Recently growth hacking is a buzzword which everyone is talking about. But what is this growth hacking? In simple words, growth hacking focus on the growth of your company or business. Sean Ellis who was a entrepreneur at Drop Box coined this term. He was very much responsible for the growth of Drop Box at that time. He defined a growth hacker as "a person whose true north is growth. It started as a subfield of marketing which focuses on customer acquisition to grow and expand. But now, specialists are applying this knowledge in product management field also. Let see how this idea can be applied to product management.
All type of companies (small or big organization), especially start-ups are ideal for adopting growth hacking. It focuses on the growth metrics of the product rather than focusing on all the metric at a time. Before applying the growth hacking into a product, the product manager needs to understand the end to end customer journey or complete ecosystem of the customer behavior.
The 3 key benefits of doing so are the following -
- Less investment - The test run for a short time period and the customer segment are very specific. So, the investment is very low, and return is quite high. Growth hacking is very much favorite for the start-ups as they manage their funds very tightly.
- Small experiments to test hypothesis - Experiments are small and targeted to specific customer segment. The resources required for running these experiments are low. Note: The user participation is very important for the experiments.
- Less time to market for new ideas - The hypothesis is run for a short time and if successful they are launched into the market very fast. As the idea of new feature focused on the growth strategy of the company, time to market gives a very good competitive advantage against the competitors.
Below steps are helpful to apply growth hacking in product management -
☑️ Understanding customer touch points - In the end-to-end customer journey, what the points customer actually interacting with your system, identify that first. For example - Imagine a coffee shop, the process to purchase a coffee is to make the payment and then collecting the coffee from the pickup counter. If we consider the high-level touch points here
- Entry in the coffee shop
- Check out the menu
- Interacting with the customer service and ask for a specific type of coffee
- Coffee item entry in the point of sales
- Payment by the customer
- Customer taking invoice or bill of the coffee
- Customer collecting coffee from the pickup point
- Having the coffee or carry it away.
Once we have a complete understanding, the focus can be given to a particular step which might improve the process or get more customer to the coffee shop.
☑️ Evaluating non-value-added friction points - Note down all the friction points which does not add value to the customer. They might be small or atomic, but when we consolidate and remove this non-value added part, it might be a great improvement. It will also improve the customer experience and generate more customer delight.
In my previous coffee shop example - let's consider the first touch point which is entry to the coffee shop. If the entry door is a manual door which needs to be pushed to open or an automatic door which open as soon as someone comes near to enter with a delightful music - which one you think would have a better impact on customer mind. Pushing the door to open can be consider here a non-value-added task performed by the customer.
☑️ Data driven - Before selecting any growth area to work on, enough data is required to collect. A data driven decision making process is a fundamental criterion for growth hacking. More data we have, more accurate decision we will be able to make.
In my coffee shop example - data can be collected for each of the steps. Few examples will be - Number of customers for a specific period, customer having the coffee, customers take away the coffee, customer left without purchasing, payment type selected by customer while purchasing etc.
☑️ Pick up the top one - Evaluate the options, check which one has most impact on users/customers. Also don't forget to evaluate on risk scale, it is better to test your high-risk assumption first.
☑️ Build your hypothesis - Build your hypothesis around the top priority one. A/B testing hypothesis is one of the examples.
In my example above let's assume the following issue - average waiting time in peak hours is 15min. A hypothesis was selected - that the existing payment method is slow, taking time to complete a transaction. A new payment method i.e., QR code might be a good idea to improve the payment cycle. Alternatively, the existing payment cycle is fine, but it needs to improve. So, test needs to run to find out which one is better.
☑️ Run tests: Run test for the hypothesis you have selected. You may take 2-3 test confirm your hypothesis. These tests are run for short period of time with higher number of users/customers. Shorter time period ensure that if you are failing, you are failing first. Also if the hypothesis is not confirmed or test not possible for a already defined hypothesis, the hypothesis can be modified.
For my example: lets assume new payment method i.e. QR code is introduced. The existing payment methods were cash/cards. The test was run for 1 week to check how many customers are opting for the new payment method.
☑️ Analyze result and validate your assumptions - Collect the result of your test and analyze. The assumptions will be either proper or incorrect.
In my example above, it was found that the payment through QR code was faster and average time to complete a transaction was reduced by half. This also reduced the average customer waiting time by half. So, the null hypothesis was correct i.e., introducing the new payment methods QR will be a successful one
Also one thing need to note here. If you are introducing a new thing, it is a good idea to inform the user so that they can participate. In my example, if user does not know that payment can be done using QR code, then the test will be a fail. Proper marketing communication channel need to be used to inform the user about the same.
☑️ Deploy your idea: Slowly deploy your idea to the market. Based upon your hypothesis, you might decide whether to go for a big bang approach or gradually increase the deployment.
In my example - it might be a good idea to introduce the new payment method as a big bang approach. Generally adding a new payment method can be configured in a centralized way (in the back office of retailer system). It can be introduced to all the market simultaneously.
The above steps are a very generic and standard way to introduce growth hacking in your product development.
Connect with me if you want to know more about growth hacking. Happy learning.
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