With the continuing rise of social media — and the changing ways in which we consume TV — a shift has occurred relating to the effectiveness of historical marketing techniques.

The metrics which show how effective these campaign are has always been flawed

Take for example a toy shop advertising a product via newspaper or television. If the advert coincides with a rise in purchasing is this because the advert was successful or because those people would have bought the toy anyway?

It’s impossible to tell through standard metrics and methods alone

Step forward growth hacking

Defined as a marketing technique which utilises creativity, analytical thinking, and social metrics to sell products and gain exposure. Measuring the success of campaigns and optimising to make them more effective.

It dispels the myth that for a product to be successful it must be seen by as many people as possible

Instead it needs to be seen by the right people

Growth hacking means that the marketing of the product is programmed directly into the product itself creating a cyclical process whereby success breeds success

Growth hacking isn’t a recent development

What you probably weren’t aware of was every time you sent an email from Hotmail you were acting as an advertisement for the product

At the bottom of each email was a “Get Your Free Email at Hotmail” tag appended to existing user’s outgoing mail. The recipient could then click on the link and set up their own account.

As a result, the companies grew users to over 1 million within 6 month.

This was one of the web’s earliest growth hacks

Growth hackers utilise quantifiable data to undertake campaigns which are often both cheap and highly effective

If done successfully the effect is meteoric and has ushered in the birth of almost every large technology company in the last 5 years.

Dropbox?

Its growth hacking was achieved through the ingenious idea of providing additional storage to those who referred friends

Instead of acquiring a large number of disengaged users they cultivated a hardcore customer base that were happy to assist in the growth of the company for the reward of additional storage. The result saw its users grow from a few thousand to millions almost overnight and it hasn’t stopped.

The use of a scheme which rewards loyalty is an incredibly effective solution as it feels legitimate and sincere. You are counting on the joy your users feel about the product leading them to tell other people about it.

Product Market Fit

Product mark fit is a prerequisite for growth hacking — without it exponential growth is impossible

History tells us that in marketing we distribute the product we are given not the one we want.

This is stupid

In today’s world we are exposed to data as often as we want. We can learn from our customers whenever we want which provides us with insight into the minds of the people we are trying to reach and ultimately sell to.

It’s incredibly simple: You have to make things people want

Product creation should always be a highly iterative process involving the engagement of existing users in order to learn how to make your product a “must have.” Often this leads to significant product revisions — or even having to hit reset — but this is essential.

What’s the point in taking a product to market nobody wants?

“the life of any startup can be divided into two parts — before product/market fit and after product/market fit. When you are before product market fit, focus obsessively on getting to product/market fit. Do whatever is required to get to product market fit. Including changing out people, rewriting your product, moving into a different market, telling customers no when you don’t want to, telling customers yes when you don’t want to, raising that fourth round of highly dilutive venture capital — whatever is required” — Marc Andreesen

And virality is essential — it is rocket fuel

The goal of growth hacking is the answer to how you turn 1 in 2, 2 into 4 and 4 into 1,000,000.

Understanding the semantics of what leads to something going viral is not quite the exercise in futility it used to be. Where as before this was luck we now we have an abundance of data to reflect and draw conclusions from.

Through the distillation of data we can understand better than ever the things which lead to virality. The effect images or video has on views, the success of specifically colour buttons and even the time which information is shared; literally anything you want to measure can be defined to the nearest unique view of your site.

All sound overly simplistic?

It undoubtedly is

Building a legitimate viral loop that actually works is just about impossible, hence the reason such a small number of companies have achieved it. For it to succeed it has to be a fundamental part of your product.

It has to be entwined within the fabric of your products DNA from conception otherwise it seems insincere and forced

Skype provides the most basic example of a network effect.

In order for you to use all its features you must have a network to do so which leads you to encourage your friends and family to join. As they download the product in order to connect with you they will go through a similar process of spreading the word to their friends to do the same with them.

The result?

Skype gets bought by Microsoft for $8.56 billion

When a product produces a viral loop, unimaginable growth becomes a possibility. Skype’s effectiveness has seen it evolve not only to millions of personal users but has been embraced by business professional the world over as well.

Retain existing users then optimise

A customer you already have is intrinsically more valuable than those you are chasing.

This means you are able to extract more value through optimisation rather than by acquiring new users.

According to Bain and company a 5% increase in customer retention can mean a 30% increase in profitability

Furthermore the probability of selling to an existing customer is 60–70% while to a new prospect it’s just 5–20%. It’s clear that retention trumps the acquisition of new customers.

Twitter provides an interesting example of this

Through analytics they quickly realised that they were acquiring a lot of users without that leading to the expected increase in ‘tweets’.

Without users ‘tweeting’ they would eventually have reached a point where there wasn’t enough content being created for the users they have to consume

Their analytics pinpointed the tipping point whereby engagement from their users was greatly increased heightening the likelihood that they would become active contributing members not just consumers or worse disengage.

If the person followed at least 9 people upon sign up they were far more likely to stay around and Tweet themselves

To encourage this twitter developed a growth hack

They moved to recommend which people to follow for new users which steered their growing userbase towards the statistics which highlighted increased use.

This optimised incoming traffic for success and has led to their growth to 350m users worldwide

Growth hacking is about breaking free from historical precedent

It is about being conscious of future growth at the moment of product inception

Growth-hacking is more than a buzzword — it is the processes in which decisions are made with a specific purpose in mind derived from quantifiable statistics.

How hard could it be?