What is ‘Growth Hacking’ and how can startups benefit from it? Explained by Harsh Shethia
Growth Hacking is a moderately new term in the field of marketing directed at the growth of a company. It is a combination of Data Analysis, Product Management, and Digital Marketing. It focuses on collecting and smartly using data to optimize and enhance the customer journey. The growth process can be implemented within the company with weekly tests, corrections, and improvements.
In the Founder’s Meet organized by StartupLanes, Mr. Harsh Shethia talks about growth strategies that startups can use to observe huge growth in a small time and on a small budget. Mr. Shethia is the founder of Startup Hackers and a Venture Partner for Ah Ventures.
Post the Covid-19 outbreak, startups are facing adverse consequences like a diminished customer spending mindset, declining revenues with expenses being almost the same, accounts receivable taking a serious hit, and cash flow management is also affected.
With most of the workforce operating remotely, the Covid era has proved that digitalization is no longer an option. Businesses are forced to go digital to remain relevant. Based on the market scenario, you have to restructure your business model and regularly follow-up on accounts receivable with the clients. Apart from this, you can benefit from various loan schemes launched by the Government to assist with working capital. also, don’t forget to streamline your operations and have multiple growth strategies.
Growth is a habit that needs to be practiced daily. So many people do not take the first step because they are afraid of failure. But as Arianna Huffington said, “Failure is not the opposite of success; it’s part of success”. In the end, you should positively take the lesson from the failure and work on your shortcomings. Don’t be afraid to be creative and experimental because sometimes the most unexpected ideas might turn out to be the best.
As a founder, your primary focus should be on the growth of the startup and you should try to delegate low-priority tasks to team members. You need to have incremental growth week over week and focus on consistency.
The most crucial concept for your business in growth hacking is the ‘North Star Metric‘. It encourages teams to go beyond making temporary, surface-level growth to instead concentrate on generating long-term retained customer growth. The North Star Metric is the sole metric that adequately apprehends the core value that your product offers to customers. Optimizing your attempts to improve this metric is important to making sustainable growth across your entire customer base.
Consumer Buying Psychology: People buy with emotional triggers. You can use a progress bar that shows the customer progress in percentage or create urgency by using countdown timers. You can use contrast tools to compare your products to others and show the value. You can also create a fear of missing out among customers by introducing limited edition products. You need to have logic to prevent buyer’s remorse and keep the customers engaged.
Growth Experiment: You should create a growth experiment roadmap and focus on one broad topic for a specific duration. Identify 5-7 hypotheses every week and figure out which one of these you want to focus on. Keep in mind to do a weekly analysis of the expected and actual outcomes of the experiment.
ICE Ranking Mechanism: This mechanism can be further broken down into– Impact, Confidence, and Ease. This tool allows you to provide a score to all three categories regarding your strategy based on how big the impact is, how confident you are of its success and how easy it is to implement. If the sum of the score is over 25 (out of 30), you can safely move ahead with your strategy.
Watch this video to learn more growth hacks.
Acquisition: This is about the different traffic strategies that you’re looking at. But for this, you need to have a clear understanding of what type of customers you will be targeting, their demographics, language preferences, etc., and use them to attract the right customers. You can use pull tactics, push tactics, or product tactics.
Attention: Once you acquire the customer, you need to grab their attention. The first thing that you should do is get their email address. You can offer them a free trial or offer a free report/ebook.
Retention: After you have the customer’s attention, your next focus should be on their retention. This can be achieved through email marketing, social media marketing, youtube videos, free consultation calls, or CRM.
Revenue: This stage involves selling your product/ service or offering a subscription. You can provide free shipping, discount coupons, or cashback to attract customers.
Referral: Through referrals, you should either provide value for both entities, or for referring entity, or for the referred entity.
Some popular examples of successful growth hacking campaigns include:
Dropbox, which rewards existing users for inviting new ones with additional storage
Hotmail, which added a line to every outgoing email prompting people to sign up for a new account
AirBnB, which used Craigslist to discover and market to people looking for affordable accommodation