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The What, Why & How of Growth Hacking

by Jacqueline Dooley, on 4 August, 2021

Growth hacking is a buzzword that gets tossed around a lot in the context of startups, but it can and does extend to any promotion or marketing initiative focused on growth.

Whether that’s promoting a new product, getting more subscribers or users, or growing your revenue, growth hacking is being embraced by all types of organisations to accelerate growth. 

The term was coined in 2010 by Sean Ellis, an investor in Silicon Valley startups and can basically be boiled down to one simple concept: it’s the process of using various low-cost (mostly) digital marketing techniques to fuel rapid business growth.

Here’s one famous example of growth hacking: After acquiring Instagram in 2012, Facebook increased Instagram’s users from 35 million to 100 million in about ten months.

They accomplished this by cross-promoting Instagram with their existing Facebook user base. That was growth hacking not only because of the staggering rate of growth, but because Facebook did it without spending millions of dollars on advertising.

What, exactly, is growth hacking? 

Growth hacking—also referred to as growth marketing—uses creative, low-cost, primarily digital marketing tactics to gain exposure for a brand, product, or business. Once upon a time we might have called it viral marketing, but that’s only part of what makes growth marketing successful.

Growth hackers employ techniques like guest blogging, content creation/sharing, podcasting, and influencer marketing with tried-and-true digital tactics like SEO, social media, and search marketing to fuel rapid growth around a specific growth goal.

Growth hacking aims to generate buzz. It rewards and incentivises existing users and customers for bringing in new users and customers. It’s primary goal is to put your brand, product, or service on the map quickly.

Successful growth hacking campaigns typically involve leveraging the resources a company already has or piggybacking on the audience or platform of another company (per the Facebook/Instagram example, above.) Companies do this in many different creative ways which we’ll get to in a minute.  

For now, the main thing to keep in mind is that growth hacking tends to prioritise digital over traditional approaches to marketing. It’s SEO instead of print ads, social sharing instead of broadcast TV, and influencer promotion instead of billboards or direct mail. It’s about being smart and savvy with your marketing budget and using the digital tools (and audiences) the internet gives you to grow your company at a massive scale.

Why is growth hacking used? 

Growth hacking abandons traditional advertising and marketing approaches in favour of digital approaches that creatively leverage a company’s website, audience, and users. The purpose of growth hacking is to achieve lightning, supersonic, breaks-the-sound-barrier kind of growth. 

Growth marketing was originally connected to startups who needed to go from zero to sixty (metaphorically) very quickly so they could remain viable, competitive, and adequately funded. The concept of growth hacking is only about a decade old and its techniques, strategies, and best practices are still very much in flux.

These days, the growth hacking approach can be applied to any business that wants to grow a product or service quickly. Growth marketing tactics like content creation, customer experience initiatives, platform integrations, and omnichannel marketing strategies currently dominate the modern digital marketing landscape.

The key benefits of growth hacking are:

  • It’s goals oriented: Growth hacking focuses on employing tactics that contribute to measurable business growth. Growth hackers use specific KPIs to guide strategy (e.g., more users, more revenue, higher view time, better retention, etc.) This laser focus is what fuels rapid growth for a given KPI, often underpinning the success of the business.

  • It’s cross-functional: A growth hacking strategy is inherently cross functional, meaning it touches all aspects of business growth including sales, marketing, customer experience/service, revenue, and retention. This aligns with the way both B2B and B2C organisations are increasingly merging and reimagining their marketing and sales approaches to work together to achieve overall business growth.

  • It’s data-driven: Growth hacking requires a data-driven, results-oriented approach that incorporates testing, user/customer feedback, and a deeply experienced team of product, marketing, sales, and analytics experts who are focused on results. This is an inherently efficient, results-oriented process that provides insights and context around what drives the best business outcomes.

One of the main reasons companies turn to growth hacking strategies over more traditional marketing techniques is the sheer competitiveness (and expense) of running standard digital campaigns.

Per eMarketer, worldwide digital ad spend is expected to reach nearly $646 billion dollars by 2024, up from $455 billion in 2021. 

Costs are continually increasing for standard digital tactics like paid search and display where the average CPAs are $49 and $75, respectively.

Depending on the industry, these numbers can be much higher. Marketers turn to growth hacking techniques because they help mitigate acquisition costs by employing tactics that make the most of an existing customer base. 

Growth hacking techniques

Growth hackers use a wide range of marketing techniques and channels, but they mix it up in creative ways with a focus on low-cost methods that spur rapid growth. These techniques tend to fall into four categories: viral or referral marketing, engagement (or “sticky”) techniques, content creation and amplification, and straight-up paid advertising. 

  • Viral/referral marketing: Expanding users, subscribers, and/or customers is a common growth hacking goal. Techniques like showcasing the brand’s name at the bottom of a page template (a.k.a., Wordpress, Wix, and Squarespace) are widely used by subscriptions-based companies. Piggybacking on another platform’s audience via the practice of social sharing icons is another example.

    You can also let your users do the work via a user generated content or revenue sharing campaign. These types of campaigns leverage the user’s own audience to grow your user or customer base. Viral tactics are a favourite growth-hacking tool and include strategies like influencer marketing and social “FOMO” campaigns that get people to watch, subscribe, buy, or share a company’s products (or message).
  • Engagement marketing: Engagement marketing is all about getting users to interact with your content more and stay on your website longer. Engagement tactics help motivate users to subscribe or share content. Think about any popular social media platform—YouTube, Facebook, TikTok, and on and on. Social platforms foster engagement and keep people within their own walled gardens by using a combination of supersmart algorithms that recommend content based on user behaviour and sticky features that keep users hanging around longer (and engaging and sharing more often). 
  • Content creation and amplification: Content marketing is an inherent part of the growth hacking process and thus gets its own spot at the table. Content creation and amplification—including user-generated content—is a cost-effective, impactful way to promote your business, product, service, or brand. 

    Content can do double (or triple) for marketers. A blog post can be shared on social media, with your email subscribers, and help you rank in search engines for a desired keyword or phrase. Guest blogging can help establish thought leadership in your industry, while also generating buzz about your company.

    Video, audio, and visual content like memes and images is not only incredibly popular across just about every social platform, but audio/video content can be repurposed into written content and used for SEO, social, and other marketing initiatives.  

  • Paid ads: Paid advertising absolutely can and should be used as a growth marketing tactic. The point, after all, is to rapidly scale the growth of your company, product, or service.

    Paid search, paid social, programmatic display, email marketing, and OTT & CTV advertising (e.g., video ads on platforms like Hulu and YouTube) are all fair game in the world of growth hacking. These tactics are particularly effective when combined with the more viral (and cost effective) tactics listed above.

Examples of growth hacking

We’ve established that the point of growth hacking is to grow quickly. But what, exactly, does that mean? Sometimes it’s easier to show rather than tell. To this end, here are some fascinating use cases that demonstrate how companies employed growth hacking to scale their product, user base, or company rapidly and effectively. 

Spotify hack: app integration

Back in 2011, Spotify grew their subscriber base from 3.4 to 5.3 million in two weeks by integrating their app with Facebook’s newsfeed and announcing this integration at Facebook’s F8 conference that year.

spotify  Facebook

Facebook users could easily share what they were listening to on their own profiles, which gave Spotify incredible visibility across Facebook’s user community. Spotify recently announced an expansion of this partnership, which enables paying subscribers to stream full-length music tracks from the Facebook app. 

Medium hack: leveraging subscribers/social sharing

Medium, a blogging platform that makes it easy for independent writers to publish and reach a wide audience, spends almost nothing on advertising compared with platforms like Twitter and LinkedIn.

Even so, they’ve managed to grow their platform to 170 million unique subscribers, of which around 725,000 of them are paid subscribers. Writers on Medium can share stories on social media using "friend" links that enable their connections to access the story for free.

Medium requires users to register to access stories and provides three free stories per month. Once the limit is reached, the user must pay the $5 monthly subscription fee to access articles.

Airbnb hack: audience piggybacking

Back in 2010, Airbnb helped their users leverage Craigslist to advertise available rentals by hacking Craigslist. Airbnb hosts were given the option to repost their listings to Craigslist via a simple one-click feature within the Airbnb website and app.

They did this without authorisation from Craigslist, but the hack was enough to give Airbnb a strong boost right when they needed it. New Airbnb users grew from well under 50,000 in 2010 to over 200,000 by early 2012.

airbnb-old-website

App integration, subscriber engagement, social sharing, and audience piggybacking are all extremely effective, low-cost growth hacking techniques that can help an organisation achieve rapid growth.

Is there a downside to growth hacking?

It’s clear that growth hacking can be extremely effective for achieving rapid—even mind-boggling—growth. Growth hacking techniques have helped companies acquire millions of users, subscribers, and customers in a short period of time.

But as with any marketing initiative, there can be downsides to achieving rapid growth, particularly if you don’t have a strategy in place to leverage your newfound success in any tangible way.

Take the Medium example, above. Medium grew its paid subscriber base to over 700,000 users very quickly, but then didn’t seem to know what to do with them.

This past March, Axios reported that Medium abruptly changed their editorial strategy from one that focused on hiring journalists and editors to one that focused on promoting the platform’s many independent writers. This shifted the content that had been routinely promoted on Medium, and was a shock to readers, writers, and Medium employees alike.

Because of this pivot, Medium abruptly lost many of its staff. In fact, since 2020, the platform’s growth has stagnated. Their paid subscriber base remains well short of their goal of 1 million which they’d hoped to achieve by 2020. Plus, without any significant investment in paid media, the growth hacking strategy that focuses on getting writers to share content continues to lose steam. 

Growth marketing, by its very nature, tends to focus on the short term. The momentum you gain from a successful growth hacking approach can fizzle out if you don’t have a long-term plan in place to leverage that growth. 

Spotify’s rapid growth may have been supercharged by their integration with Facebook, but the company’s vision for long-term growth was—and continues to be—a key driver of their success.

Their “freemium” model (for example), keeps the basic ad-supported service free to users, while tiered pricing removes ads and expands platform features. Spotify also leverages paid ads, including traditional media like billboards, and gets artists and creators involved in events that further promote the brand.

There are many pros to growth hacking, but the success of any growth initiative requires  long and short-term strategies that focus on how to leverage those new users, customers, or subscribers once they’re on board.

Summary

Growth hacking—or growth marketing—shares some commonalities with good, old fashioned digital marketing. But there are a few common themes that differentiate the most successful growth hacking approaches that can help you propel your company far ahead of your competitors.

First, growth hacking requires rapid experimentation. Test, evaluation, adjust, then test again. You may need to try ten or twelve different things at once before, like Spotify, you land on a growth formula that works for you.

Second, successful growth hacking strategies almost always leverage existing audiences. Using someone’s audience (or your own) to create buzz around a product, service, or company is a common growth technique. It’s particularly effective if there’s synergy with the products or services.

The way Airbnb piggybacked on the Craigslist crowd is an example of this. Another example: the way major publications like the New York Times make it easy to share a story to Twitter or Facebook with one click. Even retailers are getting in on the fun by encouraging their customers to share their purchases on social platforms and pulling user photos into their websites (then sharing and tagging them on social media). 

Third, growth hacking is focused on rapid growth. Yes, it’s true that all marketing is focused on growth, but growth hacking is laser focused on specific KPIs—users, customers, sales, subscribers.

These metrics are important to the viability of a company or platform, but they don’t always look to (or consider) the future. The “what’s next” part of the plan should be factored in before you see wild success with your growth marketing endeavours or you risk losing momentum right out of the gate.

There are many ways to rapidly scale growth. Growth hacking can be tremendously successful (and exciting), particularly for early growth. It can help you develop your product or service into something that sustains success over the long haul. For this reason, growth marketing techniques should be paired with a thoughtful long-term strategy that focuses on tracking and measurement as part of an overarching plan for ongoing success.

Topics:Strategy & Trends

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