Growth Hacking, Growth and Digital Marketing — What’s the Difference

A lot of confusion has been brought about by the differing terms of Growth Hacking, Growth and Digital Marketing- but what do they mean and what do they entail?

Since the definition of the term ‘Growth Hacking’ by Sean Ellis in 2010 there has been a change in mindset in how to go about growing a business. With this popularised term and its practices — it has been co-opted by the alluring term of Hacking.

Growth, on the other hand, was first pioneered by Chamath Palihapitiya from Facebook in 2007 as he found himself in a team that sat between Product, Marketing and Operations. This event gave birth to the growth hacking movement as people aimed to speed up processes. It has since been taken to an art form by the likes of Brian Balfour, Andrew Chen et al.

Digital marketing came about as early as the 1980’s and can be referred to as the marketing of products and services using digital products. It builds on traditional marketing. Teams function in similar roles with deep specializations in their selected topic (e.g. Facebook ads), working in a larger department of other specialists.

So what is Growth Hacking:

Growth hacking is a methodology that takes a data-driven approach of rapid experimentation and applies it to the product as well as all marketing channels.

Growth Hacking aims to find areas of potential growth in order to then experiment, optimise and repeat. Feedback loops allow for constant iterations.

The process commonly encompasses the following steps:

1: Generate Ideas

2: Organise & Prioritize

3: Test

4: Analyze

5: Optimise

6: Repeat

When you initiate one of the ideas you would apply the AAARRR Pirate Metrics funnel which provides a framework based on the measurement of these relevant metrics:

1: Awareness

2: Acquisition

3: Activation

4: Retention

5: Referral

6: Revenue

These are then tracked on metrics boards or simple Google sheets to track performance.

Probably one of the most referenced “Growth Hacks” is Airbnb posting listings to Craigslist and actively messaging Craigslist hosts to also list on Airbnb’s site.

This gives a great understanding about what a growth hack is — using a bit of creative thinking, testing the idea, looking at the results and optimising to generate MASSIVE supplier side growth and leeching of an incumbent’s established platform.

It also helps to illustrate the up and down nature of growth hacking, as no matter how great a channel- it might be only of intermediate success (?). Exemplified by Airbnb no longer using this method as the source is tapped. The hack has been outgrown and used up and has therefore been omitted.

Now this hack worked because Airbnb is perceived as a superior product, it well and truly could have been the same hack and equally failed with retention if the Host comes to a similar product like Craigslist’s and simply returned to their Craigslisting ways.

These are probably the most common forms of hacks, successfully driving traffic but failing to suitably retain.

If the growth hack isn’t paired to an underlying growth plan with retention built-in, it will fail or have limited impact causing lumpy growth as shown above, which can actually be more harmful and misleading to the business’s actual health.

This is why you hear a lot of buzz around some new hacks and then never hear about them again. The market has moved on, the growth is gone and if your business is built from that and hasn’t been effectively retaining and growing in other areas, the business dies.

So what is Growth:

Growth is a methodology which adopts the core concepts of being meaningful, sustainable and repeatable.

Growth aims to build a consistent engine that will in the long term carry the company to exponential growth.

Ideology:

Principles → Process → Team → Tactics

Mindset:

1: Areas-of-opportunity driven, not idea-driven

2: Constantly challenging the why of what is being worked on

3: Incorporating new assumptions into current product/marketing efforts

4: Giving the team ownership and authority to have an impact

5: Impact not activity is rewarded

Process:

1: Finding the north star metric (the one metric or constellation of metrics that drives the business)

2: Building user flows and finding WOW moments

3: Measuring Metrics: everything that matters

4: Building a growth model: planning accurate growth 90+ days in advance

5: Implementing and maintaining

In growth, there is a heavy emphasis on customer retention and working the marginal customers, slowly building consistent channels over time and avoiding big whale hunting.

A good example of this is Patagonia. They looked into their customer flows and understood that a lot of their customers are environmentally conscious with a strong focus on sustainability, quality and environment. They then determined their north star ‘Time period of clothes worn’, then focused customer flows of their product’s WOW moments around these attributes and added a recycling and repair arm to create additional WOW moments as well as increase retention. They incorporated metrics tracking accordingly important factors, built out the expected growth potential and looked at what else could be tested, then implemented their plans. They now have been maintaining a 40% growth rate.

This was not a short term endeavour that was hacked together. It was a thought out process that is now consistently delivering high levels of growth and substantial value for the business.

On the downside, a company without a base fundamental product/market fit, won’t be helped by the best growth plans.

Neither will the plan be able to create huge spikes pre-product/market fit.

These circumstances have lead to a lot less buzz around the term growth, as it is never as sexy to say we had consistent and methodical growth over time, compared to we had x after doing xy?.

So what is Digital Marketing:

It may be the oldest term of the three but is still by all accounts the most popular with businesses.

In most part as it still fits well with the traditional business of generating leads and then handing them off to sales staff to close contracts.

Marketing → Sales

Generally, you specialise in one unique skill (commonly a paid advertisement of some form) as part of a team covering the other skills.

Example: Event Marketing, email, SEO, organic social, paid social, paid search, community management, conversion rate optimisation and web design.

If done well, it can bring in consistent growth.

Generally, it is beneficial to have a digital team as an additional top line since they are focused on bringing in top of funnel traction. Team structuring might, however, be limited by financial resources available to generate growth.

Limited money means limited leads.

In Digital Marketing, growth is not exponential. Growth is only consistent when it is consuming money and is prone to changes based on the marketing channel.