At the intersection of marketing and data is an opportunity for ecommerce businesses to thrive, without the need to rely on Mad Men-style promotion.
Growth hacking is a marketing and business philosophy that brings a coder’s sensibilities together with open-minded marketing creativity to help business get more customers and more money.
The Rise of Growth Hacking
Serial entrepreneur Sean Ellis, CEO of Qualaroo, coined the phrase “Growth Hacker” to describe “a person whose true north is growth. Everything they do is scrutinized by its potential impact on scalable growth.”
Later, writer and entrepreneur Andrew Chen expanded, if you will, the definition.
“Growth hackers,” Chen wrote, “are a hybrid of marketer and coder, one who looks at the traditional question of ‘How do I get customers for my product?’ and answers with A/B tests, landing pages, viral factor, email deliverability, and Open Graph. On top of this, they layer the discipline of direct marketing, with its emphasis on quantitative measurement, scenario modeling via spreadsheets, and a lot of database queries.
While the terms “growth hacker” and “growth hacking” are fairly recent, the principles that guide growth hackers are not entirely new. These principles are also not some sort of marketing treasure map that anyone can blindly follow to success. Rather growth hacking principles, applied in workmanlike fashion over a fairly significant amount of time, can help business owners and marketers grow revenue in the face of limited resources.
Principle No. 1: Grow
There are six mantras for business growth, according to Lauren Perkins, CEO of digital marketing firm Perk Consulting, including “get your head in the game,” “narrow your objectives,” “steady your reactions,” “know and stick to your moral compass,” “perception is king,” and “get your fight on.”
Perkins’ mantra list rightly makes business growth sound something like a struggle. Growth in the ecommerce context is a conflict. Your new customers are some other retailer’s lost customers. Your revenue growth is some other business’ revenue decline.
To be a growth hacker you’ll have to be ready to fight.
Principle No. 2: Be the Quality Product
Most often growth hacking is applied to technology and software startups like Pinterest, Dropbox, and Instagram. In each of these examples, the company and the product are difficult to distinguish. It is not like one thinks about Pinterest the company versus Pinterest the product. So growth hackers at these companies could focus on promoting a single, user-pleasing product, if you will.
Ecommerce businesses need to also think of their overall operation as a product and ensure that it is high quality.
Consider it this way, if your ecommerce business is just another bland outlet for the same commodity products that a customer could buy at a dozen other online stores and big-box locations, you can only market on things like price and deliverability.
However, when an ecommerce operation realizes that it is the product, it is primed for growth. You are not only about what you sell, but also about the shopping experience you provide.
Zappos, as an example, isn’t just another place to buy shoes online. It is a customer-worshipping enterprise bent on making shoppers happy, regardless of the product sold or bought.
Position your ecommerce business as a quality product shoppers will want to experience.
Principle No. 3: Employ the Scientific Method
The scientific method is a procedure for discovering truth. It begins with a question; relies on systematic observation and research to construct a reasonable hypothesis; invents tests and experiments to collect practical data relative to the hypothesis; and analyzes the collected data to draw a meaningful conclusion.
In the growth hacking context, this principle implies at least two things.
First, every action must begin with a purpose (answering a question). A growth hacker doesn’t run out and start tying tactics like search engine optimization or pay-per-click advertising just because everyone else is doing those things. Rather the growth hacker starts with a question like “how do I get more site traffic?” or “how do I get more email subscribers.”
With this question as a starting place, the growth hacker seeks an answer.
Second, employing the scientific method means that there will be testing, measurement, analysis, and iteration. The growth hacker must experiment, collect data from the experiment, decided what the experiment showed, and renew and improve the hypothesis before starting the procedure over again.
Use this approach to ecommerce marketing and you won’t be guessing, you’ll be answering growth-related questions.
Principle No. 4: Focus on Customers
Paul Graham, a venture capitalist, software developer, and partner at Y Combinator (he also founded the Viaweb ecommerce platform in 1995 which became Yahoo! Store in 1998) sums up business this way: “Make stuff people want.”
This focus is not just about asking consumers what they want, but it is also about listening. As much as possible, let consumers decide how your products are selected, how they interact with your online store, and even how they pay.
Instead of ordering the products you think customers will like, consider asking them on Pinterest or Facebook which products they like best and how much they would pay.
Principle No. 5: Be Resilient
Almost by definition, growth hacking requires small failures on the road to success. Remember, you will be experimenting with everything from the items you sell to how you promote those products. Not every hypothesis will be spot on.
Don’t give up.