In 2007, the high rent on their apartment forced two friends to turn their loft in downtown San Francisco into a seasonal lodging space.
A new breed of travelers and renters emerged as a result of this experiment; digital natives who were keen to disregard and circumvent the traditional hospitality model for a new-age experience. Along came Airbnb, an insurgency which crept into the lives of the modern leisure traveler.
The exponential growth of Airbnb owes as much to the differentiated product, as it does to smart marketing techniques – one that is now called growth hacking. The dynamic, reactive, and subversive growth hacking practices adopted by Airbnb made it an instant viral phenomenon. The rest, as they say, is history. Today, Airbnb is the largest online marketplace for hospitality services with a valuation of over $31Bn.
Growth is the ultimate ‘hack’
The possibilities of a digital world have revolutionized the way businesses interact with their customers. Consumers are increasingly demanding a wholesome experience which embraces the whole life-cycle of the product. Start-ups and digital disruptors are providing such experiences, with a surplus of options and hybrid products and services that cater to an increasingly digital savvy, demanding customer base. The biggest challenge for a majority of start-ups lies, not in creating disruptive products or differentiated services, but in the manner in which they reach out to target bases and ensure continuous early adoption. Growth hacking, a distinct start-up lexicon in the digital world, was meant to address this specific challenge. A short-burst hybrid of cutting-edge technology-driven disruptive marketing with an austere analytical approach, which was strictly aimed at one thing - growth.
Coined in 2010 by Sean Ellis, growth hacks for start-ups combine the data focus of analytics and the hustle and expediency of a start-up environment to drive marketing strategies that only look at “exponential growth” as the metric of success. The approach looks to rapidly increase productivity and performance; a ‘hack’ that is “scrutinized purely by its potential impact on scalable growth.”
It is distinctive in the immediacy of its approach and the dynamism and agility in response; deeming growth in exact, empirical data as the only barometer for success. This creates an urgency whereby companies can achieve immediate results – empirically measured and feasible.
Where to ‘hack’ for growth
Companies, big and small, have been keeping up with the challenges of a digital world, where competition is fierce and bottom-lines are continuously receding. As marketing budgets shrink, the fractured digital landscape provides an interesting challenge to companies who now must factor in additional platforms, techniques, and choices – in the race towards achieving customer’s undivided attention. Today, large global enterprises are employing growth hackers to crack problems – leveraging the energy and urgency of a start-up atmosphere to fuel short-term strategic interests.
In large organizations, the ‘hack’ is specifically designed to bring in visible impact – that can be directly and categorically measured. Designing a growth ‘hack’ involves deep understanding of consumer experience, architecting specific markers of success, and using every available marketing tool to get it done. Dynamism in response is the key to success, as every marketing trick is applied for the fulfilment of a singular goal.
As the increasing volatility and dynamism in the markets eat into costs and resources, CMOs are looking to form tactical units within their teams; who have the dexterity and smartness to react to the ever-changing competitive landscape, in pursuit of singular big-bang initiatives that bring a visible change. Using the intensive, no-holds barred approach of start-up cultures, companies seek to create “agile” units for exponential growth.
Amazon, the world’s largest online retailer, often takes this approach – creating strategic units that look at specific individual goals to make a bigger splash. When they launched ‘Prime’, their premium subscription service, they asked multiple units – marketing, product design, engineering, and customer service – to look at one specific goal – increase adoption. Thus, a variety of new features such as more intuitive algorithms which suggest cross-sell and up-sell products based on profile history, packaging which included Prime advertising, preorder buttons, and other customized innovations were designed to increase the value of an order and the total lifetime value of customers.
Hacking for the long-tail
In the current digital marketplace, where competitors are numerous and the battleground is a complex global web, growth hacking techniques can be the real differentiator – both as a business proposition as well as a marketing tool. The trick is to create short-term impact, whereby small, agile units work in start-up mode, acting on the immediate concerns of potential customers; eschewing the long-term optimization for short term gain.
This approach often brings up unexpected and innovative ideas, generating exponential growth. Dropbox is a testament to this kind of strong singularly-minded growth, with their popular ‘Refer a Friend’ scheme. By gratifying both users with free storage space, it generated massive scale and user base. The very nature of incremental rewards pushed more and more people to reach out; a classic marketing tactic that generated windfall revenues.
The most critical quality of a growth hacker is his constant desire to test, tweak, and re-work the campaign. CMOs play a key role here, deploying growth hackers to bring in short-term value. This also serves larger goals and affects business profitability in the long-run. Therefore, the work of a growth hacker cannot be defined by “tactics” alone; it has to be shaped by intent and qualitative assessment of the overall targeted goal.
Hacking for the future
In this dynamic world, where distribution and dissonance have become major threats to growing large technology companies, growth hacking techniques can be effectively employed to build customers of tomorrow.
In 2006, LinkedIn, still an emerging business social network with minor footprint in the tech industry around Silicon Valley, introduced its most talked about growth ‘hacks’ – public profiles. It allowed users to open up their profiles, which then showed up organically in search results – a move that boosted its growth from 2Mn registered users to 200Mn.
Marketers need to crunch historical data and apply legacy knowledge to construct well-defined short-term goals; creating projects that maximize impact and further the company’s goals. This has become a combination of the art and science of marketing; continuous testing, re-working, ideating, and re-thinking the campaigns. Finally, the espousal of change is a cultural product and while short-term efforts can be managed, what is more difficult is embracing and inculcating the change throughout the organization. And that is where a growth hacker becomes a marketer, marrying his short-term strategy to a company-wide philosophy.