Structured Process for Growth Hacking

"In this blog, I will cover the key takeaways from the book and share my personal experiences.

Regardless of the company's size or segment, everyone wants to spur growth every quarter and year. While internet giants like Facebook, Uber, and Dropbox have achieved this successfully and persistently, many companies fail to consistently repeat this performance over a few quarters or year on year.

Growth hacking is more popular among tech startups, but it’s not limited to new generation internet-based companies; it applies to all companies irrespective of the sector or industry. Many well-established companies from various sectors like TCS, Apple, Asian Paints, and HDFC Bank have consistently grown at a YoY rate of 15~30%.

What is the current state?

The marketing team is primarily responsible for the company's growth, and they work with various digital channels like AdWords, Facebook, and SEO.

However, there is no direct connection between the Product Manager and the Marketing Team. Many times, the product team is turned into a project management role, where they are primarily responsible for all releases and bug fixes.

As a result, customer behavior and research are neglected, and there is no continuous process to gather customer feedback.

Growth is often narrowly focused on new customer acquisition, but customer activation and retention are key drivers of revenue, and they are often overlooked.

The suggested process for Growth hacking is as follows

1. Find the product-market fit – Product-market fit is the first step in growth hacking. It can be easily measured by conducting a simple survey. As per Sean, it can be measured by a simple question: "How much would you be disappointed if the product is no longer in use?" If more than 30% of the existing users would be very disappointed if they could no longer use the product, then there is a strong product appeal.

A company needs to find the product-market fit before committing any significant resources towards growth initiatives, i.e., acquisition, activation, retention, monetization, or referrals.

2. Understand the Loyal/Ideal Customer & Aha Moment - The next task is to find out "who" the loyal users of your product are and understand "how" and "why" they became loyal in the first place.

The Aha! moment is an emotional reaction in your user, where they suddenly grasp the true value of your product.

It's like the Archimedes "Eureka!" and then ran naked through the streets.

To get to the "Aha," you need to find the most engaged/loyal users of your product and mine their usage data to understand how they arrived at the core value of the product.

What were the common actions these users took to realize the value of the product and get to the Aha? And the actions you pick are the ones that maximize the area of intersection of retained users and the users who took those specific actions.

Aha! Moment for a few brands:

• Twitter: The team discovered early on that a user needs to follow at least 30 people to see the value of Twitter.
• Facebook: For Facebook, the minimum number of friends to get you hooked was "7 friends in the first 10 days."
• Domino's app: "Visualizing" your pizza in the oven shortly after you order it.
• Whatsapp: Group chats were a strong Aha! moment for early adopters.
• For service businesses, this could be an extremely well-organized and communicated process/delivery framework that differentiates them from their competitors.
• Capillary (loyalty software): When customers use the various audience segments for 5-10 weeks and consistently get a spike in sales using various retention channels like SMS, email & social.

3.?Set up Right Growth Metrics –

Focusing on the right levers of growth at the right time is key for growth. We have to be rigorously scientific in identifying the kind of growth we need and the levers that will drive it.

Understand which metrics matter most for your growth. Develop your 'fundamental growth equation.' To find out essential metrics, identify the actions that correlate most directly to users experiencing the core value of your product.

For example, for Uber, an essential metric is the number of rides completed. So, in addition to the number of new people downloading the app, Uber would want to track the number of rides being booked, the number of riders who return and rebook, and the frequency with which they are booking new rides.

Develop dashboards to report only the most important metrics that map to your growth levers. Present information in a way that is actionable. Use ratios, and perform Cohort analysis for deeper insights: Divide your customers or users into distinctive groups by a common trait.

Focus on the right levers of growth at the right time is key for growth. We have to be rigorously scientific in identifying the kind of growth you need and the levers that will drive it

Understand which metrics matter most for your growth. Develop your ‘fundamental growth equation’. To find out essential metrics, identify the actions that correlate most directly to users experiencing the core value of your product.

?E.g. Uber—essential metric, no. of rides completed. So in addition to the no. of new people downloading the app, Uber would want to track in the no. of rides being booked, the no. of riders who return and rebook, and the frequency with which they are booking new rides

Develop dashboards to report only the most important metrics that map to your growth levers. Present information in a way that is actionable. Use ratios, Do Cohort analysis for deeper insights: Divide your customers or users into distinctive groups by a common trait

4.?Continuous Testing – Learning more by learning faster. More experiments, the more you learn.

Generally, big successes come from a series of small wins, compounded over time.

The Growth Hacking process is a continuous cycle comprising four key steps.

Analyze—Conduct a set of user surveys and a set of interviews. Analyze data and gather insights.

What are my best customers' behaviors? What are the characteristics of my best customers? What events cause users to abandon the app/product?

• Ideate—Create an Idea Pipeline. 'The best way to have a good idea is to have lots of ideas.' Discourage self-censorship. Encourage all team members to come up with new ideas. Have a proper format and structure for ideas."
• Note: The changes made include correcting spellings, adding necessary articles (e.g., "a," "an"), and using proper punctuation to enhance clarity and readability.
• o Idea Template: Idea Name, Idea Description (Who, What, Where, When, Why, How), Hypothesis (cause & effect), Metrics to be measured (more than one, improvements in one metric come at the expense of others).
• Prioritize—Set priorities for experiments ('Hacks') based on hard data rather than assumptions. Make experiment selection a collaborative process.
• Test—Run the experiments & review results. Prerequisite: ability to gather data on customer behavior and measure product performance and the results of experiments.

Keep the experiment velocity high. Design Minimum Viable Test, then invest in a more robust follow-on test.

Identify both the experiment group & the Control group—Not exposed to the experiment.

It's critical that every experiment be designed to produce statistically valid results.

Analysis can only tell 'what users are doing'. See patterns to know 'why they're behaving that way.'

When results are inconclusive, the best course is to stick with the original, or control, version.

Conduct a growth meeting of 60 minutes: Metrics review and update focus area (15 mins), Review last week's testing activity (10 mins), key lessons learned from analyzed experiments (15 mins), Select growth tests for the current cycle (15), check the growth of the idea pipeline (5 mins).

US World War II commander General George Patton— "A good plan violently executed now is better than a perfect plan tomorrow."

After the cycle, circle back to the ‘Analyze’ and decide the next steps. Look for early winners and invest. Quickly abandon those that show lackluster results

5. Structure of Team

The growth team should comprise a cross-functional group, including members from marketing, product, technology, and one CXO-level person. An ideal growth team consists of members from all key business divisions and is headed by a CXO. The reason a CXO must be involved multiple times is to test a new feature or case that would need sign-off from the leadership team.

Growth lead:

• Product Manager
• Software Engineers
• Marketing Specialists
• Data Analyst

The size and structure of the growth team vary from company to company. In some cases, the team size is 10-15, while in large organizations, it may be as big as 100-200.

Finally, I will end with a quote from Peter Drucker: "Business has only two functions – Marketing & Innovation." If a business aims for growth, the only way to achieve that is through continuous innovation. This can be achieved through even small or micro changes in the customer journey, enabled by continuous generation of new ideas and testing.

Feedback and experiences are welcome.