Tuesday, March 3, 2015

Growth Hacking and Customer Base

Growth Hacking is a marketing technique developed by startups to gain exposure via analytics and social metrics. The phrase "growth hacker" was created in 2010 by Sean Ellis. He coined the term when he was looking to hire a replacement and received several applications that had marketing experience, but they were missing something.

He decided to narrow his search down to focus on "growth hackers,"and thus the term was born. The term hacker often has a negative connotation, but in this case it refers to a person that is clever, original and inventive. A hacker will use whatever methods they can to find a solution to a problem, in this case growth.

The Growth Funnel

Most marketing professionals are familiar with a path to purchase funnel, but the difference here is a focus on gaining and retaining users. The top of the funnel starts with getting visitors and this is where most marketers stop. Growth hacking requires getting the visitors activated by doing anything from giving an email to making a purchase.

The second step is activating members and this involves turning members into users. The Third step is retaining users and this comes from keeping users around and making sure they are active. The whole funnel is compared to a relationship with users by Neil Patel and Bronson Taylor.

Drug Dealers Utilize It?!?

While you aren't selling illicit drugs, there are three lessons that can be learned from the marketing that drug dealers do.

1.The first lesson is eliminating options. Drug dealers cannot use traditional media to market their products for obvious reasons and this allows them to be creative and focus narrowly on other ways that they can market their drugs such as word of mouth.

As a professional, you have limitations as to what you can do to market your products, so focus on what you are able to do and not on what you cant afford.

2. The second lesson you can learn is to hit the road. Drug dealers know where to be in the streets to make their product visible. The moral here is to know and be personable with your customers. While everybody is sending tweets and emails, you should go the extra mile to make a personal connection with your customers.

3. The final lesson to learn from drug dealers is to offer trials. Drug dealers often give out free samples or offer large discounts for first time buyers and you should do the same with your product.

While clearly you aren't a drug dealer these lessons can help you grow your business. There have been plenty of business articles and case studies done on, for example, Jay-Z's success as a mogul that are attributed to his street smart and former drug dealing days.

Who's Doing it? Digital All-Stars

Growth hacking has been around for only a short time but companies such as Twitter and Facebook wouldn't be what they are today without it. Another lesser known example is Dropbox, the file sharing service where you can store pictures, docs, and videos and share them freely. They used growth hacking to increase referrals and sign ups.

An example of this is that once a person referred another person, they both would receive an extra 500 MB of space, as opposed to paying for it. They offered other incentives such as connecting your Facebook and Twitter to Dropbox and you would receive and additional 125 MB for each. Then if you tweeted about how much you love Dropbox they would give you even more space.

The idea of free space for customers worked like magic, there was a large circle of referrals and it increased Dropbox in size and it only cost them 1 GB of space, which is cheaper than paying for the advertising that would have been required to gain those users.

Always Be Growth Hacking

Growth hacking will expand your business if done right. While it is still relatively new, it is rapidly expanding and not implementing some form of it will allow your competition to surpass you. The methods involved in growth hacking are usually low costing and highly innovative and can be an alternative to traditional marketing.

About the Author:

Ryan Polachi is a contributing writer concentrating his focus on Marketing, Finance and Innovation. He can be reached at rpolachi@IIRUSA.com.

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