Search LinkedIn and you'll find hundreds of thousands of people with a top skill of 'growth hacking'. But what does it actually mean?
Coined by Sean Ellis, CEO & Founder of GrowthHackers.com, growth hacking refers to marketing activities aimed at growing customers or users as quickly and cost-effectively as possible. Easy to see why it’s an in demand skill…
...But despite this popularity, there isn’t a singularly accepted definition of 'growth hacking' and people continue to be unsure of what it actually means. Google defines growth hacking as “a process of rapid experimentation across marketing channels and product development to identify the most efficient ways to grow a business”, but this definition in itself is extremely broad. ‘Growth hacks’ are generally thought of as unconventional methods that quickly and cheaply grow a company’s customer/user base; making it a favourite of startups and scale-ups due to its fast and cost-effective nature. But how do they do it?
Dropbox and Airbnb are two famous examples of companies who have leveraged growth ‘hacks’ to achieve accelerated growth.
To gain accelerated growth, Dropbox, a storage space hosted in the cloud, used a referral programme that gained them 4M members in 15 months. To incentivise users to spread the word about Dropbox, Dropbox offered free storage space to people whose friends started using the service. This strategy achieved 3900% growth and allowed them to reach 33.9M registered users and an evaluation of 10 Billion dollars (as of 2019). To learn more about how they did it, check out “How Dropbox grew 3900% with a simple referral program” at growthhackers.com.
Similarly, the founders of Airbnb, an accommodation rental platform, turned their attention to finding new ways to grow their business, as opposed to relying solely on paid acquisition. To do this, they looked to where their target audience was going to research accommodation options beyond standard hotels, Craigslist. Co-founder Joe Gebbia explains how they “didn’t want to post on Craigslist because we felt it was too impersonal. Our entrepreneur instinct said ‘build your own site.’ So we did.” To do their own thing but gain exposure on the established platform, Airbnb started encouraging their users to share their property listings on Craigslist, instantly accessing their huge audience. This resulted in accelerated growth.
The problem with growth hacking; enter growth marketing.
Despite the obvious benefits of a methodology that focusses on an explosion of growth, and success of the aforementioned examples, the problem that can arise with growth hacking is that it fails to take a holistic view across the whole business. This can result in a disjointed approach that misses out key markets or offerings. In his blog, Neil Patel notes that despite its success for some, growth hacking can be “a curse”. Neil points out that because it is often perceived as a one-stop-shop it can disappoint smaller businesses who don’t have the resources or systems in place to carry it out. The dot com companies who were successful in growth hacking generally had raised significant amounts of funding, giving them the time and resources to make it happen. The reason growth hacking can fail is that it doesn’t account for product quality; no matter how clever your marketing or ‘hacking’, people won’t buy a bad or useless product. It may sound like a simple thing, but you really need to ensure your product adds value to the end-user - 42% of Startups fail because there is “no market need”.
Once the market need has been established (yes, this bit really is crucial), growth doesn’t need the extremely innovative solutions that have made ‘growth hacking’ famous, but it does need a clever and well thought out strategy. This is where growth marketing comes in.
Growth marketing is defined as ‘a hybrid of growth hacking/brand development/marketing’ that uses the principle of scaling up quickly from a strategic perspective. It takes a broader approach across multiple channels, testing and evaluating the data to inform future marketing decisions. It retains the traditional 4 principles of - product, price, place and promotion - something that growth hacking disregards in favour of innovation. Growth marketing looks at how the product can evolve to fit the changing market need and aims to connect the brand with the customer whilst also using the sort of clever tactics growth hackers unveiled through their rapid experimentation. This means that the business can hit the ground running, but crucially that the growth will be sustainable. For more on growth marketing (and why you need to be doing it) see here.