What is growth hacking? | Product management #25

Introduction

Growth hacking is a strategy that focuses on rapid growth in the number of users or customers. Initially, the term was mainly used for startups that needed to grow their user base with limited budgets quickly. Now, it is applied in various contexts, particularly in digital product management.

Growth hacking definition

Growth hacking is an experimental process that involves rapid testing and iteration of various, often innovative marketing tactics to find the most effective ways to increase the number of users or customers.

The term was coined in 2010 by Sean Ellis, the founder and CEO of GrowthHackers. Ellis created the GrowthHackers platform intending to create a community that could share ideas and strategies related to growth hacking. The goal was to build a place where marketers and product managers could learn from each other and collaborate on innovative solutions.

Growth product managers vs. growth hackers

Although growth hackers and product managers may work towards similar goals, there are key differences between these roles. Growth hackers focus on rapid growth. To achieve it, they often sacrifice other aspects of product development, even as important as:

• profitability,
• investment security,
• LTV (Customer Lifetime Value), i.e., the total revenue a
customer is expected to generate over the entire duration of their relationship with the company.

On the other hand, product managers have a more balanced approach. They tend to concentrate on:

• increasing LTV,
• building a product value, and
• retaining customers by building trust and loyalty.

For instance, a growth hacker may decide to implement an aggressive marketing campaign to increase the user base. In contrast, a growth product manager focuses on improving user experience to boost retention and LTV.

How can digital product managers become growth hackers?

Digital product managers can expand their skills with techniques used by growth hackers, developing expertise and knowledge in key areas such as:

• data analysis – understanding and interpreting data is the key to making wiser high-risk decisions,
• building and implementing aggressive product strategies – including setting OKRs,
• A/B testing – allows you to compare two versions of a digital product to see which works better,
• viral marketing – techniques that encourage users to share and socially promote the product,
• conversion rate optimization – the process of improving a website or a mobile app to increase the percentage of users who perform a desired action.

What is a growth hacker?

A growth-focused product manager, or growth product manager, is responsible for the company’s growth through the products it builds. A growth product manager works throughout the product life cycle to conduct experiments and interpret the results to improve the product. For example, a growth product manager might run an A/B test on two different product features to see which one attracts and retains users more effectively. But what is the role of the growth hacker at each stage of the product lifecycle?

How does growth hacking affect various stages of the digital product lifecycle?

Growth hacking techniques can be applied at different stages of the digital product lifecycle. So let’s go through them one by one to look at which ones might work for your product:

• ideation stage – right at the ideation stage, and then at the prototype development and testing stage growth hackers can run A/B tests on various initial versions of the product to see which one test users like better.
• development – working with an MVP, or a minimum viable product, can be the object of interesting experiments with expanding brand awareness,
• product launch – growth hackers can use viral marketing techniques to quickly increase brand awareness and attract users as early as in the MMP phase,
• growth – the growth phase, from which growth hackers have taken their name, is the most natural time for them to act. Here, they can analyze the data of a rapidly growing group of users to understand what features or aspects of the product are most appealing to them and focus on their improvement,
• maturity – in this phase growth hackers usually look for new development directions and test experimental solutions to set sail for new horizons for a well-functioning product in the market.

The future of growth hacking in product management

As technology continues to progress and customers’ expectations change, the role of growth hacking in digital product management is evolving rapidly. For example, artificial intelligence and machine learning can offer new opportunities for growth hackers, enabling them to predict user behavior and automate growth hacking processes. Particularly promising is the ability to analyze large amounts of data, as well as use artificial intelligence to analyze unusual patterns that allow for innovation and the creation of disruptive technologies.

Summary

Growth hacking is a powerful tool that digital product managers can use to speed up the development of their products. Although it requires some skill and knowledge, the benefits can be significant. Keep in mind, however, that growth hacking is not a magic pill – it’s an ongoing process of experimentation, learning, and adjustment. A process that as often as spectacular successes yields… meager results. Especially when it comes to maintaining long-term relationships with customers.

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