This interview is a summary transcript of a video interview
It seems that everyone’s talking about it these days – growth hacking. But what growth hacking exactly? And when is it interesting to apply this into your own business? Dillon Richerdson, growth hacker, entrepreneur and founder of marketing automation platform WeConnect.chat, shares his insights and knowledge on this popular subject. From a useful framework on when and how to use growth hacking to interesting success cases from well known companies – this is all you need to know about growth hacking.
Everyone is talking about it, but what is growth hacking?
Growth hacking is a term that has been coined 12years ago by Sean Ellis and it’s focused on data driven marketing. In the last few years it has become more popular. In growth hacking you have a team of specialists that solely focus on growth. They use certain techniques and frameworks to grow a company. In this framework you research where in a funnel your biggest pain point is, and from there you start experimenting with tactics to improve that area of your business and you back the results with data.
Nowadays a lot of marketers are solely focused on the campaigns they are running. They follow a marketing calendar and base their campaigns on it. Whereas with growth hacking you’re looking at bottlenecks in the funnel over a longer period of time than just acquisition, awareness and activation on the website. As a growth marketer, you also deep dive into retention and referral. You look at different phases of your funnel, which differ per company. After defining these phases, you can look for pain points and start experimenting with different tactics to improve your results in this area. With these learnings you can move to the next area, and so forth.
How does a company implement growth hacking?
Within companies everyone has his own responsibility. The CEO focuses on the overall strategy, whereas marketers focus on newsletters, keeping the website up to date and running the campaigns. However, within small businesses, people are often preoccupied with multiple tasks even outside their job description. This is necessary to keep this fast riding train up to speed. However, in terms of growth hacking it’s important to have one task force solely focused on the growth of the company. Ideally you need a team with different expertise that have the complete freedom to implement the framework as I mentioned before – finding pain points that can be turned into growth opportunities.
How does growth hacking work?
In the growth hacking methodology we follow the famous Pirate funnel. You can analyse a funnel by using six steps – Awareness, Acquisition, Activation, Retention, Revenue, Referral. Together they spell AAARRR, which sounds like a Pirate – hence the name. With the Pirate funnel it’s easy to analyze the Awareness of your brand, the percentage of people who visit the website (Acquisition), how many people are activated (Activation), how many people come back (Retention), how many people become actual customers (Revenue), and eventually how many people refer friends to the business (Referral).
When zooming in on these stages you often find a few pain points. For instance you keep losing customers after their first purchase, which indicates a flaw in your retention phase. Or people are activated, come back multiple times but they don’t actually buy your product, which points to a bottleneck in your revenue phase. After indicating these bottlenecks for your company, you can set up experiments to tackle these pain points and turn them into growth opportunities.
When do companies certainly need to start investing in growth hacking?
When following the framework as I just described, growth hacking can be interesting for any business. However, when just starting up your business you simply have different priorities. Before you can think about growth hacking you want to make sure you have product market fit. The rule of thumb in order to find out your product market fit is as follows: if 60% of your customer base would feel bad if your product/service would end, you have product market fit. From that point on, you can start scaling your user base. Growth Marketing/Hacking is interesting for everyone. Scale-ups will have more resources to invest in an entire growth team. Bootstrapped companies usually for instance have smaller budgets available but give their employees more freedom to try new things. Funded companies on the other hand often have more stakeholders to maintain and less freedom to experiment with growth hacking. So it really depends on the company itself in which way you implement growth hacking.
Any interesting success cases of growth hacking?
AirBNB started as this platform where you can book a room, but they were not getting enough traffic to their website, pointing out a pain point in their Acquisition phase. What they did is create a connection with the US website Craigslist (like the Dutch Marktplaats). A website with huge monthly volumes. This connection made sure that every room that was placed on AirBNB to be automatically posted on Craigslist as well. This was a very smart way of generating more traffic to the website and acquiring new customers.
Dropbox also has a success case with growth hacking, based on an interesting referral model. When referring friends to Dropbox you would receive extra gigabytes of storage for free. Also PayPal generated an interesting referral model. When bringing in a friend you received € 10 in your account.
Lastly, Hotmail had this tagline in their email signature ‘with love from Hotmail’. Everyone was receiving these emails and the quote went viral, providing free branding and more awareness for Hotmail.
Are there any downsides or risks that people should be aware of before starting with growth hacking?
The absolute magic word in Growth Hacking is FOCUS! If you don’t have a dedicated (team of) expert(s) to focus on the growth hacking, it might not work the way you want it to. Also don’t do everything at once, but focus on one bottleneck, create experiments, learn from the results and take your learnings into the next. Another important aspect of growth hacking is collecting enough data and also the right data to start your growth hacking adventure with.
We like to let the results, and our customers, speak for themselves. Hopefully, this will give you a good impression of our way of working and the successes we have booked. Interested in taking on the challenge with us? Feel free to contact us. We look forward to hearing from you!