How are start-ups different from traditional businesses?
- Bohdan Lytvyn
- December 21, 2024
- 09:39 pm
Which of the growth hack steps is the most important from the strategy point of view?
Metric is the core of strategy. In a certain sense, metric is a strategy itself. We - at Nertis agency - make it extraordinary simple:
- What is the strategy?
- How to measure it very simply?
As Paul Graham said in one of his essays, “A startup is a company designed to grow fast. Being newly founded does not in itself make a company a startup. Nor is it necessary for a startup to work on technology, or take venture funding, or have some sort of "exit." The only essential thing is growth. Everything else we associate with startups follows from growth”.
Startup mentality embraces four main things or values.
How are you going to grow?
SEO? Advertising? Content marketing? The only true answer to this question is to confirm that you’ve committed to an agile growth process. Your customer acquisition plan should evolve as you grow.
“Startup growth happens in spurts. Initially, growth is usually slow. Then, it spikes as a useful traction channel is unlocked. Eventually it flattens out again as a channel gets saturated and becomes less effective. Then, you unlock another strategy and you get another spike.”
- from Ryan Gum.
‘Growth Hacks’ are strategy and tactics. ‘Growth’ is a process.
When you first venture into customer acquisition, you probably start off by trying random tactics. After experimenting with a few of these ideas you realize you’re probably not making much of an impact. You can’t randomly try different tactics and expect up-and-to-the-right success; you need a strategy behind them.
So you put together a plan of attack, and you start organizing your efforts into a spreadsheet and track your metrics. And then you think … “I just ran a Facebook Ad campaign for 2 weeks… now what do I do?”
Only then do you realize you need a goal driven process behind it. Once you understand that, it all starts to make sense.
Growth hack steps
Online marketing is all about how to acquire and retain customers. And how to vendor to them just what they require. A growth hack starts with the following steps: define your ideal customer, your goals, your customer acquisition funnel, and your metrics.
1. Define your ideal customer
Everything starts with identifying your ideal customer profile: from finding who they are and how to reach them, to how to talk and sell to them. It is often called user segmentation in the Marketing slang.
Attracting the right type of customers makes everything else that much easier, so figure out what ‘right’ means for you. Lincoln Murphy has put together a comprehensive framework to create your ideal customer profile.
2. Define your goals
Goals shape everything from your strategies, to your tactics and daily focus. Your goals might be monetary, user count, or activity based goals. For customer acquisition, your goal might be to get more visitors, convert more visitors into leads, or convert more leads into paying customers.
Determine goals, milestones and priorities. These three tasks make people more productive. Productivity makes better use of your time. Time is directly related to growth. Growth is why we’re here. Therefore, growth is goals, milestones and priorities.
3. Define your acquisition funnel
Break down the journey your customers must take to achieve a goal that you set (conversion).
This helps you identify where your funnel might be leaky (let customers out), and as a result, identify the biggest opportunities for quick wins. Think of your entire acquisition funnel as lots of smaller funnels or funnel fragments.
For example, if you’re planning on running multiple landing pages and you’re sending traffic to them from SEO, content marketing and paid acquisition, each of those channels are their own funnel to be measured individually.
4. Know your metrics
Figuring out your key business metrics is core to the plan.
Without knowing your key metrics, you might know “I need to increase traffic” but you aren’t sure what levels you need to get to. When you do know your metrics, you know what numbers you need to hit, and that guides what strategies you’ll focus on to have the best chance of hitting them.
But if you’re just starting out, chances are you don’t know these numbers, and that’s fine too.
Use external sources as a rule of thumb to aim for. If you’re running a SaaS model, take Groove’s SaaS Conversion Survey results on key metrics from 1500 responses as a benchmark:
5. Track (almost) everything from day one
The best customer acquisition plans have measurement strategies organized in advance. Most startups don’t begin this process early enough, and they pay for it later.
Even if you don’t use the data right away, it will become invaluable when you have the time to dig into it, or start new campaigns in the future and want to see if they have an impact.
It doesn’t matter if you use a paid analytics tool, Google Analytics – what matters the most is that you start to build the history as early as possible.
How do you know what you need to track? While you can measure just about anything, it’s not a good idea to measure everything:
Begin with your goals in mind
Prioritise when and what to measure based on the answers you need to make decisions that will help you grow.
Measure against your sales funnel
Make sure you’re tracking all the steps in your funnel.
Track to validate experiments
Before you run any marketing campaign, be sure you know exactly how you will measure your success and track those metrics before you start.
Reverse engineer your growth
Now that you know your goals, your metrics and have some user segments insights, you can combine these with the growth process to complete your plan.
Using your longer-term goals and your current metrics
you can reverse engineer them to figure out where you should focus your efforts. Look for bottlenecks in your metrics: is your visitor to trial rate low? Is your churn rate high? Do you need to drive traffic?
If you want to improve a certain metric
figure out what part of your sales funnel will most impact that metric. Then brainstorm on that area with ideas to test, there could be a million ways to improve it.
Start by asking questions
To reach our goal, what do we need to improve right now? How can we improve it? If your traffic is low, focus on tactics that will increase visitors. If your visit to free account rate is low, focus on tactics that will improve signups.
This is how you generate tactics to execute on
But this time, these tactics are no longer random, they are specific, implement with purpose to drive progress towards your high-level goals and milestones.