05 Dec Growth Hacking like a boss!
Everybody wants to be the next unicorn. Incubators, accelerators, business schools, tech schools and a whole plethora of organizations strive daily so startup founders reach their maximum potential. Nonetheless, only a few companies make it.
It’s not seldom for founders to have a post-launching depression while they’re waiting for millions of users to install their app but not doing so in the expected pace. This doesn’t mean you’re aiming too high, but it means you’ll need to go the extra mile to get new users and make them happy enough not to uninstall your app.
Being in Silicon Valley was an interesting source of growth hacking tips, and here’s a summary that we put together for you. As growth hacking can be key to propel your success, it’s no wonder that companies like Tinder, Snapchat, Airbnb and Hotmail have remained focused on that.
But what is growth hacking? A set of strategies and best practices to increase visibility of a brand, at the lowest customer acquisition cost, aiming at driving user growth. The tricky part is the cost-efficiency, so – as Juan from Draper University said- it basically comes down to creativity, resourcefulness, and technical abilities to make your product grow. As Aaron Ginn said, “growth hacking is a mindset, not a toolkit”.
A useful resource for understanding growth hacking is this funnel, by Dave McClure, founder of 500 Startups. It reflects how we should make the largest number of potential customers enter this funnel and go through it. The job of a growth hacker is to try to patch the different places where clients may exit the funnel, to optimize it every step of the way.
Initially, you need to have as many people as you can visiting your site or app. As your ultimate aim here is to convert visitors into users, the more you target your content and channels to your target audience the better.
So here comes advise #1 for acquisition: Know your customers. Understand who is and who isn’t your potential customer. There are many ways to reach your customers for free, social media is the most widely used. Hopping on third party platforms is another creative way to achieve that, but we’ll see that later on. Having an idea of which channels are the most used by your audience will be a plus, but remember that trends change and your audience’s preferences and behaviour will change as well, so be flexible and always attentive to any potential changes in your target market and hop on any channel you possibly can.
Please remember that it’s great to focus on your target audience but foremost is your company’s survival. So if you see that there’s an opportunity to make a buck from audiences other than the one you’re targeting while you’re still attracting people to your platform, you should consider it, no target audience will use your platform if your company doesn’t make it. This applies for funding as well.
The #2 advice for growth hacking is: Do stuff that doesn’t scale. This is an exploratory and long-term focused activity but it could pay off eventually. Talk to every customer, you never know! Generating brand awareness is the first step when marketing your product. Also remember that people love free stuff! For promoting, you can offer a free trial of your product or promo codes, so your potential customers keep the focus on your brand.
Delivering value also pays off, so investing in great content creation can help your audience share and comment your brand organically, becoming your ambassadors. An example of this was Engagio, who delivered great content before enabling sign up, having free books specifically directed to their demographic.
Remember to hack your distribution! The larger amount of people go in your funnel, the higher are your chances to succeed. This is where you must think outside the box, there actually is no box for this. A popular example is how Airbnb started by posting all its listings on Craiglist so when people looked for apartments on a popular site, it would redirect to Airbnb to get new users and traffic. Kalam Dennis, co-founder of AptDeco told us he followed the same strategy, but they would take it one step further: they would post on Craiglist items they’d find on the internet, and if anybody bought it from them, they would buy the item from the original seller and resell it to those who made the purchase on AptDeco; in order to generate transactions on their platform.
Other ways to attract people to your platform is through integrations, for example, the integration with every platform possible was key to Instagram’s success, as everybody using them could see beautiful pictures edited in this platform very few of their friends used. Spotify benefited greatly from its integration with Facebook as well. It’s not a minor thing to consider that allowing logging in with social media accounts increase conversion in a 30%.
Everybody uses social media, so these platforms already know your customer base, they have their information, know what they like. A great way to determine the size of your target audience is using for example facebook ads. By selecting your target audience, facebook will be able to determine with crazy accuracy the size of your target audience.
Coming up with new ways to improve your acquisition?
So now people are visiting your site or app, but those visits are of no use if there’s no action taken.
Hacking your activation implies the magical moment when potential users need to make a decision about you and you lead them to incline towards going “yes”. Basically, you need to define what people are going to do in your platform (the least and getting them to do so, consequently achieving your goals while making them happy.
Your activation goals can vary enormously depending on your product; from getting the visitor’s email, getting them to sign in to your platform, to buy something or to recommend your platform to their friends.
There are many marketing tools you can use to improve your activation. An example of this is A/B testing. At Draper Uni they suggested “Work on hypothesis and test”, tools for this could be for example Optimizely or Unbounce, and gave us an example used in SimCity, check it out, which one of these two screens do you believe converted the most?
The image in the left had 43% more purchases. This should make you aware that iterating is part of the optimization process.
Heat maps are another useful tool to understand your customers’ interactions with your platform.
Another interesting way to activate your audience is through social shares. Showing how knowledgeable you are on Quora on a specific topic can make you look like a specialist to the eyes to an enormous audience which is interested in what you’re talking about.
A great success case of social shares was Hotmail. Sabeer Bhatia and Jack Smith founded Hotmail in 1996, when they decided to take it to India, they defined this super simple yet effective growth hack strategy: at the footer of the emails they entered “P.S. I love you. Get your free email at Hotmail” which led them to reach the 300K users in a few months and 1 million by six months. They sold to Microsoft at a time when only 70 million people were using the internet and 9 million were on Hotmail.
Users are on your platform but given the competitive environment, you need to give them the best experience possible and make a huge effort for their retention. And by retention we mean creating the habit for your users to use your platform regularly. This is the most important part of the growth hacking process as it will promote your long term success or failure. Those users who are happy with your product are paramount to your growth.
But how? When visitors hop on your platform, it’s because you’ve made a promise which they believe will benefit them or make their life easier in some way. To retain them, you need to make sure to fulfill such promise in a way that’s quickly noticeable by the user. They need to see the value you’re delivering to them. The hook canvas shows an interesting way to approach this:
So this is how the eternal loop of retention looks like. Let’s review it:
The Trigger is seeking internal or external triggers for users to execute the intended action. External triggers can be notifications reminding users about specific actions to take and internal are those that come from the users’ own initiative.
The Action is the the effort required from the user to get a reward. In the case of Google such action is entering what you need to know in its search engine. With Instagram it’s entering the app and scrolling down the feed. It’s fundamental to make such actions as easy and short as possible, requiring the minimum effort possible.
The Reward is the benefit your users get when using your product. The more such reward is desired by your user, the better, unless they get frustrated in the process of obtaining it. So optimizing the action part will help make the rewards worth it.
People value their own work, and this is where the investment part comes in. The investment your user has made in terms of energy, time, effort; which will make them be ready for the next trigger, accumulating value and leading their inclination towards your platform. If someone becomes quite active in Quora and gets great ratings for their answers, they perceive an accumulation of social value which will make it likely to prefer that platform over another one in which they haven’t received reviews at all. Here it’s a must to consider how you’re undertaking this process and identify the improvement opportunities available to you.
Creating Drip Campaigns and giving them a personal touch can help the retention process as well. Emailing your users when they’ve lowered the frequency of use is a great way to reactivate them. Make sure to greet them back and reward them for doing so! Remember the internet is most active Tuesdays and Thursdays between 11 am and 4 pm! and also that people love receiving emails from CEOs.
Referrals are key to continue filling in the funnel. People only recommend those products which are truly exceptional to their eyes, which implies that having your users become your evangelists is definitely challenging.
It seems like in the digital product market, positive recommendations can increase a company’s market share in a 10 percent the first year, so it is no wonder how Dropbox started spending $300 US dollars on advertising which would result in 1 customer that would pay them $99 a year; this strategy paid off as they increased their user base from 100K to 4 million in a matter of 15 months!
According to the American Marketing Association, if a reward if offered for a referral, the likelihood of that happening increases; which doesn’t necessarily imply that it should be a big reward. The University of Chicago determined that non-monetary incentives had a higher effectiveness at improving performance than those which are exclusively cash incentives. A great thing to do is to offer rewards within your platform, so users can experiment blocked features or additional capacities. Never forget that a person is 4 times more likely to buy when they’ve been referred by someone they know and trust.
So to conclude, and as Juan from Draper Uni said, “Growth hacking is what is under the iceberg”. The growth of successful companies can be apparent but there’s a whole lot of work in growth hacking activities which is not. A growth hacker needs to be creative and tenacious. Go for it!