What is Growth Hacking
Growth hacking is a method used to enable strategies aiming at achieving significant and accelerated business growth by identifying its critical points.
These strategies include conducting experiments. The teams develop hypotheses, verify their validity, perform tests, and discover gaps or opportunities that make the business grow smarter and faster.
This is why growth hacking is defined as experiment-oriented marketing by Sean Ellis, the expert who coined the term and used this strategy to accelerate startups that became giants, such as Dropbox and Eventbrite.
The critical points of a company, which guide growth hacking, are identified by the KPIs that measure its success, such as traffic, leads, and sales.
If the critical point is traffic, for example, then growth hacking turns this KPI into experiments that can efficiently attract more visitors to the website.
The definition of KPIs depends on what each company understands by success. For example, for an online store, the main KPI is probably the number of sales (which can be broken down into other KPIs).
For a website that is monetized with ads, what matters most is traffic. So it would take some planning to define them.
But after reading this, you may wonder: what is the difference between growth hacking and other marketing techniques that also target growth?
First, realize that not every technique targets KPIs — many companies waste time and money on strategies that do not contribute to their goals. Growth hacking, on the other hand, always focuses on the objectives.
The big difference is the emphasis on accomplishing all this as quickly and inexpensively as possible with the experimentation method, which validates the hypotheses. Growth hacking attempts to discover doors to growth with less cost and more speed.
However, do not assume that hacks work like magic! You need to invest in tools that allow you to perform experiments and automation, and assemble teams to find the best solutions.
So, what do you need to practice growth hacking? We can summarize the fundamental parts of this process as follows:
- Objective: clearly define the goal of growth hacking.
- Hypothesis: develop hypotheses based on the know-how and intuition of your professionals.
- Experiments: conduct tests to prove the hypothesis’s efficiency.
- Tools: use testing, analytics, and automation tools.
Now, let us find out more about the professionals responsible for this area in a company.
What a growth hacker does
The word “hack” in the expression growth hacking might lead to confusion. Many people associate this type of strategy with the practice of computer hackers who look for security holes in our systems.
For this reason, there are quite a few people who think that growth hacking is unethical and illegal (although not every hacker is unethical and illegal, ok?). There is nothing like that, although this connection helps to explain what a growth hacker does.
In the same way that a computer hacker is famous for finding and exploring security holes, the growth hacker is the professional who finds “open gateways” to grow the results of a business rapidly.
Their goal is also to find breaches, but in a way that will provide intelligent and accelerated growth for the company. All within the limits of the law and ethics!
The association with hackers also implies that growth hacking is pure technology, programming, and mathematics. The practice usually involves these areas because they typically provide faster and more efficient solutions. But the concept is much more comprehensive and involves broader business strategies.
Therefore, the growth hacker does not need to be an IT or programming professional, although this knowledge would help in aligning with other programmers on the team.
Generally, the growth hacker is a marketing professional who is already focused on business growth. But those who enter this area should not think only about sales or revenue, but rather about the company’s goals and the efficiency — faster and cheaper — to achieve them.
Growth hackers are usually creative and exploratory, looking for growth possibilities and proposing new hypotheses. They are also agile and analytical, testing and proving their efficiency through data.
In addition to technical and conceptual marketing knowledge, a growth hacker needs to have a good understanding of:
- processes;
- experiment methodology;
- technology and development;
- data analysis;
- consumer behavior.
Knowing how people think along the buying journey, how they react, and what motivates them is essential for a growth hacker. Once they understand this, the professionals use their marketing knowledge to find possible growth triggers and methodically conduct experiments to prove their hypotheses.
If proven, they become repeatable and scalable, allowing the company to spend less time and money on that task.
To accomplish all this, many businesses not only hire or train growth hackers, but also set up growth teams.
The teams may consist of the following positions:
- Growth master, who is the team manager and makes the final decisions;
- Growth marketers (specialists in SEO, social media, email marketing etc.), who propose and implement experiments focused on KPIs;
- Growth analysts, who feed the team with performance data analysis concerning the experiments and the implemented strategies;
- Designers, programmers, and engineers, who develop products, tools, and software derived from the experiments.
- With this combination of expertise, it is possible to cover all ends of the growth hacking process.
Although many companies have a growth hacker or growth hacking teams, usually within marketing, growth hacking is a way of thinking rather than a formal position.
Any professional can and should adopt this exploratory, creative, opportunity-seeking, and results-focused behavior.
Growth hacking is a reality in marketing, sales, accounting, and any other company area where there are potential triggers for growth.
Why use growth hacking
The old marketing formulas are facing a lot of changes. In the past, you would contact traditional media outlets (radio and TV, for example), analyze the advertising costs, assess the outlet’s affinity with your audience, negotiate prices, and air your ad.
But who could guarantee that your ad would reach the number of people you wanted? Or that you would get the expected return on your investment?
This is how companies bought advertising, without any guarantees — which could be very expensive, especially for brands with tight budgets.
The questions also began to come from the public. Traditional advertising has to work hard to convince people who no longer accept what brands say as the absolute truth. Instead, they take their criticisms to the Internet and can put the entire investment at risk.
Therefore, investing in traditional advertising has become unfeasible for many companies, both because of the cost and the public’s rejection. So brands looked for new ways to get results through marketing. And this is why growth hacking has gained so much buzz.
Growth hacking presents itself as a safer solution for companies, since it relies on experimentation and data analysis before applying strategies.
Such strategies are only adopted if the experiments prove their effectiveness, i.e., if they provide faster and cheaper solutions than traditional marketing.
The mission of growth hacking is to make businesses scalable, repeatable, and sustainable. Suppose you invest in strategies that have no guaranteed return, that are not turned into processes, that require too many manual actions, and demand too much time and resources. In that case, your company is not using growth hacking.
Growth hackers look at some business activity and ask themselves: how can this be done at scale, with repeatable processes, and in such a way that the company does not spend so much time and money? It is out of this questioning that they look for growth opportunities.
This description of growth hacking explains why startups widely adopt this strategy.
They can use the technique to grow their business rapidly and with few resources, proving to potential partners and investors their ability to generate market impact.
Thus, growth hacking helps startups to be scalable, have repeatable processes, and become sustainable.
Large companies can also use growth hacking to meet specific objectives, such as boosting growth or launching new products or services.
Growth hacking often serves to indicate whether a new product is sustainable, fast-growing and whether the company is on the right track before it starts investing heavily in advertising.
However, these types of companies usually do not have the internal structure that enables growth hacking results. So they need to change their organizational culture and get closer to the environment of startups — much more flexible, less hierarchical, and less bureaucratic.
Growth hacking demands a culture of experimentation that encourages risk and accepts error.
After all, this is what these professionals do: they assume a hypothesis that can go wrong, but that, if verified and successful, will leverage results.
This does not mean that the technique is a “shot in the dark” because experiments only become processes after being tested and validated.
Moreover, it is also vital that the team and the professionals are granted autonomy to make decisions. If it is necessary to go through the entire hierarchy to approve a tool, an experiment that could last only a week will take months to be executed. Thus, the whole process would lose agility and would not accomplish its purpose.
That is why growth hacking is generally more efficient in startups and small businesses, often in the technology or digital area.
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