Growth Hacking:
What It Is + 8 Tactics
to Speed Up Growth

Every now and then, there’s a company that manages to take over an industry, despite its newcomer status and a decent playing field of competitors.

If you study the graphs associated with such companies, you’ll often find a specific moment when the customer base grew exponentially. 

And a lot of the time, this inflection point is typically the point at which the business identified a viable ‘growth hack.’

An uncommon marketing tactic that usually allows an advantage to be had - like Dropbox’s referral loop or Airbnb’s Craigslist usage, growth hacking is often the reason many companies experience exponential growth. 

However, a lot of people don’t really understand what growth hacking is or how the concept can be applied to their business.

Not to mention, “growth hacking” has become a shiny new word that a lot of businesses hope is a silver bullet to their marketing problems.

But as I sat down with Sean Ellis, the father of growth hacking (he founded GrowthHackers.com), on episode 18 of our marketing podcast, BoostSauce, he told us clearly what it is and what it isn’t.

We’ll also share an in-person interview I had with Sean Ellis at our Costa Mesa, CA HQ.

This post will provide you with an introduction to growth hacking, how it works, where it can be leveraged, and how the discipline can be used to its full potential IF executed correctly. 

Growth hacking is one of those buzzwords people throw around so much that it has now lost much of its original meaning. 

Growth hacking is a process of rapidly experimenting with and implementing marketing and promotional strategies that are solely focused on efficient and rapid business growth. 

Like I mentioned earlier, growth hacking is a concept first described by a Newport Beach gentleman named Sean Ellis, and according to him, a growth hacker is a person that focuses purely on growth. 

Sean then expanded on the term by suggesting that a growth hacker is special because they adopt an entrepreneurial and scientific approach towards growing the customer base of a given product.  

At this point, you might be wondering how a growth hacker is different from a traditional marketer.

Both are focused on “growth”, right?

This graphic below does a great job of highlighting some of the key differences between traditional marketers and growth hackers. 

One of the main differences between a growth hacker and a traditional marketer is that a growth hacker generally has a broader skill set. This broader skill set, if often referred to as a ‘t-shaped’ skill set.

When this broad, but general knowledge is combined with a data-driven approach, a growth hacker can achieve remarkable results. 

That’s because their skill set allows them to test multiple marketing channels at the same time. Their data-driven approach means that they can quickly determine which marketing channel is producing the best results. 

Their reliance on data, also means they’re able to work out how they can exploit a particular marketing channel so that it’ll produce even better results. A lot of the time, these ‘exploits’ tend to involve unique strategies that no one else is using. 

This often results in a marketing strategy that is unique to the product/service being promoted, and this then allows for potential explosive growth. 

A traditional marketer, though, will often use a relatively standard approach in regards to achieving growth. 

They will rely on tried and tested marketed channels, and they won’t run rapid experiments to identify and then exploit the best marketing channel for a given product/service. 

Additionally, a traditional marketer will also focus on things like “brand awareness” (just getting eyeballs on your messaging), which don’t produce a direct ROI in regards to growth.

The visual below does a good example of highlighting this, with traditional marketers on the left and growth hackers on the right. 

Understanding the difference between a growth hacker and a marketer can be a bit difficult at first. But once you make this distinction, it becomes a lot easier to define what growth hacking is and how growth hacking can help your company. 

Now that we’ve covered the basics of growth hacking, we’ll cover a few startup growth hacking case studies.

Hopefully, these case studies will help you develop a better understanding of how growth hacking works, thereby making it easier for you to implement growth hacking strategies within your business. 

Dropbox is now a household name, but when they were starting out, they faced a lot of competition, and it was hard for them to stand out. 

Not to mention an $800 million offer from Steve Jobs to buy them - that Drew Houston (the founder of Dropbox), declined.

They tried many different customer acquisition strategies, but they often found themselves coming up short. For instance, not too long after launching, they tried the obvious approach of using a then-called AdWords marketing campaign (now called Google Ads). 

However, that approach didn’t work for them, as the customer acquisition costs were simply too high. 

Following this, they went back to the drawing board and tried to figure out what actually led to someone signing up and joining their customer base. After thinking about it, they found that the customer experience typically followed the process below. 

Their research showed that word of mouth marketing was one of the best ways for them to acquire customers. Therefore, they went about creating a “growth hack” that allowed them to exploit this marketing channel.

As you read this, notice how a traditional marketer may have stopped as the Google AdWords failed acquisition cost and simply “quit” that marketing channel without digging deeper to understand why that channel wasn’t working.

Dropbox also figured that if they did some landing page testing, they would be able to optimize the referral and subsequent signup process. This would then allow them to magnify the impact of their referral scheme.

Thus, they split tested the pages that people would see during the referral and signup process. At the end of each a/b test, they would monitor their results to determine whether they should keep a particular change or if they should try something else.  

After doing all this, they were able to improve conversion rates, which allowed them to generate more signups from the same number of visitors. 

This tactic, combined with the two-sided referral tactic, paid huge dividends. So much so that shortly after implementing these changes, Dropbox generated 2.8 million referral invites in 30 days. 

Hotmail also managed to experience significant growth in a short period, thanks to growth hacking. 

Hotmail did this by including the text ‘Get your free email at Hotmail,’ in the signature of each email. There wasn’t really a highly researched process here, and the marketing team just thought they’d try something creative. 

Airbnb is another household name that owes a lot of its success to growth hacking. 

When Airbnb was starting out, one of their biggest challenges was figuring out how they could get in front of their target market. 

For reference, Airbnb’s target market was essentially people that wanted short-term accommodation that wasn’t a hotel. 

Based on their research, they found that people who wanted short-term accommodation but didn’t want to stay at a hotel would often use Craigslist to find a suitable place. 

Following this, Airbnb had to figure out how they could get their property listings on Craigslist. If they could work this out, their properties would end up in front of their target audience, and this would result in people using the Airbnb service. 

So how did Airbnb tackle this issue? 

Well, Airbnb created a tool that allowed people to repost their Airbnb listing to Craigslist. 

In this section, we’re going to touch on something a lot of people tend to ignore when it comes to growth hacking – the importance of a good product. 

If you don’t have a good product, you will experience a ‘high churn rate.’ 

Meaning simply, that your acquisition efforts might not lead to long and high lifetime values of your customers. You’re essentially, filling a bucket with holes bigger than they should be.

This means the rate at which you’re losing users/customers is greater than the rate at which you’re acquiring them. The chart below does a good job of highlighting how churn rate works. 

The easiest way to determine if you’ve achieved product-market fit is by asking users how disappointed they’d be if they couldn’t use your product again. 

If at least 40% of the people would feel ‘very disappointed’ if they couldn’t use your product again, you have product-market fit. 

According to one survey, Slack is an example of a product that has achieved this. 

Since growth hacking works best when the entire company understands and “buys in” to growth hacking, you need to make sure your company has a “North Star” = a single metric, that if improved, makes everything better, easier, etc.

For example, Uber’s “North Star” is “trips completed”.

This North Star example shows that both riders and drivers are getting value from the Uber platform, and revenue grows as well.

Facebook’s early North Star was “the number of Facebook users adding seven friends in the first 10 days”.

The more Facebook users that did that, the more the retention of using Facebook would increase, which as you can imagine, led to more time on the Facebook platform which led to more ad impressions, which led to more ad dollars spent by advertisers on the Facebook platform.

With a North Star metric, everyone wins - the company and the customer.

For us at KlientBoost, our North Star metric is “number of quarterly goals hit”.

We set quarterly goals for our clients and the higher the number of goals hit, the more successful we’ll be as a company - clients stick around longer, clients become happier, our team wins more and has better relationships with their clients too.

Now that we’ve covered the fundamentals of having a good product, we’ll now check out some of the more popular growth hacking tactics.

Note that you don’t have to use a growth hacking tactic in isolation, and you’ll often get better results if you combine different tactics. 

Research shows that around 54% of marketers use 3-4 marketing channels. 

This number is surprisingly low when you consider there are at least 51 marketing channels to choose from. 

Thus, if your competitors are only using 3-4 marketing channels, you can overtake them by using the marketing channels they’re ignoring. That’s because you’ll be able to capture a greater portion of your audience’s attention. 

For instance, suppose nobody in your industry is using YouTube as a marketing channel. 

If you focus on YouTube, it might be easier for you to reach your target audience. Many of your competitors might not have a YouTube presence, and so people interested in your niche might consume your content as they have no alternative. 

Now, for this approach to work, you will need to consider some of the best practices within your industry, regarding client acquisition. 

You will then need to consider which approaches aren’t included within these best practices. If you do that, you should be able to identify some marketing channels that you can exploit. 

According to one study, companies that use marketing automation are able to achieve a 451% increase in marketing qualified leads. 

Following this, automation can be a great growth hacking tactic, especially when it is combined with some of the other tactics mentioned in this post. 

Automation simply refers to creating an automated system that will ‘nudge’ your target audience into the next stage of the buyer’s journey. 

Creating a free tool is another growth hack that you may want to think about using. 

In addition to bringing value to potential customers, it’s also a massive linkable asset that can drive backlinks and increase your SEO strength (remember how I mentioned many marketing channels/tactics shouldn’t live in isolation?).

One of the reasons a free tool works as a growth hack is because it allows you to draw a large amount of attention. That’s because people will need to go to your website to use this free tool. Once you have this attention, you can then direct people towards your paid offering. 

This approach can be especially helpful if you don’t have a lot of money to spend on customer acquisition. 

A good example of a free tool working as a growth hacking tactic is the ‘HubSpot Website Grader.’ 

For the most part, a critical event is something that results in someone learning about and then signing up for your product. 

If we take the Dropbox example from earlier, a critical event is when someone tells another person about Dropbox. Dropbox identified that event as a key driver of growth, and when they oriented their growth strategy around that event, they managed to increase signups dramatically. 

Following this, you need to identify how most of your existing customers actually became customers. If you can do that, you can then go about incentivizing the specific events that typically transform a stranger into a customer. 

So, one critical event you may want to incentivize is getting people to talk about the product on social media. This can be especially powerful when you consider that 43% of consumers are more likely to buy a new product if they learn about it from friends on social media. 

Another critical event you might want to incentivize is getting someone to refer a product to a friend. 

Providing incentives in exchange for a referral can be incredibly powerful since 50% of people are more likely to provide a referral if there’s an incentive on offer. 

Incentivizing critical events works as a growth hacking tactic because people will often do what you tell them to do, provided there is a suitable incentive. For instance, the chart below highlights some of the things people would be willing to do to earn a reward. 

Building a community is one of the best low-cost growth hacks you can use within your business. One of the main reasons for this is that a community can help you achieve many goals. 

For instance, 66% of businesses use community engagement to help them during the product research phase. 

Thus, if you join these businesses by using a community to help you with product development, it will be easier for you to achieve product-market fit. This will then ensure you achieve a low churn rate when you finally start promoting your product. 

Furthermore, data shows that 53% of Americans who belong to a brand community, are loyal to that brand. Following this, you can use a community to create loyal brand advocates that will help you trigger viral loops on social media. 

So, with all that said, how do you attract members for a community? 

Well, when you’re trying to build a community, there are typically two paths you can go down. 

The first path is to essentially create a waiting list for your product, and Robinhood is a good example of a company that did this. 

Another growth hack you may want to consider is making your product ‘invite-only.’ 

This approach is similar to the waiting list example from above, but in this case, the product is actually working and available for people to use. The only difference is that they will need an invitation before they can access the product. 

Again, this makes people feel like they belong to a special club, and it can create a significant buzz around your offering. 

Gmail is an example of a product that managed to build a lot of buzz by adopting an invite-only approach. 

There’s no doubt that you’ll use the same marketing channels as your competitors.

But how do you know if what you’re doing is objectively better than them?

A few ways we here at KlientBoost have been able to outperform much older marketing agencies is by looking at “how” they do their marketing.

This helped us set a new “marketing bar” - for example:
1) Blog post we publish MUST have more examples, more data, more tactics, and usually, higher word count
2) Podcast episodes we publish MUST have more expert guests (usually three guests on average) and more actionable tactics
3) YouTube videos we publish MUST be shorter in time and be more fun to watch (animations)

By measuring the “bar” - you’re able to pick a part how your marketing output is measurably better than your competitor’s.

In addition to having a strong product, it’s important you also look at how your brand and customer experience is different and objectively better than the competition.

If you’re not focusing on that at the same time as you’re “hacking growth” then you may be selling your performance potential short.

You should now understand how growth hacking works and how you can use this approach to grow your business. 

If your initial attempts at growth hacking fail, don’t be too hard on yourself. 

Remember, success with growth hacking often comes down to trying out a bunch of different marketing tactics while maintaining a scientific approach. Check out what other people are testing out and see what tests you can implement for your growth needs. 

And if your initial tactic fails, all you need to do is come up with a new idea that you can test.

You literally only need a single win to warrant the continuance of growth hacking.

It’s also worth noting that you don’t have to rely on digital marketing tactics, as it’s often a good idea to experiment with offline tactics too. 

And remember, review every part of your business to see what levers can be utilized for growth.

It’s hard to say how many experiments you will need to run until you have a viable growth hacking strategy. 

But if you keep pushing forward, you should eventually come across a growth hacking technique that’ll allow you to achieve that coveted ‘hockey stick’ growth. 

Happy hacking!