In the past few years, unusual job titles that include words like “rockstar”, “ninja”, and “guru” have become trendy. If you’ve never heard of growth hacking before, you might be tempted to put “growth hacker” into this category. After all, what does it mean to “hack” the growth of a company? Isn’t that the same thing as 

marketing?

Well, not exactly. Growth hacking is a field that’s somewhat distinct from conventional marketing, and only certain types of companies hire growth hackers. According to Google Trends data the term began gaining in worldwide popularity around 2014.

growth hacking

However, the concept of growth hacking is actually a few years older. Sean Ellis, entrepreneur and CEO of GrowthHackers, first introduced the term in a 2010 blog post.

Below, we’ll explain what exactly growth hacking is, why it’s important, and how you can use these techniques to get better results for your business. 

What is growth hacking?

 

Growth hacking is a methodology typically used by early-stage startups. These emerging companies need to grow quickly and cheaply to get their business off the ground.

Growth hacking is lean, efficient marketing based on testing and experimentation. It’s about coming up with innovative ideas and comparing them to see what works best, then repeating this process over and over to drive growth. The “hacking” part of “growth hacking” implies a technical or scientific mindset. Besides just conducting experiments, growth hackers must be able to use the data they gather to make smart decisions. 

Who is a growth hacker?

Growth hackers require specific traits. They should be analytical, highly disciplined, creative, and strategic.

Most growth hackers:

  • Work at an early-stage startup
  • Are focused on rapidly growing their company
  • Favor lean, low-cost strategies
  • Use experimentation and testing to find the best growth techniques
  • Regularly measure the success of their initiatives

   

I would define growth hacking as aligning a team around the North Star metric with rapid experimentation in big areas of opportunity. Thinking about growth this way helps keep me on track and do things that make a measurable difference for our users. And, it makes the often overlooked point that the people on your team are an important part of your growth equation. 

                                                                                                                                                 - Anuj Adhiya, Vice President of Growth, Sophya


Growth hacking: Why is it important now?

 

With the growth of Silicon Valley and the startup economy, growth hacking has become increasingly important. Modern businesses operate in a fast-paced, competitive environment. As new technologies rapidly emerge, companies must pursue aggressive and agile business strategies to succeed in the market. 

Growth hacking is all about rapid results, user testing, and creative marketing strategies. These are key concepts for growth-focused businesses, especially startups bringing out a never-before-seen product. Since these companies are still unknown, they need a fast way to gain new customers at the beginning. This can help them attract investors, making their future growth snowball and sending them on an upward trajectory. 

growth hacking

Growth Hacking vs. Marketing: Is There a Difference?

 

Growth hacking is a subset of marketing, but it’s different from conventional marketing.

Growth hacking typically:

  • Happens at startups or early-stage businesses
  • Is focused on rapidly growing the business
  • May extend beyond the marketing department
  • Is mainly concerned with experimentation and testing
  • May use unconventional methods to get fast results

On the other hand, conventional marketing:

  • Can happen at any business, from startups to large corporations
  • Is focused on growing the business over the long term
  • Happens in the marketing department, and may be segmented into channels
  • Is mainly concerned with executing initiatives according to a marketing strategy
  • Is more likely to use conventional, lower-risk methods

Types of Growth Hacking

Viral Growth Hacking

Most people know what it means to go viral on social media: create a post, get people to like and share it, and watch your engagement increase exponentially.

Viral growth hacking is based on the same idea, but instead of a social media post, the viral effect applies to your product sales.

For example, imagine you’ve gained five customers. Each customer might share the product with five of their friends, who share the product with five of their friends, and so on. This is sometimes called a “viral loop”.

growth hacking

The easiest way to set up a viral loop is to create a product that users will naturally want to share. For example, if a user signs up for a communication tool like WhatsApp, they’ll want their friends to sign up too, so they can talk to them on the app. But if your product doesn’t have this kind of “built in” virality, there are still ways you can encourage sharing—like referral programs and incentives.

Sticky growth hacking

Sticky growth hacking is about getting customers to "stick" to your product. Rather than continuously gaining new users, you’ll want to create something that keeps existing users coming back for more.

Social media like Facebook and Instagram are "sticky" products, since they encourage regular engagement and have low churn rates. 

growth hacking

Paid Growth Hacking

Paid growth hacking is based on the traditional marketing techniques you may already be familiar with. Paid social, content marketing, promotions, and giveaways can all be effective, but they require some capital investment up front. 

paid growth hacking

Five growth hacking examples

 

1. DoorDash

 

For its first few years of operation, food delivery startup DoorDash didn’t run paid marketing campaigns at all. Instead, they reached out to customers through flyers and word-of-mouth to create a viral buzz. They then used highly personalized emails and customer service to keep those early adopters with the company.

Today, DoorDash has retained this growth hacking ethos. During the COVID-19 pandemic, the company began offering deliveries of essential household goods as well as restaurant food. This pivot in strategy allowed DoorDash to grow dramatically and surpass its rivals in 2020, eventually leading to a successful IPO later that year.  


2. Glossier 

 

Skincare and beauty brand Glossier has successfully used viral growth hacking to grow their business through word-of-mouth. About 70% of the company’s online sales and traffic come from peer-to-peer referrals. Overally, nearly 80% of customers are referred by a friend. 

So what’s the secret to Glossier’s success? The brand has focused heavily on community-building. Glossier’s Instagram account posts content specifically tailored to their target audience. They continuously engage with customers and even turn them into “micro-influencers”, reposting selfies of real clients wearing Glossier products. 

audience segmentation goodfood screenshot

 

3. Freshworks 

 

Doing business is no longer about merely selling products or services. Businesses are now geared towards nurturing lasting relationships and creating meaningful experiences—it’s the age of the experience economy. Across businesses, jobs and industries, many of us work hard to deliver valuable experiences to our customers. Freshworks has launched Refresh Community, a platform that brings together its members to help them learn and gather insights across CX, IT, Sales & Marketing; network with like-minded professionals, peers and thought leaders, and enable them to grow their business, careers and skills.

 

refresh community

4. Tinder

 

Another growth hacking example comes from Tinder. This wildly popular dating app was launched in 2012, and reached 10 million users in just two years.

To support its growth, Tinder used a combination of viral, sticky, and paid strategies. The company’s former VP Marketing, Whitney Wolfe Herd, personally visited college campuses to drum up interest through word-of-mouth. The Tinder concept is radically different from dating websites that preceded it, since the experience is highly simple and gamified. Users can easily set up a profile and swipe right or left on potential dates, without the need to fill in complicated profiles. 

 

growth hacking example

 

And the company has invested in a number of unique experiential marketing campaigns, including a partnership with Domino’s Pizza and celebrity brand integrations.

 

5. Mint

 

Personal finance and budgeting app Mint is now owned by Intuit, but originally began as an independent startup. After Noah Kagan joined as the app’s Marketing Director, Mint grew to 1 million users in just six months.  

Kagan used a mixture of paid marketing channels to achieve this rapid growth. Specifically, he developed a framework known as “quant-based marketing”. Quant-based marketing involves reverse-engineering a business goal using a unique seven-step method. 
 

How to Start Growth Hacking: Strategies and Tips to Get You Started

 

1. Evaluate Product-Market Fit

 

The first step in growth hacking is to have a great product. To sell well, a product must have a strong product-market fit. That is, there should be a clear market out there for the product, and the company should have a keen understanding of the product’s target audience. 

Pirate Funnel

One tool commonly used to evaluate product-market fit is called the “pirate funnel”. Growth hackers use the pirate funnel to narrow down areas to focus on within their business model.

Why “pirate funnel”? Well, this tool is also known as the AARRR funnel (as in “Aarrr, matey!”). The acronym AARRR stands for Acquisition, Activation, Retention, Revenue, and Referral. This model was developed by venture capitalist Dave McClure. 

growth hacking product market fit

2. Segment Customers

 

Segmenting customers is a very important concept in growth hacking. You can separate your customers into groups based on demographic and psychographic characteristics, interests, behavior, needs, business value, or geography. It may be helpful to create personas or customer avatars to better understand these groups.

Once you’ve created your segments, you can build a marketing strategy that appeals to the needs of those segments. This might mean using separate email marketing lists, dividing your company blog into different sections, or creating targeted ad campaigns.

growth hacking segment customers

Anuj Adhiya believes growth hacking is all about getting a good understanding of people’s motivations. According to him, "Growth is all about helping your users achieve their goals. Which means that you need to understand what their problems and dreams are for themselves. If you pay attention only to quantitative analytics, you will only know what happened. You won’t understand why something happened. This is the qualitative aspect of growth, which is often underrated and under-executed. If you can understand the “why”, it becomes easier to serve those needs. Growth becomes easier as a result."

 

3. Experiment with New Growth Strategies

 

Customer Activation

“Customer activation” is about moving your existing clients to the next stage of the customer lifecycle. This might mean getting a free customer to upgrade to premium, or getting a premium customer to refer their friends to your platform. 


To activate your customers, you’ll need to have mapped out their lifecycle and defined your buyer personas. You can then create highly targeted campaigns to nurture different segments of your customer base. 

Referral Campaigns

To get existing clients to refer your product to their friends, try offering an incentive. For example, each user can be given a unique referral link. For every new user that signs up using that link, the referring user receives a financial or other reward within your platform.

Podcasts

Podcasts are growing in popularity—100 million people listened to one each month in 2020, and this number is expected to reach 125 million by 2022. To drive growth using podcasts, you can advertise on existing podcasts or have your team members start their own. 

Webinars

Offering free webinars to your client base is a great way to show your expertise and get customers to engage with your company. If your clients respond well to this format, you could even consider hosting an in-person event. 

Product Review Sites

Promoting your product on product review sites has two key benefits. First, more people will hear about your company. Second, the product review site will probably link back to your website, offering you a boost in the search engine rankings. 

Influencer Outreach

Working with social media influencers can give your product a boost, but the key is to stay true to your brand. Be sure to seek out influencers who will appeal to your target audience, and choose platforms your audience already uses. For example, a beauty brand might want to advertise with a lifestyle influencer on Instagram, while a software company may find their audience on a tech-focused YouTube channel. 

Email Marketing

Hopefully you’ve already begun building up an email list for your company. This list may be made up of current customers, newsletter subscribers, or leads who’ve put in their email address in exchange for a free ebook or other incentive.

To use this list effectively, make sure your emails are adding value. If you’re still at the stage where you can do so, try to make your contacts personal (e.g. “How are you finding the platform? Is there anything I can help you with?”) If your email list is too large for this tactic, try using segmentation to ensure the right message is reaching the right people. 

Guest Blogging

Like product review sites, guest blogging has two main advantages: it promotes your company, and it helps your SEO. To achieve both of these aims effectively, make sure the websites you’re guest-blogging for are of high quality.

To establish your expertise, you could consider having your executives create thought leadership content for a business site like Forbes. You could also use a service like Help a Reporter Out to give comments to the media.

Content Marketing

Finally, you can use content marketing as a growth hacking strategy. This involves creating online content like blog posts, guides, and white papers. Having helpful content on your website demonstrates your expertise, and it’s also a crucial factor in gaining search engine traffic. To get maximum results from your content marketing, you should try to strike a balance between search engine optimization and user needs. 

 

Pro-tip for growth hacking: To-do list for onboarding

 

Another tip that Anuj Adhiya recommends for growth marketers is a to-do list during onboarding. If you already have one, play around with what’s on the list or the order of to-dos. A to-do list helps new users through a path to a predictable first-experience which in turn helps them get to their aha! moment as soon as possible.

A great first experience is important because without it there is no second experience and any other growth efforts will suffer as a result. Multiple onboarding tools now provide functionality to make testing this easy

4. Evaluate Your Growth Experiments

 

As you try out different growth hacking strategies, be sure to evaluate what’s working and what isn’t. You can do this by gathering and analyzing data, using a tool like Freshsales. 

A/B Testing

A/B testing is one of the most common growth hacking techniques out there. It’s about comparing two versions of something, Version A and Version B, to see which one performs better. You can A/B test a webpage, ad, or email campaign. To ensure the data you get from A/B testing is accurate, remember to control for confounding variables (like holidays or special events).

Test your pages and pick the page that works for your audience. 

Heatmaps

Heatmaps help you see what users are doing on your website. You can use heatmaps to understand what users are clicking on or ignoring, and where they might be getting stuck. When reading a heatmap, spots of warmer color indicate higher visitor engagement, while cooler colors denote lower engagement. 

Set up heatmaps and understand your user journey on your website.

Google Analytics

Google Analytics is an additional tool you can use to evaluate performance on your website. With Google Analytics, you can gain information on pages viewed per session, bounce rate, average time on site, and more.
 

Growth Formulas


Viral Coefficient (K):

This is the number of new users generated by each existing user. There are a variety of different formulas used to calculate the viral coefficient. Here’s one example: 

 

 

viral coefficient formula


Customer Acquisition Cost (CAC):

The CAC is the approximate amount it costs you to acquire each of your customers. It can alert you if your spending is outpacing your growth. Here’s how to calculate CAC:
 

Customer Acquisition formula
Lifetime Value of Customer (LTV):

This formula tells you how much value each customer brings to your business over their entire lifecycle (that is, the entire time they’re purchasing from you). Here’s how to calculate it: 
 

5. Analyze and Track Metrics

As you track the performance of your experiments, there are certain metrics you should keep an eye on, from Net Promoter Score (NPS) to email performance and churn rate.

You may need to create reports to present these metrics to other stakeholders in your company. As a growth hacker, you’ll want to be sure you’re meeting your monthly and quarterly goals.

Automated reports can save a tremendous amount of time during this process. With Freshsales, you can easily create automated sales and marketing reports at regular intervals. You’ll also be able to use the data you gather to predict future outcomes, and share your reports with other teams.   

audience segmentation prune list