As any start-up founder knows, you constantly have to do more with less. You need to boost media exposure, but don’t have the budgets to hire a PR agency. You need to acquire customers, but the marketing department is either small or non-existent. The only option left is to get creative and make the best use of the resources you have, whilst trying to achieve profitability.
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 profitability.
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 and Profitability
There are many growth hacking to profitability techniques you can try experimenting with to acquire more customers. Social media, email marketing, search engine optimisation and content marketing are just some of the options available to you.
One profitability technique many startups pioneered in the early 2010s was to play their online advertising budget against customer lifetime value. In Canada, Social Media Analytics firm Crowdbabble discovered 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 meant that the cost to acquire new customers was less than the revenue generated from them. That made online advertising very profitable for them; allowing them to plough revenues back into online advertising and keep getting new, profitable customers. In other words, growth hacking.
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
In some cases, the cost of online advertising may increase. For certain types of businesses, acquiring users via this channel may no longer be as profitable as it initially was.
In such a situation, the best response might be to scale back online advertising and turn your focus to other growth hacking techniques such as content marketing and search engine optimization.
The main thing is to be constantly experimenting to to find new growth hacking methods that are profitable for you.
As a start-up, 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 start-up to achieve profitability.