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

by Sean Ellis

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.

IDEA DESCRIPTION: The best way to think about what the idea description should look like is along the lines of an executive summary. It should address the who, what, where, when, why, and how of the idea. Who is being targeted? For example, all visitors, new users only, returning users, or users from a particular traffic source? What is going to be created, such as new marketing copy or a new feature? Where will the new copy or feature be implemented: Will it be on the app’s home screen or elsewhere? When will it appear during the customer’s use, such as on the landing page when a visitor first comes to the site? In addition, the description must include the why—the rationale behind the idea—and the how—a recommendation of the type of test to be done, such as an A/B test, or new feature to be built, or a new ad campaign to be launched.

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.

This means that the language you use must directly and persuasively connect with a need or desire they have in order to hook them—in eight seconds or less!—

To recap, those steps are: map all of the steps that get users to the aha moment; create a funnel report that profiles the conversion rates for each of the steps and segments users by the channel through which they arrive; and conduct surveys and interviews both of users who progressed through each step where you’re seeing high drop-offs, and those who left at that point to understand the causes of drop-off.

Personalization can be based not only on information customers have provided, or on their activity on the company’s website or in its app, but also on data about their wider behavior on the Web, which is readily obtainable from data providers such as Demandbase. Many companies offer personalization technology, such as Salesforce Marketing Cloud, Optimizely, and HubSpot.

have built a program, which they call Copytune, that allows the team to rapidly test dozens of variants of notifications sent to users, across more than 30 languages,

Netflix uses this tactic effectively in spacing out the release of new seasons of their original series like House of Cards and Orange Is the New Black to make sure you keep your subscription active as you await the next show to binge-watch. Salesforce similarly holds the release of their big product updates to new yearly events—one in the summer and one in the winter—to keep customers subscribed with the promise of must-have new features.

Dan Wolchonok, product manager at HubSpot, says the first step in considering experiments to try based on zombie customer feedback is to understand whether the reasons people leave are ones that you can actually control or address.27

The next step after doing this basic mapping is to analyze where in the customer journey the company is making the most money, and where there seem to be pinch points, meaning steps where potential earnings are lost, which vary by model.

For an ad-revenue-based company, the breakdown will be a little more complex. Because the level of users’ engagement is one of the primary factors in determining the number of ads the company can show and the rate they can charge advertisers for space, ad-based companies should track not only the average revenue per user (ARPU), which is the most basic monetization metric for this business model,

simple formula called a Jaccard index, or Jaccard similarity coefficient,

The lesson is unmistakable: teams should experiment with a product option that is priced to help customers better understand the relative value of the items and plans you hope to sell.

When free users try to access these features, they encounter a call to action to unlock the premium features

For example, the popular dating app Coffee Meets Bagel sells “beans”—a currency that can be used to do things like get a second chance with a missed match,

Thinking, Fast and Slow. Similarly, economist Daniel Ariely covers eye-opening experiments he has conducted about how consumers make purchasing decisions, such as we saw earlier with The Economist subscription example in his book Predictably Irrational. Another fascinating look at how consumers make choices is The Art of Choosing, by one of the