Hacking Growth

Books · Marketing, Startups

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The Everything Store

Summary

The Team: Get a mixture of engineers and marketers for growth hacking
1. Are you ready for Growth? You must not move into a high-tempo growth push until you know that your product is a must have, why it’s a must have, and to whom it is a must have
The Process (1): Run growth experiments at a high velocity to figure out what works and what doesn’t. Have clear, quantifiable indicators to understand what experiments are performing and what are not
The Process (2): Have a clear list of indicators to decide what experiments to run first. One way to do this is to rate all experiments on 3 metrics – ease of implementation, impact, confidence in success – and then take the arithmetic mean of all 3 as an overall score
The Hook: Focus on your Language-Product-Market Fit: How well does the way you describe your product resonate with your customers? (Emails, mobile notifications, within the product, ads). A/B test the hell out of your headlines and CTAs
User Activation: Funnel Reports are super useful for analysing activation and retention. Ditto for cohort analysis. Making sure you remove all friction from these is super important if you want to avoid a leaky funnel and keep your customer acquisition costs in control
Monetization: Optimize for customer lifetime value, not always for a one-off purchase. Understand which customers are willing to pay for bells and whistles and which only want the basic features, and create plans accordingly. Also, it can often be a good idea to create plans for students and non-profits. They are unlikely to ever become premium customers, but you can generate some revenue from them this way

Highlights

Chapter 1 – The team

Getting a mixture of engineers and marketers for growth hacking – ideally rolled into one person – is super important for growth hacking in the internet age
Product driven growth hacking — where you convert or re-engage free/low-tier users to pro/high-tier users — costs nothing and can lead to significant revenue increases

Chapter 2 – Determining if you’re ready for a growth push

You must not move into a high-tempo growth push until you know that your product is a must have, why it’s a must have, and to whom it is a must have. Growth hacking should only be deployed after the product has been determined to be a must-have
NPS scores and “how disappointed would you be if this service stopped existing” questions are a good way to find out if you’ve reached project market fit
A/B test as much as you can to see if you can determine what drives customer preferences

Chapters 3+4 – The process

Run growth experiments at a high velocity to figure out what works and what doesn’t
Create dashboards and automated reports that make it easy for your team to figure out:
- 1. How your company is performing
- 1. How the experiments you run are performing
Have clear, quantifiable indicators to understand what experiments are performing and what are not
Think about what confidence interval you’re willing to accept. 95% CI (1 in 20 results may be wrong) or 99% CI (1 in 100 might be wrong)
Have a clear list of indicators to decide what experiments to run first. One way to do this is to rate all experiments on 3 metrics – ease of implementation, impact, confidence in success – and then take the arithmetic mean of all 3 as an overall score

Chapter 5 – The hook

Language Market Fit: How well does the way you describe your product resonate with your customers? (Emails, mobile notifications, within the product, ads)
The first piece of text a consumer sees must send the right message fast
A/B test the hell out of your headlines and CTAs
Prioritise the channels which you are going to use to reach customers. 3 categories of these — viral/word-of-mouth, organic, paid. Have some metrics to quantify this prioritisation
Always be looking for new and emerging options. They tend to have much lower CPMs and sometimes much higher engagement than existing options
For viral, the metrics you should care about are payload (how much text in a message), frequency, and conversion rate

Chapter 6 – Activation

Map all of the steps that get users to an “aha!” Moment
Make funnel reports to discover drop off points for each step. Track referrers in funnel
Look at differences in behaviour of those you converted and those who didn’t

Chapter 7 — Retention

Is super important because you don’t have any cac, can upsell, and learn more about customers over time (thereby giving them a better service)
High and stable retention is a sign of product market fit
Do cohort analysis to figure out what is causing changes in retention
Using habit-forming loops, where possible, to drive retention
Increasing the perceived value of rewards leads to greater retention
The promise of a new feature/new content coming soon can lead to greater retention. Example — HBO’s Rome was a flop, but because it was so expensive and hyped, HBO had near zero churn 2 months before the shows release

Chapter 8 — Monetization

Optimize for Customer Lifetime Value, not always for a one-off purchase
To analyze monetisation, map the entire customer journey
- Identify barriers to generating revenue (such as friction in the payment process)
- For retail companies, the 3 key screens are 1) the screen displaying items for sale, 2) the shopping cart, and 3) the payments page
- For SAAS companies, 1) page explaining features, prices, and plans, 2) pages promoting add-ons and upgrades
- For ads — all pages where company can display ads
Recommendation Engines are an insanely powerful tool here
Understand which customers are willing to pay for bells and whistles and which only want the basic features, and create plans accordingly. Also, it can often be a good idea to create plans for students and non-profits. They are unlikely to ever become premium customers, but you can generate some revenue from them this way
Ask users to make small commitments upfront (like Amazon’s wishlist) to lead to larger purchases later