The term “Growth Hacking” is thrown around a lot these days, mainly by tech companies that seek to learn and apply its concepts to grow their business quickly and efficiently. But what does it mean, and how can it help you attract more clients and reach higher profits? Let’s dig in and find out!
What is Growth Hacking?
Growth Hacking is a way of working your business' growth based on the empirical construction of best practices from hypotheses and experiments. For those who think that it’s a question of having a brilliant idea that will change the paradigms of the company's results, that’s not the point!
To completely understand the concept of Growth Hacking, it is also necessary to know its origin. The term was created in 2010 by Sean Ellis (former growth leader at Dropbox). Ellis, when analyzing companies that had fast growth, found that they all had points in common:
They used outside-the-box marketing strategies instead of conventional ones;
They had teams dedicated to company growth with a very heterogeneous background;
They made rigorous optimizations based on data analysis.
In addition, Ellis also noticed that these companies had a step-by-step process to implement improvements and make the company grow sustainably.
How to apply Growth Hacking in your company?
As we saw in the previous topic, Groth Hacking is a sequence of actions that aim to meet the premise of growth. Thus, it’s composed of 6 steps that, when implemented effectively, can engage the entire company and bring expressive results quickly. Let's talk about each one.
Define which problem of your company you want to solve
The first step is to raise improvement opportunities in your business. After that, choose which one is the most important to be solved and focus on it. For example: Imagine that you did an analysis and realized that your company's bottom-of-funnel conversions like quote requests, test orders, and contact are stagnant for a semester. So you were able to set the focus for improvement.
Raise ideas to solve the problem
After defining the focus, the second step is to raise ideas for improvements in any area: website homepage, product description page, pricing page, blog, email template, etc. – always thinking about the metric focus of the experiments (generate more conversions, in the example). To define which idea should be applied first, analyze its potential, importance, and difficulty.
Modeling the experiment
You need to answer what the experiment is and what your hypothesis is about it. Good modelings contain the following elements:
1 - Hypothesis
Define the hypothesis of the experiment. It’s essential to relate the change and the (numerical) impact it will bring on the results. In the previous example, we can define our hypothesis: "By reducing from 8 to 4 fields in the Landing Page 'X' form, we want to increase the conversion rate by 20%".
2 - Key performance indicators (KPIs)
These are the metrics to look out for to ensure you are proving or disproving your hypothesis. Example: landing page visits, conversions, and conversion rate.
3 - People involved
Who did and participated in the experiment in some way?
4 - Tools involved
What tools and resources it's needed to put the experiment into practice?
5 - Workflow
6 - Monitoring
Define how to monitor the results. Will it be watched daily? Weekly? Just at the end of the experiment?
Good modeling ensures that: the purpose is clear to the entire team (hypothesis); you are thinking about all the steps and good execution (workflow); and you are measuring the right thing in the right way (metrics).
Now it’s time to run the model. Plan the steps well, set up the experiment, test how it works, and track the results.
8- Results analysis
After analyzing the metrics, ask yourself: Was the hypothesis confirmed? If not, what can explain this non-confirmation? What were the main lessons learned? What ideas can I extract for future experiments? If so, how can I systematize and enlarge this experiment? Most experiments go wrong, so it's fundamental to use these learnings to generate new ideas.
9- Next steps
If the hypothesis is not confirmed, try a new cycle of experiments. Sometimes it’s common to work on a “2nd version” of the same experiment and use the lessons learned previously to model the new hypothesis.
When the experiment works, plan actions to expand it. When we apply the experiments, the tests are usually done on just one page or on a small volume of online traffic to know if there will be a positive result and if it will not cause any harm. Thus, it’s natural that results don’t have as much impact on a macro scale.
Therefore, by replicating and expanding this strategy, the results take on a relevant volume. Imagine if you get that 20% increase in conversion from the Landing Page of the initial example, generating one additional quote request each week. It seems useless. But if your company has dozens of Landing Pages and you apply this change to all of them, it could have a very expressive increase.
Growth Hacking is a philosophy of constant improvement that allows you to scale your business quickly and sustainably through the application and empirical analysis of experiments and hypotheses. Growth hackers experiment, test, and always push limits with unconventional acquisition strategies.
The premises are: growing (the process needs to encompass several expertises, which go through the acquisition, activation, revenue, retention, and referral of users), north metric (it is a metric that defines what growth means for your company or any problem that you will solve) and experiments (they are the engine of the growth hacking operation).
The three main reasons for implementing Growth Hacking in your company are: quickly and expressive growth through several small ones, running several experiments at once, and the learning accumulation that generates more ideas for optimization.
Now that you have understood the main concepts, it’s time to apply this strategy to your business!