Rarely does a startup have enough money to fund its primary marketing efforts. Most of them earn just enough money to survive and pay their employees, while some have a hard time making the ends meet. So competing with the big organizations through traditional marketing is a far-off dream for most of them.
So how can make your product get noticed and used by people?
We all know, not all great products came out to be popular unless you back them up with an effective marketing effort.
Take Everpix as an example. A great app, that was critically acclaimed by specialists and early adopters. The app would let you sort the best shots from a bunch of almost the same photos using a sophisticated algorithm. If you ever faced the uphill task of choosing the best photos from thousands of others, when you just come back from a tour, you'd realize the true wonder of Everpix.
However, despite building such a great product, they did not do enough to market the app. Thus, the product shut down after a short span of time after launching.
That's where comes the usefulness of Growth Hacking for startups. A type of marketing that can help you attain growth, despite lacking in funds. The term “Growth Hacking” has become a buzzword, and that happened for a reason.
So if you have a startup struggling to gain traction or planning to build one, this article is for you. We will let you know how to use growth hacking for startups and be a ninja marketer.
So, What is Growth Hacking?
Growth Hacking is a marketing technique that relies on continuous idea generation and experimentation. According to Sean Ellis, who invented the term growth hacking, “The definition of growth hacking was actually based more on the definition of what growth hacking is not”. “Growth hacking is about running smart experiments to drive growth within your business. Marketing is about experimentation to move growth as well”, he adds.
In simpler terms, growth hacking is an experiment-driven marketing technique that helps you market a product with impactful but cost-effective ideas.
Growth hacking relies on rapid idea generation and A/B testing. When you find one true idea that helps you skyrocket your growth like a supersonic jet, only then you'll realize the value of testing a hundred other ideas.
Growth hacking strategies proved to be effective for companies like Tinder and many others, and there's no reason that growth hacking will not work for startups like yours.
Importance of Growth Hacking for Startups
We can't stress enough the importance of growth hacking for startups. And there are good reasons behind that.
For instance, as we have talked about above, startups tend to have a lack of financial capabilities to match their bigger competitors. So they can never pull off extravagant traditional marketing, that their larger counterparts can. But unlike traditional marketing, growth hacking usually needs little to no money to implement.
When Airbnb started its journey, it did not have enough money to gain traction using traditional marketing efforts. They understood that they need a standout idea that will set the foundation of their growth. That is when they experimented with one of the most famous growth ideas. And just like most other growth hack ideas, it took no money, just an excellent idea, and a good engineering approach.
Another reason that growth hacking for startups is so highly suggested, is because they need less human resources. This is also a common problem for startups.
Last but not the least, most growth hacking success stories show that, if you have a killer idea, growth hacking can accelerate growth faster than any other marketing technique. And there is no startup that doesn't need fast growth, is there?
The Growth Hacking Funnel and How you Should Approach It
“Growth hacking funnel” is a term that most people do not know about. But it is the fundamental formula behind the growth hacking strategy. Sean Ellis, the person who coined the term “Growth Hacking”, said that growth hacking relies on a five-step funnel.
This is called the “AARRR” model.
These represents five steps of the funnel, which are –
The acquisition is the entry to the funnel, which deals with user acquisition.
Activation means influencing the visitor to do a meaningful action, such as signing up or completing the setup wizard, and such.
Retention part is about getting the customers to repeat their purchase. When a customer does that, it shows you the essentiality and quality of your product.
Revenue, however, is the main goal of the growth hack funnel, which focuses on the primary goal of a company. The growth hack funnel revolves around this generating revenue.
You know your product has achieved must-have status when people are referring it to their friends and family. The referral part is all about getting referred by your existing customers. It is a good indicator of knowing whether your product has made an impact or not.
10 Sure Success Strategies for Growth Hacking for Startups
Growth hack strategies have the potential to uplift your growth rate very quickly. For a startup, this can prove to be very crucial. Below, we will talk about 10 growth hack strategies for startups that have the potential to kick start your little venture.
1. Build a Core Growth Team
Growth team is the one that is responsible for generating ideas. Growth team should not necessarily be a independent team. It's better to have growth team members from all department of the organization. This team should be handpicked or hire to generate ideas on top of their regular tasks.
Another thing that is important, is having a growth lead. Your growth lead will be responsible for setting the metrics and the tempo of the growth hacking experiments, while also evaluating the performances.
Overall a growth team should be formed with the 5:1 ratio in mind. That means for a startup of 5 employees, at least one will be a member of the growth team. This is a formation that is suggested by startup advisor and investor Andrew Chen.
One of the prime examples of how a growth hacking team can help your startup is the famous case of Dropbox. By September 2008, they had 100K registered users, and they were spending big dimes on marketing. By December 2009, they had more than 4 million registered users and spending almost no money on marketing.
A newly-formed growth hack team and their idea.
2. Make Sure Your Product has Achieved Product-Market Fit
As effective as growth hacking might be, you can not actually start it for a product that is not desired by the customer. In marketing terms, we call it the product-market fit.
So what is actually product-market fit?
Product-market fit means having a product in the market where that is desired.
If nobody needs the product, they will not bother using it. No matter how much growth hacking you do, or how many bucks you spend on marketing it will all be in vain.
So how do you know if you know if your product has achieved product-fit market or not?
Well, according to Sean Ellis, the person who coined the term “Growth Hacking”, the best way to know that is by asking people if they feel that product is essential for them or not. A quick way to do so is by survey. And in modern technology, there are loads of social media to run your survey and ask people, if you don't want to go door to door.
Swipes, a company that developed productivity tools because of not having the product-market fit. After 6 years of trying to market it and getting $1m in investment, the CEO admitted at last that the products they were developing were not something that their customers wanted. 6 years and $1m for nothing!
3. First and Foremost – Build an Email List
One of the first and foremost strategies for a growth hack is building an email list. So many growth hacking ideas depend on having a good email list. With $38 ROI for every dollar spent, it is by far the most rewarding way of marketing online.
There are many ways for email list building that you can follow.
Dell, the famous computer technology company ran a gif-based email marketing campaign and saw a whopping 109% increase in revenue! Still haven't started building an email list? Well, you should!
4. Generate Ideas: There's No Such thing As Bad Ideas
Groom your team in such a way that they generate ideas. The more ideas the better. You never know which is your moonshot idea, you just have to experiment more and more, and for that, you need newer ideas.
Twitter is a prime example of getting success by generating and experimenting with more and more ideas. This strategy is called the “High Tempo Testing”.
What they did is upping their tests from 0.5 to 10 tests per week. In doing so they generated more ideas and experimented with them pretty quickly.
They grew from 90,000 to 152,000 monthly active users in about eleven weeks without spending a dollar on advertising or increasing the size of their growth team. So what are you waiting for?
5. Getting back to Growth Hack Funnels – Start with Retention
We have talked about the growth hack funnels, and what each element of that funnel mean for your business. And here we are, suggesting you to form your growth hack strategy around them.
But wait, there's a catch!
Didn't we tell you that the first step of the growth hack funnel is the acquisition? Well, yes, we did tell you that. But what we didn't tell you is that according to Aladdin Happy, “Acquisition is the easiest part of the growth hack funnel”. And unless you can build a product that people want to keep buying or even after the first interaction, no matter how many users you acquire, that will only be “carrying water in a leaky bucket”, as quoted by Aladdin Happy, the Author of amazon best-seller “TOP 101 growth hacks” and the founder of GrowthHackingIdea.
Retention is the second hardest part of the growth hacking process after the product-market fit. Once you achieve product-market fit, you know that customers want your product. Now it's time to work on how you can retain these customers.
According to Aladdin Happy,
“The maximum good retention is when all of your customers stay with you forever. The maximum bad retention is when
your customers fall off the next day—altogether and forever.“
Here's how Slidebean increased their retention rate,
Slidebean made an A/B test on their pricing and found out that there is a correlation between increasing the prices and increasing retention. So, they experimented by increasing their prices over 4 times. The result? Their retention rate increased by 282%. And their Life Time Value increased by 20 times!”
6. Excel at Activation
Activation gets us back to email list building again. The more email you have, the more chance you have to reach customers to pass the activation phase of your product.
Ausmed, an education startup significantly improve its customer onboarding experience and increase its activation rate from 15% to 75% over two years.
When it comes to activation, it is the smallest things that matter. Tweak, tweak, and tweak, and you'll stumble upon a great idea now or later.
7. Revenue is The Primary Goal
“Every sale has 4 basic obstacles: no need, no money, no hurry, no trust.” Once you can overcome these 4 obstacles, your revenue will follow.
First build a financial model for your business, so that you can use the customer flow to generate revenue for your business. Because, let's be honest, in the end, if you don't have enough revenue, your business won't sustain the long run.
After creating a financial model, focus on how to improve your revenue generation through innovative growth hack ideas.
In one test, the guarantee for the product was changed from “a 30-day money-back guarantee” to “a 100%-money-back guarantee within six months, and a double-your-money-back within the first 30 days.”
The result was an increase in sales by 133%.
8. Make People Refer Your Products
When people like your product, they refer it to others. And that is one of the primary objectives for any business. But reaching that point takes time. Before you reach that point, you'll still need referrals, right?
So how do we get it?
If organic referrals don't happen, then growth hack with new ideas to get them. Remember that the holy grail of virality is to reach such a point when each of your users invites at least one new user.
Above is one such trick to get people to refer or share you in their private space. Another way is to incentivize your user for referring their friends.
Dropbox’s referral program was one of the greatest examples of that. Their business was to offer storage space in the cloud, so they decided to reward people with free space for referring to their friends. However, they also rewarded the same for someone who is accepting an invitation.
And guess what? Business flourished!
9. Growth Hack Funnel Ends with Acquisition
Finally, the stage that was supposed to be the gateway to the growth hack funnel, is the last one that we'll look into.
Because, once you have all other strategies in place, only then you can keep your acquired customer happy. Also acquiring customers is quite easy these days. You have loads of opportunities to acquire them. Content Marketing, SEO, Amazon Book, Email Marketing, Free Tools, Community Marketing, and many more. There are just so many places to find users, so don't worry about them.
Just use the channels mentioned above and wait for the users to find you. That's all it takes!
10. Follow the Successful Growth Hack Case Studies
The last one of the strategies is to follow the tried and tested. When you don't have enough resources to brainstorm enough ideas for high tempo testing, make a small team, and try the proven growth hack experiments that were successful.
If you search online, you will find many growth hack case studies, successful examples from many startups, which will surely help you generate ideas of your own.
Bonus: Growth Hack Case Studies You Must Read
So now we will share some case studies of growth hacking that might inspire you to generate growth hack ideas for your startup.
1. Airbnb’s Growth Hack Story
Airbnb is a company that helps users to find homes and rental spaces when they are traveling to someplace. Unlike the traditional hotels, you can stay at someone's home, paying a much lower price than hotels. If someone is a homeowner, they can earn some bucks without much effort. The company now has over 12 million rental locations available online and 2.9 million hosts.
So what's the secret of Airbnb that made them so big?
Yes, the company ran one of the most famous experiments of growth hacking for startups. Well, the founder's trio of Airbnb found out that Craigslist was one of the platforms where most of their target audience are. So they wanted to build on that. However, there was no way to get the API from Craiglist to do what they intended to do.
So they built a system, that if anyone posts their home listing on Airbnb, it will automatically be posted on Craigslist as well. The result? You tell me!
2. Dropbox’s Referral Genius
Dropbox, a cloud storage company used a growth hack that remains one of the best examples of growth hacking for startups.
So what did Dropbox do?
When Dropbox started, there was multiple cloud storage company, competing for the top spot. Like all of them, Dropbox also spent a lot of bucks on digital ads. However, it was not giving them the result they wanted.
As a matter of fact, for each acquisition of $99, they spent over $250. Which was never going to be feasible.
So they come up with an idea. They launched a referral program where a user could invite their friends and both of them would be rewarded with free storage. Within 1 year, their userbase grew from 100K to 4M!
3. Storytelling Hack from Dos Equis
Dos Equis, a Mexican beer company started a promotional campaign in 2006, which went on to become one of the most influencing campaign ever.
The campaign was named – The Most Interesting Man in the World.
The ad depicted the American actor Jonathan Goldsmith performing some eyecatching tasks. His already macho appearance was well-complimented with the finishing line, which was, “I don't always drink beer. But when I do, I prefer Dos Equis.”
This ad saw its sale increases by 26% in the USA that year. Apart from the punchline, the actor was termed as the most interesting man as well. This resulted in both brand awareness and an increase in sales for the company.
4. Facebook's Activation Campaign
Many of our social lives now revolve around Facebook. A company that has more than 2 billion active users. Their history of growth hacking is well-applauded all over the tech industry.
They noticed people who add their phone contacts as friends on Facebook were more likely to come back on their platform. So they made it easy for people to add friends after you register a profile on Facebook.
They saw huge success with this small activation hack.
The story of Hotmail's growth was a fun one.
What Hotmail did, was adding a signature to every user’s outgoing email, inviting the recipient to get a free account with a fun little message. They reached 12 million users which were around 20% of the share of the email market at the time. The time it took? Just 18 months!
Start Growth Hacking Today and Accelerate your Startup Growth
Are you convinced enough? Then start growth hacking today and get a better chance of seeing your business grow at the earliest. The more ideas that you generate, the more chance you will have on getting the moon shot idea, the one that turns the game around for you.