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Growth Hacking vs Traditional Marketing
- 1. I’ve worked with... Find me... andrew@foraging.io @andrewallsop https://medium.com/@AndrewAllsop http://meetup.com/Manchester-Startup-Growth/
- 3. What is the difference?
- 4. Traditional Online Journey Channel/Campaign Lead Impression Click Conversion Transaction Submission
- 6. New Tech Lifecycle Channel/ Campaign Signup/ Download /Install ££ MONTH MONTH Impression Click Conversion/ Acquisition Activation Revenue/Retention /Referral
- 8. Growth is… A process and framework for identifying the most capital efficient ways for a startup to achieve it’s goals within the realm of product, engineering and marketing.
- 9. Growth is NOT... Silver bullet tactics, ‘data-driven marketing’, a remedy for a non- scaleable idea
- 10. Examples
- 11. Liquidity Hack
- 12. How can you beg, borrow and steal to ensure your first impression shows you’re able to satisfy the needs of the people who use your product?
- 15. "This kind of integration is not trivial. … I wouldn’t be surprised if the initial integration took some very smart people a lot of time to perfect. A traditional marketer would not even be close to imagining the integration above – there’s too many technical details needed for it to happen. As a result, it could only have come out of the mind of an engineer tasked with the problem of acquiring more users from Craigslist.” Andrew Chen, Uber
- 16. Ask yourself: Where are the edge cases or small communities of your customers on other platforms? What can you do to make it easier to use your product on those platforms? What can you do to formalize the partnership once traction has been demonstrated?
- 17. Referral Program
- 18. Buy some AdWords Big TechCrunch launch Hire a PR firm and a CMO
- 19. Result ~100,000 users Cost Per Acquisition: £300 Customer Lifetime Value: < £100 Source: http://www.slideshare.net/gueste94e4c/dropbox-startup-lessons-learned-3836587/32-Results_ulliSeptember_2008_100000_registered
- 21. Results 14 months later: 4,000,000 users over 55% from referral, viral and sharing features
- 22. How can I gamify the act of my customers to refer me to other customers? What story does my customer interaction data tell? If my product isn’t viral, what can you do to create viral artifacts around the problem you’re solving?
- 23. CONCLUSION Traditional marketing is an important part of the users lifecycle - but ignorant towards the majority of it Traditional marketing doesn’t include the most effective methods for optimising the lifecycle beyond acquisition Traditional marketing isn’t sympathetic towards some of the most pressing issues early-stage startups face
Editor's Notes
- Just a bit of background on me Worked with startups for about 4 years Qmee was the earliest Different levels of success at each But a good level of experience Even if I don’t always know what will works I’m pretty good at knowing what won’t work
- Set a few things straight I’m a marketer who is interested in growth, not a growth hacker I’m always sceptical of anyone who calls themselves a growth hacker Also I’m considering traditional marketing, what we’d call digital or online marketing SEO, PPC, Display, that sort of thing
- Important to define exactly what the difference between growth marketing and digital marketing is
- This is how I’d illustrate the journey the majority of people used to take on the internet to provide some kind of economic benefit They’d be lured in using a channel or campaign - SEO, PPC, Display, PR etc They’d click through and land on the website Maybe there’s be some optimisation here - CRO, exit intent popups etc Then if you’re lucky, they’d convert That’s where the journey ends They become a lead, customer, transaction, maybe get stored in a CRM but the digital markters work is traditionally finished here
- Simplification of a digital marketer The most important skills they will have are channel specialism Analytics is important - although it’s often channel analytics packages, Google Analytics They’re solely focussed on the acquisition part of the funnel
- Web Apps added more depth to the customer journey The users journey doesn’t stop at the conversion We expect them to become part of our SaaS application, social network or mobile app They stay on this digital platform And this opens up further opportunities for optimisation and learning Which means we need new tools, techniques and methods of working And I think growth has grown as a response to the web being less of a proxy to another platform And more as the singular operating system for the majority of our day to day software usage
- what we've called marketing in the past has become way more technical and quantitative in the world of software. What I would call "Mad Men skills," that qualitative soft side of branding skills are becoming less important in the day and age of software. The quantitative and technical piece has become a much larger piece of the pie. The other thing is growth does not equal acquisition. I can pour people into the top of my funnel all I want, but if they’re not converting into paying customers it’s useless And likewise, if I can get a steady trickle of users to activate at a better rate, churn less and refer more friends The acquisition part becomes a whole let important I’ve done exercises where I’ve modelled the impact of improving acquisition vs improving retention and the skew in performance towards retention is insane And it’s only when you do these types of things that you really begin to understand the tangible benefits of optimising the other stages of the users lifecycle
- If I had to sum up growth in one phrase, this would be it For me, a lot of people focus on the tactics when they should focus on the process What looking at successful tactics does is cover over the fact they’ve probably done tens or hundreds of experiments that didn’t work I used the phrase withint he realm of product, engineering and marketing because I also wanted to explain growth has it’s limitations It’s become a mature concept now and it’s possible that it may not be a model that lends itself as well to other
- I’ve chosen these three best in class examples because I think they are brilliant demonstrations of some of the core values of growth
- The first one I wanted to talk about was Uber’s liquidity hack I chose this because I think it’s a brilliant example of two things: ensuring the user has this WOW moment and finding the most resource efficient way of doing so A wow moment is when the user of your product has that moment of inflection that makes them think, this is the thing for me Where it gets complicated for Uber is that they have two types of users, riders and drivers, with two different WOW moments Drivers wanted to get paid more than a traditional taxi model, riders wanted an easier way of calling a cab As well as creating a brilliant UI and technology, Uber rolled out their services city by city And to ensure that as soon as they fired up the application riders would see tons of available drivers, they simply did this They paid drivers to sit around and do nothing From the riders perspective, I know there’s a taxi near me From the drivers perspective - great, I’m earning money! And this ensured that when Uber goes into new markets everyone is super happy with the product Which really increases their chances of success there
- Uber aren’t the only ones to do this You’ve got to do whatever you can to make that brilliant first impression Examples Tinder - tinder’s supply side was good looking girls. They hacked this by going to sororities in their target launch cities and getting them to sign up before it went public. This ensured that when their demand side came onboard, they got a great first impression by seeing lots of good looking girls Reddit used to create fake accounts en mass and post content to make it look like the platform was active PayPal used to message eBay users and ask if they could pay using PayPal
- Airbnb grew through what I call platform piggybacking
- Airbnb knew through their market research that Gumtree was where their potential customers where To tap into this market So they offered them the ability to automatically list their airbnb posting on gumtree Which seems simple in hindsight But Gumtree didn’t offer an API or sanction this sort of activity So their engineers had to reverse engineer Gumtree’s listing process Which is anything but simple, and a conclusion that a marketer wouldn’t have come to
- Andrew Chen explains this perfectly A traditional marketer who was given the task of getting users from Gumtree to Airbnb wouldn’t have thought “I have the skills to reverse engineer their listing process - lets do that!” They will have probably thought - lets buy Gumtree Ads. At best, lets hire someone to do it manually.
- Platform piggybacking is something every one can do They don’t even have to be online platforms - Airbnb also piggybacked on offline events too PayPal piggybacked on Ebay YouTube drafted off people embedding videos into their myspace page - remember that? You just need to ask yourself these questions Are you getting inbound traffic from platforms that could be scaled with some effort? Are there APIs or processes you can put in place to reduce the amount of effort it takes to get your product on someone elses platforms? And finally, make sure you’re having formalised face to face meetings with these platforms to ensure that your access doesn’t get cut off. You can be like PayPal and come to a conclusion that satisfies both parties, or Airbnb who gets cut off for stealing Gumtree’s users
- Dropbox suffered from the AdWords addiction And I think it’s a great demonstration of where digital marketing falls short
- This is probably one you’re all familiar with Dropbox They’re worth over $10billion dollars now When they first started, this was their strategy You can see it in their YCombinator application It’s not something they’ve gone back and dramatised for publicity
- What’s the problem with that? They tried Google and they were paying over £300 to acquire customers Their product is only £79 a year Do those economic work out? They’re paying way more than the customer is paying them Customers weren’t staying around for long enough Those costs don’t include support, development, everything else
- They said: Want more space on dropbox? Invite friends, Tweet it out They used the fact that people valued their product to bring more people into it When you’ve got something people want, you don’t have to think about currency in terms of your financial resources Think about what you have that your users want Think about the value your product offers Incentivise people to go further down the rabit hole - whether it’s increasing engagement or improving referrels But by making referrals a part of the user funnel They also made themselves more competitive in the paid space Because now one person wasn’t worth 1 life time value They could be worth the value of two or three customers
- 14 months later, they had 4million users 55% of those coming from these viral features This is a great example of a distribution tactic By looking at your data, by understanding the psychology behind reciprocity You can increase the distribution of your product without spending money on ads But remember growth isn’t only about distribution and acquisition, we’re focussing on the whole funnel, MORE people and MORE value
- If a viral program is something you want to apply to your product, think about these points Can you make a user bringing someone else onto your platform beneficial for them - either by offering intangible moments of satisfaction or buy giving them paid incentives? Think about when the user experiences their WOW moment on your product, this is the point they’re most likely to share it Finally, if you don’t have a product that is viral, think about artifacts you can create that can go viral - either content or even small applications, a strategy that’s working brilliantly for PickCrew and since the rising popularity of product hunt
- I know that some marketing models include retention and referral, but they always focus on channels Social media for referrals,Email for retention, That kind of thing And in practise, these make such a small impact that they’re almost non-legible They’re so saturated, no one reads lifecycle emails anymore But by all means - try them. But make sure you’re looking at true measure of improvement , Not open rates and click rates But I garunteee you will find more success in analysing user behaviour - and again, not just clicks and conversion rates Finding out what value they get from your product, And building more of that value into it You just can’t do that with traditional marketing And the last thing to consider, is that startups just don’t have the resources to complete in these traditional channels I’ve spoke to three businesses in the last three weeks who’ve had their CPAs skyrocket They’re becoming non-eligible Growth gives you a framework to experiment and find routes to revenue outside of these channels And that’s why when it comes to growing a product driven online business, I’m definitely in growths corner.