Some people think growth hacking is a mysterious way of finding a magic marketing bullet. One that will create new, innovative ways of finding new customers. And some think it’s not relevant for their kind of business.
Return on marketing spend
The truth is less glamorous and more often than not, very hard work. It’s about focusing precious time and resource on where it’s going to make the biggest impact. For SaaS businesses, it’s all about focusing on what’s going to move the needle on the business KPIs such as MRR, CAC and LTV.
It uses a fusion of data, technology and psychology to both reach and prompt potential customers into action. Full optimisation of user journeys is par for the course as is exploring untapped channels and opportunities. The objective is to constantly improve how you acquire, convert and retain new customers.
Growth hacking came out of the startup space because they lacked the resources that larger enterprise businesses had. This forced them to find more creative routes to growth, which actually ended up being more effective than their traditional counterparts. They needed the largest possible return on marketing investment, so they tracked everything that they spent and made sure that every penny spent on acquisition was earning money for them.
The way they did it is the way you can do it. Many SaaS companies, early on, are faced with the same ‘David vs Goliath’ problems in the marketplace. Budgets can be tight and ongoing customers can be hard to find. By tracking the results, you can better target those who will benefit most from what you offer. And once they’ve completed a trial (or any other introductory offer you may have), you can target those most likely to subscribe.
When they acquired potential customers, early growth hackers concentrated on working out who were most likely to purchase. This meant finding out who they were, where they were in the sales cycle, and what made them more likely to convert. This didn’t just mean that they attracted more of the right people – they didn’t waste money targeting the wrong ones. The same applies for job roles and company types, helping you target the right person in a company’s decision chain.
Optimising the funnel
When reviewing their customer journey, growth hackers looked at the data to find every point in the sales cycle where the user may be bouncing, losing interest, or getting confused. They also found the points that made users more likely to complete the journey. This could be anything from adding layers of social proofing and testimonials or better explaining the benefits through to more impactful calls to action.
By optimising the journey and sending the visitors through the funnel to conversion, you can see big results – and with SaaS, those results can be even larger. It takes a continuous test and learn approach (and not falling at the first hurdle if initial tests aren’t positive) but conversion rates of 100% increase aren’t uncommon with a dedicated approach. When you take into account the potential lifespan of a SaaS customer, this can result in serious and significant increases in revenue.
Because growth hacking means testing changes and tracking the data, it avoids relying on assumptions. And the data then informs further changes. The data drives everything. The more growth hackers knew about their users, the better they could communicate with them. And the more chance they would spot an opportunity to innovate in the way they communicated.
Product / Market fit
Before most of this, though, you need to make sure your product or service is ready for your audience. Otherwise you’ll be wasting time on growth when you’ve got other more pressing issues to address. You can put time, energy and money into trying to learn why your audience isn’t converting, pricing models etc. When it’s actually a poor user experience of the product or service that’s holding you back. It’s crucial to know this before getting lots of potential customers to trial it, as you won’t get many second opportunities to impress them.
By making product/market fit your first step, you’ll be in a much better position when you start driving the audience to your product or service. By testing, making sure the service is ready and learning about your potential customers, you’ll get more reliable data and your tests will mean more. And, of course, you’ll acquire and retain more customers.
Rinse and repeat
Growth hacking is an ongoing process. You can keep optimising and testing throughout different parts of your relationship with your customers. Acquisition, trials, retention – the same approach applies. It can also help with customer relationships and direct marketing. You keep testing, seeing the results, and optimising. And you follow the data.
Post produced in partnership with True Up.