Growth Hacking: Definition, Functions & Strategies for Implementing It
Lately growth hacking has become the concern of many world startups because this marketing strategy is suitable for startups who are just starting their business in the digital era. The advantage of this marketing technique is that we don't need to spend a lot of capital but it has effectiveness in increasing the development of startups.
What is Growth Hacking?
Growth hack marketing or growth hacking is an experiment-based marketing technique. Growth hacking is used to determine the most productive way to grow a business.
The term "growth hacking" is taken from a mixture of various data engineering, analytics, and marketing techniques. A growth hacker uses all of these techniques optimally. That way, they can find the most innovative, most effective, and fastest ways to achieve startup success.
Some of the techniques adopted by growth hackers are reverse engineering, A/B testing, SEO, email marketing, viral marketing, and content marketing. In the process there are several techniques that are carried out independently. However, these techniques can also be used simultaneously. It all depends on the type and vision of the startup itself.
Growth Hacking Strategy
There are three main types of strategies used in growth hacking, namely:
Growth hacking uses advertising as a way to promote its business and can even increase brand awareness. One way to do promotions is by using PPC or Pay per click. This strategy is carried out by carrying out the AARRR or acquisition, activation, retention, revenue, and referral stages. The following describes each stage in the growth hacking funnel and the strategy for optimizing it.
Acquisition is the first time your business and potential customer make contact. It can be through the website or from the products you sell. This stage is very important, you know! Because, you can find out if potential customers are further interested in your business.
Therefore, for this stage to be optimal, you must be able to reach many potential buyers, aka expanding your brand awareness. How to? Instead of promoting on various platforms, you should promote it in a place that is really busy with potential customers.
For example, your startup targets millennials or generation Z. That means, so that the acquisition stage is optimal, you promote it on social media Instagram or TikTok where the majority of users are young people.
Activation is the second step in growth hacking which is marked by customers starting to use your product or service. So, if Acquisition is the process of attracting potential customers, Activation is the process of making them become customers for the first time.
The large number of consumers who become customers is called the conversion rate and is a rather tricky stage. Because, even though you have promoted in the right place, many potential customers are still unsure about new startups.
Here are some strategies you can try:
- Install a good CTA on your website/blog. Starting from writing with imperative sentences, mentioning benefits in CTA, to placing them in the right position.
- Take advantage of pop-ups. Pop Up is a form that appears when visitors browse your website.
- Make it easy for visitors to contact you. Surely visitors will ask and confirm many things to you before making a purchase. Therefore, make it easy for them to do it. You do this by installing live chat on the website, including your email address/phone number, and providing an inquiry form.
The above are just a few examples of strategies to increase conversion rates.
After successfully getting customers at the Activation stage, it's time to make them regular customers at the Retention stage. Therefore, you should try to ensure that customers don't only use the product or service once. However, many times in the future.
How to? Here are some retention optimization strategies that you can try:
- Give a limited promotion in the next purchase. For example, additional discounts, free shipping, or bonus goods.
- Make your customers feel special. Starting from sending thank-you emails after buying your product, giving special vouchers for customers' birthdays, to running UGC campaigns as a form of appreciation for customer work.
- Send newsletters. Newsletters are emails containing product or service information that are sent to your customers. So, they will always be updated and can build a sense of interest again.
Referral is the stage where your regular customers promote your product or service to other people. Generally, through a strategy known as Word of Mouth Marketing or word of mouth promotion. This strategy is very powerful and can help your business grow quickly.
So, to encourage your regular customers to promote other people, you give bonuses every time they successfully invite other people. For example, special discounts, cashback, additional features, and the like.
Well, the last stage of growth hacking is revenue. If the previous four stages go smoothly, you will start earning revenue and can use it to grow your startup even further.
Unfortunately, many startups fail to reach this stage for various reasons. So that you don't fall into the same hole, here are some tips to increase Revenue that you can try:
Immediately find a profitable business model. So you don't just burn money without getting profit.
Don't just focus on finding new customers. This is because getting new customers costs five to twenty five times more expensive than focusing on regular customers.
Offers an annual subscription plan. The customer will pay in full up front, so you have a handle on the money to grow the startup.
2. Content marketing
The content marketing strategy is a technique that doesn't require a lot of capital and is enough to provide an increase in business. Utilizing content marketing can be the right choice that can sign quality leads. Content marketing can be done by creating articles on blogs, e-books, social media content, videos, infographics, and email marketing.
3. Product Marketing
Product marketing is able to make the product more attractive and build a user base. For example, by creating a special registration system for certain customers then offering a referral program that can be profitable for old users and those who have just joined can also take part in this program.
Main Purpose of Companies Using Growth Hack Marketing
The goal of companies using growth hacking techniques is to be able to sell products and get publicity. In addition, the main goals of companies using growth hack marketing are as follows:
- Advertise your business using content marketing
- Advertising a product within a product
- Used to pay for an advertisement or other promotional activities.
- Ensuring products or services are needed and sought after in the market
Example of Growth Hacking
Here are some successful examples of implementing growth hacking in their businesses:
Surely you are no stranger to hearing the name AirBnB, yes, AirBnB offers accommodation for travelers from cheap to expensive prices in various cities to remote villages. In the early days of AirBnB, this business owner realized that many people were looking for accommodation through the marketplace site Craigslist. As a result, they also posted AirBnB lodging on the site and got a lot of customers from there.
Dropbox also implemented a growth hacking strategy to increase its usage. Dropbox is one of the largest storage services in the world. They offer additional free storage for users who log in via their Twitter and Facebook applications and promote through their social media.
Gmail uses a growth hacking strategy called FOMO. It is using an invitation system so you can use it. This made many people curious and in the end many tried this gmail-like strategy.