As any startup founder knows, we constantly have to do more with less. We need to boost media exposure, but we don’t have the budgets to hire a PR agency. We need to acquire customers, but the marketing department is either small or nonexistent. The only option left is to get creative and make the best use of the resources we have.
Meet Growth Hacking
Growth hacking is a marketing approach used by startups to achieve business growth and ultimately improve the ever critical profit loss statement. The goal is to find techniques that have a direct impact on your bottom line.
Growth hackers are forced to get creative and use low-cost alternatives to traditional marketing techniques—such as using social media or mobile marketing as opposed to traditional channels like TV or newspapers.
Who Uses Growth Hacking?
Companies that have successfully growth hacked their way to profitability include the likes of Facebook, Dropbox, Airbnb and Groupon.
Airbnb, an alternative to hotels, has one of the most notorious growth hacking stories, executing the famous Craigslist hack.
Dropbox, the cloud storage service, is notorious for the viral marketing loop they introduced into their product.
Not bad company to be associated with.
Experimenting with Growth Hacking
In the early days at Crowdbabble, we experimented with a number of techniques in an attempt to acquire more users. We used social media, email marketing, search engine optimization and content marketing. We even had a small budget for online advertising.
We quickly realized which channels worked the best for us to attract the most customers.
For example, we initially noticed that the cost to acquire a paid customer via online advertising on sites such as Facebook and Google was actually less than the customer lifetime value. This was great, because it meant that the cost to acquire new customers was less than the revenue that we generated from them. This meant that online advertising was a profitable channel for us.
So what did we do? We leveraged online advertising as much as possible. When we generated revenue from customers, we re-invested most of it back into online advertising.
We were growth hacking and loving it!
Growth Hacking Keeps You on Your Toes
The challenge with growth hacking is that your techniques usually (with some exceptions) become less effective over time.
There are many variables in play. For instance, competitors can catch on to your growth hacking initiatives and replicate your techniques or user behaviour could change. Whatever the reason, your growth hacking technique can often lose steam over time
At Crowdbabble, the cost of online advertising eventually increased. For our business, acquiring users via this channel wasn’t as profitable as it initially was.
In response, we scaled back our online advertising investment and turned our focus to other growth hacking techniques such as content marketing and search engine optimization.
We are constantly experimenting to find new growth hacking methods that are profitable for us.
As a startup, you are more nimble than larger competitors. Your ability to identify new opportunities and immediately adapt is a big advantage. This is why growth hacking can help your startup to achieve profitability.