Growth hacking methodology

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To combat startups’ lack of money and experience, growth hackers approach marketing with a focus on innovation, scalability, and user connectivity. Growth hackers incorporate product growth potential, user acquisition, monetization, retention, and virality into the product itself. Fast Company used Twitter’s “suggested user list” as an example: “This was Twitter’s real secret: it built marketing into the product instead of building an infrastructure to do a lot of marketing.” However, growth hacking isn’t always free. TechCrunch shared several almost-free tricks explaining that growth hacking is effective marketing and not mythical “pixie dust” marketing. As new SaaS tools emerge that focus on more advanced forms of growth hacking, more and more tools are being offered for free.

The heart of growth hacking is the relentless focus on growth as the only metric that really matters. Mark Zuckerberg had this mindset while growing Facebook. While the exact methods vary from company to company and industry to industry, the common denominator is always growth. Companies that have been successful with growth hacking typically have a viral cycle built into their onboarding process. New customers often find the product or service through their network and, by using the product or service, share it with their contacts. This cycle of awareness, use, and sharing can result in exponential growth for the company.

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Growth hacking frames the process of acquiring users through the funnel: new users move down the funnel through 6 stages or levels (AAARRR): awareness, acquisition, activation, revenue, retention and referrals. Rapidly optimizing this process is a core goal of growth hacking, as making each stage of the funnel more efficient will increase the number of users at the most advantageous stages of the funnel.

Twitter , Facebook , Dropbox , Pinterest , YouTube , Groupon , Instagram and Google are some of the companies that use growth hacking to build their brands and improve their profits.

AAARRR
Awareness

Awareness metrics focus on getting in front of your potential customers and trying to drive them to take action. It would be impossible to measure, but every time a person sees someone wearing a branded t-shirt or a sticker with your logo on a laptop, that would be awareness.

Awareness metrics to measure : impressions, CTR, minutes of attention, website visits, and also the so-called “vanity metrics” (likes, social shares, social impressions), podcast impressions, etc.

Channels to work with : SEM (AdWords), SEO/content, display, word of mouth, retargeting and affiliation.

Acquisition (Acquisition)

Acquisition is your first transaction with a user. This is when you can target customers as individual users (and measure the results).

Instead of exchanging money for a product or service, it is typical to exchange some form of content with their permission to message them again in the future.

A good practice is to spend as much time as possible trying to move your visitors cpa email marketing database from awareness to acquisition as quickly as possible, even if you don't plan to send them a message.

Acquisition metrics to measure : New leads, email subscribers, resource downloads, support/sales chats – pretty much any time you get a customer’s email address.

Channels to work on : Conversion rate optimization (CRO), lead magnets, webinars, chat widgets, newsletter subscriptions, landing page optimization, promotions…

Activation

Different verticals have different shaped funnels, but activation is generally the “demo” of your product.

The differences between acquisition and activation are confusing, so it's important to remember that you're solving a customer's problem with content during the acquisition stage, but you're solving their problem with a sample of your good or service during activation.

Activation metrics to measure : new trial registrations (SaaS), product sales (e-commerce), freemium customers (SaaS), responses (sales).

Channels to work on : User-experience, customer success, traditional sales, early customer success.

Revenue (income)

Income is probably the easiest stage to remember. It's when your contact finally takes the plunge to exchange some of their money for some of your products.

The most important thing to remember about the revenue stage is that you’re not done! You’re almost at the end of the road through the funnel! But don’t stop here – this is where the most fun part of running your business comes into play.

Once someone makes their first payment, you don’t need to guess who your customers are or what they care about – you have their information! And, more importantly, they’ve already completed the step of taking out their wallet.

It is much cheaper to get an existing (satisfied) customer to repeat the purchase than to acquire a new one. The path from revenue to retention is only one step away, but a new customer has to go through all the As again.

Revenue metrics to measure: customer acquisition cost, trial-to-paid conversion (SaaS), first purchase (e-commerce)

Channels to work on : shopping cart abandonment, checkout flow, UX, sales, the product itself (assuming you're leveraging an activation stage).

Retention

Retention is the amount of incremental revenue you can generate from a given customer.

The goal is to make your customers sticky. When you think about your customer acquisition cost (CAC) from the revenue stage, this is a fixed cost. From this point on, additional revenue is “free.”

Retention metrics to measure : Customer lifetime value (CLTV), net promoter score (NPS), churn, revenue expansion.

Channels to work with : customer lifecycle marketing, email marketing, retargeting, product marketing.

Referral (references)

Referrals are one of the most important and often overlooked groups of metrics, even more so than retention.

New business isn't the only reason to continue developing a referral marketing strategy. In fact, 43% of social media users report having purchased a product after sharing or favoriting it on Facebook, Twitter, or Pinterest. For these reasons, the referral stage is really a specialized awareness stage, which is why we sometimes refer to referrals as "closing the loop."

Referral metrics to measure : Net Promoter Score, referrals, social shares, awareness metrics (by channel).