Some call it growth hacking. Others call it optimization. But what we’re all talking about, really, is crazy smart, innovative, results-driven, product-focused marketing that has an outsized impact on your company’s growth and bottom line.
In certain circles, the term of art is traction. Traction is what separates fledgling startups from international brands and it’s the name of a one-day, one-track event that brought dozens of founders and growth champions from tech giants like Twitter, LinkedIn, Dropbox, Hootsuite, Marketo, HubSpot, and PlentyofFish to Vancouver last month.
The day was filled with actionable insights and examples of how small tests, tweaks, and tactics can make or break your business. Here are some of our key takeaways.
Product Comes First
In many companies, product and marketing are viewed and operated as distinct departments. But one of the prevalent themes of the day was that your product is actually your most important marketing asset.
Indeed, Markus Frind, founder and CEO of dating site PlentyofFish made the crowd gasp when he said that by the time he hired his first employee (and started to build out his marketing team), he already had a hit product with 15 million users and $10 million in revenue!
Neil Patel, co-founder of KissMetrics and CrazyEgg, pointed out that conversion optimization is actually a lot like dating; you need to give people a chance to get to know you before you ask for their hand in marriage. He suggested letting potential customers play around with your product before they have to sign up.
Selina Tobaccowala, President & CTO of SurveyMonkey, said something similar:
The more you can get people using features of the product before they have to upgrade, the better for conversions.
But Tobaccowala also cautioned against pulling the old bait and switch. If you put a paid feature in people’s hands, let them know the price tag before they spend time with something they can’t afford.
Ryan Holmes, the founder and CEO of social relationship platform Hootsuite, insisted that the only reason Hootsuite outlasted or surpassed early competitors like Seesmic and TweetDeck is that it invested in product rather than advertising and PR.
Now that they’re the industry leader, HootSuite has built its marketing around the product – and the role it plays in people’s lives. Here’s how Holmes sees his role:
As CEO or founder your job is tell the story of your product and get people excited about it.
Find the Metric that Matters
If there’s anything that distinguishes growth-minded marketers it’s a steadfast belief in the power of numbers. As Aaron Ginn, Head of Growth at online retailer Everlane (and formerly of StumbleUpon) put it, a growth hacker is:
Someone who emphasizes data over opinions.
We know that data is big these days (especially “big data”) but that’s precisely the problem: Data is big. There’s a ton of it. And it can be intimidating and unwieldy.
That’s why, before staring into the abyss of analytics, you need to identify the metrics that really matter to your business.
Dinesh Thiru, VP Marketing at online education marketplace Udemy, said that his two main metrics are revenue and student happiness. While user growth is also important, Udemy learned that you have to look at both the quantity and quality of users you’re acquiring. Some users “monetize better than others” and so focusing on actual purchases helps keep Udemy honest.
In terms of tracking student happiness, Thiru said he looks at Udemy’s Net Promoter Score (NPS), which measures how likely users are to recommend the company to friends or colleagues. Interestingly, Thiru found that users who reported a higher NPS also had a higher lifetime value. In this way, Udemy’s two key metrics reinforce each other nicely.
Allen Lau, the founder and CEO of online writing community Wattpad, said that at his company’s primary metric is monthly active users. This is something Wattpad’s investors insisted the company focus on instead of making money. That said, more recently Wattpad has begun to zero in on advertising as its core business model and so the monthly users metrics now seems less like a vanity metric and more revenue-oriented after all.
Retention is Not an Afterthought
If you have poor retention, nothing else matters.
That’s a quote from Brian Balfour, VP Growth at HubSpot. It may seem dramatic, but we’ve all heard the adage that it’s easier to market to existing customers than new ones and without retention, traction just isn’t possible.
Balfour enumerated a few reasons retention is so important:
- As you increase retention, you increase lifetime value and can afford a higher cost per acquisition (CPA) – allowing you to spend more at the top of the funnel
- As you increase retention, you increase virality (your longtime customers become advocates on your behalf) and eventually decrease CPA
- As you increase retention, you increase upgrade rates and decrease payback periods (meaning more money in the bank)
The key to retention in the first week after sign-up, according to Balfour, is to get users to experience your core value as quickly as possible through better onboarding, clearer messaging, and tailoring the user experience to new customers.
For example, HubSpot was looking to increase adoption of its new email tool, Sidekick. The first step was to understand why users were churning in the first week. A majority of people reported that they just didn’t understand the product or have time to figure it out.
By separating the new user experience from the core application, encouraging users to sign up with their work email addresses (where they were more likely to see the product’s value) and improving their educational content, they were able to significantly reduce churn.
It Takes a Community
Retention, of course, isn’t just about great user experience or clever email marketing. The key to keeping your customers for the long haul is to empower them to become more than customers.
Here’s the recipe for sustainable growth that Phil Fernandez, Marketo’s CEO, shared:
- Acquire new customers
- Grow lifetime value
- Build brand advocates
Fernandez said businesses need to think about how they’re creating a “shared purpose” with everyone in their “ecosystem,” meaning customers, employees, and partners.
In other words, you need to build a community.
Part of this comes down to great customer support. Patrick Llewellyn, CEO of Australian design marketplace 99designs, said that establishing a customer support center in San Francisco early on was one of the keys to the company’s remarkable growth; customers would actually call them up just to validate that they were legit.
Another big piece of the puzzle is partnerships. Bastian Lehmann, CEO of online food delivery service Postmates, talked about building a “three-sided marketplace” that has allowed his company to monetize through three different streams:
- Customers, who pay a delivery fee
- Couriers – Postmates has been able to negotiate competitive rates for things like insurance and gear that they resell to delivery staff
- Merchants – now that they have scale (and leverage), they can ask businesses, who they previously ignored, for a cut
Likewise, companies like Uber, PayPal, and Dropbox have thrived off of old school referral programs. HootSuite’s Holmes boasted that partners have made hundreds of thousands of dollars off their ecosystem.
Bottom line: Give people a reason to love you and an incentive to spread that love and your boss (or investors or heirs) will love you too.
Mobile is Kind of a Big Deal
Markus Frind, the plainspoken PlentyOfFish CEO, said something else that took the audience’s breath away at the very end of the day. He said that 90% of his site’s traffic is now mobile, which has led him to question whether they even need to support a desktop website anymore (!).
That’s a staggering statement from a tech founder. And he wasn’t the only one who emphasized just how important mobile has become as a lever for growth.
Sameer Dholakia, CEO of email delivery service SendGrid, pointed out that savvy marketers want to be able to run their campaigns across all channels.
Since your mobile users are the same people as your desktop users, you want to make sure the experience you’re giving them on mobile is complementary. It should reinforce the goals of the larger campaign while catering to their needs and intentions at that particular moment, on whatever device they’re using.
The trick is to make the lives of mobile users as easy possible. That means reducing the amount of friction between them and your conversion goal. As Dinkar Jain, Senior Product Manager at Twitter put it, “mobile users rarely want to do anything fancy.”
Alexander Peh, Head of Mobile at PayPal Canada, pointed out that something as simple as entering an email and password on a mobile device can be a “pain in the ass” because you’re forced to keep switching between numbers, letters and symbols on a tiny keyboard. Peh said that when they replaced the email and password requirement with a phone number and 4-digit pin on mobile, usage skyrocketed.
For more detailed advice on how to optimize your pages and campaigns for mobile users, check out this handy article.
[“source-searchenginejournal”]
