Hacking Growth

Growth isn’t just a goal; it’s a process fueled by experimentation, collaboration, and a deep understanding of your customers.

1. Form Growth Teams for Collaboration

A growth team is a cross-functional unit focused solely on driving growth for your company. By bringing together members from marketing, engineering, and product departments, you ensure diverse perspectives and collaborative solutions to tackle stagnation.

At BitTorrent, for instance, their growth plateaued because users remained stuck using the basic version of their product. A growth team, led by an innovative project-marketing manager, discovered that users weren’t upgrading due to a lack of awareness rather than a product issue. Marketing and engineering worked together to promote the premium version, leading to a 92% revenue increase.

Leadership plays a key role in the success of growth teams. Strong leaders set priorities, establish timelines, and ensure that the team stays focused on its goals – avoiding distractions, despite possibly attractive but non-aligned ideas.

Examples

• Maintaining collaboration between departments at BitTorrent to solve upgrading issues.
• Marketing and engineering pinpointed solutions by sharing their unique insights.
• Revenue rose significantly after implementing collaboratively developed strategies.

2. Develop a Must-Have Product

If your customers love your product so much they can’t imagine living without it, then you’ve tapped into something powerful. But how can you measure whether your product is essential?

Using the "must-have survey" is an easy way to gauge this. Simply ask customers how disappointed they would feel if your product disappeared. If 40% or more answer “very disappointed,” your product qualifies as a must-have. When the percentage falls below this threshold, improvements are necessary.

Testing is key for improvement. A/B tests are efficient ways to refine how you communicate your product’s value. For example, Basecamp found twice as many customers responded to "See Plans and Pricing" versus "Sign Up for Free Trial" during such an experiment.

Examples

• Conducting a must-have survey to measure customer reliance on products.
• Basecamp using A/B testing to determine the more effective call-to-action.
• Refining features and messaging based on customer feedback.

3. Track the Right Metrics

Not all data points are equally meaningful. Businesses must focus on determining which customer actions provide the clearest insight into their product’s value.

Online platforms like Facebook track metrics such as login frequency, user involvement, and average session durations to understand engagement. While such metrics help analyze trends, companies should identify one "North Star" metric above all others. At Facebook, this metric is the number of daily active users, which directly reflects growth and engagement.

By narrowing focus to key metrics that matter most, companies can avoid drowning in irrelevant data. Metrics must remain tied to measuring customer satisfaction or product development success.

Examples

• Facebook's North Star metric, daily active users, drives their growth targets.
• User activity metrics like posts and comments offer additional context.
• Avoiding unimportant data which could distract teams from priorities.

4. Analyze and Ideate Rapidly

Growth hacking thrives when teams operate quickly by analyzing habits and brainstorming fresh solutions. The Baylor football team exemplified this: by replacing slow-paced strategies with fast-paced, high-frequency plays, they learned and improved faster.

In businesses, the first step is gathering actionable data about customer behavior. This helps teams identify trends, such as why users stop engaging or what draws in returning customers. Once the data is reviewed, open brainstorming sessions allow everyone to contribute creative ideas.

A structured system, like an “idea pipeline,” ensures submissions are straightforward. Key details – goals, action steps, and expected benefits – should accompany every suggestion.

Examples

• Baylor University's football team adopting fast-paced strategies for learning.
• Collecting data using surveys to understand customer behavior.
• Open brainstorming sessions to generate actionable ideas.

5. Test and Prioritize Ideas Effectively

Not every idea is practical or worth testing immediately. Prioritization requires evaluating ideas systematically using criteria like impact, confidence, and ease (ICE scoring).

For example, offering referral credits might be simple to implement (ease score: 8) but lack enough supporting user data (confidence score: 4). By implementing a systematic scoring method, teams can focus on ideas with high scores, increasing the likelihood of producing results.

Finally, testing completes the process. By working with strict data guidelines—like ensuring statistically significant results—businesses can learn which strategies genuinely promote growth.

Examples

• Using ICE scoring to rank ideas based on impact, confidence, and ease.
• Testing referral programs or reward incentives based on ranked priorities.
• Designing experiments with strong data reliability measures to ensure accuracy.

6. Create Resonating Messaging

Messages targeted at potential customers set the tone for your product’s appeal. With average attention spans as short as eight seconds, the first impression matters immensely.

Apple captured attention with the iPod tagline, “1,000 Songs in Your Pocket," immediately demonstrating both the product’s benefit and its groundbreaking innovation. Teams should experiment with multiple variations of similar taglines using A/B tests to find successful messaging.

Focusing on fewer marketing channels also leads to better results. Testing the effectiveness of specific channels ensures resources are directed to those that yield the greatest impact.

Examples

• Apple’s impactful iPod tagline captivating audiences quickly.
• Brainstorming creative yet simple slogans to resonate with customers.
• Testing marketing channels for cost-effectiveness and target reach.

7. Simplify Conversions

Though visitors may initially express interest in your product, only a fraction convert into paying customers. To address this, funnel reports identify where potential customers drop off in the buying process.

Uber used funnel reporting to understand, for example, that many users signed up but hesitated to book rides. Surveys revealed underlying concerns (e.g., safety during travel). By addressing these pain points, businesses can smooth conversion steps and refine the customer journey.

Examples

• Uber analyzing customer drop-off points using funnel reports.
• Conducting surveys to understand customer hesitation at each step.
• Revising user interface or process friction to improve conversions.

8. Build Customer Habits with Rewards

Regular customer interactions lead to habit formation. By incentivizing repeat usage, businesses can ensure they remain top-of-mind for their audience. Amazon’s Prime program achieved this through rewards like free shipping and exclusive entertainment options.

Positive reinforcement—from recognizing loyal customers to achievement badges—motivates users to engage regularly. Fitbit, for instance, celebrates milestones like completing 10,000 steps, further encouraging activity.

Examples

• Amazon’s engagement loop creating long-term commitments through Prime.
• Fitbit awarding users for health achievements.
• Social recognition programs like Yelp’s “Elite” user status.

9. Segment Revenue-Driving Customers

Focusing on customer segments increases your ability to boost revenue strategically. Analyzing behaviors, preferences, and habits between groups reveals actionable insights.

HotelTonight discovered that app users on cellular data contributed twice the revenue of those on Wi-Fi. Adjusting advertisements to target mobile data users resulted in increased profits. Similarly, companies can continuously refine services with feature feedback and progressively roll out meaningful updates.

Examples

• An app noticing cellular-data users yield higher revenue.
• Continuous customer feedback driving product-feature rollouts.
• Segmenting users based on geography or demographic to reveal trends.

Takeaways

1. Start A/B testing variations of major product messages or taglines to find what connects best with your audience.
2. Use ICE prioritization scoring to rank new growth ideas and focus on quickly testing ones showing the most promise.
3. Set up recurring customer feedback surveys to tap into the needs of your highest revenue-generating segments.