Growth Hacking: How It Helps Companies
Key principles of growth hacking
- how users behave inside the product;
- at which steps they drop off;
- which channels perform more effectively and cost-efficiently.
Differences between growth hacking and traditional marketing
At first glance, growth hacking and traditional marketing pursue the same goal: to help a product grow and find new customers. However, there are fundamental differences between these approaches.
| Traditional marketing | Growth hacking |
|---|---|
| The product is perceived as something that needs to be delivered to the market through communications and promotion. The main task is to explain the value and persuade the audience to make a purchase. | The product is viewed as a growth tool in itself. Here, the central question is, "How to change the product to better solve user problems and stimulate growth?". |
| Long-term focus: quarterly or yearly plans with numerous channels and budgets approved for extended periods. | Built on a "hypothesis roadmap": a list of ideas tested in short cycles. For example, today the team tests a new onboarding format, and next week tries a different pricing model. |
| Relies on conducting marketing campaigns, often large-scale and expensive: outdoor advertising, media, event sponsorships. | Uses precise mechanics that are usually cheaper and can be implemented faster: content personalization, automated CRM scenarios, experiments with the product, pricing, and subscription plans. Their cost largely depends on infrastructure, but they often allow testing ideas without significant investments. |
| Media metrics (reach, impressions, and scale of advertising impact) and metrics like CAC (customer acquisition cost), LTV (customer lifetime value), and ROI (return on investment) are measured. The focus is often on media metrics, especially in large branding and ATL campaigns. | Works with the same business metrics (CAC, LTV, ROI), but these metrics become the starting point for experiments. If a channel or mechanism does not improve key metrics (acquisition cost, retention, revenue), it is not scaled. |
| Risk is often concentrated in one large campaign. If it fails, the business loses both money and time. Therefore, the launch is accompanied by long preparation and a high level of caution. | The team launches a series of small experiments simultaneously and quickly checks the results. The process is more flexible, allowing the company greater freedom for trial and error. If the hypothesis works, it is scaled, and if not, losses are usually minimal. |
Tools for growth hacking
To ensure marketing experiments yield results, teams use proven analytical approaches and tools. Let's examine the main ones.
AARRR model
One of the most well-known models in growth hacking, consisting of five stages:
A/B testing
This is one of the key tools of growth hacking. An element of the product or campaign (such as a landing page, registration form, or pricing tier) is created in multiple options. The audience is divided into groups, with each group seeing a specific option. After that, it is analyzed which option generated more clicks, registrations, or purchases.
The main advantage of A/B tests is that decisions are made based on accurate data. This approach helps identify the exact changes that can impact sales and conversions.
Marketing analytics
Helps identify weak points in the funnel and prioritize growth opportunities. The following tools are used:
- Cohort analysis. Comparing the behavior of different groups of users (for example, those who registered in different months). This helps understand how retention changes over time.
- Heat maps. Show where users click on a page and when they close the site.
- Event tracking. Track specific actions in the product: registration, video views, adding items to the cart.
- Attribution systems. Help determine which channel actually brought in the customer: social media advertising, email newsletters, or organic search.
Steps to work with growth hacking
Growth hacking is a full-fledged methodology that integrates into the marketing management system. The process of working with it involves five main steps.
- "If a video tutorial is added to the onboarding, the activation rate will increase by 12%".
- "Reducing the number of fields in the registration form will increase conversion by 7%."
- are implemented in the product and become part of its functionality;
- are integrated into the marketing strategy;
- enter the company's managed growth system.
Over time, a base of proven tools and mechanics that work for the company is formed from such findings.
Where growth hacking is used
Startups and new projects
For startups, growth hacking can become a tool for testing product viability. A limited budget does not allow for large-scale campaigns, so every initiative must deliver quick and noticeable results. Hypotheses (from small changes to new scenarios) are tested promptly, successful solutions are scaled, and ineffective ones are discarded.
Companies in the scaling stage
When a product has already found its audience and generates initial revenue, the business faces the challenge of accelerated growth. Here, growth hacking works in addition to traditional marketing and allows for faster and more precise scaling:
- experiments in different channels are launched in parallel;
- new monetization models are tested;
- retention mechanics and referral programs are implemented, stimulating repeat purchases and organic customer influx.
Product teams in corporations
Large companies can use growth marketing within individual product teams when there is a need to enhance process efficiency or improve user experience. For this:
- A/B tests of interfaces and usage scenarios are conducted;
- data is analyzed to identify weak points;
- specific improvements that can impact conversion and the company's overall strategy are made.
Agencies and consulting teams
Growth hacking is also used in agencies that are expected to deliver quick results with limited budgets. It allows testing hypotheses for clients without large investments and finding successful promotional channels. At the same time, effectiveness is confirmed by numbers and analytics rather than just expert opinions.
Risks and limitations of growth hacking
Focus on local improvements
Constantly optimizing small details (buttons, texts, banners) can improve metrics but often only on a local scale. For a major breakthrough, companies sometimes need to take bigger steps, such as entering a new market, changing the product presentation, or launching a fundamentally new product.
Low data volume
If traffic is low, the sample is too narrow, or there are insufficient events, statistics may become unreliable. The solution is either to increase the observation period or to launch more substantial changes so that the effect is noticeable even with a small user base.
Flaws in analytics
Errors in calculations, ignoring statistical significance, or choosing an inappropriate metric can lead the team to false-positive conclusions. Scaling these can lead to wasted time and budget, as well as slow product development.
Ignoring strategy
Growth hacking does not replace a comprehensive marketing strategy. It provides important data about hypotheses, but the long-term direction must be set separately. If the focus is solely on tactical experiments, the overall picture of product development may be overlooked. It is crucial to maintain a balance between rapid tests and strategic planning.
Conclusion
Growth hacking demonstrates that a company's growth can also be built on experiments and a flexible approach. It teaches how to seek growth opportunities within the product, discard what is unnecessary, and focus on what truly delivers results. Even failed hypotheses can turn into a source of valuable knowledge, and successful findings can form the basis for scaling.
