Growth Hacking For Marketers: A Starter Guide 2022

This guide will walk you through everything you need to know to get started with growth hacking in marketing.

What is growth hacking?

Growth hacking is a set of cross-functional strategies and experimental campaigns that are focused on increasing user acquisition and retention rates as quickly and cost-effectively as possible. Growth hacking is known for its test-and-learn mindset, and encouraging almost rapid-fire experimentation to better engage users throughout the funnel. 

The concept of growth hacking came about in the era of rapidly rising startups (it was Dropbox’s first marketer, Sean Ellis, who coined the term in 2010). This was right around when companies like Spotify, Airbnb, and Uber were becoming Silicon Valley canon with their monumental growth.

Growth hacking versus traditional marketing 

Growth hacking has become its own unique discipline, branching off from traditional marketing methods. First, growth hacking is more holistic. While traditional marketing is concerned with user acquisition and driving brand awareness, growth hacking looks at the entire customer experience. 

Growth hackers often form “tiger teams” with colleagues from product, customer support, design, engineering, etc., to implement more innovative and resourceful strategies for customer acquisition and retention. The goal is to compound growth by increasing customer lifetime value, capitalizing on cross- and upsell opportunities, and continuing to hone the business’s unique differentiators to edge out the competition (as just a few examples). 

Because growth hacking prioritizes speed and frequent testing, it’s gotten a reputation for being a collection of unsustainable shortcuts. (This is why some people prefer to use the term growth marketing instead.) But, when done right, growth hacking is a data-driven and process-oriented strategy, using specific metrics to guide testing roadmaps and iterate on campaigns. 

5 key growth hacking benefits in marketing

Growth hacking has become a sought-after strategy among both startups and longstanding enterprises that don’t want to be eclipsed on the S&P 500. Here are 5 examples of the business benefits tied to growth hacking.  

Developing a growth mindset across your organization

Previously, growth may have been taken as a synonym for acquisition. But as we discussed earlier, there are multiple levers for growth in any organization (e.g. customer referrals, cross- and upsell opportunities, etc.). Collaborating across departments allows organizations to think more fluidly about how customers are experiencing their product or brand – and how to maximize the value of each customer relationship. In other words: it encourages everyone to adopt a growth mindset. 

A growth mindset champions learning, creative problem-solving, calculated risks, and learning from failure. As Grace Bacon, VP of Growth Marketing at Showpad put it, “Growth is a stage or condition of increasing, developing, or maturing.” This mind frame of being open to improvement is linked to higher performance rates and greater enthusiasm among employees, as opposed to those with a fixed mindset who feel that skills are innate. 

Testing new ideas or hypotheses with agility

A central tenet of growth hacking is to test often, and test (just about) everything. In other words: there’s no room for assumptions when it comes to your strategy. One of the benefits of having a cross-functional team focused on growth is the ability to implement test ideas at a brisk pace.  

As Morgan Brown, VP of Shopify, noted, “When growth arises out of marketing, the initial reaction is to hire more marketers, when, in fact, usually what marketing needs is engineering support, business analytics, and data science, or revenue ops to stitch together the MarTech stack in a way that makes sense of their data.” 

Through testing, teams accumulate insights into their customer base: from how they navigate a website or app, to their preferred channels of communication.  Being able to optimize customer experiences around these insights is what fuels growth at a faster rate. 

Twitter’s testing roadmap confirms this. In 2011, after seeing stagnating growth, Twitter’s then VP of Product Satya Patel put a new plan into effect. Instead of running one test every other week, Twitter ramped up to 10 tests a week, and more than tripled their number of users in roughly two years (from 54 million in 2010 to 185 million by the end of 2012). 

Source

Making data-driven decisions that drive positive results

Here’s the thing, not every experiment is going to be a home run. But while you may swing-and-miss when it comes to a few of your hypotheses there is a silver lining: failure can be just as informative as success. Sometimes, even more so. The advantage of collecting data from experiments, user research, or customer interactions comes from what you learn, and how you use those learnings to launch savvy, customer-centric campaigns. This is the ethos of growth hacking: follow the data. 

Source

The positive impact of using data to drive decision making has been proven time and again – data is what fuels personalization, machine learning models, and long-term business strategies. In fact, Deloitte found that companies that prioritized having a data-driven culture were twice as likely to exceed their business goals within a year (compared to the companies that didn’t). 

Discovering scalable marketing strategies

Growth hacking aims to balance speed and scalability. In fact, growth hackers are often tasked with finding ways to increase acquisition, retention, and overall business revenue without having additional resources at their disposal. (This is where growth hackers get their reputation for being creative.) 

This type of outside-of-the-box thinking has certainly paid off. Examples of scalable growth hacking strategies include:

  • Launching user-generated social media campaigns to boost engagement and brand awareness. 

  • Boosting organic traffic with SEO-optimized articles. 

  • Redesigning the header on a website to make CTAs more visible and encourage conversions. 

  • Incentivizing customers to make referrals (e.g. offering a discount) or using a freemium model to hook prospects. 

A greater return on investment

Last but not least, one of the greatest benefits a growth hacking strategy can offer your business is a higher return on investment. Companies like Dropbox, AirbnB, and Uber all became business case studies for pulling off exponential growth with thrifty tactics. 

Especially as traditional methods for customer acquisition become more costly, having an open mind on how to reach users – whether it’s through word-of-mouth, social media posting, or interactive pieces of content that pay off dividends in lead generation – can amount to more profit in your business’s pocket. 

5 steps to define your growth hacking strategy

Now that we’ve covered what growth hacking is, it’s time to talk strategy. Below are the six steps you need to take to define a plan of action for growth. 

1. Know your audience 

Casting a wide net for any-and-all customers isn’t the most strategic (or budget-friendly) approach to growth. While the concept of the more customers the better is certainly true, it’s too competitive a market to waste ad money on an uninterested demographic or hope for the best with generic marketing messaging. 

Instead, take the time to know your audience. What problems are they trying to solve? What value is your product offering them? By analyzing your current customer base, you can start identifying shared traits and characteristics to create different cohorts –  which lays the groundwork for launching more personalized campaigns. 

2. Identify areas of improvement in your funnel

The second step in defining your growth strategy? Identify what could be better.  

This is where measuring your baseline comes into play – it validates your team’s understanding of what’s driving growth and helps spot performance gaps. Here are some basic steps for optimizing your funnel

  • Map out each step a user needs to take to convert.

  • Track how many people reach each funnel stage (using Google Analytics, etc.) 

  • Identify drop-off points by looking at the biggest percentage dips. This could be relative to the rest of the funnel, or significant dips within a specific period. 

  • Hypothesize the reasons for drop-off rates to form test ideas (along with sending surveys for direct customer feedback). 

  • Prioritize fixes based on cost, revenue impact, and expected time to complete. 

Example of mapping out areas of improvement in your funnel. 

3. Brainstorm experiments to conduct with your team

There’s always the fear that, after a certain amount of time, you’ll be scraping the bottom of the barrel when it comes to testing ideas. But just like other processes involving growth hacking, brainstorming experiments should be cross-functional and collaborative. Customer support may have ideas when it comes to onboarding, whereas marketing may want to test out a certain forum or social media channel your target audience is active on (e.g. Reddit, GitHub, etc.). 

While each experiment should be rooted in your overarching growth goals, open up the discussion to your teammates to consider each facet of the customer experience. 

4. Prioritize your experiments and A/B tests

In growth hacking, it’s important to balance shorter tests that yield fast insights and more complex, long-term experiments that could lead to big payoffs. Sean Ellis also suggested organizing test ideas into two categories: the ones that help you discover something new, and the tests that optimize an existing stage of the funnel.

As for deciding what should be tested now versus later, consider: 

  • How much it will cost.

  • The impact on revenue. 

  • How long it will take to set up and implement. 

5. Analyze your results and iterate 

You’ve come up with the idea, launched the test, and now it’s time to iterate. 

With each experiment, your team should have greater insight into customers’ behavior, intent, and how they’re interacting with your business. Use this data to make adjustments, and inform new hypotheses for further testing.  

Examples of great growth hacking

Now that we’ve covered the processes involved, let’s get to three real-life examples that set a high standard for growth hacking. 

Dropbox

Dropbox started out as a cloud storage company and has since added more features for file sharing and content collaboration. Now valued in the billions, Dropbox is often cited as a top-notch lesson in growth hacking for its early strategies: particularly, its referral program. 

In 2008, Dropbox had been struggling to gain new users in traditional methods like paid ads (with acquisition costs going as high as $388 per customer). So, they decided to incentivize referrals. The offer was simple: invite friends to join Dropbox, and both parties would receive more storage space (starting at 50MB for Basic account members). This referral opportunity was integrated into onboarding, and spurred 2 million invitations in a single month.  

Slack 

Slack, like Google or Uber, has become a part of our lexicon - especially in the workplace. (It’s not uncommon to hear: I’ll send you a Slack.) 

Slack launched in 2009, positioning itself as a better way to communicate with team members online. Rather than cluttering inboxes, it could organize conversations with its intuitive UI. And in 2021, Salesforce acquired Slack for 27.7 billion. 

So, why is Slack a case study in growth? In 2014 investor Marc Andreessen tweeted the following image for Slack’s skyrocketing user rates, saying it was all word-of-mouth: 

Source

That incline is pretty impressive (and Andreessen’s tweet certainly did hurt when it came to keeping the momentum). But what made Slack so special? For one, it stood out visually with its bold colors and animated accents. Andrew Wilkinson, who helped work on the design for Slack even said, “We gave it the color scheme of a video game, not an enterprise collaboration product.” Slack wasn’t just easy to use, it was fun to use. 

Second, the business offered a freemium subscription that had that Goldilocks effect of being just right. There were enough features in the freemium subscription for people to fall in love with the product, while premium still offered advantages worth upgrading for. As a result, Slack’s freemium-to-premium conversion rate has been reported at an impressive 30%

Dollar Shave Club 

You’ve seen the commercial a million times: a glossy close-up of a rotating razor, a color palette of silver and ice blues. This had been the quintessential marketing tactic for big-name razor blade brands – until Dollar Shave Club. 

Dollar Shave Club burst onto the scene with a subscription model and a commercial that poked fun at some of the frills that had come to be associated with shaving products. In a little over a minute, Dollar Shave Club conveyed their competitive price point and how they were different from big-name brands, with the added benefit of creating a commercial people didn’t want to skip through. 

If you haven’t yet, watch it here.

After launching the commercial (which cost $4,500 to make), Dollar Shave Club brought in 20,000 subscribers in ten days. By the end of that month, the video was shared 4 million times, and in 2016, Unilever bought the company for $1 billion


Interested in hearing more about how Segment can help you?

Connect with a Segment expert who can share more about what Segment can do for you.

For information about how Segment handles your personal data, please see our privacy policy.


Frequently asked questions