Is Growth Hacking the New Growth Frontier?

Word of mouth, push notifications, in-app referrals and star ratings have been some of the basic growth hacking tools over the time.

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By Sandeep Soni


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Name that strategy from which the expeditious growth of brands like Ola, Flipkart, Zomato, Airbnb, Uber, Twitter and LinkedIn emanated. Marketing or digital marketing? Wrong. They all have done the same thing in acquiring, retaining and monetizing their customers.

They used an experiment-driven marketing technique involving analytical thinking, social metrics and product/service iterations called growth hacking

Growth hacking is essentially a set of numerous customer acquisition and retention tools, existing from last more than a decade, that works best for B2C technology-based companies right after the product development stage.

Coined in 2010 by US-based entrepreneur Sean Ellis, Founder, GrowthHackers – world's largest community of growth hackers, the term growth hacking gave such tools a structure and for people to use and appreciate them.

The primary purpose is to get customer adoption quickly at negligible or no cost. Word of mouth, push notifications, in-app referrals and star ratings have been some of the basic growth hacking tools over the time.

"It is about understanding ways that automatically pulls users towards your product or service. It is a continuous process by understanding users' behavior and optimizing ways to attract them," says Laxman Papineni, Co-founder, AppVirality.

Hyderabad-based AppVirality offers mobile app developers with growth hacking tools like in-app referrals, sharing in-app purchases on social networks and unlocking premium content through a software development kit and a dashboard without the need of writing new code for tools.

"For example, apps offering Flipkart coupons will ask users to probably follow them on Facebook or Twitter to unlock those coupons. This is unlocking premium content," says Papineni.

AppVirality already has more than 100 customers. Much like others, Aditya Vuchi, who launched Zippr (app to convert physical address into codes) in 2013, used AppVirality's in-app referrals to boost its app installs. After using radio initially along with running a few digital campaigns to create awareness, Vuchi switched to growth hacking.

"With traditional and digital marketing, the cost per install of our app was between Rs 150 and Rs 200 while retaining customers is always a challenge. AppVirality has given us out-of-thebox solution. We put the "invite friend' functionality into the app where people earn rewards as they refer other people and install the app," says Vuchi. The start-up, which raised $1 million in 2014, has since then witnessed around three times increase in its app installs.

Ditching Digital

While growth hacking has its genesis in marketing but it focuses only on untapped routes to acquire customers by analyzing data unlike traditional set of digital marketing services like Google Adwords or Facebook Ads, online and mobile phone ads, and digital mediums like TV that need separate team and budget with often delayed results.

"Digital marketing is an extension of your brand marketing to improving sales and create awareness, etc. whereas growth hacking makes the product robust enough that it sells by itself," says Basesh Gala, Founder and MD of strategy and brand management firm 39 Solutions. But that sounds like an evolved version of frugal Indian way of innovation – jugaad. So should that ring alarm bells for digital marketing firms? No way, because the brand will still be built overtime through digital or traditional marketing.

"Growth hacking can be seen as a jugaad technique, however, the objective is not limited to lower the cost. Digital marketing begins when you have a product ready but growth hacking begins at the product development stage itself," says Pradeep Chopra, Co-founder, Digital Vidya. Started in 2009, Digital Vidya is a digital marketing training company that has trained more than 100 entrepreneurs, product and sales professionals in growth hacking in last few months.

Time to Hack

While a start-up can work upon creating awareness about the product before minimum viable product, the real measure of growth hacking will come once the product goes out for testing. "In terms of the right time to growth hack, I won't even suggest in-app referrals until the app has 10,000 active customers to understand better and make iterations before growth hacking," says Papineni.

Nonetheless there is a word of caution before hiring a growth hacker. It is not just to figure out what are the different techniques and apply them randomly because growth hacking per se is in fashion. "You need to identify people with a jugaad mindset as growth hacking is not a toolkit, it is a mind-kit," further says Papineni. However, once these start-ups scale to a significant size around 10 years later and their technology and design become sound or don't develop edgy codes, use of growth hacking would scale down. "Once they enter mature stage shipping great products as they have a great market with set processes, they won't need growth hacking," concludes serial entrepreneur Nikhil John, Co-founder, Growth Hack India that conducts growth hack events.

How They Hacked Growth

Airbnb, an online renting platform, showed an option to those who wanted to list their properties on Airbnb through which their listings would get posted on popular online classifieds portal Craigslist as well. This cross posting helped Airbnb get more people to view listings and boosted their SEO with a heavy growth.

In late 90s, every e-mail sent using Hotmail used to read towards the end "PS – I love you,' which was linked back to the Hotmail homepage. This led to massive growth where 12 million Hotmail accounts were created. In 2007, Hotmail was acquired by Microsoft for $400 million.

In order to reduce high customer attrition during its initial days, Twitter added a step in the sign up process for users to select 5-10 people to follow. This was to increase their chances of coming back to Twitter and becoming regular users.

Moreover, this gave Twitter insight into user behavior by which it could send users tweets of people they were following which would also redirect them to twitter app or website. This way Twitter now knows you before you actually use it. Ola's referral program, similar to Uber, has worked out greatly.

Through the referral program, the user get a free ride every time someone (friends/family/others) sign up with Ola using the user's referral code and takes the first ride. In the process, a new user also gets a free ride coupon.

Auto classifieds portal CarDekho launched an internship program for automobile enthusiasts to join them and create content on automobile, which can further drive portal's SEO. Instead of hiring writers and paying them, CarDekho got tremendous content created without any cost and reached two million visitors on the website.

The checklist that Zoomcar, an online self-driven car rental start-up, added in the process of booking a car for users has led to around 2,000 cars and more than 20,000 bookings per month. While booking or returning a car, an user just have to fill up the checklist, for example, any damage, car quality, etc. on the app without contact anyone as the entire process is automated.

Sandeep Soni

Former Features Editor

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