Categories: Blog

Fast intro into Growth hacking

Who needs it?

The purpose of this article is to act as a “Hello World” guide for  entrepreneurs or marketing specialist that want to get into the world of growth hacker marketing.

It serves you well if:

  • You want to build a product, and what to start somewhere
  • You have a product started, and want to learn how to test hypothesis’
  • You have a business and want to find potential customer markets
  • You just want to know more about online marketing strategies

The article is fast paced and aims to introduce concepts that when brought together may shed some light on the bigger picture (at least that’s how it helped us).

Grow hacking concept

Growth-hacking is based on trial and error in order to achieve marketing conversions.

In growth-hacking you stick to the law of traction, meaning that marketing channels should be used until they stop bringing fruitful results.

As part of growth hacking the goal is to see the big marketing picture as a huge funnel. The AAARR from pirate metrics is a good example of a funnel that refers to different stages in which users can be when interacting with your online presence.

Once you grasp the funnel, you will understand the growth hacking concept.

Online presence

Whether you’re a company that sells fruit or an online streaming service, in todays world, your company must also have a means of identifying itself online. This is what online presence means.

Online presence is regularly achieved by having a means of showing off your products or services to potential customers over the internet.

Landing page

A landing page is practically a simple page where potential customers can “land” when either searching for a specific thing using a search engine or when clicking on an ad that caught their attention.

This page can be of many forms, such as a Facebook business page or a website page where customers end up if they follow an interaction case.

The landing page itself should offer a simple and clean user experience, with flashy content having the ability to load up fast (under 3 seconds according to google bounce rate stats) that presents the user with call to actions that progress him through the marketing funnel. You can test out how many users you lose by using Google’s Test My Site feature.

If your aim is to let customers know of your products via email, you should present your customers with a means of subscribing to your news letter.

If your aim is to sell products online, you should make it as simple as possible for the user to use your landing page in order to meet his needs.

In case you opt for creating a website, a fairly simple to use and very customizable platform for creating a website would be WordPress. Just pick a theme such as Salient or Divi that’s easily customizable, and you’re on your way. Another option would be to just install and use the premium AMP for WP plugin to build a very fast and very mobile friendly website, which will score a lot of points when it comes to performance.

Keeping track

As growth hacking relies heavily on trial and error, when setting up the marketing system, a very important step is to add monitoring abilities to the landing page so that you can keep track of the users that land on your page in order to identify the users that are potential customers.

Having an analytics system in place enables you to identify your target audience and further interacting with them via multiple marketing channels.

Depending on your landing page choice, practical tools such as Google Analytics or Facebook Pixel can be used in order to track useful metrics.

Making sense of captured data

Having data with regards to “whom” accessed your landing page is only helpful if you manage to find out “why” they have landed there in the first place.

Taking for example the data captured from Google Analytics, in order to grow, you must try and makes sense of the following metrics (as also explained in this tutorial and found in this google documentation)

Sessions

Session represent the number of times that the website was visited within a 30 minute time frame.

Users

A user is a single unique person that has visited the website (had at least one session). A user can have multiple sessions, which means that the user has visited the website more than once.

Ex. A website that has 100.000 sessions, can have 70.000 users, which means that some user visited the site more than one time

Bounce rate

The number of sessions in which the user visited only the first page of the website, for a very short period of time, and then left the website.

Page View

This metric measures a single view of a specific page. This helps you gauge the effectiveness of a specific page versus another.

Sharing your landing page

Once you have a landing page, you’ll want to expose it to the world and attract as many opinions as possible. But before doing that, a good idea would be to use a tool in order to shorten out the link to your landing page and also to gain valuable access metrics (a lot of people share content with each other using copy-pasted links, so keeping track of the share-ability of a link is always a good idea)

Bit.ly allows to you shorten links and also keep track of interactions made to the link.

Periodic marketing newsletter

Data is always better visualized in a graphical way. After having set up a means of extracting analytical information about the users that land on your site, in order to have overview it would be cool to have a means of receiving a newsletter with weekly or monthly traffic information, so that you can have a sense of progress.

This tutorial does an outstanding job of creating a dashboard that extracts weekly traffic metrics from Google Analytics. Furthermore, using IFTTT this process can be automated in order to become a weekly marketing status newsletter.

Markets and Segmentation

You can attempt to see a market as a forest of trees, where each tree represents  a customer of a generic category of  items. Following this analogy, the e-commerce market represents all of the users that engage in e-commerce activities or simply buying stuff online.

In a forest, there usually are different types of trees. These different types of trees represent different types of customers having different types of needs and preferences. Following the forest analogy that compared a generic forest to a generic e-commerce market, out of the entire e-commerce market, there are customers that usually purchase software subscription online (think of a Spotify music plan) and there are customers that perform shopping online (think of purchasing something from Amazon).

In a practical sense, we’ve identified two submarkets of the e-commerce market that further describe our customer’s needs. The method used in order to identify a sub-market is called a market segmentation, which aims to further specify generic markets. The above example can be further specified to almost any degree.

Personas

One of the most important things in growth hacking is defining a customer persona. A persona is a demographic of the preferred type of customer belonging to a specific market segment.

Let’s say that you’re building a financial business plan management platform. The key thing we require in order to understand our customers is data with regards to our customers needs, frustrations, habits and whereabouts.

This data can be collected either directly by asking users about their needs, or by collecting analytic information about user behavior when being pitched by a concept or a product.

Generating data

Customer interview

Customer interviews aim at firstly asking the user about their needs and concerns. These interviews aim to give you insight about the actual need for what your building for the assumed market. Taking the market of people that purchase subscriptions online, you would want to find out if they have any other issues that you could solve. Also, you would want to find out if they would have the need of managing a business plan.

In short, customer interview’s reveal the following needs:

  • Must identify needs or features that your product must have in order to fully satisfy customers
  • Latent needs are nice to have features that are not crucial for your users

Having know how about customer needs allows you to generate demographics.

Digital Analytics

Digital analytics aim to validate assumptions about markets. Let’s say that we plan to launch our new business plan management product. By creating a landing page and spreading it around in the chosen market or submarket, we can validate whether or not our product fits the proposed persona that identifies the specific market.

Contouring the Persona with data

Having data about our potential customers and having confirmed data assumptions about the market means that we can start contouring our customer persona.

Demographics

A demographic represents a set of qualities that can identify a market of customers.

Demographics explain “who” your customer is.

An initial demographic for a persona could:

  • Sex: Male
  • Age: between 28-40 year
  • From: Romania
  • With interests in: Business

Psychographics

A psychographic represents a set of behaviors, habits and concerns that your customers have.

Psychographics explain “why” your customers buy stuff

An initial psychographic fora persona could be:

  • Own a business
  • Is frustrated with managing the business’ financial data
  • Finds it hard to manage a business plan using conventional tools
  • Would be willing to pay for such a product

A good article on psychographics can be found here.

Marketing channels

Social media marketing

Social media marketing means that the marketing attempts are performed using social platforms such as Facebook, LinkedIn, Twitter etc. to generate leads onto your landing page.

Content is always king

Content should be of high quality always, and should abide to the specific platform rules.

For example, for Facebook, an ad should be aware of the content recommendations metrics that Facebook provides, as these metrics have been collected by Facebook, and statistics have been made in order to improve click-through-rates.

Article sharing automation

If your content strategy is focused more on blog posts, or sharing cool stuff, this can be automated by subscribing to RSS feeds. All you need to know is the rss feed address for your favorite blogs, which can be easily found by using searching for it on Google.

To automate this sort of content sharing even more, using IFTTT you can create an applets that extract RSS feeds and automatically send them to Buffer for posting. The whole setup shouldn’t take more than an hour or so, but will provide you with unlimited fresh content sharing capabilities.

Social media automation

Planning content based posts for multiple platforms can get tricky. That’s why we can fully

automate it. Tools such as Buffer allow you can aggregate multiple social media accounts into one roof. The content posted using such tools can be posted and scheduled for posting onto multiple platforms at the same time, which of itself is a huge advantage.

Email Marketing

Email marketing is the means of marketing via email duhh!

Usually when having a landing page where users can subscribe to know more about your products or services, they opt in by fiving you their email so that they can know more about you.

This emails from such subscribers are aggregated into a CRM (Customer Relationship Management) platform so that you can keep track of the users and of their interest in your products.

A good email should have HTML content that is no larger than 600-800px and does not contain

Too many selling terms such as “Buy now!” or “Limited time only!” as they may be picked up by spam filters, but still offer enough engagement in order to have the user interact with it.

There are 3 base strategies of email marketing

Re-engagement (activation & retention)

Let’s say you have a user that has subscribed to your email campaigns, but has not received any news from you for a while. Re-engagement targets to re-engage users and get them interested in your emails again.

Using a tool email marketing segmentation and analytics such as is MailChimp, allows you to setup campaigns that more precisely target audiences such as  “only the people that have not opened your emails in from the last 5 campaigns”. This means that customized messages can be created for these types of users in order to get them engaged again, and to proceed them through the funnel.

Event triggered messages

Let’s say that you have an e-commerce site and that a customers accesses your site and places something in the shopping cart, without proceeding with the actual purchase. A good strategy for such scenarios is to have an automated system that tracks for such events and send out an email to the user, asking him if he required aid in completing his purchase.

Drip lead nurturing

Let’s say that you have a product which should launch in some time, and you have some users that have subscribed to the newsletter. Drip marketing suggests that you customize a set of emails for specific days, in order to interact with these users, and from time to time also include another sales related email that allows the users to buy your product in advance.

An example scenario for a user that has subscribed to the email:

  • Day 1: you could send the user a special thank you email
  • Day 5: you could send the user a useful tutorial on how to manage personal finances. On Day 7: you could send your user an article explaining basic macro-economic terms.
  • Day 10: a sales email could be sent in order to pitch your product or services.
  • Day 14: if the user hasn’t purchased, let him know that the sale will soon be over or offer him a discount
  • Day 18: Restart content email strategy

This kind of schematic can be used as a monthly cycle.

SEM & SEO

As you well know both SEM and SEO are are relevant for customers that are in a more advanced step of the marketing funnel, as their decision to solve a problem has already been taken.

SEM and SEO are similar because both rely on strong and well targeted keywords in order to score your landing page as more relevant. For SEM, you have to pay for the ads in order to get the top spots in Google, Bing or Yandex, while SEO is a ranking based on overall relevance, that generates organic leads.

Research keyword markets

Because ads run this world, scoring relevant ads in search engine searches has become a market of it’s own. For both SEM and SEO, the best strategy is to firstly perform a keyword analysis and a track of all the competitors for potential keywords (we have an article being made ready which covers the entire optimization process for SEO).

Research to some extent can be started by using Google Trends to sniff out locations in the world where some keywords are trending. This gives you enough insight in order to plan out your next lead generating posts.

Humanly readable content

A lot of sites get down-ranked because they think they can fool Google’s crawler with cheap tricks such as adding repeating keywords in a manner that impairs readability or hiding keywords inside of the DOM. The best way to win when it comes to readability is to use headings accordingly, as titles and headings are easily understandable by humans, and that’s all that Google cares about.

Also, ensure that the content creates an easy to read and understand experience for each user of the landing page. As an example I give you our site, RED Abacus and the landing page for our “in development” project, Bizmod.

Trial and error

As SEM has become a fairly competitive market place, and CPC (cost per click) rates in competitive markets leads businesses to bleed out, keyword research is key. After having the keyword research done, just run ads and assess traffic and conversions on the landing page.

Business level metrics

There are businesses that rely solely on digital marketing in order to break a profit. In order to

find out the feasibility of a an online business model, it’s safer to start doing metrics early on that help predict the factors of success.

CAC

Customer Acquisition Cost refers to the sum of costs that are necessary in order to convert a lead into a paying customer. Let’s say that for example, our landing page acquires leads using SEM marketing, for which it pays around 100 euros a month for which the business receives around 100 unique visitors. If 2% is the average rate of conversion, then that means that the cost per acquiring a user is 50 euros (you pay 100 to get 100 users on the website, but only 2 of them become customers).

LCV

Lifetime customer value is the metric which refers to the total revenue that a customer produces over the lifespan of the interaction of the business with them. Let’s say that you own an online book store where all books are valued 10 euros. If the average number of books that users buy on your platform is around 2 books, that means that your lifetime customer value for each customer is 20 euros. This is an important metric in analyzing the feasibility of a business model.

A reasonable rule of thumb is that LCV / 3 = CAC

MGM

Minimum Gross Margin refers to the amount of money that a business attains after subtracting the CAC from it’s customer produces revenue. Let’s assume that you operate an online subscription based business model that receives around 300 euros in total from each customer over each year of activity. If you plan to have a yearly revenue of 30%, then the cost of acquisition for each customer should not exceed 210 euros. (30% out of 300 is 90, which represents the expected profit).

The plot thickens when you have to take into account that you also have to spend time writing and adjusting ads, which implies a bit more cost, so be sure to take effort into consideration.

Market segment focus

Because some customer segments wield higher MGM values than others, it’s a good idea to compute MGM values for different types of customers. By doing this and testing the business model out, you can gain valuable insight with regards to which type of customers yield the greatest returns.

Let’s assume that you own an online shopping site, and that you have two types of user personas that frequently visit the site, mainly the “Nomo” persona which has an average LCV of 100 euros and CAC of 50 euros, and the “Momo” persona which has an average LCV of 200 euros and a CAC of 120 euros.

When doing the math, the “Momo” type of customers yield 80 euros in profit as opposed to the “Nomo” type of customers that yield only 50 euros, thus implying that the online shopping platform should be more oriented towards acquiring “Momo” type of customers.

In order to compute what the most profitable customer segments are in a multi year estimation, the following 3 metrics should be multiplied for each:

  • Average purchase by customer per year
  • Average purchase size
  • Number of years that the user is loyal to your platform

Final advice

If you’re a fresh entrepreneur that wants to build the future, growth hacking is definitely what you need to keep track of your product and market needs.

The final advice for anyone going down this path, is to “Just BUILD <insert_what_here>“.

As there is no such thing as a free lunch, we’re a software development company that want to help companies build impactful software solutions. We also are in the process of securing funding for our Bizmod project.

Abacus

Share
Published by
Abacus

Recent Posts

Business agility

Who needs this? This article intends to shed some light on the overall benefit of developing software in an agile…

3 months ago

CSS interview cheatsheet

Who needs it? This article intends to be a fast paced guide for anyone who is interested in undertaking a…

3 months ago

The Calibrated Normalization Method

Normalizing story points for enterprises Insightful Analogy The concept of normalizing estimates is analogous to converting (i.e., normalizing) currencies across…

6 months ago

Comparing tech stacks

Who needs this? This article intends to shed some light on the performance and memory consumption metrics of multiple technological…

7 months ago

This website uses cookies.