas of retention to focus on: initial, middle, and ongoing retention. By improving retention, you can save money compared to the cost of acquiring new customers.

#1: Initial retention – Use triggers like emails and notifications to prompt users to return immediately after your NUX. Apply growth hacking tactics to optimize language and presentation.

#2: Middle retention – Use strategies like customer loyalty, product ambassador programs, and in-app rewards to keep customers interested. Reward customers that use your product frequently to create a habit.

#3: Ongoing retention – Continually introduce new features to keep your product competitive and valuable. Talk to customers for feedback and use cohort analysis to find popular features to improve. Test changes at a steady pace that won’t bother existing users.

Investing: Modify Your Prices

To maximize long-term profitability, the authors suggest optimizing revenue per customer through growth hacking. First, set up a “customer journey” funnel to track user behavior and find areas where customers drop off.

Use surveys to correlate customer behavior with sales process steps. With this data, generate ideas to adjust the sales funnel and test them incrementally to reduce friction. To optimize pricing, analyze user behavior and surveys to determine the price range customers are willing to pay. Test different prices within this range on different user segments and use pricing psychology tricks, such as .99 or .95 prices and dummy prices to bundle products and encourage spending.