Hacking Growth: How Today's Fastest-Growing Companies Drive Breakout Success

by Sean Ellis

customer interviews instead, as having just a handful of survey responses can lead to false signals.

Somewhat ironically, it’s best if you target the survey at active

Active users, by contrast, will be much more familiar with the product or service and as a result will often have much more specific and detailed responses.

You’ll dive into more specific aspects of the user experience that people love and don’t love, based on the data you’ll accumulate about how people are using the product, in order to determine how you can continue to test improvements.

The second measure to use in assessing whether or not you’ve achieved must-have status is your product’s retention rate, which is simply the number of people who continue to use your product over a given time.

the team should be frequently tracking the number of users who churn, usually on either a weekly or monthly basis. Frequent monitoring provides early warning about defections, which can otherwise be hard to detect, especially if new user acquisition is strong.

A company can be acquiring lots of new users but also be starting to lose some of its earlier adopters all at the same time, and those defections can be masked by the new user growth.

sustaining retention.

But what’s critical at this early stage is that you have at least seen the retention rate stabilize, which indicates that you have a set of users who sees the product as worthy of continuous use.

The retention rate is simply calculated as the percentage of users who continue to use or pay for your product, generally tracked month to month.

The shorter time horizon helps you deduce how many users are making the use of the product a habit, making it a regular part of their lives, versus how many are only sporadically checking in.

businesses or products have different retention rates, so it’s best to see if you can find benchmarks in your industry for successful products that are fairly comparable and, if possible, come up with an average rate in order to determine if you’re doing better or worse.

It’s essential that you instead talk to users (on a deeper level than achieved through the aforementioned survey) to understand what the true objections and barriers are to your product’s success.

In many cases, improvement comes from what you remove, not what you add on, as was true for Yelp, which pared down to focus on reviews.

analytical approach to finding out why that aha moment

For this there are three key methods, all of which should be ...

Additional customer surveying, including interviews and getting out in the marketplace to talk to custom...

Efficient experimental testing of product changes and messaging; A deep plunge into a...

you need to get out of the building to find out what your customers really want from you and your product.

You’ve got to be listening and observing, not pitching.

what aspect of the selling experience they considered most important, and what kind of aha moment it would require to convince them to shift that experience to Etsy.

(1) Can you tell us why you signed up in the first place?; (2) What didn’t work for you? Why’d you bail?; (3) What caused you to come back and try it again?; and (4) What worked this time?

achieving growth is not a matter of lack of value in the product or service itself, but rather of how you are communicating that value to existing and potential customers.

One particularly powerful and typically inexpensive method is A/B testing, by which two different messages—say, two different headlines in an online newsletter, or two different designs of a landing page, are tested on two or more randomly targeted groups of people to determine which elicits the better response.

“Sign Up for Free Trial” to “See Plans and Pricing” netted 200 percent more sign-ups.

Anyone who has clicked on an irresistible news headline only to be disappointed by the article can understand how a “click” is a poor indicator of long-term customer loyalty. In order to solve this problem, it’s essential that your data analytics can track the participants in any given A/B test from click-through to long-term use.

Remember that a core tenet of growth hacking is experimentation all through the customer experience funnel: not just customer awareness and acquisition but also activation, retention, revenue, and referral.

to uncover what makes (or will make) your product a must-have, you need to collect the right data for your business,

and build the connective tissue between various sources, such as your email marketing database and your point of sale system, so you can create a complete data picture.

with. These days most companies, even the most nascent, shoestring start-ups, are keeping close track of basic analytics for their websites and products, such as those captured by Google Analytics. But while metrics like page views, visits, and bounce rates are important to collect, they barely begin to tell the whole story about how customers interact with your product.

That’s because these are very surface level metrics that don’t tend to reveal deeper insights into what customers truly value about what you are selling and whether you have achieved product/market fit.

It’s essential that your team have data on each piece of the customer experience—well beyond just how often they visit your website and how long they stay there—so that it can be analyzed at a granular level to identify how people are actually u...

proper tracking to websites, mobile apps, point of sale systems, email marketing, and customer databases.

user information must

detailed and robust picture of user behavior that your dat...

data warehouse: a single location where all customer information is stored and where you can really dive in and uncover distinctive groupings of users who may be using the product differently from other groups.

explore product use at the individual user,

examining, for example, how, say, an extraordinarily active user is spending her time on your website or with your app, or what a user who was about to make a substantial purchase but then didn...

track the key actions of your users or customers.

This is done through the process of event tracking.

key events within your system such as when a user clicks a button, watches a video, downloads a document, fills out a form, plays a song, ...

Again, growth teams must set up event tracking for the activities customers are engaging in all the way through the customer experience, as they go from a visitor to a new customer...

The key mission at this stage is to look for the behaviors that differentiate those customers who find your product must-have—that is, those who use or buy repeatedly—from those who don’t.

many different customer attributes, such as demographic info including location, age, or gender, and additional attributes such as their job title, industry, or mobile device they use, as well as by the ways in which they are using your product, such as whether they are power users or only intermittently use it, and examining the choices they are making, including which products they are shopping for or the services they are availing themselves of, you will discover correlations between those attributes and behavior and greater levels of purchasing, higher engagement, and longer-term use.

All of these pivots speak to the importance of collecting and analyzing both qualitative and quantitative data about customers’ use of your product and their thoughts about its strengths and weaknesses before investing extensive time and resources in pushing for growth.

deep data analysis into customer behavior may also provide confirmation that it’s not the product or service, or even the messaging, that’s the problem—but rather how the product is being introduced to its target market.

Once you have discovered a market of avid users and your aha moment—i.e., once product/market fit has been achieved—

the company was spending nearly $400 to acquire each new user and the premium subscription price was just $99.

All that said, making acquisition efforts as cost effective as possible is always good business, and all companies should always be striving to spark strong word of mouth in order to reduce the expense of acquiring new customers.

The first phase of work in scaling up your acquisition of customers should be devoted to achieving two additional types of fit: language/market fit, which is how well the way you describe the benefits of your product resonates with your target audience, and channel/product fit, which describes how effective the marketing channels are that you’ve selected to reach your intended audience with your product, such as paid search advertising or viral, or content, marketing.