You want to grow your business. Now, what does growth mean for you, and what kind of growth accountability is essential for social enterprises? As a social business, it is essential to learn how to become financially sustainable and measure your social impact. Here, growth hacking plays the beautiful role of getting you exactly where you need to grow to and having the right numbers to show for it. Dive into this article to learn what you need to know about growth hacking. Learn why you should use the growth hacking methodology to grow as a social enterprise.
By now, you may have heard about growth hacking.
Perhaps you read about successful examples of quickly-growing organisations or you work in the start-up scene where you have seen growth hackers in action.
Some may see it as a fad, a tool used by start-ups to quickly, yet unsustainably, force growth.
This couldn’t be further from the truth.
Growth hacking is a methodology that in other forms has already existed for decades. It is simply a data-driven way to use experimentation to grow a business. Officially, the term growth hacking was coined in 2010 by Sean Ellis and initially took off in the tech industry. Since then, it has been adapted to formats that fit almost any type of organisation.
With this article, we want to give you access to the basics of growth hacking and show you how to grow your knowledge on it.
Growth hacking in a nutshell
Growth hacking is a methodology used by organisations to create long-lasting growth. Its core ingredient is data on customer behaviour and using this to optimise. each. step. of the marketing and sales funnel – we like to refer to that as a growth engine, but we’ll get back to that. Its core activity is identifying the most efficient and successful scalability strategies via rapid experimentation. These experiments run via the marketing, sales and product development departments. Successful results are scaled and the rest is fed to the database.
What growth hacking can do for an organisation
Growth hacking transcends traditional departments. See it as an overarching layer on top of your sales, marketing and product development departments giving purpose and direction and steering the organisation towards growth. It oftentimes only takes 1 or a few people within an organisation to execute and monitor growth activities – all in collaboration with each department. Other than saving costs on expensive sales and marketing campaigns, growth hacking brings a multitude of benefits:
- It helps lower cost of acquisition
- It increases customer lifetime value
- It generates more systematic sales and a loyal engaged customer base
- It structures, controls and optimises sales, marketing and product development departments and efforts for each can be tracked and scaled
- It makes sure all investments are accounted for and serve a purpose (e.g. trade exhibition, website improvements, sales visits, advertisements)
- It automates digital activities and data tracking
- It prepares the organisation for (international) scalability
The science behind it
Tracking online behaviour patterns via rapid experimentation provides data on ROI. This data unlocks successful and profitable scalability options. Additionally, it identifies customer perception of the most valuable content. This content can then be implemented across your marketing/sales funnel (growth engine) to build high-quality relationships with customers and develop the best product/market fit.
A working growth engine
Ideally, you guide leads through a buyers’ journey in which they not only convert to customers, but they also become loyal to your organisation. To make sure that happens, you need enough strategies on each part of the funnel. Let’s take a look at the 6 phases of the marketing/sales funnel (growth engine) and questions that need to be answered at each phase.
- Awareness: Introduction. The lead learns about your organisation. How do you drive traffic to your important content? Which and how many touch points are needed before a lead is considered acquired?
- Acquisition: Superficial relationship. The lead shows a sign of interest. What do you consider an acquired lead? Think of social media likes/follows or newsletter signups.
- Activation: Established relationship. The lead commits via further engagement without becoming a customer. With what WOW factor do you commit leads and what can you offer them? Leads can commit via e.g. freemiums (a free version of your product).
- Revenue: Profitable relationship. The lead converts, becomes a customer. What data can you abstract from these customers? Think of machine learning algorithms such as Google Analytics, Google Ads and Facebook Pixel. How can you use this data to generate more sales?
- Retention: Steady relationship. The customer purchases again. When do they purchase again? How often do they come back? What are they looking for when they return? How are they returning?
- Referral: Loyal relationship. The customer is so satisfied, that they start recommending your organisation to their network and actively engage with your brand. How are customers incentivised to recommend? What, when and how do they recommend? Here is the time to look at virality.
Each phase has its own metrics and will undergo experiments to answer the questions and identify multiple successful scalable strategies. A working growth engine is one that has sufficient strategies on each phase and methods to continuously optimise these strategies.
About the experiments
Running experiments sounds complex, expensive and time-consuming. In traditional sales and marketing, it could take months to design one campaign after which it still has to run for months to yield results.
Growth experiments operate differently.
The premise of growth hacking is to quickly identify successful growth strategies based on available data. It starts with using online and offline data to select high-potential strategies. The likelihood of experiment success is also rated by employees throughout various relevant departments. Experiments can be as small as homepage changes and as large as campaigns that run on each company channel. A crucial component is setting up proper tools that gather customer behaviour data. We’ll come back to that later. Experiments can run from one day up to months.
Examples of experiments
- Online purchase flows (delays, unclear buttons, drop-out moments)
- Google: SEO fixes and AdWords
- Instagram: hashtag targeting, influencer tagging, Instagram purchases
- Email marketing: lead nurturing series including opt-in content
- Content for niche communities and online groups
- Offline sales techniques linked to online platforms
It’s all about the data
Identifying already available data and setting up online tracking systems are the two most important activities to start growth hacking. So what kind of data are we talking about? See below a list of questions that are answered to identify trends in available data.
Examples of customer behaviour data
- Website visitors and visitor behaviour (Example questions: Which pages do they visit? How long do they stay? What content is most popular? Who are these visitors?)
- Social media statistics (Example questions: Which content is most popular? Who are the followers and how do they interact with the content?)
- Competitor statistics (Example questions: Who are the most successful competitors? What is their most popular content? Who are their customers? How do the customers go through the funnel?)
- Sales statistics (Example questions: Which products are sold best and worst? How often are they sold? Which target groups purchase them? What is the customer lifetime value? What is the cost of acquisition?)
We refer to data as gold. When gold is unprocessed, it may just collect dust in a safe. It’s when gold is processed into usable goods, that its worth is truly realized. Growth hacking lets you transform gold you probably did not know you had into usable goods. Via the experiments the gold stock is replenished, giving you even more to work with.