The origins of growth hacking?
The term “Growth Hacker” was first coined back in 2010 when it featured in a blog post by Sean Ellis, the founder and CEO of Qualaroo and Silicon Valley start-up investor. Whilst it may be a relatively new term increasingly used by technology marketers many of the tactics used in growth hacking have been around for a long time.
Growth hacking is a marketing technique that uses creative campaigns, organic PR, analytics, and social media to gain exposure for a brand. It is an approach that has become popular due to its low cost innovative approach compared to traditional methods – especially for tech start-ups who can’t or don’t want to fund big budget marketing campaigns.
The benefits of growth hacking compared over traditional marketing
Start-Ups want to get moving quickly and want to protect seed funding for product development, hiring new talent and acquiring office space. Whilst many recognise the value of marketing it is a question of priorities.
The tactics used for growth hacking can differ from your ongoing digital marketing strategy, as the main objective is to increase brand awareness on-board new customers, accelerate revenue and accelerate growth as quickly as possible.
Think of growth hacking as an escalator. Using these techniques allows you to move up at speed and, once you have achieved your initial growth objectives, you can then consider other forms of marketing to support your future plans.
Tech companies that have used growth hacking success Dropbox
When Dropbox first launched, it tried using paid ads as a way to acquire new customers. However, being in such a competitive space, they quickly realized the cost per ad was much higher than the average customer lifetime value. This led them to look at other growth acceleration strategies.
They then went on to launch their easy-to-use referral program that rewarded users with 500MB of free Dropbox storage for inviting others to sign up. Once the new user signed up for a Dropbox account the referrer would then receive their free storage. This increased signups significantly. Within a 15-month period, Dropbox went from having 100,000 customers to having 4 million users.
When Mailbox launched its awesome email management app for iPhone in January 2013, it turned to growth hacking, implementing an innovative structured reservation system, boosting virality around the product by offering exclusivity.
Even if you didn’t have access to the app, users could still install the app on their device. Once installed, you, either, entered the reservation code – if you were lucky enough to receive one, or you could claim your spot in the reservation line. The interface would then show users how many people were waiting in front of them. Within just a few weeks 1.25 million people signed up for the waiting list and 50 million messages were being delivered per day to users.
In March of 2013 Mailbox was acquired by Dropbox, however, the app was allowed to run as a separate, standalone application and has allowed Mailbox to reach new audiences much quicker and develop a scalable infrastructure for the platform.
Spotify currently uses several growth hacks as a way to on-board new customers. These include providing users with a freemium model that comes with limitations driving them to sign-up to one of Spotify’s premium packages.
Spotify have also built relationships with other tech companies, such as Facebook, and were one of the first companies to integrate their app with the Facebook Newsfeed making it the main provider of music on FB.
Users can easily share what they are listening to on their Facebook profiles giving the Spotify brand some of the best visibility on the biggest social network in the world. Within 2 weeks of its announcement at Facebook’s F8 conference in September 2011, the streaming music service saw the number of users increase from 3.4 million to 5.3 million.
Integrating with other popular apps is a growth hack that we are now seeing used by many other apps and web services as this allows them to tap into someone else’s audience like Spotify with Facebook.
Growth hacking can have a significant impact on a business’s early growth and revenue. It’s an ideal way for tech companies to grow reach and engage their audience, gathering data that helps shape offers and future campaigns at a low cost.
We hope you enjoyed the first post in our growth hacking series. Next month, we will look at some of our favorite growth hacking techniques and show you how you can integrate these with your own growth hacking strategy.