Growth Hacking: what it is and how to apply it to your business

Growth Hacking is one of the common elements among startups that grow in the short term, year after year.

It is a new thought, originating in 2010, created by angel investor Sean Ellis, which seeks the growth of small businesses through experiments, tests, ‘hacks’.

Dropbox, Facebook and Uber are three popular examples of solutions that came from this model.

And what does marketing have to do with Growth Hacking? Marketing in Growth, in fact, assumes its most evolved version possible.

That’s because traditional marketers focused on optimizations, mass audiences, and coworking. Then, we evolved to inbound marketing, with attention to the sales funnel, integration of the marketing team with the sales team and, finally, in Growth, we seek to automate marketing and sales actions, data analysis and others.

In this text, you will understand more about what Growth Hacking is and how you can apply it yourself!

After all, what is Growth Hacking?

It’s not just another buzzword. Much less a miracle that turns a microenterprise into a unicorn.

It’s just a way of working that has been proven to bring growth — for companies large and small.

In fact, Growth Hacking adds because it is already in its nature since its conceptualization: it unites marketing knowledge with psychology, data science, technology and engineering.

Also in this methodology, the sales funnel is called the growth funnel or pirate funnel. Because for English, its steps form the acronym AAARRR (Awareness, Acquisition, Activation, Revenue, Retention and Referral) which, translated means:

  • Acquisition

It is the way the customer reaches the company. To make this connection, you can use paid ads, viral marketing, press relations, etc. Tracking metrics are: website traffic, engagement on social media, landing page entries, among others.

  • Activation

It is the consumer’s first experience with the product or service. Explore product unboxing and user experience on websites. The main metric for this case is the conversion rate.

  • Retention

It refers to whether or not customers buy again. It is very common to use redemption attempts via email, blog articles, remarketing etc. The number of active users, number of purchases per year and proportion of returning customers are the best indicators.

  • Revenue

How is the money generated? The main actions are the recurring billing itself, the use of discount coupons, promotions… so keep an eye on the cost of acquisition (CAC), revenue per customer and profitability.

  • Recommendation

In this ‘ funnel bottom ‘, you will see how many customers recommend your product. Promote referral campaigns, use mental triggers, and invest in viral growth to improve that rate. Keep track of the number of invitations passed on to potential customers and your conversion rate.

How to apply Growth Hacking in my business?

Of course, such a complete method can be arranged in stages, and these are what, in general, every growth hacker follows:

Idealization of Product-Market Fit

Companies are born to solve problems. But by what methods then? The solution proposals must be clear and must generate valid ideas, this is the objective of this first stage of Growth Hacking. With the developed ideas, you have the company’s main product or service.

To be sure, Ellis advises the 40% rule: Ask customers how they would feel if the product stopped shipping. If 40% respond “very disappointed” (on a scale that passes for “indifferent” and “not very disappointed”), then you have really found your Product-Market Fit.

Growth Hacks in practice

It’s time to create hypotheses that can make changes faster and cheaper (the same applies when the company is new and launching a product or service).

Ask questions like what would happen if we did it any other way? How would this product look without such a thing? What if we used a certain tool instead of that one?

Scale and viralization

Once your consumers access the product, create a way for them to be the propagators themselves.

As a classic example, Hotmail had a call to action at the bottom of each email. This went viral and generated 12 million customers in just a year and a half.

Optimization and retention

With the product arriving in the hands of so many people after this scaling stage, the best time comes to gather feedback and resolve the negative points obtained. That way, you’ll have an optimized product and be more likely to retain customers.

But it doesn’t end there. The next steps will be continuous improvement, so many companies make up a team of growth hackers. Not that they had their own training, but the attributions of these professionals are totally focused on this experimentation process in search of improvement.

What are the best Growth tips for small businesses?

In addition to following the classic dynamics conceptualized by Ellis, make sure you have differentials such as:

  • E-mail list

Email marketing is one of the most used resources by growth hackers. Through it, it is possible to request responses and feedback from customers (useful in the pirate funnel retention phase).

  • Adjacent markets

Even though you have a defined niche, it is possible to export your capabilities to a neighbouring market. For example, if you work in the production and sale of sneakers, why not try to create and market gift rugs?

  • Smarter cookies

Hide redirect cookies for 45 seconds with javascript to ensure you’re only redirecting users who are interested in your content. Remember that in Growth you really need to have this more technical knowledge.

Thus, Growth Hacking is purely a marketing methodology, the latest, which helps your business grow through agile and assertive experiments. That’s why it’s so compatible with small businesses that are just starting out on the entrepreneurship battlefield.