About the book
I’m sorry – this is going to be one of the loooooongest LinkedIn articles that I have ever published. But I’m so excited about the topic and especially the content of the book was spot on – so I’ll forgive myself.
This book is all about breaking the silos within organisations and especially breaking the walls between marketing and engineering.
For me the key question while reading the book was that is growth hacking a new way of doing business development or merely a new way of doing prospecting?
After reading the book I can conclude that growth hacking is kind of next generation war room activity, but without the typical sense of urgency of war room activity. That does not mean that growth hacking would have more time to deliver results. On the contrary growth hacking is very focused on delivering results. But growth hacking teams does not come from an idle world where business has been so gooooood. Growth hackers come from the world of Internet.
“Growth hacking is so much more than a business strategy, or even an ongoing process. It’s a philosophy, a way of thinking, and it’s one that can be adopted in any team or company, big or small.”
What are the key learnings?
“Where did Skype go wrong? Put simply, the product and executive teams failed to grasp the appeal of mobile messaging and perceive how rapidly mobile phones and tablets were being integrated into workplace communication.”
This book has two key learnings:
1) Customers Relationship
a. Approaches like these is meant to be used as building, growing, and retaining a customer base.
2) Ability to Grow
a. “More important, companies’ growing ability to collect, store, and analyze vast amounts of user data, and to track it in real time, was now enabling even small start-ups to experiment with new business opportunities at an increasingly low cost, much higher speed, and greater level of precision.”
Lead your business via measuring:
– Aha moment
o “Vital step in determining whether your product has the aha potential is to seek out truly avid fans by mining user data and feedback, and then to search for any similarities in the ways these people use the product.”
– Retention
o “Whether or not you’ve achieved must-have status is your product’s retention rate.”
The way of working is a “process is a continuous cycle comprising four key steps”:
(1) ANALYZE:
a. Data analysis and insight gathering;
(2) IDEATE:
a. Idea generation;
(3) PRIORITIZE:
a. Experiment prioritization; and
(4) TEST:
a. Running the experiments, and then circles back to the analyze step to review results and decide the next steps.”
North Star
Choosing your North Star is a crucial part of the Growth Hacking operations:
– “To determine what that is you must ask yourself: Which of the variables in your growth equation best represents the delivery of that must-have experience you identified for your product?”
– “The North Star should be the metric that most accurately captures the core value you create for your customers.
– “The North Star may change over time as the company grows and initial goals are achieved.”
By far the best part of the book is about almost classic cases:
– “Hotmail, for example, was one of the first to tap into the viral quality of Web products—and their ability to “sell themselves”—when it added the simple tagline “P.S: Get Your Free Email at Hotmail” at the bottom of every email that users sent, with a link to a landing page to set up an account.”
– “LinkedIn, which had struggled to gain traction in its first year, saw their growth begin to skyrocket in late 2003, when the engineering team worked out an ingenious way for members to painlessly upload and invite their email contacts stored in their Outlook address book, kicking network effects growth into high gear.”
– “How would you feel if you could no longer use Dropbox?” Users could respond “Very disappointed,” “Somewhat disappointed,” “Not disappointed,” or “N/A no longer using the product” (I wrote the question this way because I found that asking people if they were satisfied with a product didn’t deliver meaningful insights; disappointment was a much better gauge of product loyalty than satisfaction). I had found that companies where more than 40 percent of respondents said they would be “very disappointed” if they could no longer use the product had very strong growth potential, where those that fell under that 40 percent threshold tended to face a much harder path in growing the business (due to user apathy).”
Growth hacking as a way of working
Growth hacking is combination of new tools and old tricks. “Growth was about engineer[ing] systems of scale and enabling our users to grow the product for us. The Lean Startup adopted the practice of rapid development and frequent testing, and added the practice of getting a minimum viable product out on the market and into the hands of actual users as soon as possible, to get real user feedback and establish a viable business. Growth hacking adopted the continuous cycle of improvement and the rapid iterative approach of both methods and applied them to customer and revenue growth.”
How to organize?
“At LinkedIn, for example, the growth team has evolved from an initial 15-person unit to comprise 120-plus members, broken down into five units dedicated to: network growth; SEO/SEM operations; onboarding; international growth; and engagement and resurrection of users.13 At Uber, by contrast, the growth team is divided into groups, including those who focus on adding more drivers, growing the pool of riders, expanding internationally, and more.”
Benefits of growth hacking
SURVIVING DISRUPTION
⁃ They risk being disrupted by a competitor who has growth hacking methods.
THE NEED FOR SPEED
⁃ Start-ups and established companies alike, in other words, simply can’t afford to be slowed down by organizational silos
MINING DATA GOLD
⁃ Growth hacking cultivates the maximization of big data through collaboration and information sharing.
THE RISING COSTS AND DUBIOUS RETURNS OF TRADITIONAL MARKETING
⁃ Growth hacking empowers companies to achieve breakout growth without pouring money into outdated and horribly expensive marketing campaigns of questionable business value.
GETTING THE JUMP ON NEW TECHNOLOGY
⁃ Seizing these opportunities requires tech and marketing teams to work closely together.
(VIRAL CHANNEL EFFECTIVENESS is rapidly changing)
Myth busting
0. First, the process is not, as it’s been misunderstood by some, about discovering one “silver bullet” solution.
0. Second, many companies believe they can simply hire a single Lone Ranger to be the growth hacker, who will swoop in with a bag of magic tricks to bring growth to their business. This, too, is badly misguided. Throughout the book we show that, in reality, growth hacking is a team effort, that the greatest successes come from combining programming know-how with expertise in data analytics and strong marketing experience, and very few individuals are proficient in all of these skills.
0. Growth hacking is often characterized as being specifically about bringing in new users or customers. But in fact, growth teams are, and should be, tasked with much broader responsibilities:
A) They should also work on customer activation. In addition, growth teams should work on finding ways to
B) retain and
C) monetize customers.
Part I: Method
Building Growth Teams
Breaking silos…. “This kind of collaboration between marketing and product teams is woefully uncommon. As the BitTorrent team soon realized, often the best ideas come from this type of cross-functional collaboration, which, again, is why it’s a fundamental feature of the growth hacking process. P.S. BitTorrent was a company that had 50 people in their pay roll.”
“The success of this data-driven approach to growth and product development prompted the BitTorrent executives to invest more heavily in data science and staff up its analytics team.”
THE WHO
These positions can be also seen as functions or responsibilities if they cannot be identified/dedicated as persons to the growth team.
A) THE GROWTH LEAD
“The growth lead sets the course for experimentation as well as the tempo of experiments to be run, and monitors whether or not the team is meeting their goals.
All growth leads require a basic set of skills: fluency in data analysis; expertise or fluency in product management (meaning the process of developing and launching a product); and an understanding of how to design and run experiments.”
B) PRODUCT MANAGER
“The role is well suited to assisting in the growth hacking mission of breaking down the silos between departments and identifying good candidates in engineering and marketing to help start the growth team.”
C) SOFTWARE ENGINEERS
“Recall that at BitTorrent, the engineers were invaluable in recommending the development of the lucrative battery saver feature. The very essence of growth hacking is the hacker spirit that emerged out of software development and design of solving problems with novel engineering approaches. Growth teams simply don’t work without software engineers being a part of them.”
D) MARKETING SPECIALISTS
“The cross-pollination of expertise between engineering and marketing can be particularly fruitful in generating ideas for hacks to try.”
E) DATA ANALYSTS
“Understanding how to collect, organize, and then perform sophisticated analysis on customer data to gain insights that lead to ideas for experiments, is another of the cornerstone requirements for teams. A growth team might not include an analyst as a full-time member, but rather have an analyst assigned to it who collaborates with the team but performs other work for the company as well. “
“What is essential is that data analysis not be farmed out to the intern who knows how to use Google Analytics or to a digital agency, to cite extreme but all too frequent realities.”
F) PRODUCT DESIGNERS
“Having design experience on a team often improves the speed of execution of experiments, because the team has a dedicated staff person to immediately produce whatever design work may be involved.”
THE SIZE AND SCOPE
“If you’re just starting to form a growth team, then bringing over one or two individuals from different departments to get the team started may be a good way to get the ball rolling, and the size of the team can grow over time.”
THE HOW
“The process is a continuous cycle comprising four key steps:
(1) ANALYZE: Data analysis and insight gathering;
(2) IDEATE: Idea generation;
(3) PRIORITIZE: Experiment prioritization; and
(4) TEST: Running the experiments, and then circles back to the analyze step to review results and decide the next steps.”
<= Check also the process behind The Lean Startup (Build-Measure-Learn).
Churn – is it a new business opportunity?
“An in-depth analysis of customer churn (meaning identifying those who recently abandoned the product) might reveal that the people who are defecting haven’t made use of a particular feature of the product that is popular with avid users.
Growth cannot be a side project
You need a Executive sponsor…. “Growth teams must be worked into the organizational reporting structure of a company with total clarity about to whom the growth lead reports. It is imperative that a high-level executive is given responsibility for the team, in order to assure that the team has the authority to cross the bounds of the established departmental responsibilities. Growth cannot be a side project. Without clear and forceful commitment from leadership, growth teams will find themselves battling bureaucracy, turf wars, inefficiency, and inertia.”
THE REPORTING STRUCTURES FOR TEAMS
THE PRODUCT-LED MODEL
Growth team is under vice president for products.
– Acquisition = New Business
– Activation = Current customers
– Retention = Retention
In addition to Pinterest, companies that follow this model include LinkedIn, Twitter, and Dropbox.
THE INDEPENDENT-LED MODEL
“Independent teams are most easily established early in a company’s development before corporate structures have crystallized and ownership battles over resources and reporting formalize. When the turf isn’t yet claimed, there are fewer complaints against redistributing responsibility and headcount to a growth team. That said, it’s not impossible to introduce independent growth teams in established, larger companies.”
Chapter 2 Must-have product
The Cardinal Rules of Growth Hacking
“One of the cardinal rules of growth hacking is that you must not move into the high-tempo growth experimentation push until you
1. know your product is must-have,
2. why it’s must-have, and
3. to whom it is a must-have: in other words, what is its core value, to which customers, and why.”
“The opportunity costs of pushing for growth too soon are twofold.
0. First, you’re spending precious money and time on the wrong efforts (i.e., on promoting a product that no one wants); and
0. second, rather than turning early customers into fans, you’re making them disillusioned, even angry, critics. Remember that viral word of mouth can work two ways; it can supercharge growth or it can stop it in its tracks.”
“Many other products that achieved rocket-like growth by pushing too hard too soon for adoption have flamed out in similarly spectacular fashion. Which is why all growth hackers must always keep in mind that, as the growth team at Airbnb says, “love creates growth, not the other way around.”
“And for there to be love, there needs to be that aha moment.”
WHAT’S THE AHA MOMENT?
“Identifying what a product’s aha moment is can sometimes be quite tricky.”
Find your true believers: “Vital step in determining whether your product has the aha potential is to seek out truly avid fans by mining user data and feedback, and then to search for any similarities in the ways these people use the product.”
For example at Slack the 2 000 messages is a threshold. “A team chat and messaging product designed to eliminate internal corporate email threads (and one of the fastest-growing business applications of all time), data showed that once team members had sent and received 2,000 messages to one another, the team became far more likely to make Slack a core part of their communication workflow and upgrade to a paid plan with premium features.”
“The good news is that while discovering how to make a product deliver an aha moment can be very difficult, determining whether or not your product meets the baseline requirement generally doesn’t require elaborate diagnostics. We advise a simple two-part assessment.”
THE MUST-HAVE SURVEY
This Must-Have Survey begins with the question:
How disappointed would you be if this product no longer existed tomorrow?
a) Very disappointed
b) Somewhat disappointed
c) Not disappointed (it really isn’t that useful)
d) N/ A—I no longer use it
Now this is important!
– “Interpreting the results is simple enough; if 40 percent or more of responses are “very disappointed,” then the product has achieved sufficient must-have status, which means the green light to move full speed ahead gunning for growth.”
– “If 25 to 40 percent of respondents answer “very disappointed,” then often what’s needed are tweaks either to the product or to the language used to describe the product and how to use it. If less than 25 percent answer “very disappointed,” it’s likely that either the audience you’ve attracted is the wrong fit for your product, or the product itself needs more substantial development before it’s ready for a growth push.”
– “In these cases, a set of additional questions on the Must-Have Survey will help to point you toward your next steps: What would you likely use as an alternative to [name of product] if it were no longer available? I probably wouldn’t use an alternative I would use: What is the primary benefit that you have received from [name of product]? Have you recommended [name of product] to anyone? No Yes (Please explain how you described it) What type of person do you think would benefit most from [name of product]? How can we improve [name of product] to better meet your needs? Would it be okay if we followed up by email to request a clarification to one or more of your responses?”
“The question about alternative products can help identify your chief competition for customers.”
MEASURING RETENTION
“The second measure to use in assessing whether or not you’ve achieved must-have status is your product’s retention rate.”
Achieving stable retention should not be viewed as a benchmark that once passed can be assumed has been accomplished and that the team is done with; teams must expect to continue to work on sustaining retention. And, in fact, they should keep working to improve the retention rate.
Remember that “according to data published by mobile intelligence company Quettra, most mobile apps, for example, retain just 10 percent of their audience after one month, while the best mobile apps retain more than 60 percent of their users one month after installation.”
“And fast-food restaurant chains see month-over-month retention of customers ranging from 50 to 80 percent. For example, McDonald’s saw 78 percent of their customers come in every month to their restaurants in 2012.14 A 2013 study concluded that credit card companies in the US see annual churn rates of roughly 20 percent, while European cellphone carriers see churn of anywhere between 20 and 40 percent.”
“Be aware of the feature creep; that is, adding more and more features that do not truly create core value and that often make products cumbersome and confusing to use.”
How to find your true believers?
Innovators and Etsy…. “Etsy discovered the network power of “Stitch ’n Bitch” groups, comprised of feminist crafters who were a key force in the growth of the craft movement.”
Proximity and Tinder… “Yet Tinder faced a unique challenge in gaining early adopters that wasn’t an issue for Etsy—people are only interested in finding dating prospects who are fairly close by.”
Preexisisting communities… “Preexisting communities to target for insight into how to achieve the aha moment can also.”
House of Cards…. “For example, at Netflix, by examining the movies and shows that customers were watching, the company found that Kevin Spacey films and political drama series were both hugely popular with their customers. That insight gave the company confidence to green-light the development of House of Cards, which became not only a huge hit, but also a must-have experience for many subscribers.”
Instagram… “Systrom and cofounder Mike Krieger realized that taking and sharing photos was the aha experience they should redesign around.”
YouTube…. “Similarly, though it is hard to believe today, YouTube started as a video dating site, pivoting to be the home for all video online only once the founders saw that users weren’t only uploading video profiles to find dates, but rather sharing videos of all types.”
“A minimum viable test (MVT), the least costly experiment that can be run to adequately vet an idea.”
“One particularly powerful and typically inexpensive method is A/ B testing.”
DRIVING TO THE AHA
– Focus…. “Remember that all of this experimentation and analysis should be focused on discovering the aha moment you are offering, or can offer, customers.
– New customers…. “Once the conditions that create that magical experience have been identified, the growth team should turn its attention to getting more customers to experience that moment as fast as possible.”
Companies deploy many additional tactics to drive users to the aha, such as product tours, email communication, special offers, and more, and we’ll cover when and how to implement each type more fully in the later chapters.
III. Identifying your growth levers
HACKING YOUR GROWTH STRATEGY
Growth strategy…. “Creating an aha moment and driving more people to it is the starting point for hacking growth. The next step is to determine your growth strategy.”
Mad scientist…. “You must be rigorously scientific in identifying the kind of growth you need and the levers that will drive it.”
Build your own growth equation.
Uber…. “For Uber, for example, one crucial factor is the number of drivers, because there must be enough of them in any given location to ensure the aha moment of a ride showing up quickly. The number of riders is also crucial, not only for generating revenue, but for assuring that there’s enough demand for drivers so that those who do sign on keep driving. This is why the growth team at Uber is tasked specifically with improving these two core metrics.”
LinkedIn…. “But for LinkedIn, the large pool of people who have simply filled in their work profiles, even if they hardly ever visit the site, is the fundamental basis of the site’s value.”
eBay…. “By contrast, for eBay, one of the metrics that matters most is not daily users or new users but the number of items listed for sale.”
CHOOSING A NORTH STAR
“Some in the growth community refer to this one key metric as the One Metric That Matters, while others call it the North Star.”
“The North Star should be the metric that most accurately captures the core value you create for your customers. To determine what that is you must ask yourself: Which of the variables in your growth equation best represents the delivery of that must-have experience you identified for your product?”
WhatsApp… “WhatsApp’s North Star was therefore the number of messages sent.”
AirBnB… “For Airbnb, the North Star was nights booked.”
“The North Star may change over time as the company grows and initial goals are achieved.”
“As companies grow, they also create more product and growth teams, which have their own North Stars, even while the company may still have its one overridingly important metric.”
Picking the right North Star helps to reorient growth efforts to more optimal solutions.
IT’S NOT ALL ABOUT THE NUMBERS
Dashboards…. “For small start-ups such as Geckoboard and Klipfolio, to enterprise solutions such as Tableau and Qlik Sense and dozens more.”
Twitter…. “Three cohorts: core users, who visited at least seven times a month; casual users, who visited less often; and cold users, who never came back after a first visit.”
IV. Testing at high tempo
“Learning more by learning faster is also the goal—and the great benefit—of the high-tempo growth hacking process.”
Mannaryyni-strategia… “Remember that, generally, big successes in growth hacking come from a series of small wins, compounded over time.”
“Many of the leading growth teams regularly run 20 to 30 experiments a week, and some run many more.”
THE GROWTH HACKING CYCLE
Recall that the stages of the process are:
0. Analyze – data analysis and insight gathering,
0. Ideate – idea generation, experiment prioritization,
0. Test – running the experiments, and
0. Analyze – then returning to the analyze step to review results and decide next steps, in a continuous loop.
“In the very first growth meeting, you won’t yet be making decisions about which tests to run. Rather, team members will take the next week to brainstorm and percolate ideas for what experiments to run in the first cycle.”
As Linus Pauling said, “The best way to have a good idea is to have lots of ideas.”
“Ideas should be submitted to an idea pipeline, following a templated format by which they should be submitted. It’s important to standardize the format so that ideas can be quickly evaluated, without the team needing to ask lots of questions.”
HYPOTHESIS
“Like in any other type of experiment, the hypothesis should be a simple proposition of expected cause and effect.
You ultimately want ideas coming in not only from the members of the team, but from people all around the company.
Before an idea is ready to be considered by the team, it must be scored. ICE score system, with ICE standing for
0. Impact,
0. Confidence, and
0. Ease.
When submitting ideas, the submitter should rate each idea on a ten-point scale, across each of the following three criteria: the idea’s potential impact, the submitter’s level of confidence in how effective it will be, and how easy it will be to implement.
It’s true that scoring your own ideas can be challenging, as they do require relative subjectivity and some degree of trying to predict the future.
While we like to use the ICE system, many other scoring systems have been created by fellow growth hackers. Bryan Eisenberg, considered the godfather of conversion optimization, recommends his TIR system, which stands for Time, Impact, and Resources. 3 Another system is PIE, for Potential, Importance, and Ease.”
BACK TO STAGE
“ANALYSIS AND LEARNING The analysis of the test results should be conducted by either the analyst or the growth lead, if he or she has the expertise.
It should also be added to a database where you store all test summaries, which we call the knowledge base. Create a “Wins” email distribution list.”
War Room schedule
Your weekly schedule:
– Monday
o On Monday, the members check in on experiments in progress to identify any that can be concluded, or to collect data to update the team on during the meeting.
– Tuesday
o The growth meeting is held on Tuesdays, which provides the team with a day at the beginning of the week to finish some of the requisite prep work.
o The growth team lead does a review of the activity from the prior week, including:
§ Look at the number of experiments successfully launched and compare it to the velocity goal of the team
§ Confer with the data analyst to update all of the key metrics they’re following so that she can brief the team about them, perhaps distributing reports
§ Gather the data about any tests that were concluded
§ Conduct a high-level assessment of the previous week’s activity and results, including a summary of findings about both the positive and negative effects on growth discovered from the experiments
§ Compile this information and include it with the meeting agenda, which acts as a living document and is shared with the team beforehand. Some teams keep this document as a file that lives in the cloud, such as in Google Docs or Dropbox, while others use an internal wiki page in software such as Google Sites, Confluence, or the corporate intranet.
Meeting schedule:
– 15 MINUTES: METRICS REVIEW AND UPDATE FOCUS AREA
– 10 MINUTES: REVIEW LAST WEEK’S TESTING ACTIVITY
– 15 MINUTES: KEY LESSONS LEARNED FROM ANALYZED EXPERIMENTS
– 15 MINUTES: SELECT GROWTH TESTS FOR CURRENT CYCLE
– 5 MINUTES: CHECK GROWTH OF IDEA PIPELINE
PART II: GROWTH HACKING PLAYBOOK
V. Hacking acquisition
“The first phase of work in scaling up your acquisition of customers should be devoted to achieving two additional types of fit:
– Language/ market fit, which is how well the way you describe the benefits of your product resonates with your target audience, and
– Channel/ product fit, which describes how effective the marketing channels are that you’ve selected to reach your intended audience with your product, such as paid search advertising or viral, or content, marketing.”
“The term language/ market fit was coined by James Currier to refer to how well the language you use to describe and market your product to potential users resonates with them and motivates them to give it a try.
Research has shown that the average attention span (the amount of time we focus on a new piece of information online) of humans is now eight seconds.”
“This means that the language you use must directly and persuasively connect with a need or desire they have in order to hook them—in eight seconds or less!”
“Most email marketing systems, such as Salesforce Marketing Cloud and MailChimp, make it easy to test specific pieces of your email copy, such as the subject line or call to action.”
LANGUAGE FIT HELPS HONE YOUR PRODUCT, NOT JUST YOUR BRANDING
“Sometimes the changes in wording you arrive at will lead you to additional changes to make.”
Don’t diversify:
– “In stock market investing, experts agree that it’s best to spread your money across a wide swath of diverse types of businesses and sectors. But this is not the right strategy when it comes to finding the channels for marketing and distributing your product (which in Web business are often one and the same).
– Marketers commonly make the mistake of believing that diversifying efforts across a wide variety of channels is best for growth. As a result, they spread resources too thin and don’t focus enough on optimizing one or a couple of the channels likely to be most effective.
– Most often it’s better, as Google founder and CEO Larry Page has said, to put “more wood behind fewer arrows.” Or as Peter Thiel, cofounder of PayPal, Palantir, and the first outside investor in Facebook, tells start-up founders, “It is very likely that one channel is optimal.
– Most businesses actually get zero distribution channels to work. Poor distribution—not product—is the number one cause of failure.
– If you can get even a single distribution channel to work, you have great business. If you try for several but don’t nail one, you’re finished.”
There are two phases in which to home in on your best channels:
1) Discovery and
2) Optimization.
“You’ll often need to offer users an incentive. The best way to do this is to create a double-sided incentive, that is, one that offers something to both the sender and the recipient.”
CREATE AN INCENTIVE THAT’S IN SYNERGY WITH YOUR PRODUCT’S CORE VALUE
“Cash offers can work also, but for the best effect, it’s important that they’re also related to the core value of the product.”
EXPERIMENT, EXPERIMENT, EXPERIMENT
“The point is: many of the best hacks are unanticipated discoveries. The methods you read about are designed to help you find them—strategically, efficiently, and at low cost.”
VI. Hacking activation
“The first step in hacking activation is to identify each point in your customers’ journey toward the aha moment.”
CREATING A FUNNEL REPORT OF CONVERSIONS AND DROP-OFFS
“One of the best ways to measure conversion rates is through a funnel report, a tool that displays the rates at which people who come to your product are moving on to each of the key steps in the customer journey.”
SURVEY DOS AND DON’TS
“We advise asking one or two questions at maximum, which either can be open-ended or can offer a set of answers to select from.
We have a preference for open-ended questions because they don’t shoehorn people into your preconceived notions of what the problems users are encountering are. Letting them respond with whatever they feel like sharing allows them to surprise you.”
“The key takeaway here is that you cannot know ahead of time which experiments are going to be most effective.”
“The bottom line is: there are no shortcuts. But if you follow the three steps we have outlined above, you will rapidly discover ideas and insights that will produce dramatic gains in activation for your product. To recap, those steps are:
– map all of the steps that get users to the aha moment;
– create a funnel report that profiles the conversion rates for each of the steps and segments users by the channel through which they arrive; and
– conduct surveys and interviews both of users who progressed through each step where you’re seeing high drop-offs, and those who left at that point to understand the causes of drop-off.”
ERADICATING FRICTION
“In user experience design, friction is the term used to refer to any annoying hindrances that prevent someone from accomplishing the action they’re trying to complete, such as ads that pop up in the middle of an article you’re reading.”
DESIRE – FRICTION = CONVERSION RATE
Important…. “In order to improve activation, you can either increase your customers’ desire or reduce the friction they experience.”
OPTIMIZING THE NEW USER EXPERIENCE
First rule…. “The first rule of designing and optimizing your NUX is to treat it as a unique, onetime encounter with your product.”
Second rule…. “The second rule is that the first landing page of the NUX must accomplish three fundamental things: communicate relevance, show the value of the product, and provide a clear call to action.”
“Flip the funnel, meaning to allow visitors to start experiencing the joys of your product before asking them to sign up.”
THE POWER OF POSITIVE FRICTION
“One of the great ironies of improving activation is that not all friction is bad.
Learn flow is Elman’s definition of a new user experience that’s designed to more than just sign people up, but rather purposefully educates new users about the product, its benefits and value.”
THE ART OF THE QUESTIONNAIRE
“Neil Patel, a leading expert in growth hacking, has highlighted the effectiveness of asking users a set of questions as you greet them.
A key caution here is that you also don’t want to ask too many questions. Patel recommends no more than five, and making them multiple-choice rather than open-ended.”
GAMIFICATION PROS AND CONS
“Gamification is, in essence, offering rewards, such as perks and benefits not available to all people, to customers for taking certain actions.”
INS AND OUTS OF TRIGGERS
“Triggers are any sort of prompt that provokes a response from people, common ones being email notifications, mobile push notifications, and, less obtrusively, calls to action on a landing page.
There is no denying that triggers are one of the most powerful tactics for increasing the use of your product.
A great rule of thumb about deploying triggers is that your rationale for getting in touch with the users should be to alert them of an opportunity of clear value to them. For example, the grocery app team could send notifications when an item that a person has saved in their shopping list goes on sale.
The bottom line is: do experiment with triggers, because they can be extraordinarily effective, but do so with a very thoughtful understanding of how they can actually be of service to your users.”
VII. Hacking retention
“Legendary business expert Peter Drucker famously wrote many years ago that the purpose of business is to create and keep a customer.”
“Frederick Reichheld of Bain & Company has shown that a 5 percent increase in customer retention rates increases profits by anywhere from 25 to 95 percent.”
WHAT DRIVES RETENTION?
“What builds customer loyalty and keeps customers coming back.”
THE THREE PHASES OF RETENTION
1. “The initial retention period is the critical time during which a new user either becomes convinced to keep using or buying a product or service, or goes dormant after one or a few visits.
2. “Medium retention phase, a period when the interest in a product’s novelty often fades.”
3. “Long-term retention. This is the phase in which growth teams can help to assure that a product keeps offering customers more value.”
“For e-commerce, the basic metric of retention is the repurchase rate of customers, which might, for example, be the number of times customers make a purchase per month.”
IDENTIFY AND CHART YOUR COHORTS
Cohort analysis….. “This allows you to probe more deeply into your data to make discoveries about why those who are staying are doing so—and why others are not.”
HACKING INITIAL RETENTION
“Once you’ve analyzed the cohort data to identify drop-off points in initial retention and deployed surveys to probe into the causes of the defections, you can begin to experiment with solutions.”
“One general rule that holds true across most product types is that improving the perceived value of the rewards leads to greater retention.”
“Teams should be creative about thinking of ideas for such nontangible rewards to offer, and they should also experiment with blending both tangible rewards and experiential and social ones.” Such as:
1. BRAND AMBASSADOR PROGRAMS
2. RECOGNITION OF ACHIEVEMENTS
3. CUSTOMIZATION OF THE RELATIONSHIP
“Promise of new features as a retention hook. “Coming Soon” hack.”
LONG-TERM RETENTION
“Once you’ve achieved strong retention for a good base of users, the next step is to focus on continuing to keep them happy and highly active over the long haul. Here we recommend a two-pronged approach that involves:
(1) optimizing the current set of product features, notifications, and subsequent rewards from repeated use; and
(2) introducing a steady stream of new features over a long period of time.”
ONGOING ONBOARDING
As new features are added, and also as more discoveries are made about how the most avid and satisfied of your customers are using your product, it’s important to continue to educate your customers about the value they can be deriving from your product.”
RESURRECTING “ZOMBIE” CUSTOMERS
“Winning back users who’ve abandoned a product is called resurrection in growth circles. The growth hacking process can again help you discover experiments to run to win back “zombie customers” who have disappeared off your radar.”
VIII. Hacking monetization
MAP YOUR MONETIZATION FUNNEL
“As with all growth hacking efforts, the first step is to perform data analysis that will help you home in on the highest-potential experiments. When it comes to monetization, analysis starts by returning to the basic mapping of the entire customer journey.”
ASK CUSTOMERS WHAT BENEFITS THEY WANT
“Growth teams should also again make use of surveys and find out directly from customers what improvements in the product, such as possible new features, new plan levels, or perhaps improved selection of items for sale, each of your key customer segments would most like to see.”
DON’T BE INTRUSIVE
“An important word of caution about customizing is that it can backfire if you’re not sensitive about how you’re doing it. If you seem to be prying too deeply into people’s lives, customization becomes, for lack of a better word, creepy.”
OPTIMIZING YOUR PRICING
“William Poundstone cites the power of using “charm prices,” those that purposefully end with a 9 or 99 or 98 or 95 instead of the full round dollar amount. Hard as it may be to believe, those pricing strategies actually work; Poundstone writes, “In 8 studies published from 1987 to 2004, charm prices were reported to boost sales by an average of 24 percent relative to nearby prices.”
LESS IS NOT ALWAYS MORE
“Psychologist and bestselling author Robert Cialdini explains this phenomenon: he says this is the result of people using price as a signal for quality, and it’s particularly common in markets such as technology and professional services.”
“Moreover, monetizing free users through ads, or by charging for add-on features, can be extremely lucrative.”
How should we change according to the book?
“Certain species of sharks must always keep moving to survive; if they stop swimming, they literally die. Growth teams are like those sharks. Teams that aren’t constantly innovating, that aren’t continuously diving into customer data and surveying, and that aren’t rapidly experimenting and producing results are not long for the world.”
What should I personally do?
I’m glad that I’ve studied statistics, because doing Internet business for 22 years has required basic understanding on statistical analysis. How little did I know back in the university days that statistics will be so useful in my career. My learning would that you should always study topics that might not seem super relevant “right at the moment”.
I should venture into new areas and educate myself.
And…. Try Kissmetrics.
Summary
The book in six words – “Love creates growth, not the other way around”.
