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Growth hacking has become a buzzword in the business world but often, people are left wondering what it actually means. The term “growth hacking” was first used by Sean Ellis in 2010. Back then, it was used to describe experiment-oriented marketing. Over time, the growth hacking definition has broadened into an umbrella term that encompasses all strategies that aim to help a company grow. This can be to increase the customer base or retain current customers.
As expected, since growth hacking started in the US, this is also where the first growth hacking agencies popped up. Slowly but surely, this expanded and reached Europe. Such agencies compromise of a professional growth team. Each team member has their own expertise, providing multiple points of view to help your business achieve sustainable growth.
Growth is key to maintaining a healthy business and it is essential for survival. It allows the organization to reach its goals more efficiently and effectively. Subsequently, it means that goals can be reached faster.
As a sneak preview, this article will:
- Explain the growth hacking process
- Deep-dive into the concept of growth hacking agencies
- Compare growth hacking agencies to traditional marketing agencies
- And provide insights into choosing the right agency for you
There’s even a useful list of questions that you can use when assessing growth agencies all the way at the end!
What is Growth Hacking?
As mentioned, growth hacking compromises any strategy that has the end goal of achieving growth. Often, and most commonly, these strategies are related to marketing, however, any activity that helps an organisation grow can be categorized as growth hacking.
For example, Dropbox allowed users to gain extra storage for referring their friends to the platform. This resulted in an exponential increase to their user base. If you’re curious to read more growth hacking examples, check out our previous blog.
The Growth Hacking Process
Growth hacking, also known as growth marketing, compromizes any strategy that has the end goal of achieving growth. Whichever strategy you end up choosing to achieve your growth, it should be data-driven.
Being data-driven is one of the main characteristics of growth hacking. This means that data has to be gathered, monitored and analyzed in a consistent manner. Therefore, many growth hackers follow pre-defined steps, which we describe below:
1. Define Goals: Identify the specific goals of your business.
- Some common growth hacking goals are: increasing revenue, acquiring new customers, or improving engagement and retention.
2. Collect and Analyse Data: If needed, collect data through research or analyse existing data.
- This is done to understand how the current strategies are performing and where there is room for improvement.
3. Develop Hypotheses: Once the data has been analysed, it is used as a base for ideation and brainstorming.
- The ideas that result from the analysis should be quantified into hypotheses to ensure they are testable and measurable. Naturally, the hypotheses should also relate to the specific business goals created in Step 1.
4. Experiment: Once the hypotheses have been defined, it is time to start experimenting. During this process, you implement the strategies you have defined.
- Some examples of experiments that can be done include (but are not limited to): A/B testing, landing page optimizations, referral programs, or paid ad campaigns.
5. Measure Results: Once the experiments have collected a sufficient amount of data, it is time to measure their results.
- When analysing results, ensure that you are keeping your business goals in mind as well as the ROI.
6. Scale and Iterate: Once you have identified the most successful experiments, you can scale them to achieve maximum impact.
- Unsuccessful experiments are not a waste. They can still provide valuable learnings and insights that allow you to further refine your approach.
Goals & Techniques
As discussed, the goal of growth hacking is to achieve growth for the business. However, this can be broken down further. For example, growth hacking may aim to increase customer acquisition, improve customer retention, increase revenue, or even increase sales predictability.
Goal-setting is key in the growth hacking process. It allows you to have quantifiable benchmarks that you can compare your results to. This makes it easier to decide whether a certain experiment was a success.
Naturally, there is a variety of techniques that can be used to approach these goals. For example, an organization has the goal of increasing customer acquisition. This can be approached by improving the customer journey or by focusing on improving conversion rates. The strategy used would differ for each. On one hand, paid ads tailored to a specific target audience could be used whereas on the other hand, the landing page could be optimised.
Furthermore, to improve customer retention the focus might be on increasing the number of satisfied customers or increasing customer loyalty. Such a growth objective would be approached differently. For example by providing exclusive discounts or promotions or creating a nurturing email flow that encourages repeat purchases.
It is important to ensure that the technique chosen matches your goal. To achieve this, expertise and experience are required in order to evaluate which approach is likely to be most effective. However, growth hacking is often about trying innovative new things. Therefore, this can result in typically unconventional techniques being chosen.
What is a Growth Hacking Agency?
Now that we have defined growth hacking, we can move on to growth hacking agencies. Another synonym for growth hacking agency is digital growth agency. Such agencies usually consists of a team of specialized growth marketers that can help grow your business. Often, growth hacking agencies are likened to traditional marketing agencies, however, there are many differences between them. In this section, we highlight some of the main ones:
1. Data-driven Approach
One of the key differences is the importance of data. Growth hacking agencies make decisions based on data and analysis rather than theory. There is some theory and subjectivity, of course, but the aim is to make data-driven decisions as much as possible.
2. Agile and Experimental
Experimentation is one of the main pillars of growth hacking, hence, agencies often follow an agile way of working. Rather than focusing on tried-and-tested traditional marketing strategies, they implement out-of-the-box experiments. Additionally, they continuously optimise and iterate to maximise the impact of their experiments.
3. Specialized Skills
Growth hacking agencies often consist of a diverse team with expert skills in several areas. For example, within a growth team you could find someone specialized in UX design, search engine optimization or even graphic design. This is often more diverse than traditional marketing agencies, hence increasing the possible services and activities available.
4. Cost-efficiency
Last, but not least, the constant optimization and iteration process allows growth hacking agencies to be more cost-effective than traditional agencies. This is because growth hacking agencies focus on targeted experiments and are often able to achieve better results while spending less.
How to Choose a Growth Hacking Agency
Having defined the difference between growth hacking agencies and traditional ones, you may be wondering whether you should work with a growth hacking agency. Hence, to make that decision easier, we have defined some factors to take into account.
- Business Goals: ensure that you understand what your goal is with hiring an agency. This will make it easier to evaluate whether the agency is meeting your expectations.
- Budget: keep your budget in mind and be realistic in regard to what you can spend. Knowing how much you can spend is key to evaluating whether the investment will justify the expected return.
- Expertise: evaluate the expertise you have in-house. It is possible that you have team members with advanced marketing skills. This means you don't have to hire an external agency, which saves money.
- Cultural Fit: it is important to find an agency that is a good match for your organization. This includes having a similar culture, working method and communication style. This increases the chances of a successful collaboration.
To help you even further we have compiled a list of questions that you can use to assess the suitability and capabilities of your chosen growth hacking agency.
- What is the process and methodology you use for identifying and executing growth opportunities?
- What experience do you have in our industry? What were the results from past clients?
- How do you measure success and how will it be reported?
- What is the time and resource investment do you require from our side?
- How do you collaborate with clients? How often do we get updates on progress and provide feedback?
- How do you stay up-to-date with the latest advancements in growth hacking?
- What sets your agency apart from others in the industry?
- What is your pricing structure and what is included in the service fee?
Conclusion
To conclude, we have defined the basics of growth hacking and the process behind it. In general, this is a relatively new approach that is still developing and evolving. However, what sets growth hacking apart from other approaches is its holistic and data-driven approach.
Furthermore, we have defined what a growth hacking agency is and how it differs from a traditional marketing agency. Taking this information into account allows you to make better strategic decisions to grow your product or service.
And if you decide to work with a growth hacking agency, make sure to use our handy list of questions. We guarantee that it will help in the decision-making process!
