Increase Revenue 20x in Just 12 Months GROWTH HACKING
The chicken-egg issue of getting customers to your business while you dont have any money to spare is a puzzle that many companies are unable to figure out at all.
Getting the first tracks of revenue is one of the toughest processes of building a startup.
If youre building a startup, youre likely to be in one of these two situations:
Launching and selling a new product that nobodys ever heard about, and probably dont even know they need, or
Improving an existing product or service, which means that youre going head on against someone with more traction, people, and money than you.
We call growth hacking the process of figuring out this extremely complex puzzle of selling a product better and faster than anyone else.
If you cant do that, then someone is going to outgrow you sooner or later.
In this article, Ill go through the steps and the strategy I followed to achieve this and successfully solve this maze.
One of the most commons problems I see with startups that Ive come across is the lack of a growth team.
Lets face it, working on the product is awesomeseeing it evolve, figuring out new features, and witnessing them as they come alive.
Selling a product is a tough process, full of nos, whether they come on the phone with a prospect or as a low conversion rate on your landing page.
I strongly believe that the first few hires of a startup should belong to the growth department, whether theyre marketers, community managers, or salespeople (selling your product is the best way to learn how to improve it).
My best advice here would be to ensure that the people you hire are able (and willing) to handle a large number of different tasks, that might be far from their original job description.
The reality of growth hacking is that its a trial and error process. The faster your try and measure the effectiveness of a growth idea, the faster youll make it or break it and be able to move to the next one.
1.Lean marketing
I approach our growth tactics with a monthly brainstorm session with all the growth team. No idea is badwe write them all on a board and then select the ones we like best. These may range from joining an affiliate marketing platform to trying new Google AdWords keywords.
This is when metrics come into play.
Your customer acquisition cost and lifetime value are the two magical numbers you need to calculate for each one of your campaigns. The cornerstone of any business is that LTV > CAC.
Cost of Acquisition (CAC): The total cost of acquiring a user through a given channel. This includes ads, team costs (fraction of your weekly work hours invested), and any other effort required.
Customer Lifetime Value (LTV): The potential revenue that youll be receiving from a given user.
If you are measuring these two correctly, you can make simple rules/decisions based on your results:
If the CAC is over twice the LTV dont even botherthis channel is likely not going to work.
If the CAC is above the LTV, but not too muchtheres some potential in this channel. Assign some budget for the next period and keep experimenting.
If the CAC is equal to or under the LTV, theres big potential here.
Most campaigns can be optimized to increase conversion rates and lower costs. Increase budget for the next period.
Using this approach, Ive been able to identify a number of profitable customer acquisition channels. Once a channel is identified, I increase its budget by approximately 50 percent each month, until the channel can no longer get more users from it, or when increasing budget results in an unsustainable LTV-CAC ratio.
There are a number of other variables here like virality (the chances of a user referring another user), but thats for another time.
Ill be going over some of the tests I did and our results. This is clearly our data, and it might or might not apply to your company. Hopefully, however, it will serve as a guide to planning and budgeting your own tactics.
Ive also added a note about the potential cost of each campaign, which should help determine if it makes sense for your company.
1. Users who love your product (cheap or free)
Its no joke that your users are your best advertisers. From day one, your focus needs to be on creating a product that people will love using. People love products that save them a tremendous amount of time or money. They also love beautifully crafted design, or even exclusivity.
Weve invested a lot in making our users feel like they are our friends. From small details like a friendly and casual tone in all our messaging, to large strategic investments like hosting live 24/7 support, our customers feel like they know us personally, and that gets them to create a deeper connection with our product.
Especially in the early stages, keeping a relationship with your customers can be paid off exponentially, not only in overall engagement but with extremely valuable word of mouth marketing.
2. Masterful onboarding (cheap)
Intercom allows you to build drip email campaigns based on specific actions users take on your site. As you evolve your user base, you can get down to tiny details and email users based on very specific actions, which makes them feel you are reaching out to them personally rather than automatically.
For instance, we target users based on their language, the type of customer they are (startups, marketers, consultants, academic) and based on the actions they take on their site. Thanks to Intercoms powerful tracking and automatic emails, we know when a startup founder finished and shared a deck. We can then email them at the right time to take an action or upgrade their account with a message that is so specifically crafted that they often assume it was only sent to them.
3. Big press (cheap or free)
While its not a sustainable growth channel because you simply cant get featured every week, kicking off with a major tech press publication definitely helps.
While it has a direct impact on traffic it also helps with overall SEO, brand recognition, and it allows you to brag on your website and on your ads, which improves conversion rates.
Getting published is a combination of luck, creativity, and most importantly, relationships.
The press buzz around the launch nailed us about 8,000 signups on the platform in the course of a week and that was all referral traffic from these articles.
One important thing to consider is that these are very targeted audiences: startups, VCs, and so on.
If you are not focused on serving those users, then you might not get a lot of value out of this effort.
Also, many of them will just sign up to look around and not come back ever but hey, its free traffic!
4. Small press (cheap or free)
Its significantly easier to get a press mention from smaller bloggers or internet evangelists (Youtube, Scoop.it).
Theyre usually on the lookout for great content to share on their websites, and its easy to get them to feature you if you have a product they like.
Dont underestimate small blogs! While their communities are much smaller, the engagement rate is significantly higher and they will continue to bring you valuable traffic as time moves on.
5. Google AdWords or SEM (expensive)
I avoided investing in Google AdWords for months because of how expensive it is. Still, its become one of our most profitable acquisition channels, and more importantly an excellent way to test new customer verticals and target markets.
Search ads are expensive, however.
Be prepared to pay at least $1 per click for any decent keyword in the U.S. (this drops by $0.30-$0.50 in other countries).
This means that you need to convert customers very efficiently if you want to get positive unit economics out of it.
I found that the best performance we could get out of a landing page was about 40 percent conversion to (free) sign up, which means that a sign-up cant cost less than about $2.50.
The best way to optimize in Google Adwords is to be extremely specific with your targeting.
Build a profile of your ideal customer (Where do they work? How old are they? What do they do? What would they type in a Google search?). In other words, get in your customers head and figure out what theyd be looking for.
6. Display ads (cheap)
Youll find that display ads are much cheaper than search ads, and the main reason is the moment of intent.
If a person runs a search for digital cameras, theyve already made the decision to purchase one, and its just a matter of which one and where to buy it. The moment of intent is clear and the customer is further down the acquisition funnel.
With display ads, you are targeting the customer further away in the acquisition funnel, and at a moment when they are not particularly interested in making a purchase or trying a new product out.
Display ads for sign ups: Fail
I started experimenting with Facebook Ads, which felt significantly cheaper than Google AdWords.
I created a set of beautiful designs with a Sign Up call to action, only to find that the click through rate never went above 0.5 percent (with Facebook you should aim for at least 1 percent).
This resulted in a $10 cost per sign up, and lower than average activation rates.
Video ads: Fail
I also tried running some Facebook and Youtube video campaigns and saw little success. While the cost per video impression is usually around the $0.05 (and you only get charged if a user sees more than 30 seconds), we saw very little conversion rate from the video to the landing page.
Display ads for content promotion: Success
Eventually, I figured that promoting content through display ads gave us significantly better click through rates, up to three percent or even five percent for some audiences.
The reason is clear, while hanging around on social media sites, users are actually consuming content, so it feels more natural to click and read through a piece of content that seems interesting.
Promoting content does not necessarily result in sign ups, so the measure of the success of a content campaign is rather different.
It relates to content shares, brand awareness, and even position in search engines, so measuring CAC here can be a whole different challenge.
Retargeting through display and video ads: Success
We also found that running retargeting campaigns was extremely cheap.
While conversion rates and cost of acquisition through retargeting is not particularly outstanding, we like to think that theres an underlying, unmeasurable added value of brand exposure that is achieved through retargeting. Honestly, there is no way for us to know that users are converting better because they get to see our ads everywhere, but were willing to allocate a fraction of our marketing budget to this cause.
7. Blog or content marketing (cheap or free)
If I could go back in time to when we first launched our product, one of the first things Id do differently is run a blog from day one.
Other great startup blogs to look at are Buffer and Baremetrics; blogs have become the main customer acquisition channel for those companies.
Once you have an ideal profile of your customer, it becomes simple and rather obvious to blog about topics that are interesting to those audiences. It gets your brand in front of them; if the content is good it will be organically shared to their peers, and sooner or later users will end up knowing you.
Onboarding and converting blog readers is a much longer process, but by using a combination of retargeting ads with well-crafted email drip campaigns, you can start improving this process. On our blog, we aggressively collect emails.
8. Reddit (cheap or free)
If you dont know Reddit, its about time you start getting familiar. Reddit is a content sharing community that gets short of 20 million visitors each month. With thousands of sections about specific topics (called subreddits), Reddit is an ideal place to find and engage with target customers.
Ive never seen a sense of community similar to the one you can find on Reddit, and this is why youll need to spend a few weeks getting familiar with the language, tone, and type of publications that get shared and spread in the community.
If youre able to get a hang of it, however, it can become a strong and close to free distribution channel for your product or service.
We hacked Reddit by sharing our blog content in the startups, entrepreneurs, and small business subreddits, and making sure it got high visibility.
If your content is truly good, youre looking at a few thousand reads from ideal customer prospects, not to mention the SEO benefit.
9. Twitter and Quora conversations (free)
Twitter and Quora are two great places to find conversations relevant to the problem youre solving (as a matter of fact if you cant find any questions or discussions, then you really should reconsider the way youre positioning your product or service).
Get used to monitoring Twitter conversations around your vertical and try to engage with as many as you can.
Make sure to sound interested and casual and avoid just selling your product or pointing people to your landing page.
Sometimes its better to promote content that youve published and only share your products homepage when they are explicitly looking for what you have to offer.
A similar situation occurs in Quora. Lurk around the site for any topics that relate to you and jump in to answer as soon as you find something.
Also, get your team to upvote and comment on your posts to make sure they get some extra visibility.
10. Instagram and Twitter automation (cheap)
When it comes to community building, you might want to start outside of Facebook.
Facebook has become so competitive (and therefore expensive) that your organic reach in the platform is practically zero percent.
I find users who have recently tweeted articles about a specific topic;
We export that list as a CSV and then create a spreadsheet with automatic tweets.
We do something a little different with Instagram using a tool called Instagress, which allows you to automatically follow, like, or comment on photos with specific hashtags or from specific locations.
If you bring Instamole into the mix, you can even automate responses to people who follow specific pages (like your competitors).
This way, you can grow your Instagram user base significantly with only a few bucks, and expose your brand to a network that has literally a 100 percent organic reach.
What growth comes down to in the end, the success or failure of your marketing campaigns and your startup depends on how fast you can iterate over your growth tactics, and how quick you are to identify the good and the bad channels.
Following this scientific approach when testing new growth channels is what allowed me and my team to pick the right campaigns and scale them accordingly. Whether you are on a tight budget or not, the key to growth is identifying these profitable acquisition channels as soon as possible, and being on top of the numbers at all times.
In the end, your metrics will give you the answer.
Make it a rule of thumb across your team to keep a tight control on the time theyre spending in each channel and the amount and quality of the traffic youre getting.
Keep experimenting and keep brainstormingyou are literally in a race to figuring this out before you run out of money, or before your competitor outranks you.
Getting the first tracks of revenue is one of the toughest processes of building a startup.
If youre building a startup, youre likely to be in one of these two situations:
Launching and selling a new product that nobodys ever heard about, and probably dont even know they need, or
Improving an existing product or service, which means that youre going head on against someone with more traction, people, and money than you.
We call growth hacking the process of figuring out this extremely complex puzzle of selling a product better and faster than anyone else.
If you cant do that, then someone is going to outgrow you sooner or later.
In this article, Ill go through the steps and the strategy I followed to achieve this and successfully solve this maze.
One of the most commons problems I see with startups that Ive come across is the lack of a growth team.
Lets face it, working on the product is awesomeseeing it evolve, figuring out new features, and witnessing them as they come alive.
Selling a product is a tough process, full of nos, whether they come on the phone with a prospect or as a low conversion rate on your landing page.
I strongly believe that the first few hires of a startup should belong to the growth department, whether theyre marketers, community managers, or salespeople (selling your product is the best way to learn how to improve it).
My best advice here would be to ensure that the people you hire are able (and willing) to handle a large number of different tasks, that might be far from their original job description.
The reality of growth hacking is that its a trial and error process. The faster your try and measure the effectiveness of a growth idea, the faster youll make it or break it and be able to move to the next one.
1.Lean marketing
I approach our growth tactics with a monthly brainstorm session with all the growth team. No idea is badwe write them all on a board and then select the ones we like best. These may range from joining an affiliate marketing platform to trying new Google AdWords keywords.
This is when metrics come into play.
Your customer acquisition cost and lifetime value are the two magical numbers you need to calculate for each one of your campaigns. The cornerstone of any business is that LTV > CAC.
Cost of Acquisition (CAC): The total cost of acquiring a user through a given channel. This includes ads, team costs (fraction of your weekly work hours invested), and any other effort required.
Customer Lifetime Value (LTV): The potential revenue that youll be receiving from a given user.
If you are measuring these two correctly, you can make simple rules/decisions based on your results:
If the CAC is over twice the LTV dont even botherthis channel is likely not going to work.
If the CAC is above the LTV, but not too muchtheres some potential in this channel. Assign some budget for the next period and keep experimenting.
If the CAC is equal to or under the LTV, theres big potential here.
Most campaigns can be optimized to increase conversion rates and lower costs. Increase budget for the next period.
Using this approach, Ive been able to identify a number of profitable customer acquisition channels. Once a channel is identified, I increase its budget by approximately 50 percent each month, until the channel can no longer get more users from it, or when increasing budget results in an unsustainable LTV-CAC ratio.
There are a number of other variables here like virality (the chances of a user referring another user), but thats for another time.
Ill be going over some of the tests I did and our results. This is clearly our data, and it might or might not apply to your company. Hopefully, however, it will serve as a guide to planning and budgeting your own tactics.
Ive also added a note about the potential cost of each campaign, which should help determine if it makes sense for your company.
1. Users who love your product (cheap or free)
Its no joke that your users are your best advertisers. From day one, your focus needs to be on creating a product that people will love using. People love products that save them a tremendous amount of time or money. They also love beautifully crafted design, or even exclusivity.
Weve invested a lot in making our users feel like they are our friends. From small details like a friendly and casual tone in all our messaging, to large strategic investments like hosting live 24/7 support, our customers feel like they know us personally, and that gets them to create a deeper connection with our product.
Especially in the early stages, keeping a relationship with your customers can be paid off exponentially, not only in overall engagement but with extremely valuable word of mouth marketing.
2. Masterful onboarding (cheap)
Intercom allows you to build drip email campaigns based on specific actions users take on your site. As you evolve your user base, you can get down to tiny details and email users based on very specific actions, which makes them feel you are reaching out to them personally rather than automatically.
For instance, we target users based on their language, the type of customer they are (startups, marketers, consultants, academic) and based on the actions they take on their site. Thanks to Intercoms powerful tracking and automatic emails, we know when a startup founder finished and shared a deck. We can then email them at the right time to take an action or upgrade their account with a message that is so specifically crafted that they often assume it was only sent to them.
3. Big press (cheap or free)
While its not a sustainable growth channel because you simply cant get featured every week, kicking off with a major tech press publication definitely helps.
While it has a direct impact on traffic it also helps with overall SEO, brand recognition, and it allows you to brag on your website and on your ads, which improves conversion rates.
Getting published is a combination of luck, creativity, and most importantly, relationships.
The press buzz around the launch nailed us about 8,000 signups on the platform in the course of a week and that was all referral traffic from these articles.
One important thing to consider is that these are very targeted audiences: startups, VCs, and so on.
If you are not focused on serving those users, then you might not get a lot of value out of this effort.
Also, many of them will just sign up to look around and not come back ever but hey, its free traffic!
4. Small press (cheap or free)
Its significantly easier to get a press mention from smaller bloggers or internet evangelists (Youtube, Scoop.it).
Theyre usually on the lookout for great content to share on their websites, and its easy to get them to feature you if you have a product they like.
Dont underestimate small blogs! While their communities are much smaller, the engagement rate is significantly higher and they will continue to bring you valuable traffic as time moves on.
5. Google AdWords or SEM (expensive)
I avoided investing in Google AdWords for months because of how expensive it is. Still, its become one of our most profitable acquisition channels, and more importantly an excellent way to test new customer verticals and target markets.
Search ads are expensive, however.
Be prepared to pay at least $1 per click for any decent keyword in the U.S. (this drops by $0.30-$0.50 in other countries).
This means that you need to convert customers very efficiently if you want to get positive unit economics out of it.
I found that the best performance we could get out of a landing page was about 40 percent conversion to (free) sign up, which means that a sign-up cant cost less than about $2.50.
The best way to optimize in Google Adwords is to be extremely specific with your targeting.
Build a profile of your ideal customer (Where do they work? How old are they? What do they do? What would they type in a Google search?). In other words, get in your customers head and figure out what theyd be looking for.
6. Display ads (cheap)
Youll find that display ads are much cheaper than search ads, and the main reason is the moment of intent.
If a person runs a search for digital cameras, theyve already made the decision to purchase one, and its just a matter of which one and where to buy it. The moment of intent is clear and the customer is further down the acquisition funnel.
With display ads, you are targeting the customer further away in the acquisition funnel, and at a moment when they are not particularly interested in making a purchase or trying a new product out.
Display ads for sign ups: Fail
I started experimenting with Facebook Ads, which felt significantly cheaper than Google AdWords.
I created a set of beautiful designs with a Sign Up call to action, only to find that the click through rate never went above 0.5 percent (with Facebook you should aim for at least 1 percent).
This resulted in a $10 cost per sign up, and lower than average activation rates.
Video ads: Fail
I also tried running some Facebook and Youtube video campaigns and saw little success. While the cost per video impression is usually around the $0.05 (and you only get charged if a user sees more than 30 seconds), we saw very little conversion rate from the video to the landing page.
Display ads for content promotion: Success
Eventually, I figured that promoting content through display ads gave us significantly better click through rates, up to three percent or even five percent for some audiences.
The reason is clear, while hanging around on social media sites, users are actually consuming content, so it feels more natural to click and read through a piece of content that seems interesting.
Promoting content does not necessarily result in sign ups, so the measure of the success of a content campaign is rather different.
It relates to content shares, brand awareness, and even position in search engines, so measuring CAC here can be a whole different challenge.
Retargeting through display and video ads: Success
We also found that running retargeting campaigns was extremely cheap.
While conversion rates and cost of acquisition through retargeting is not particularly outstanding, we like to think that theres an underlying, unmeasurable added value of brand exposure that is achieved through retargeting. Honestly, there is no way for us to know that users are converting better because they get to see our ads everywhere, but were willing to allocate a fraction of our marketing budget to this cause.
7. Blog or content marketing (cheap or free)
If I could go back in time to when we first launched our product, one of the first things Id do differently is run a blog from day one.
Other great startup blogs to look at are Buffer and Baremetrics; blogs have become the main customer acquisition channel for those companies.
Once you have an ideal profile of your customer, it becomes simple and rather obvious to blog about topics that are interesting to those audiences. It gets your brand in front of them; if the content is good it will be organically shared to their peers, and sooner or later users will end up knowing you.
Onboarding and converting blog readers is a much longer process, but by using a combination of retargeting ads with well-crafted email drip campaigns, you can start improving this process. On our blog, we aggressively collect emails.
8. Reddit (cheap or free)
If you dont know Reddit, its about time you start getting familiar. Reddit is a content sharing community that gets short of 20 million visitors each month. With thousands of sections about specific topics (called subreddits), Reddit is an ideal place to find and engage with target customers.
Ive never seen a sense of community similar to the one you can find on Reddit, and this is why youll need to spend a few weeks getting familiar with the language, tone, and type of publications that get shared and spread in the community.
If youre able to get a hang of it, however, it can become a strong and close to free distribution channel for your product or service.
We hacked Reddit by sharing our blog content in the startups, entrepreneurs, and small business subreddits, and making sure it got high visibility.
If your content is truly good, youre looking at a few thousand reads from ideal customer prospects, not to mention the SEO benefit.
9. Twitter and Quora conversations (free)
Twitter and Quora are two great places to find conversations relevant to the problem youre solving (as a matter of fact if you cant find any questions or discussions, then you really should reconsider the way youre positioning your product or service).
Get used to monitoring Twitter conversations around your vertical and try to engage with as many as you can.
Make sure to sound interested and casual and avoid just selling your product or pointing people to your landing page.
Sometimes its better to promote content that youve published and only share your products homepage when they are explicitly looking for what you have to offer.
A similar situation occurs in Quora. Lurk around the site for any topics that relate to you and jump in to answer as soon as you find something.
Also, get your team to upvote and comment on your posts to make sure they get some extra visibility.
10. Instagram and Twitter automation (cheap)
When it comes to community building, you might want to start outside of Facebook.
Facebook has become so competitive (and therefore expensive) that your organic reach in the platform is practically zero percent.
I find users who have recently tweeted articles about a specific topic;
We export that list as a CSV and then create a spreadsheet with automatic tweets.
We do something a little different with Instagram using a tool called Instagress, which allows you to automatically follow, like, or comment on photos with specific hashtags or from specific locations.
If you bring Instamole into the mix, you can even automate responses to people who follow specific pages (like your competitors).
This way, you can grow your Instagram user base significantly with only a few bucks, and expose your brand to a network that has literally a 100 percent organic reach.
What growth comes down to in the end, the success or failure of your marketing campaigns and your startup depends on how fast you can iterate over your growth tactics, and how quick you are to identify the good and the bad channels.
Following this scientific approach when testing new growth channels is what allowed me and my team to pick the right campaigns and scale them accordingly. Whether you are on a tight budget or not, the key to growth is identifying these profitable acquisition channels as soon as possible, and being on top of the numbers at all times.
In the end, your metrics will give you the answer.
Make it a rule of thumb across your team to keep a tight control on the time theyre spending in each channel and the amount and quality of the traffic youre getting.
Keep experimenting and keep brainstormingyou are literally in a race to figuring this out before you run out of money, or before your competitor outranks you.
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johntriton -
Thanks
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CedricMarkwatson -
Thanks
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