What is Growth Hacking

Growth Hacking is a term implemented by Sean Ellis. According to him, the most correct definition is experiment-oriented marketing. The objective is to find opportunities aiming at quick results for the company’s growth.

Grow, grow, grow! This is the obsession of most companies, especially those that are starting their operations. How, then, to enhance this growth? That’s what growth hacking is for.

An expression that has become popular in recent years, growth hacking has proven to be a powerful solution to make businesses grow.

It is a new way of thinking about Digital Marketing that puts companies on the path to their goals, more quickly and with the least possible use of resources.

In this article, we show that growth hacking is much more than an expression of fashion. You will meet:

  • What is growth hacking
  • What a growth hacker does
  • Why do growth hacking
  • The 4 phases of growth hacking
  • Main growth hacking strategies
  • Growth hacking success stories
  • Tools to grow your business

Want to know everything about growth hacking? So, stay with us until the end!

What is growth hacking

Growth hacking is a new way of adopting strategies aimed at significant and accelerated growth of the business from the identification of its critical points. 

These strategies involve carrying out experiments. The team’s elaborate hypotheses, verify their validity, make tests and, thus, discover loopholes or opportunities that make the business grow smarter and faster.

That is why growth hacking is conceptualized as experiment-driven marketing by Sean Ellis, a professional 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 have the potential to attract more visitors to the site more efficiently.

The definition of KPIs depends on what each company means by success. For a virtual store, for example, the main KPI is probably the number of sales (which can be broken down into other KPIs).

For a site that is monetized with ads, what matters most is traffic. So, it takes planning to define them.

But, after reading this, you might think: what is the difference between growth hacking and other marketing techniques that also aim at growth?

First, realize that not every technique is aimed at KPIs – many companies waste time and money on strategies that do not contribute to their goals. Growth hacking, on the other hand, always aims at goals.

But the big difference is the obsession with doing all of this in the fastest and least costly way possible with the experiment method, which validates the hypotheses. Growth hacking wants to discover doors to grow at less cost and faster.

For that, it is useless to think that hacks are magic! It is necessary to invest in tools that allow experiments and automation to be carried out and teams to be able to find the best solutions.

So, what do you need to do growth hacking? We can summarize the fundamental parts of this process thus:

  • Objective: clearly define what the goal of growth hacking is.
  • Hypothesis: develop hypotheses based on the professionals’ know-how and intuition.
  • Experiments: perform tests that prove the efficiency of the hypothesis. 
  • Tools: use test, analytics and automation tools.

Now, we will understand better who is and what does the professional responsible for this area in companies.

What a growth hacker does

The word “hack”, in the expression growth hacking, can cause confusion. Many people associate this type of strategy with the practice of hackers, who look for security flaws in their systems.

So, not a few people think growth hacking is unethical and illegal (although not every hacker is unethical and illegal, okay?). It has none of that, although this link helps explain what the growth hacker does.

In the same way that a hacker is known to find and exploit security holes, the growth hacker is the professional who finds “open passages” to quickly grow the results of a business.

Its objective is also to discover loopholes, but that provide intelligent and accelerated growth for the company. Everything within the law and ethics!

The relationship with hackers also suggests that growth hacking is pure technology, programming and mathematics. Practice usually involves these areas, because they usually provide faster and more efficient solutions. But the concept is much broader and involves business strategies.

Therefore, the growth hacker does not need to be an IT or programming professional, although this knowledge helps to align with the programmers who make up the team.

Generally, the growth hacker is a marketer, who already has a vision for business growth. But those who enter this area should not only think about selling or invoicing but taking care of the company’s objective and efficiency – faster and cheaper – to achieve it. 

The growth hacker generally has a creative and exploratory profile, to find possibilities for growth and propose new hypotheses, but also agile and analytical, to test and prove its efficiency quickly through data.

In addition to the technical and conceptual knowledge of marketing, the growth hacker needs to understand very well:

  • Law Suit;
  • experiment methodology;
  • technology and development;
  • data analysis;
  • consumer behaviour.

Knowing how people think along the buying journey, how they react and what they are motivated for is essential for a growth hacker. Understanding this, the professional uses his marketing knowledge to find possible growth triggers and, with the method, experiments to prove his hypotheses.

If proven, they become processes, repeatable and scalable, so that the company does not spend so much time and money on that task.

To accomplish all of this, many companies not only hire or train growth hackers but also build growth teams.

Teams can be composed 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 with an eye on KPIs;
  • Growth analysts, who nourish the team with the analysis of performance data from experiments and strategies implemented;
  • Designers, programmers and engineers, who develop products, tools and software from experiments.

With this combination of knowledge, it is possible to cover all the ends of the growth hacking process.

Although many companies have a growth hacker or growth hacking teams, usually within the marketing area, growth hacking is more a way of thinking than a formal position.

Any professional can and should adopt this exploratory, creative behaviour, in search of growth opportunities and with a focus on results.

This can be a reality in marketing, but also in sales, controllership and any other area of ​​the company where there are potential growth triggers. 

Why do growth hacking

The old formulas of marketing are being questioned. Before, you contacted the traditional communication vehicles (radio and TV, for example), analyzed the advertising costs and the affinity of the vehicle with your audience, negotiated values ​​and hired the space.

But who guaranteed that your ad would reach the number of people you wanted? Or that you would get the expected return on your investment?

The purchase of advertising was done this way, without any guarantee – which could be very expensive, especially for brands with lean budgets.

The questions also started with the public. Traditional advertising needs to unfold to convince people, who no longer accept what brands say as absolute truth, take their criticism to the internet and can put all the investment to waste.

Therefore, investing in traditional advertising has become unfeasible for many companies, due to the cost and the rejection of the public. So, brands looked for new ways to have results with marketing. And that is why growth hacking has gained so much strength.

Growth hacking presents itself as a safer solution for companies since it presupposes carrying out experiments and analyzing data before applying strategies.

They are only adopted if the experiments prove their efficiency, that is when they present faster and cheaper solutions than traditional marketing.

The mission of growth hacking is to make businesses scalable, repeatable and sustainable. If you are investing in strategies with no guaranteed return, which is not transformed into processes, which require a lot of manual actions and require a lot of time and resources, then your company is not doing growth hacking.

The growth hacker looks at some business activity and asks himself: how to do this at scale, with repeatable processes and in a way that the company does not spend so much time and money? It is from this questioning that he seeks opportunities for growth.

This description of growth hacking explains why this strategy is very popular among startups.

They can use the technique to make the business grow quickly and with few resources at the moment of traction and prove, to potential partners and investors, their ability to generate impact in the market.

Thus, growth hacking helps startups to be scalable, have repeatable processes and become sustainable.

Large companies can also adopt growth hacking to meet certain objectives, such as boosting growth or launching new products or services.

Growth hacking often serves to show 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, this type of company generally does not have the internal structure that provides the results of growth hacking. So, they need to change their organizational culture and get closer to the startup environment – much more flexible, less hierarchical and less bureaucratic.

Growth hacking demands a culture of experiments, which encourages risk and accepts error.

After all, this is what this professional does: he assumes a hypothesis that can go wrong, but which if it is verified and works, can leverage the results.

This does not mean that the technique is a “shot in the dark”, because the experiments only become processes after being tested and validated.

In addition, it is also important that the team and professionals have the autonomy to make decisions. If you need to go through the entire hierarchy to approve a tool, an experiment that could only take a week would take months to apply. Thus, the process loses agility and does not fulfil its function.

That is why growth hacking is generally more efficient in startups and small businesses, often in the technology or digital area.

The 4 phases of growth hacking

Growth hacking is a process. There is no point in starting to do experiments without method and applying techniques without a purpose.

Therefore, we will now present the phases of this process so that you can reap faster and more economical results with growth hacking. Know what they are!

1. Product-Market Fit

Create products that people want to use: this is the basis of marketing, the creation of startups and, of course, growth hacking.

In this first step, what you need to do is think about the alignment between product and market. The Product-Market Fit refers to the creation of a product desired by the market and able to meet your needs.

It is often this step that explains the failure of many products, which choose the wrong market or are created without targeting the needs of the public.

So, to accomplish this step, it is necessary to understand people, their needs and desires, their motivations, their buying journey, to then develop products that they want or need to use.

And we are not necessarily talking about creating a totally disruptive product. Often, a small change in what your company already sells or in the process it already uses can serve to meet the needs of the market and bring incredible results.

One technique used to check if your product is in line with the market is the 40% Rule, created by Sean Ellis.

This technique checks, through a questionnaire, how your customers would feel if their product ceased to exist.

If more than 40% respond that they would be “very disappointed” (instead of “indifferent” or “slightly disappointed”), then you have Product-Market Fit.

2. Growth Hacks

The second step is the application of growth hacks. It is here that the team formulates hypotheses, experiments begin to come to life and the first users begin to arrive. The intention is to identify which changes can generate faster and cheaper results.

For that, growth hackers must look at the product and, based on their know-how and intuition, find vulnerabilities and growth opportunities.

This is how the hypotheses are formulated: “what would happen if we did otherwise? What if we added an element to the product? What if we used a particular tool in the process? ”.

A good example was the strategy adopted by Quora, a website specialized in questions and answers. They needed to enhance the acquisition of users to leverage the platform with responses that people trusted.

Then, the company asked itself: “what if we invited renowned, influential and authoritative professionals to the platform?”. 

Then, the company directed its marketing efforts to that type of user. Thus, Quora leveraged the acquisition of users for the platform, which has become a recognized source of knowledge.

3. Scale and viralization

Growth hacking is a growth strategy that seeks to use as few resources as possible.

So, the ideal way to do this is to make your own consumers become propagators of your product – and receive some benefit from it.

Perhaps this stage is the most difficult. Not every solution can go viral, but success will always depend on the power of word of mouth. What you can do is give it a little push to make it happen.

A good example is Candy Crush, the famous puzzle game that went viral on Facebook. The game leveraged user acquisition when it defined that they would earn more lives as they invited more people to play.

Thus, there was no need to invest in advertising or traditional marketing – the users themselves would do the job of publicity.

Another example is Hotmail. In his early years, an email message made all the difference.

The phrase “PS I Love You. Get Your Free Email at Hotmail” was placed at the bottom of emails and significantly increased the user base. In six months, there were more than one million registered users. In one year, 10 million.

It is at this stage of the experiment, therefore, that it shows its scalability potential. After running an experiment, conquering the first users and getting results, you need to scale it up. With an expanded user base, you also begin to understand your audience better.

And when we talk about gaining scale, we are talking about automating actions. A scalable process cannot be manual.

4. Optimization and retention

Finally, you need to optimize the solution to improve usability and satisfy users. The goal now is to retain the consumers you have conquered to consolidate your customer base.

If this happens, the experiment is finished and approved. From there, it can become a process in the company.

Here, testing, feedback and data analysis play an essential role. You should check the metrics – keeping an eye on the KPIs, which we explained earlier – to find out how consumers are using your product, whether they are coming back to use it, and if not, why this is happening.

Then, with this information, continuously optimize your solution to meet the needs of users.

Growth hacking does not mean launching an idea, approving it and finishing the job. The process is one of continuous improvement and requires you to optimize the idea from time to time to always improve the user experience.

In addition, a completed experiment opens doors for others. The team cannot stand still, as there is always a problem waiting for new ideas to solve it.

Main growth hacking strategies

The application of growth hacking strategies depends on the definition of KPIs, which can vary from business to business. Therefore, it must be designed specifically for each company.

But there are strategies that usually work for all types of companies with expressive results. Check now what are the main strategies we recommend and think if they meet what your company needs.

Referral Marketing

It was with this strategy that companies like Paypal, Dropbox and Uber consolidated themselves. And this is one of the main viralization strategies in the growth hacking process.

Referral marketing consists of turning your customers into brand promoters. Usually, the system works like this: the user indicates a person to be a customer and receives a reward for that (often, the indicated person also receives).

The Paypal case pioneered this: in 1999, the online payment system gained 100,000 users in the first month of operation, simply by paying $ 20 per referral.

Thus, marketing encourages word of mouth, which is essential to reduce the cost of acquiring customers, leverage the user base and enhance the company’s growth.

Referral marketing is also related to loyalty marketing. After all, loyal customers tend to recommend your product or service even more to acquaintances. So, you can combine this strategy with loyalty programs as well.

Content Marketing

Content Marketing is one of the main traffic growth strategies. If you have a blog with relevant posts about your area, you will certainly receive more visitors in an organic and scalable way. However, the blog alone is not enough for rapid and expressive growth.

If you want to speed up the acquisition of traffic to your blog, it is important to adopt other Content Marketing strategies.

First, you must optimize your publications with SEO. By applying on-page SEO techniques and getting backlinks to your pages, your blog grows faster. Start these optimizations with posts that are already successful and tend to grow exponentially.

Adopting a guest blogging strategy on partner blogs is also a way to increase your blog’s audience more strongly, rather than just waiting for visitors to arrive spontaneously.

If your goal is to increase lead acquisition with Content Marketing, you need to use capture elements on the blog pages.

Inserting pop-ups, forms, banners and CTAs along with the pages for the user to fill in with their email is a way to grow their contact base.

Take the opportunity to do this also in publications that already perform better to accelerate growth.

Principle of scarcity

This is one of the main mental triggers used in growth hacking because it can motivate people to buy the product right away. This principle is based on the idea that everything that is scarce is more valuable.

When a consumer realizes that a product is running out or is restricted to just a few people (or is led to believe it!), He wants to guarantee his right away.

So, marketing takes advantage of this trigger in its strategies to accelerate the acquisition of customers, without spending more money on advertising.

It was with this strategy that Nubank grew and became so desired. Initially, the user would only have his card if he received an invitation from a member or if he was on a waiting list that could last for months.

This gave the feeling that the product was incredible! It is no accident that the queue reached one million users.

You can also use this scarcity principle when announcing limited editions of your product or discounts until a certain time. Run tests and check the impact of these actions on your results.

Constant tests

Culture of experiments demands the execution of constant tests. The best known are the A / B Tests, which consist of running two versions of a material (a landing page or an email marketing, for example), with only one different variable between them, and checking which one generates more results.

For this, it is essential to define which variable you want to evaluate and which result you want to obtain. For example, you can see that a given email title generates more openings, but fewer conversions.

If your goal is to convert, then this test showed that the title doesn’t work for what you want. As we said, growth hacking always aims at objectives.

But it’s not just A / B testing that you can do. Any type of experiment can be applied to growth hacking. The only requirement is that they rely on data to support decisions.

You can, for example, run the software version for a select group of customers, check the results it generates and then make the decision to insert it (or not) in the process.

Growth hacking success stories

Facebook

Facebook recently came to 2.3 billion brand assets and good users of this success are due to the mentality of growth hacking the company has since its first day.

When the creation of profiles was released to everyone, not only for university students, the acquisition of new users became a great challenge: how to remain interesting, if now everyone could be invited?

The first Facebook hack was to allow people to add badges and widgets to their websites (the evolution of these widgets is the current  Page Plugin ). As a result, people who accessed the site were invited to enjoy that site’s Facebook page – and ended up creating a profile.

Another Facebook growth hack was related to user retention.

Analyzing the behaviour of users who remained active on the social network, Facebook’s growth hackers came up with an activation metric:

“Anyone who adds 7 friends in the first 10 days has a much better chance of remaining an active user.”

With that in mind, they created several features to encourage new profiles to find those first 7 friends.

One of them happens when, when creating your profile, you are encouraged to associate your email account. With that, Facebook searches your contacts for friendship suggestions for you.

Another is the possibility of a friend of yours suggesting another friend who is known to both of you but you haven’t added yet. This feature appears a lot to friends of a person who has just created their account and then, over time, it tends to no longer appear.

LinkedIn

One of LinkedIn’s most famous growth hacking actions helped the company grow from 2 million to 200 million active users.

The change implemented for this was the possibility of creating public profiles, visible to people who were not on LinkedIn.

It seems contradictory, doesn’t it? If it is possible to view a profile without creating an account, why would I create an account?

The secret was that these profiles were fully optimized for SEO. When someone searched for someone else’s name on Google, one of the first results that came up was their LinkedIn profile.

The same thing happened to anyone looking for company names: there was the page, ranked on Google.

This was a major growth trigger.

Obviously, it was not an attempt that came about randomly. Remember that the growth hacker needs to have a good knowledge of people and their behaviors?

It is very likely that LinkedIn professionals have noticed the tendency for people to search Google for their new professional contacts and the companies where they work.

Upon realizing this, LinkedIn took the opportunity to position itself as an authority in the results of these searches – after all, viewing the person’s curriculum is something very relevant when you want to know more about them!

Quora

Quora is a website specialized in questions and answers. You can create your profile, ask a question and expect people from around the world to respond to your knowledge.

One of Quora’s biggest challenges was acquiring users. How could people trust them to find quality answers on the site?

To this end, the company directed its efforts towards the acquisition of users of recognition and authority in its means.

When people realized that they could ask a question about technology and startups, for example, and get answers from influential people in the environment – founders, marketing directors, etc. – Quora started to be seen as an excellent source of knowledge.

Detail: the two founders of Quora are former Facebook employees. In other words, the company was born with a strong culture of growth hacking.

Tools to grow your business

There are no growth hacking tools specifically. In this process, you will adopt tools that you may already be used to using in traditional marketing.

The difference is the mindset that you will apply when using them.

The tools you will use depend on the experiments you are going to propose. You may focus on the SEO area and need the keyword and competition analysis tools, like Google Search Console, Keyword Explorer and SEMrush.

If you focus on the social media area, management and automation tools, such as mLabs and Hootsuite, can be useful. For email marketing, shooting tools like MailChimp or GetResponse.

Everything will depend on the area of ​​the experiment you are going to perform. But some tools are inevitable: you will need data analysis and testing tools, which are intrinsic to growth hacking.

To perform tests, Google offers a super useful tool: Google Optimize. It allows you to optimize any HTML element on a page, such as blog posts, CTAs, landing pages, images and forms.

Another interesting tool is Optimizely, which allows you to do more advanced experiments on websites, mobile apps, TV apps and the internet of things.

In addition, many email marketing, social media and automation tools, for example, include A / B Testing in their native resources. Some examples of tools that do this are:

  • RD Station (automation);
  • LeadLovers (automation);
  • MailChimp (email marketing);
  • GetResponse (email marketing);
  • Unbounce (landing pages);
  • LeadPages (landing pages).

For data analysis, you have great free tools. Now let’s see a list of those that are indispensable:

  • Google Analytics, the main free digital analytics tool;
  • Hotjar, to analyze the user experience on a website and collect feedbacks in real-time;
  • SimilarWeb, for website and competition analysis;
  • Facebook Analytics, Instagram Insights, Twitter Analytics, which are the data analysis tools native to social networks.

You may think that some of these tools are very expensive and undermine the idea of ​​getting cheaper results with growth hacking.

In that case, you need to evaluate your company’s budget and the expected return to know what is worth. But it will certainly be cheaper than placing an advertisement on TV.

Now you know how growth hacking works. Remember that this is not a magic trick. The growth hacker is a curious, creative and analytical professional, who wants to find opportunities that no one has noticed before to accelerate the growth of companies.

In place of traditional marketing, growth hacking is concerned with reaching KPIs as quickly and economically as possible through these loopholes. As we said, this is the growth hacker’s obsession!

For this, he uses experiments to validate ideas that are scalable, repeatable and sustainable for the business. If you do not meet these requirements, then it is not growth hacking.

Now, start adopting this growth mindset in your company.

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