Growth hacking is one of the biggest buzzwords of the past years, and in 2021, it’s no different, which is why so many people are asking, “What is Growth Hacking?”
Consultants, marketers, and entrepreneurs call growth hacking the best way they grow a business and some even call it ‘the future of marketing’, but what does it mean?
In this article, I’ll give a clear definition and explain what growth hacking is and how growth hacking works. Let’s get started with the definition of growth hacking:
The origin of growth hacking comes from 2010 when Sean Ellis coined the term and has mostly been popular among startups, because of the limited budgets and resources. Since then, more people stood up and started calling themselves a growth hacker, growth marketer, technical marketer, data-driven marketer or head of growth.
Ever since it has seen a huge increase in popularity among scale-ups and larger, traditional companies. Companies like Uber, TikTok or Shopify have their own VP/Head of Growth and dedicated growth team(s).
What is the difference between Growth Hacking versus Marketing?
“But Ward, isn’t that just the modern way to do marketing? Isn’t Growth Hacking just ‘marketing-done- well’?”
I have to confess that the difference isn’t that big at some times. In my opinion, there are several differences in job description between growth hackers versus traditional marketers, that you can’t put those two in the one basket, and that makes that growth hacking deserves its own term.
For this reason, many people and especially in enterprise business use the term ‘Growth Marketing‘ to keep it simple (and for the bad associations with the word ‘hacking’).
There are six differences between marketing versus growth hacking:
· A growth hacker focuses on next growth opportunities, while marketers are often already too busy with current day-to-day marketing and branding.
· A growth hacker uses the entire funnel, including Retention and Referral, where most marketers look at Awareness and Acquisition.
· A growth hacker runs small experiments; he tests which directions work best/show most potential, where a marketer often works on bigger, long-term projects.
· A growth hacker works data-driven, where that is not the case for most marketing departments.
· A growth hacker has more technical skills, such as programming, tooling and automation.
· A growth hacker is involved in the product, because, among other things, he has to pay attention to the retention of active customers.
What does a Growth Hacker do?
Skills of a Growth Hacker
As a growth hacker, you have to be able to work quickly and therefore you have to be as independent as possible. That is why it is important for a growth hacker to be able to program, handle data and design. He/she does not have to be an expert in everything, but in any case, has to understand the basis to be able to execute the biggest part by themselves.
You need a broad skill set: knowledge of data is necessary because that is the only way to find your main problem and its cause. Then comes creativity to come up with solutions for this problem and finally, a growth hacker needs technical skills to bring these solutions to reality. Hence these are the skills of a T-shaped Growth Hacker:
A growth hacker should have 20% of all the knowledge needed to execute 80% of the work. It is therefore much more efficient to at least master the basics of the fundamental and generalistic growth hacking skills and a large arsenal of growth hacking tools, while learning the Specialist Skills on the job.
Which technical skills should a growth hacker have?
· Build landing pages
· Build websites
· Design and understand colors, fonts, branding, etc.
· Run ads on channels like AdWords, Facebook, LinkedIn, etc.
· Basic HTML and CSS
· Implement tracking tools like Google Tag Manager, Google Analytics, Hotjar, etc.
· And many more concepts/techniques, like conversion rate optimization, Artificial Intelligence in marketing, web scraping, chatbots, API’s, etc.
A Growth Hacking mindset
The question “What is Growth Hacking?” is such a difficult question, because above all growth hacking is a way of thinking/working, commonly referred to as the ‘Growth Hacking Mindset‘.
A growth hacker sets the goal above the means; growing his ‘North Star Metric‘ is his main goal and which channel, technique or tool is used for this is secondary. That is why it is so important that a growth hacker has a broad set of knowledge and skills.
Having a growth hacking mindset, means:
· Speed > Perfection: It’s better to see quickly if something has potential, versus building it from start-to-end, only to find out that you misinterpreted your customer. You see this come back through the experiments and the less-talking-more-doing mentality.
· Make data-driven decisions: By using data, you can positively improve your effectiveness. Where to focus your time and resources for the most significant impact? What improvement would bring the most growth based on data from our experiments? Which type of users is most valuable?
· Always be improving (both in business and personal): There is always a new bottleneck in your business’s growth to tackle. And in personal terms, you learn to have a high level of “Learnability”: If you don’t know how something works, you just start to Google it to find out.
1. Discover your Growth Bottleneck – The Pirate Funnel
First, we need to understand what is holding back your current growth from growing faster. We want to tackle the weakest point of the business first, because it’s likely the easiest part to improve and at the same time have the biggest possible upside.
For this, growth hackers use the Pirate Funnel. The Pirate funnel is a model by Dave McClure to cut a company in six phases: Awareness, Acquisition, Activation, Revenue, Retention and Referral. The first letters of the stages spells AAARRR, hence the name Pirate funnel. This model can be put on any business model.
Use the Pirate Funnel Canvas and follow the included instructions to find your bottleneck. Use your Google Analytics, customer database, other analytics tools or, if you must, educated guesses to fill in the metrics. This way you’ll see where you lose most customers and thus potential growth.
Now that we know where we are losing most customers, we have to find out why we lose customers at that step. How?
· Do customer interviews.
· Read your negative reviews.
· Watch Hotjar recordings.
· Poll current customers/random people.
· Do 5-second tests with UsabilityHub.
Make sure that you have some data or evidence. Believe me: It will dramatically increase your success rate of solving the problem and improving your growth in the next steps. This is what it means to be data-driven.
(For more details on the above step, read: “What is the Pirate Funnel and how to apply it in 5 steps?“)
2. Set up your Growth Experiments – G.R.O.W.S. Process
Okay, thanks to the Pirate Funnel we’ve found our focus metric to work on. This point will be your only focus and is known among growth hackers as the ‘One Metric That Matters’ (OMTM).
By trying a channel/tactic in a small experiment, you can avoid losing a lot of time or money. If during an experiment it appears that it doesn’t work, then you do not have to invest in it. If it does, you can continue exploring. In this way, a growth hacker ensures a higher ROI (“Return on Investment”) by spending time on the most effective channels. Here you can also see the big similarity between Growth Hacking and Lean Startup.
Here we start the widely-used G.R.O.W.S.-process:
· Gather Ideas
· Rank Ideas
· Outline Experiments
· Work work work
· Study Outcome
(For a more detailed explanation of the steps below, read “G.R.O.W.S.-process explained: A step-by-step growth hacking process“)
Start by gathering your ideas and rank them with the PIE prioritization factors: Potential of success, Impact if successful & Ease/cost. Now we know what our best possible solution is, we need to turn it into a growth hacking experiment: a small, quick-to-execute test to see if our idea would work if we’d fully implement it.
To make it easy for you, I’ve created a little cheat sheet including a set of questions to design an experiment effectively: a Growth Experiment Card.
Time to move on!
3. Analyze & Implement
Now probably you’ve tried a few solutions (remember: start small!) and see if it delivers anything.
For example: Does my conversion rate improve if I give people a free trial of the product? Or: How much longer does a user stay active in my software if I send them daily, educational emails? Just try!
If you’ve filled in the Growth Experiment Card, you now know if your experiment was a failure or a success.
Make sure to follow-up on the experiment outcome: If it failed, plan in your second-best experiment idea to test. If it was successful, make sure that that new insight is being adopted in your business: Let the development team implement the full improvement, spread the knowledge of what works with colleagues and look where else this same winning principle could be applied.
And then…
4. Repeat this G.R.O.W.S-Process
The circle is round! Each experiment will give you new insights, every analysis will uncover new bottlenecks to be improved and every time you fix the worst bottleneck, there comes a new ‘worst’ bottleneck to be solved.
Next to these bottleneck-driven experiments, you can also do opportunity-driven experiments. This is when you see an opportunity that might bring a bigger upside then fixing a bottleneck. These become more and more common for growth hackers when your company is maturing as a scale-up or corporate.
Need inspiration? Growth Hacks & Tactics for 2021
Here are a few amazing lists of growth hacking ideas & tactics that you can use as inspiration for your new growth hacking adventures:
· Read 200+ Growth hacking ideas by Ladder.io, a polish growth hacking agency
· Read Wishpond’s 100 Growth Hacks, Strategies & Techniques
Or follow some blogs and communities below to stay up to date with the latest growth hacking trends.
Growth hacking is one of the biggest buzzwords of the past years, and in 2021, it’s no different, which is why so many people are asking, “What is Growth Hacking?”
Consultants, marketers, and entrepreneurs call growth hacking the best way they grow a business and some even call it ‘the future of marketing’, but what does it mean?
In this article, I’ll give a clear definition and explain what growth hacking is and how growth hacking works. Let’s get started with the definition of growth hacking:
The origin of growth hacking comes from 2010 when Sean Ellis coined the term and has mostly been popular among startups, because of the limited budgets and resources. Since then, more people stood up and started calling themselves a growth hacker, growth marketer, technical marketer, data-driven marketer or head of growth.
Ever since it has seen a huge increase in popularity among scale-ups and larger, traditional companies. Companies like Uber, TikTok or Shopify have their own VP/Head of Growth and dedicated growth team(s).
What is the difference between Growth Hacking versus Marketing?
“But Ward, isn’t that just the modern way to do marketing? Isn’t Growth Hacking just ‘marketing-done- well’?”
I have to confess that the difference isn’t that big at some times. In my opinion, there are several differences in job description between growth hackers versus traditional marketers, that you can’t put those two in the one basket, and that makes that growth hacking deserves its own term.
For this reason, many people and especially in enterprise business use the term ‘Growth Marketing‘ to keep it simple (and for the bad associations with the word ‘hacking’).
There are six differences between marketing versus growth hacking:
· A growth hacker focuses on next growth opportunities, while marketers are often already too busy with current day-to-day marketing and branding.
· A growth hacker uses the entire funnel, including Retention and Referral, where most marketers look at Awareness and Acquisition.
· A growth hacker runs small experiments; he tests which directions work best/show most potential, where a marketer often works on bigger, long-term projects.
· A growth hacker works data-driven, where that is not the case for most marketing departments.
· A growth hacker has more technical skills, such as programming, tooling and automation.
· A growth hacker is involved in the product, because, among other things, he has to pay attention to the retention of active customers.
What does a Growth Hacker do?
Skills of a Growth Hacker
As a growth hacker, you have to be able to work quickly and therefore you have to be as independent as possible. That is why it is important for a growth hacker to be able to program, handle data and design. He/she does not have to be an expert in everything, but in any case, has to understand the basis to be able to execute the biggest part by themselves.
You need a broad skill set: knowledge of data is necessary because that is the only way to find your main problem and its cause. Then comes creativity to come up with solutions for this problem and finally, a growth hacker needs technical skills to bring these solutions to reality. Hence these are the skills of a T-shaped Growth Hacker:
A growth hacker should have 20% of all the knowledge needed to execute 80% of the work. It is therefore much more efficient to at least master the basics of the fundamental and generalistic growth hacking skills and a large arsenal of growth hacking tools, while learning the Specialist Skills on the job.
Which technical skills should a growth hacker have?
· Build landing pages
· Build websites
· Design and understand colors, fonts, branding, etc.
· Run ads on channels like AdWords, Facebook, LinkedIn, etc.
· Basic HTML and CSS
· Implement tracking tools like Google Tag Manager, Google Analytics, Hotjar, etc.
· And many more concepts/techniques, like conversion rate optimization, Artificial Intelligence in marketing, web scraping, chatbots, API’s, etc.
A Growth Hacking mindset
The question “What is Growth Hacking?” is such a difficult question, because above all growth hacking is a way of thinking/working, commonly referred to as the ‘Growth Hacking Mindset‘.
A growth hacker sets the goal above the means; growing his ‘North Star Metric‘ is his main goal and which channel, technique or tool is used for this is secondary. That is why it is so important that a growth hacker has a broad set of knowledge and skills.
Having a growth hacking mindset, means:
· Speed > Perfection: It’s better to see quickly if something has potential, versus building it from start-to-end, only to find out that you misinterpreted your customer. You see this come back through the experiments and the less-talking-more-doing mentality.
· Make data-driven decisions: By using data, you can positively improve your effectiveness. Where to focus your time and resources for the most significant impact? What improvement would bring the most growth based on data from our experiments? Which type of users is most valuable?
· Always be improving (both in business and personal): There is always a new bottleneck in your business’s growth to tackle. And in personal terms, you learn to have a high level of “Learnability”: If you don’t know how something works, you just start to Google it to find out.
1. Discover your Growth Bottleneck – The Pirate Funnel
First, we need to understand what is holding back your current growth from growing faster. We want to tackle the weakest point of the business first, because it’s likely the easiest part to improve and at the same time have the biggest possible upside.
For this, growth hackers use the Pirate Funnel. The Pirate funnel is a model by Dave McClure to cut a company in six phases: Awareness, Acquisition, Activation, Revenue, Retention and Referral. The first letters of the stages spells AAARRR, hence the name Pirate funnel. This model can be put on any business model.
Use the Pirate Funnel Canvas and follow the included instructions to find your bottleneck. Use your Google Analytics, customer database, other analytics tools or, if you must, educated guesses to fill in the metrics. This way you’ll see where you lose most customers and thus potential growth.
Now that we know where we are losing most customers, we have to find out why we lose customers at that step. How?
· Do customer interviews.
· Read your negative reviews.
· Watch Hotjar recordings.
· Poll current customers/random people.
· Do 5-second tests with UsabilityHub.
Make sure that you have some data or evidence. Believe me: It will dramatically increase your success rate of solving the problem and improving your growth in the next steps. This is what it means to be data-driven.
(For more details on the above step, read: “What is the Pirate Funnel and how to apply it in 5 steps?“)
2. Set up your Growth Experiments – G.R.O.W.S. Process
Okay, thanks to the Pirate Funnel we’ve found our focus metric to work on. This point will be your only focus and is known among growth hackers as the ‘One Metric That Matters’ (OMTM).
By trying a channel/tactic in a small experiment, you can avoid losing a lot of time or money. If during an experiment it appears that it doesn’t work, then you do not have to invest in it. If it does, you can continue exploring. In this way, a growth hacker ensures a higher ROI (“Return on Investment”) by spending time on the most effective channels. Here you can also see the big similarity between Growth Hacking and Lean Startup.
Here we start the widely-used G.R.O.W.S.-process:
· Gather Ideas
· Rank Ideas
· Outline Experiments
· Work work work
· Study Outcome
(For a more detailed explanation of the steps below, read “G.R.O.W.S.-process explained: A step-by-step growth hacking process“)
Start by gathering your ideas and rank them with the PIE prioritization factors: Potential of success, Impact if successful & Ease/cost. Now we know what our best possible solution is, we need to turn it into a growth hacking experiment: a small, quick-to-execute test to see if our idea would work if we’d fully implement it.
To make it easy for you, I’ve created a little cheat sheet including a set of questions to design an experiment effectively: a Growth Experiment Card.
Time to move on!
3. Analyze & Implement
Now probably you’ve tried a few solutions (remember: start small!) and see if it delivers anything.
For example: Does my conversion rate improve if I give people a free trial of the product? Or: How much longer does a user stay active in my software if I send them daily, educational emails? Just try!
If you’ve filled in the Growth Experiment Card, you now know if your experiment was a failure or a success.
Make sure to follow-up on the experiment outcome: If it failed, plan in your second-best experiment idea to test. If it was successful, make sure that that new insight is being adopted in your business: Let the development team implement the full improvement, spread the knowledge of what works with colleagues and look where else this same winning principle could be applied.
And then…
4. Repeat this G.R.O.W.S-Process
The circle is round! Each experiment will give you new insights, every analysis will uncover new bottlenecks to be improved and every time you fix the worst bottleneck, there comes a new ‘worst’ bottleneck to be solved.
Next to these bottleneck-driven experiments, you can also do opportunity-driven experiments. This is when you see an opportunity that might bring a bigger upside then fixing a bottleneck. These become more and more common for growth hackers when your company is maturing as a scale-up or corporate.
Need inspiration? Growth Hacks & Tactics for 2021
Here are a few amazing lists of growth hacking ideas & tactics that you can use as inspiration for your new growth hacking adventures:
· Read 200+ Growth hacking ideas by Ladder.io, a polish growth hacking agency
· Read Wishpond’s 100 Growth Hacks, Strategies & Techniques
Or follow some blogs and communities below to stay up to date with the latest growth hacking trends.
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