In “Hacking Growth,” Sean Ellis and Morgan Brown introduce a revolutionary approach to driving business growth known as “growth hacking.” This method, embraced by successful tech companies, involves rapid and focused experimentation to continually optimize your business for growth. By fine-tuning your product and presentation based on what your audience needs, you can boost revenue and expand your business.
The authors argue that in today’s competitive marketplace, traditional marketing approaches like large-scale ad campaigns are ineffective and outdated. Growth hacking, they claim, is the only strategy that can keep your business competitive. Sean Ellis, a pioneer in growth hacking, and Morgan Brown, an experienced growth strategist, collaborated to provide a comprehensive “playbook” for this innovative approach.
The book is divided into three parts tailored to online businesses, covering preparation, execution, and customer development:
Part 1: Setting up – Learn how to ensure your product is a “must-have,” build a proficient growth team, and establish robust data analytics.
Part 2: The growth hacking cycle – Explore the core principles of growth hacking, how to conduct productive meetings, and maintain team focus on key objectives.
Part 3: Customer development – Discover essential strategies and tactics for acquiring, retaining, monetizing, and fostering loyalty among customers.
Additionally, the book addresses ethical considerations in data-driven business practices and provides insights into contemporary resources, both free and paid, to enhance your growth hacking expertise.
Part 1: Setting Up for Growth Hacking
Before diving into the world of growth hacking, you need to establish a strong foundation. This involves ensuring you have an indispensable product, forming a skilled growth team, and setting up effective data analytics. Your product should create a “click” moment for users, and you can validate this through a simple survey to see how many users would be very disappointed without it.
There are various product validation methods, such as problem-solving, customer interviews, and test-selling prototypes. However, surveys may not always provide accurate results due to their sample size and biased questions. To pinpoint the “click” moment, reach out to your most loyal users and analyze their behavior patterns.
If you don’t have a “click” moment or your product needs improvement, consider researching your competitors and enhancing your offering. Be open to pivoting your product to better align with customer preferences, as major companies have done.
Step 2: Building Your Growth Team
Creating a dedicated growth team is crucial for success in the competitive and fast-paced modern business environment. Growth hacking encompasses various aspects, from marketing to product development, requiring an interdisciplinary team. Key roles on your growth team should include a growth lead, analyst, product manager, marketer, and engineer. Collaborating with experts from different backgrounds enhances creativity and innovation.
Building an interdisciplinary team is a common strategy to improve information flow and problem-solving. Finding common ground and minimizing the use of jargon can facilitate effective communication among team members.
Step 3: Setting Up Data and Analytics
Data analysis is at the heart of growth hacking, enabling data-driven decision-making. Track user behaviors throughout their journey with your product, from initial contact to product usage, favorite features, and churn rate. Tracking user behavior helps identify patterns that can guide product optimization and growth strategies.
Continuously gather both quantitative and qualitative data to gain insights into how users use and feel about your product. Combining data analysis with customer outreach allows you to make informed improvements. Effective surveys should have clear goals, target the right population, and ask straightforward questions.
Choose key metrics that matter most to your business and are closely related to your product’s “click” moment. Common growth metrics include revenue, conversion rates, and active users.
By laying a strong foundation, building a capable growth team, and harnessing data and analytics, you’ll be prepared to embark on your growth hacking journey.
Part 2: Implementing Growth Hacking
With your product, growth team, and data readiness, it’s time to put growth hacking into action. This section delves into the core practice of growth hacking, emphasizing high-tempo testing conducted in a continuous cycle. You’ll learn how to extract insights from your data, generate creative growth hacks, select the most promising ones, and conduct experiments.
The Growth Hacking Cycle
The growth hacking process involves a continuous cycle: rapidly analyze your product, brainstorm growth hack ideas, choose the most promising concepts, experiment with them, and then repeat. This iterative approach enables you to discover effective changes quickly and maintain flexibility. Be open to creative solutions for complex problems and think outside the box.
By testing rapidly and consistently, you accumulate numerous small successes, much like compound interest. It’s recommended to start with at least two tests per week and adjust the tempo as your team becomes more proficient.
Growth Hacking and Agile Software Development
Growth hacking shares similarities with agile software development, which emphasizes making incremental changes that cumulatively lead to a more significant product. Weekly high-tempo testing aligns with agile methodologies, promoting adaptability and steady progress.
Step #1: Generate Insights
To kickstart the process, the growth lead and data analyst should delve into your data to uncover user patterns and gain insights. This data analysis reveals opportunities to optimize your product for growth. Pay attention to where users drop off in your sales funnel, their time spent on pages, and email open rates. Simultaneously, conduct user surveys to collect information on user demographics and behaviors, allowing you to target tests effectively.
Step #2: Gather Ideas
A continuous flow of creative ideas is essential for growth hacking. Set up project management software for idea submission and encourage brainstorming. All ideas, no matter how unconventional, are valuable. Each idea should follow a template, including a statement of the idea, reasoning, and a hypothesis targeting a key metric with actionable changes.
Step #3: Determine the Best Ideas
Team members should score their own ideas using the ICE criteria: Impact, Confidence, Ease. Impact gauges the potential for significant change, Confidence measures the certainty of success, and Ease assesses the implementation difficulty. Before your weekly meeting, have team members nominate three ideas for discussion. During the meeting, the growth lead should reevaluate these scores.
Alternative Prioritization Frameworks can be considered, such as Value vs. Complexity, the Kano model, or Buy-a-feature. Choose the framework that aligns best with your company’s values and goals.
Step #4: Run the Experiment
Once a test idea is selected, assign ownership to the relevant team members, and initiate the experiment. Collaborate across specialties to implement necessary changes to the product, and inform the rest of the team to avoid interference. If results appear neutral or ambiguous, it’s better not to pursue further testing to prevent wasting time on unpromising endeavors.
Repeat the Cycle
After completing a test, analyze the results, learn from successes and failures, and document everything in a shared knowledge base. This practice prevents the repetition of mistakes and ensures continuous improvement.
How to Run Weekly Meetings
Weekly meetings are the focal point of your growth team’s activities. They serve to align team members, review progress, and strategize for future growth. Follow these steps in your weekly meetings:
- Review the data: Check key growth metrics to assess whether progress has been made.
- Review the previous week: Report on your team’s testing pace and any delays due to technical difficulties.
- Report on active experiments: Discuss the progress of ongoing tests and their impact on growth metrics.
- Choose the next experiments: Each team member presents nominated test ideas, and the most promising ones are selected for the coming week.
- Ensure the ideas keep flowing: Ensure the idea pipeline remains active, and team members actively contribute new ideas for tests.
Maintaining this structured meeting format will keep your team focused on achieving growth goals.
Part 3: Growth Hacking in Practice
In this section, we move from theory to application, delving into practical strategies for each phase of customer development, from marketing to sales funnels and user experience. The goal is to optimize each of these phases at the right time to ensure maximum growth and profitability.
Customer Development Phases
Customer development involves guiding your customers from sign-up to long-term loyalty, creating an experience that keeps them engaged and excited about your product. This journey can be broken down into four phases: getting customers to sign up, retaining their interest, nurturing loyalty, and encouraging them to spend money.
Signing Up: Hack Your Marketing
The initial step in driving your company’s growth is to focus on customer acquisition. This consists of two key steps:
Step #1: Find your language and market fit: Create compelling language in your marketing materials that entices people to try your product.
Step #2: Find your channel and product fit: Identify the best marketing channel for your product and optimize it for growth.
To succeed in this, conduct A/B tests to refine your language and optimize the presentation of your product. Your language should be concise and immediately convey how your product improves users’ lives. Finding the right fit in language and market is crucial in a world where attention spans are as short as eight seconds.
Channel and Product Fit
Select a marketing channel that aligns with your target audience and business goals. Concentrate your efforts on a single channel that makes the most sense for your business. The chosen channel should cater to your specific audience and maximize growth potential.
Sticking Around: Hack Your User Experience
Once you’ve acquired customers, retaining their interest becomes essential. To keep users engaged, make it easy for them to experience the core value of your product. Follow these steps:
- Map the steps to your click moment: Identify the steps users must take to reach the core value of your product.
- Measure how far users progress: Analyze data to understand where users drop off, and create reports to identify areas for improvement.
- Survey your users: Gather feedback from both those who left and those who stayed to understand the reasons behind their actions.
Reducing friction and simplifying the user experience is vital to encourage more users to engage and stick around. A good user experience design should be user-friendly, provide solutions to users’ problems, and be visually appealing.
Staying Loyal: Hack Your Retention
Retaining customers is essential for long-term business success. Cohort analysis, which involves dividing users into groups with shared characteristics, can help in understanding user behavior and reducing churn. Focus on three key areas of retention:
1. Initial retention: Encourage users to return and continue using your product through triggers like emails and notifications.
2. Middle retention: Keep users engaged by implementing tactics such as loyalty programs, product ambassador initiatives, or in-app perks to reward regular usage.
3. Ongoing retention: Continually introduce new features and gather user feedback to enhance your product. Strive to balance change with users’ attachment to existing features.
To foster loyalty, build relationships with customers, respect their needs, and continuously improve your product. Treating customers with respect and personalizing their experience can enhance customer loyalty.
Spending Money: Hack Your Pricing
Optimizing your pricing strategy is crucial for maximizing revenue. Create a customer journey funnel to track user progress and gather data to identify areas of improvement. Use insights from user behavior and surveys to understand what customers are willing to pay.
Experiment with different price points within the range of customer willingness to pay. Employ pricing psychology tricks, such as pricing that ends in .99 or .95, and explore dummy pricing to encourage customers to spend more by offering bundled options.
Maximizing revenue is a balancing act that requires incremental testing to avoid alienating customers with aggressive marketing tactics. Pricing psychology plays a significant role in influencing customer choices.
In summary, this section focuses on the practical application of growth hacking in various areas of customer development, providing strategies to optimize each phase and foster sustainable growth and profitability.