Optimization Glossary

Growth Hacking

What Is Growth Hacking?

Growth hacking (also known as 'growth marketing') is the use of resource-light and cost effective marketing tactics to help grow and retain an active user base, sell products and gain exposure. Think ‘hacking’ in terms of life hacks – those little shortcuts that make your life easier – rather than nasty bits of code that ruin your computer.

It is most commonly associated with start-ups and small businesses, i.e. those organisations that don’t have a huge amount of cash to spare but need results quickly. However, it’s a scalable concept applicable to any online business keen to maintain the growth and retention of an active user base.

The Difference Between Growth Hacking & Traditional Marketing

A lot of people think of growth hacking and marketing as one and the same. However, there are some subtle but important differences.

Growth hacking is like marketing in that its ultimate aim is to encourage more people to use a particular product or service. However, because of origins within the start-up community, it relies heavily on tactics that don’t involve spending the huge budgets that larger businesses have access to.

Typically, growth hacking combines marketing, optimization and developmental know-how to pull off automated marketing on a small budget. For example, automated notification emails, super-simple sign-up forms or sign-up driven homepages, or making it as easy as possible to find other people you know using that same website/service.

What Is a Growth Hacker?

Someone whose profession is growth hacking is known as a ‘growth hacker’. This term was first coined by Sean Ellis, founder and current chief executive of GrowthHackers.com, who, among a wealth of other positions, was head of growth at image storage service Dropbox.com.

In a 2010 blog post, Ellis wrote:

“A growth hacker is a person whose true north is growth. Everything they do is scrutinized by its potential impact on scalable growth…”

“An effective growth hacker also needs to be disciplined to follow a growth hacking process of prioritizing ideas (their own and others in the company), testing the ideas, and being analytical enough to know which tested growth drivers to keep and which ones to cut. The faster this process can be repeated, the more likely they’ll find scalable, repeatable ways to grow the business.”

From Ellis’ quote alone, it’s possible to see the intrinsic link between growth hacking, A/B testing and optimization. Data is at the heart of growth hacking, and the hacks must be tested to determine what is effective and what isn’t.

Benefits Of Growth Hacking

  • Provable ROI – By using data to inform every decision you make, and tracking the performance of a hack accurately, you can easily see which hacks are performing as you’d hoped, and which aren’t. Persevere with those that show promise, discard those that don’t.
  • Low-cost – By its nature, growth hacking is designed to use whatever resources you have in as economical a way as possible. Although testing process may be fairly lengthy before hitting upon that golden nugget, growth hacking doesn’t have the traditional costs associated with it that other methodologies such as content marketing or advertising do.
  • Low-resources - Growth hacks are often developed and implemented by a single person on the product or engineering team, and don't require an entire marketing team to execute.

Criticisms Of Growth Hacking

In recent years, the practice of growth hacking has been criticized by some for focusing on quick hacks and shortcuts rather than developing an in-depth marketing strategy. Others have argued that growth hacking is just traditional marketing given a new and fancy name.

Due to these and other critiques, some growth professionals have started calling themselves "growth marketers" in order to distance themselves from negative connotations of the term "hacking."

Examples Of Growth Hacking

Here are some examples of well-known growth hacks that have been successful in generating massive results for top tech companies:

  • Hotmail – ‘Get your free email at Hotmail’ with a link to the sign-up page automatically added to users’ signatures
  • LinkedIn – One-click endorsements for existing connections
  • YouTube – Making it as easy as possible for people to share YouTube videos on their own sites by providing embed codes
  • Twitter – Automated notification emails
  • DropBox – Incentivised ‘refer-a-friend’ scheme

Testing what works and discarding what doesn’t is at the heart of these successful growth hacks – and so many more. Only through a consistent process of hypothesising, testing and refining can the hacks that drive a business’s growth be discovered.