Grow, grow, and grow! Most businesses, especially start-ups, are fixated on this. So, how to take advantage of this expansion? The answer is Growth Hacking.
Growth hacking, a concept that has recently gained popularity, is an effective way to grow businesses. It’s a new way of thinking about Digital Marketing, helping companies achieve their goals faster, using as few resources as possible.
So what is Growth Hacking, and how to unlock growth hacking metrics? Let’s find out!
What is Growth Hacking?
Growth Hacking (also known as Growth Marketing) is the use of effective and cost-effective Marketing strategies to help grow and maintain an active user base, sell products, and gain reputation.
The word “Hack” has the meaning of the word “Life Hack”: little tips to make your life easier.
One of the people considered the “father” of the term Growth Hacking is Mr. Sean Ellis, founder and CEO of GrowthHackers.
According to this concept, Growth Hacking refers to three main factors:
- The way to achieve the goal (non-traditional)
- Investment resources (less resource usage)
- Time (only takes place over a period of time)
A standard Growth Hacking team usually includes members from marketing, product development, engineering (technology and engineering), and product management, and the primary goal of this team is to build and attract customers.
Growth Hacking is often associated with start-ups and small businesses, that is, organizations that only have a little money but need quick results. However, it is a scalable concept that applies to any online business that wants to maintain growth and an active user base.
5 Most Common Growth Hacking Metrics
For each company, metrics measure the development of a Growth Hacking strategy. Many start-ups use Dave McClure’s AARRR growth funnel as their growth formula.
AARRR stands for acquisition, activation, retention, referral, and revenue, which comprise the customer life cycle stages. According to the AARRR framework, you should measure each step to determine the location, time, and frequency at which a user uses the product to complete a desired activity.
AARRR may be represented as a funnel, with “acquisition” denoting the start of the customer life cycle and “revenue” denoting its conclusion.
Here are the definitions of each AARRR measure category and how each is used to spur development.
- Acquisition: How do people find us?
- Activation: How can infrequent users turn into loyal clients?
- Retention: How can we hold onto our clients?
- Customer referrals: What are some ways to encourage them?
- Revenue: How can we make a profit from users?
Acquisition refers to the point at which a user discovers the company’s online presence. Users usually come from a broad range of channels during this period, such as email, social media, and search engine optimization.
McClure advises disregarding visitors who click through and immediately “bounce” or quit the website, as they likely visited by mistake. After that, he suggests segmenting bounce-controlled click-throughs by channel and assessing each one according to its cost, the number of users it attracts, and the caliber of those people. Do users remain active? Which channels are the busiest right now?
The best-performing acquisition channels may get resources based on the answers to these questions.
Metrics to track acquisition:
- Bounce rate
- Click-through rate
- Customer acquisition cost
- Lead conversion rate
People should realize the value of your product or service during the Activation phase.
They must have the “Aha” or “WOW” moment (a brand promise). Your (possible) consumer needs to exclaim, “Wow” or “Aha” since this indicates that they have grasped the value contributed to your product or service and are likely also proficient in its use.
Metrics for measuring activation:
- Customer conversion rate
- Drop-off rate
- Dwell time
- Time to value
In contrast to the previous phases, retention refers to the process by which a new user turns into a regular user and keeps returning.
Metrics such as the frequency with which a user returns to a website, resubscribes to a service or opens emails may be used to gauge retention. To increase retention, it is advised that start-ups send out three automatic, routine emails to new customers during the first month of their arrival on the site. Email open rates and click-through rates over time are then provided as organic retention metrics by these emails.
Metrics to track retention:
- Churn rate
- Email open rate
- Login frequency
- Retention rate
Any situation in which the user refers others to the product is referred to as a referral.
Metrics such as how often a person uses product referral programs or posts about a product on their own social media may be used to quantify referrals. Referral rewards may take several forms depending on the company, such as in-app purchases or exclusive savings. Referrals are an essential source of new business as customers’ suggestions for products are often seen as more reliable than those made by the brand.
Metrics to track referrals:
- Net promoter score
- Purchase rate of referred customers
- Referral rate
- Viral cycle time
All of the times a user does anything that generates income is included in revenue. The specifics of the action may differ significantly across products. For Eventbrite, it can include switching from free to paid event hosting; for Netflix, it might entail keeping a membership beyond the free trial period.
Naturally, the revenue indicator is expressed in dollars; nonetheless, McClure suggests comparing it to the lowest sustainable revenue and the revenue threshold at which the business would break even.
Metrics to track revenue:
- Customer lifetime value
- Expansion revenue
- Monthly recurring revenue
- Revenue churn
Either way, the end goal is to get traffic and visitors, turn visitors into users, and retain those users who become active customers.
Tools and Techniques for Measuring Success
There are no specific tools for Growth hacking. Instead, you will apply tools you may have used in traditional Marketing.
The difference is the mindset you will adopt.
The tools you will use depend on the experiments you will perform. Perhaps you’re focused on SEO and need to use keyword and competitive analysis tools, such as Google Search Console, Keyword Explorer, and Ahrefs.
If you’re focused on the Social Media industry, management and automation tools, such as mLabs and Hootsuite, can be helpful. For Email Marketing, try using tools like MailChimp or GetResponse.
Everything will depend on the type of testing you will conduct. However, some tools cannot be avoided: you will need substantive data analysis and testing tools for Growth hacking.
For testing, Google provides a 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 run more advanced tests on websites, mobile apps, TV apps, and the Internet of Things.
Besides, many Email Marketing, Social Media, and Automation tools, for example, include A/B Testing in their platform features. Some examples of tools with this feature are:
- RD Station (Automation)
- LeadLovers (Automation)
- MailChimp (Email marketing)
- GetResponse (Email marketing)
- Unbounce (Landing pages)
- LeadPages (Landing pages)
3 Common Pitfalls in Measuring Success of Growth Hacking
What are the common pitfalls in measuring the success of growth hacking? Let’s find out:
1. Misinterpreting Data
Misinterpreting data is one of the biggest pitfalls when evaluating the effectiveness of growth hacking. Data-driven decision-making is a common strategy used by growth hackers and is crucial. On the other hand, incorrect data interpretation might result in misplaced tactics and missed chances.
Increasing website traffic, for example, is good, but if that traffic does not convert into active users or paying customers, it may not contribute to real growth. To ascertain if their tactics are working, growth hackers need to go deeper into the data to comprehend user behavior, conversion rates, and client lifetime value.
2. Over-relying on Singular Metrics
Another frequent mistake is more than relying on individual measures, such as the number of followers on social media or page views on a website. While these measurements might provide insightful information, they often overlook important details.
A limited definition of success may result from concentrating just on one statistic, leaving out other important aspects. Considering a comprehensive set of measures covering several growth facets, such as revenue creation, client acquisition, and retention, is critical.
3. The Danger of Chasing Vanity Metrics
Metrics that seem good on the surface but need to provide fundamental insights into how well a company is doing are known as vanity metrics. Social media followers, shares, and likes are a few examples of vanity metrics. While seeing these measures rise might be rewarding, they often don’t correspond with observable business results.
For instance, to determine the success of their expansion initiatives, you should concentrate on measures like customer acquisition cost (CAC) and customer lifetime value (CLV) rather than the quantity of Facebook likes.
Thrive with Growth Hacking Tactics from Tech-One
Sustainable development in today’s competitive digital market is only possible by first measuring the efficacy of your growth hacking metrics.
If you want to take your growth hacking strategies to the next level, consider contacting Tech-One. With overwhelming growth hacking metrics – 225% increased conversion rate, 354% increased traffic, and 74% increased successful transitions, Tech-One is confident in providing customer businesses with dedicated and highly efficient Growth hacking services.
Visit Tech-One today to unlock your business’s full growth potential with the help of TechOne.