Growth Hacking explained with examples of Dropbox, Facebook, and Gmail

Growth hacking, also known as growth marketing, is a subset of marketing that deals with immediate growth using cost-effective tactics. Growth Hacking helps a company to grow its user base, generate more business from existing ones, increase its cart size and improve the company’s revenue.

A little sidenote- Some people hate the term. That includes marketers as well. This is because this term has been overused by people with no substance. Also, some people don’t understand how it works and that annoys them. Often some people consider Growth Hacking as a replacement for marketing. That was not the intention of the guy who coined the term.

Sean Ellis first coined the term growth hacking. In his blog, he defined a growth hacker as the guy whose true north is growth.

How to define growth hacking

According to Growwithward, Growth Hacking is a combination of lean startup, technical marketing, and conversion rate optimization. What are these factors —

1. Lean Startup: When marketing & psychology incorporates data and experimentations, it becomes a lean startup. Your traditional marketing spend can become a lean startup. For example, assume your company provides target-based benefits to distributors. You can identify which benefit helps you get better results and then cut the others. You’ll be lowering costs without changing the results much.
2. Conversion rate optimization: This is about using tech, tools, and automation using data & experimentations to optimize results. For example, you can run experiments on social media ads. You can try 3 different types of ads to see which one does better than only focus on that.
3. Technical Marketing: Technical marketing is the process of using tech, tools, and automation to do marketing & manage consumer psychology. For example, you can calculate the net promoter score (NPS) to understand consumer satisfaction. This data collection can be automated by sending an email after every purchase. Then you can check what influences higher NPS.

It sounds a bit technical. But in summary, growth hacking is about optimizing marketing results by tapping into consumer psychology, with the help of tools, data & experimentation. Growth hacking tricks will get you fast growth at a comparatively lower cost.

For example, if your customer acquisition cost is $10, you can offer an affiliate program at $8 per successful referral. You’ll save $2 and still grow your company.

In short, Growth Hacking = Lower your costs while maintaining/increasing growth

Examples of real-life growth hacking

Dropbox

Dropbox increased its growth by incorporating gamification. It offered its existing users more free storage for linking with social media & sharing about Dropbox on Facebook & Twitter.

Facebook

Facebook continuously encourages its users to add their friends, family, and acquaintances. The platform asks users to send emails to invite them. It also sends an email if someone (who’s not on Facebook) is mentioned or tagged.

Gmail

In 2004, Gmail shared an “exclusive” invite to new users that they can share with others. They opened only a limited number of slots that created so much hype that the company grew very fast. Those invites were even sold on eBay! With that, Google tapped into an integral part of human psychology- the fear of missing out (FOMO).

How Companies Exploit Your Fear Of Missing Out (FOMO) For Growth Hacking

Google, Clubhouse, Airline industry, Groupon, and e-commerce sites hack massive growth

medium.com

To summarize

Growth hacking is the process of getting more done at a lower cost. Because of using the term incorrectly, it has a mixed reputation. It’s important to understand if this is something your business needs. Sometimes regular marketing is the way to go if the industry dictates that.

Subscribe to email updates to never miss an update on marketing trends and data-driven marketing.

Learn how to calculate Customer Acquisition Cost.

This article was first published on Medium.