Transcript of Why Everybody is Growth Hacking

Transcript of Why Everybody is Growth Hacking

Marketing traditionally is very acquisition focused but growth hacking takes that and takes really all steps of the customer journey – increasing engagement, even revenue experiments but really running experiments across the customer journey to grow customers and ultimately revenue. That’s the first place, I always start just understanding – does somebody consider this product a must have and if so, how are they using and what’s the benefit they’re getting from it and how can I build my customer acquisition and conversion engine to get people to that experience. Sean Ellis: It is and that’s a lot of what I used to do in shorter term in BP marketing roles was just – you find products that you have some passionate customers and really just try to tap into what makes a passionate customer and how do we build an engine of growth around, getting more people to that great experience, get more the right people to that great experience. Sean Ellis: Without must have customer value. John Jantsch: Yeah and that’s a really interesting point because I like the times when people start talking about measurement which unfortunately a lot of marketers don’t do at all. John Jantsch: Yeah. John Jantsch: So how do you then take growth hacking and say, okay that’s going to be marketing, it’s going to be in sales, it’s going to be in customer service, it’s going to be in engineering. Sean Ellis: Yeah and so do you mean just on channels or do you mean on both channels and within that user journey? John Jantsch: Great work and what I love about this is we’re starting to see people who were more traditional businesses that are embracing this idea not as something that’s just for a start up product company. John Jantsch: Thanks Sean, hopefully we’ll see out there.

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John Jantsch: Growth hacking – it’s not just for a little startup SaaS companies anymore, nope. Everybody’s doing it. We’re going to talk to Sean Ellis author of “Hacking Growth” – check it out.

Hello and welcome to another episode of the Duct Tape Marketing Podcasts. This is John Jantsch and my guest today is Sean Ellis. He is the CEO and co-founder of growthhackers.com and he’s also the co-author of “Hacking Growth” – how today’s fastest growing companies drive break out success. So Sean, thanks for joining me.

Sean Ellis: Thanks John, you have me on.

John Jantsch: I think that going back about a year ago, I was on growth hackers, like an AMA or something.

Sean Ellis: I think you are.

John Jantsch: Do you do this every week?

Sean Ellis: We often did 2 of them in a week. It’s great. It’s a great opportunity for the community to ask questions of interesting people and get the learning real time you.

John Jantsch: Yeah, that was fun for me because I’m sure your community skews a little younger than my community sometimes and certainly younger in their ambitions for starting a business, so it’s kind of fun energy.

Sean Ellis: Yeah, I’ve done a few AMAs myself and you definitely get some writer’s cramp by the end of, lot of keep pounding.

John Jantsch: So let’s define the term – growth hacking. Because I think it’s probably abused and misused.

Sean Ellis: Absolutely. It’s defined about a 100 ways by a 100 difference people. But as the guy who coined the term, I think my definition maybe a little bit more, hopefully. So it’s a rapid experimentation across all customer journey. Marketing traditionally is very acquisition focused but growth hacking takes that and takes really all steps of the customer journey – increasing engagement, even revenue experiments but really running experiments across the customer journey to grow customers and ultimately revenue.

John Jantsch: That expanded, well, it’s not expanded because like you said, you created. But I think unfortunately a lot of people have a tendency to shrink that definition to being about some clever way that they trick people into subscribing or sharing their content or something that wouldn’t have happened organically.

Sean Ellis: The output of all of these experimentation as often pretty creative, it clever things but most the time what you think thing’s going to work doesn’t work and the only way to know what’s going to work is to do experiments. And the more experiments you run, the more likely you’re going to come across something that’s really game changing for your business.

John Jantsch: Let me push back a little bit from somebody who is a long time marketer. Are we really just to finding good marketing?

Sean Ellis: I think we probably are. I think you’re right. I think that unfortunately marketing for a lot of people has become primarily about customer acquisition and branding. If you think back on the 4 piece of marketing, one of them is product. But product as a means of growth, there’s something that most companies don’t put a lot of investment in and they should.

John Jantsch: Yeah, I’ve said a long time ago, I think I wrote it in my second book that the greatest source of customer acquisition is a happy customer.

Sean Ellis: Absolutely. The fastest growing company, so when I was at LogMeIn and the Dropbox. By far our leading source of customers was other customers.

John Jantsch: So with that definition or with that sort of conclusion, I suppose, I think we could then also conclude that growth hacking is for everyone.

Sean Ellis: Absolutely. I think it’s done differently in really small companies or in big companies. But people should be holistically looking at the customer journey and think about the levers of growth is being multiple areas of that journey instead of just buying another advertisement or testing another advertisement. And things you do to activate new customers are often way more powerful than just running another advertisement somewhere.

John Jantsch: And I think that unfortunately, it’s got a little bit Pigeonhole to SaaS premium models like Dropbox.

Sean Ellis: Yeah, I think part of the reason that’s Pigeonhole bears that in SaaS, it’s really clear that if you’re not experimenting across that full customer journey, you are not going to be successful because if you can’t retain a customer in SaaS, I mean, all businesses should focus on retention. But when you have a recurring revenue model where you’re getting a subscription each month, when you lose those subscriptions; if you have a 1000 customers and a 5 percent monthly turn rate, that means every month you lose 50 customers. And so if you don’t add more than 50 customers, you didn’t grow, you’re shrunk. So it’s just a little bit more obvious in SaaS but I think it does apply to all businesses. It’s just SaaS’s grabbing onto a probably faster than other areas.

John Jantsch: So if I’m that more traditional business, maybe a lot of my transactions are actually face to face across the desk, how would I unpack this idea of bringing this mindset into a business like that, where would we just start?

Sean Ellis: What you just talked about earlier, you said that customer referrals are a really important part of growth in a lot of businesses. And what drives a customer referrals? A great experience. And so I think that starting point is to understand what that experience is. To understand, first of all if you don’t have it. So some products have marketing and something that’s trying to make up for a an undifferentiated or not just very valuable customer experience. That’s the first place, I always start just understanding – does somebody consider this product a must have and if so, how are they using and what’s the benefit they’re getting from it and how can I build my customer acquisition and conversion engine to get people to that experience. So that’s the starting point, just understanding the people and the experience that they’re having.

John Jantsch: I think that is such an easy thing actually for a lot of businesses to do but it’s an afterthought so often because I interview a lot of customers of customers. It’s a process that we do to help them develop strategy. And 90% of time they don’t know what their customers actually value and think as unique and there are often surprised when we come back and say well here’s what we keep hearing. It’s such an easy thing to do.

Sean Ellis: It is and that’s a lot of what I used to do in shorter term in BP marketing roles was just – you find products that you have some passionate customers and really just try to tap into what makes a passionate customer and how do we build an engine of growth around, getting more people to that great experience, get more the right people to that great experience.

John Jantsch: Okay, this is a fill in the blank question. You can’t to growth hacking without?

Sean Ellis: Without must have customer value.

John Jantsch: You’re close, I was going to say without measurement.

Sean Ellis: That as well, part of that then becomes measuring impact on that customer value. That’s another really important part of actually building that engine is one, how do you quantify that value? It’s a pretty touchy feely thing to just say we need more value. But what the fastest growing companies like Facebook have done is that they’ve actually put a in metric on that value, a metric on the number people who experience that value. So Airbnb has done it, Uber has done it and the entire company then is optimizing their day to day activities on increasing the experience that quantified experience that leads to more sustainable growth.

John Jantsch: Yeah and that’s a really interesting point because I like the times when people start talking about measurement which unfortunately a lot of marketers don’t do at all. But you certainly have a lot of people jumping on the big data train and it’s like look at, everything we can measure. And I think quite often the real challenge is measuring what matters.

Sean Ellis: Yeah and in growth hacking in particular, there’s one metric that we refer to as the Norstar metric which is that quantification of value and once you have that metric, now you can start to think about all the other activities that you do and how they impact that metric. And through the experiments that you then start to run, if I do it this way or this way, which has the better impact on my Norstar metric? So that’s where the experiment piece comes into play.

John Jantsch: So I can hear the wheels turning in listeners right now. How do you find that thing?

Sean Ellis: How do you find the Norstar metric?

John Jantsch: Yeah.

Sean Ellis: That’s really what I was talking about, I’m first trying to find the most passionate customers and I do it through surveying personally. I ask a single survey question which has been really powerful for me which…

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