If a company understands growth hacking, and utilises it, they immediately have a competitive advantage. As a result, it’s no surprise that growth hacking is revolutionising the world of new business growth. The term growth hacking was coined by Sean Ellis in 2010, who was responsible for helping a number of Internet companies achieve impressive growth. Since then the phrase has become a popular buzzword. Some people feel that growth hacking is just a fad and could be seen as a pile of tricks to cheat long-term sustainable growth. However, it’s a process that’s caught the attention of companies worldwide and should be recognised by any new start-up businesses.
So what is growth hacking?
Growth hacking is a process of obtaining and engaging consumers or Internet users by using traditional marketing skills combined with analytical and product development skills. The basic idea is that growth doesn’t have to only come from having a good product; improving growth rates should be an active process rather than a passive one. The reason that “hackers” are used for this process of improving growth is not for their coding and programming skills – instead, it’s because hackers aim to achieve a specific objective, and do not restrict themselves to following prescribed processes. This can result in new innovations pushing the growth of a company rather than reliance on traditional marketing skills alone.
What is the job of a growth hacker?
The objective of a growth hacker is quite simple: grow the number of consumers for a specific product. This would normally be a job for marketers, but over the last few years companies have learned to turn their few consumers into millions of consumers with very little marketing at all. Instead of using only marketing skills, growth hackers have cross-functional roles, ranging from Human Resources and Finance to Product Developer and Company Operations.
Every growth hacker focuses on what will impact the growth of the company, rather than relying on the product itself to obtain the consumers. Ultimately, by recognising that if you understand the consumers and how they discover their products of interest, each company can personalise its features to help obtain and retain more consumers, thus saving the company valuable money rather than spending it all on marketing and advertising.
What are the origins of growth hacking?
Growth hacking can be traced back to around the early 2000s, and when small technology companies were blossoming. At this time, companies started to focus on more than just designing an appealing product or brand to ensure that their company was recognised – they started to improve their image and popularity by working on how to get people to talk about it, and subsequently obtain greater numbers of users. Since then, the fallacy that products “sell themselves” online has disappeared, mainly because every online consumer enters an overloaded and fully saturated market, making it hugely difficult for any product to gain any competitive foothold.
As the market adapted, products started to ignore technology and high quality and focus on marketing, customer satisfaction, and customer service. Today, a strong distribution strategy can be more successful than a greater product. Sean Ellis, founder and CEO of Qualaroo and GrowthHackers.com, coined the term “growth hacking” in 2010, but even before this the challenges of growth had initiated a market-driven response. The instability and saturation of markets led to growth hackers searching for new opportunities to create sustainable growth. Growing any business becomes harder each day, and as a result, growth hackers are becoming more prevalent as more creative thinking is needed.
What are the benefits of growth hacking?
The simplest way to demonstrate the benefits of growth hacking is to provide an example. Josh Elman from Medium.com, who has worked on Twitter, Facebook Connect and LinkedIn, solved one of the puzzles of Twitter: why people heard about Twitter in the media, blogs and friends, and happily signed up, but didn’t actually become users of Twitter. Typical marketing ploys would usually resort to sending out email newsletters or redesigning adverts, and the aim of this was to bring the users back. However, after investing and understanding the product (Twitter itself) the company were able to understand what made each new user want to stay.
Once they understood this, they redesigned their user experience and ensured that they targeted each user’s interest more quickly. Their solution was to encourage new users to manually select and follow several Twitter accounts on their very first day of signing up. This remarkably improved the number of users who stayed simply because each user chose to follow things that interested them. Features were tweaked and optimised, such as helping users to gain their own followers, and this helped to dramatically improve their retention rates.
Now that you fully understand the ins and outs of growth hacking, are you ready to get started?