Growth Hacking: Myths, Risks, and Tips for Startup Businesses
Although a relatively fresh approach on how online enterprises propel their status from an unknown fledgling to a big name, growth hacking is gradually gaining prominence as one of the preferred methods in advancing startup businesses.
But before you press the panic button at the sight of the word “hacking”, take the time to learn how good it can actually get while dispelling a few myths on your way. Read on to find out everything you need to know for you to decide whether this practice would fit your startup business’ roadmap to success.
Defining Growth Hacking
The term “growth hacking” was first coined by Qualaroo CEO Sean Ellis back in 2010. However, it was only in April 2012 when this term started to gain popularity through Andrew Chen’s viral article regarding the topic.
Growth hacking does not have a universal definition in the same way as other known strategies do. For simplicity’s sake, Chen aptly described this practice as the effective combination of the disciplines of marketing and the technicalities of coding.
Those who engage in this practice are called “growth hackers,” and they aim to increase the number of customers for a product without solely relying on conventional marketing. More than focusing on their skill sets, Tech Crunch maintains that growth hackers also employ the mentality of using data, curiosity, and creativity to increase the user base of a product.
To make a product more appealing, especially for online startups targeting to have thousands or millions of users, this practice makes use of writing codes, which places the method on the technical side for a more quantifiable approach of measurement.
Some of the methods used include A/B tests, Open Graph, and landing pages, as well as banking on the viral potential of a product. Growth hackers come up with strategies on how prospective customers will land on their pages and eventually bite into the entire marketing strategy they will operate.
The Benefits of Growth Hacking
One of the main ideas of growth hacking is that it simply tries what works. In a way, it can be considered as a series of trial and error processes until the hackers figure out how the application of their strategies can generate customers and, consequently, income.
It also encourages productivity as it requires the expertise of both programming and marketing heads to think and let their ideas be in sync. In effect, it sharpens the analytical skills of all the people involved.
If you’re looking for a more convincing argument as to why you should employ this marketing strategy, simply look at Hotmail–one of the earliest recorded growth hacking success. When Hotmail was launched by Sabeer Bhatia and Jack Smith in 1996, they only intended for it to serve as a way to exchange emails privately. But after embedding the signature “PS : I love you. Get your free e-mail at Hotmail,” the number of their users skyrocketed to as much as six million users in the next six months.
Other well-known companies today that used this approach include Pinterest, Facebook, Dropbox, Slideshare, Zynga, and many more.
Growth Hacking Myths Debunked
Though growth hacking as a process has been in practice for quite some time, it still has to demystify a few myths associated with it, including the following:
- That its progression is linear. One of the many mistakes often committed by marketers is assuming that a large network is tantamount to the number of customers. But the thing is, the size of a network cannot guarantee that all of its proponents will be your paying customers. If, for anything, the tendency of converting a prospect into an actual customer can lessen for the simple reason that there is no one-size-fits-all formula to approach all potential clients.
- That it’s compulsory to reach huge networks. Though a number of businessmen swear by growth hacking, it is still not the be-all and end-all action to take. There is nothing wrong with keeping tabs on hacked alternatives but you should use the full potential of non-hacked options. One example includes communicating with customers. While it is perfectly fine to send e-mails to clients, some would go as far as calling them on the phone.
- That it’s focused on gaining prospects. There are some businessmen who think that growth hacking’s main purpose is to acquire more prospects. This is not essentially wrong, but if you are bent on advancing the interests of your business, you have to realize that growth hacking is more than just that. Since it involves a great deal of tests and studying especially of shared experiences, growth hacking can also be a powerful tool to retain customers, keep them engaged, and even convert others to patronizing your product.
Utilizing Social Media
If there is one place on the Internet teeming with shared user experience, it would be the social media sites. Since growth hacking thrives on aggregating what users have to say about a product, it is only wise to incorporate social media in the process. So how exactly can you do that?
Presented below are some of the most prominent social networking sites and how you can make the most out of them.
- Facebook. Establishing an online presence on Facebook does not stop when a user decides to click on your page’s Like button. You should also keep this particular line active by posting and replying to comments regularly. That way, you’ll be able to establish your voice within the network.
- Twitter. Although it only allows you 140 characters to say what’s on your mind, this shouldn’t stop you from getting your message across. Twitter is a good vehicle to enlarge your following especially when there is a need for you to simply be straight to the point.
- LinkedIn. The more serious companies are not only active on Facebook and Twitter. They also pay equal attention to the more professional face of networking through LinkedIn. Similar to the aforementioned sites, what you can do is add companies in your circles and participate in their discussions. You have to make sure, however, to share highly significant comments and posts, such as solutions that only your expertise can provide.
Risks in Growth Hacking
More than thinking from the perspective of the business owner, growth hackers know how to put themselves in the shoes of the customer and recognize the risks involved in their business, especially when it comes to transactions. Throughout the course of developing and marketing your product/service, the idea is to know what’s in the mind of your customers—the risks that naturally come up in their heads—and then think of ways that would make them feel secure in purchasing what you have to offer.
With that said, some of the risks you need to be aware of are the:
- Actual Risk. This refers to the definite, quantifiable risks involved with any kind of purchase.
- Inherent Risk. This type of risks involves those that come naturally with any given product regardless of outside factors. If your business involves any financial products (e.g. B2B), those are risky even before any purchase is made since both parties (the buyer and seller) need to display a certain degree of trust to complete a transaction.
- Perceived Risk. From the perspective of a potential customer, every purchase would leave them feeling that there might be something wrong with either the product or with the transaction itself, especially if it is done online.
Doing Growth Hacking Right
Do you think you’re ready to use growth hacking in your business? Here are some pointers you should consider before treading these unchartered waters.
- Hire artistic programmers. Now that the playing field is taken into a different level, you should consider working with programmers who can do well in their coding job and can still make room to think like a marketing strategist.
- Establish Key Performance Indicators (KPIs). A major part of growth hacking is based on marketing what works, so set realistic KPIs. These should reflect the most important factors involved in the business, such as budget and other resources.
- Set correct goals. For startup businesses, it’s okay to monitor even the littlest of things like your traffic and the number of clicks you’re getting. But you have to keep in mind that what matters ultimately are the acquisition of clients and turning them into actual customers.
- Concentrate on your brand. Putting up a business can be quite demanding, but you should remember that not all that works for others can be effective for you. As such, keep your brand upright by sticking to your vision to establish who you are and not just to simply get everybody’s attention. Don’t employ a marketing method just for the sake of doing it. Always exercise caution and discernment.
Is Growth Hacking for You?
Many of the biggest names in the online industry have banked on the capabilities of growth hacking. If you feel that your company can benefit from it as well, it’s about time you open your mind to a non-traditional way of doing marketing and find out for yourself if you will be the next business owner who will testify that growth hacking really works.