Required Reading: Strategies for Hacking Growth
Most companies understand that a certain amount of cooperation among their various departments is essential in today’s competitive marketplace. But in Hacking Growth, authors Morgan Brown and Sean Ellis argue that the ideas that lead to quick expansion are simply not possible without close, rigorous collaboration involving interdepartmental teams of experts. Associate editor Oren Smilansky caught up with Brown to learn more about how organizations can get started on the growth hacking process.
CRM: How do you define “growth hacking,” and how does it relate to marketing?
Morgan Brown: Growth hacking is experiment-driven optimization and growth, focused primarily on how the product is used to create growth, both from the distribution and retention side. Many marketers will identify this as marketing, and some of it surely is. Many product managers will identify it as product development. They are both right. The key differentiator, for most, is the product-level focus of these efforts versus the channel-level focus of traditional marketing. Marketing might be focused on how to market a product on Facebook for Facebook ads; the growth team might be focused on how the customers’ use of the product leads to other people discovering it through Facebook.
What do cross-functional growth hacking teams actually do?
Growth teams bring together experts from engineering, product development, design, and, yes marketing, to develop, build, and experiment with strategies for creating growth for the company. These teams run a high-tempo experimentation process that involves four steps: (1) mining customer data and feedback for opportunities; (2) generating ideas based on their learnings; (3) prioritizing tests that have a high likelihood of success; and (4) testing those assumptions to find winners and discard losing bets. They move continuously through this loop to build on wins and compound gains for the company.
Why should organizations build these teams?
Many times the best growth opportunities lie outside the realm of marketing, and to execute on them requires many different disciplines. Too often the teams that could best drive growth are siloed from one another on different floors, buildings, or even countries. The growth hacking team is designed to eliminate that organizational roadblock and unlock new growth wins.
Can growth hacking be employed by companies that are just getting established and have smaller budgets and little margin for error?
For newer companies without room for error, I’d argue the growth hacking approach is even more important. When you don’t know what’s going to work, you can spend a lot of precious time and money going down the wrong path. Growth hacking provides a framework to develop, test, and learn from the market response in the shortest time possible, with the lowest possible cost. A company can decide to spend money on advertising when its product isn’t ready to scale growth, or on an advertising channel that isn’t working. The agility growth hacking provides gives new companies the tools to learn and iterate toward success as quickly as possible.
Many companies you mention in the book are hi-tech (like Uber and Dropbox). How can companies with less of a technology focus apply your advice?
A restaurant chain that has an attached store can launch new items quickly in its store, promote them at the counter, and measure responses to them, and then move them to the restaurant if they’re popular or abandon them if they’re not, before committing to update the menu and advertise their availability. Companies can also take smaller steps and apply this process and approach to just their digital marketing. That same restaurant can start small by testing which offers work best to drive people into the restaurant, surveying people who eat there about why they do, and then using those responses to formulate new promotions to test. Those promotions can be A/B tested easily in their email marketing software.
What is a common mistake for beginning growth hackers?
Searching for the magical sole growth hacker whose bag of tricks will cure what ails you. There are no silver bullets in growth, and copying what worked for other companies is not a recipe for success. Sure, learn from best practices and get inspiration from others, but you need to solve for the unique challenges of your business, and the best way to do that is to follow the growth hacking process: Uncover data, create and prioritize experiments, and run tests to see what works.