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Growth Hacking: What Lean Startup Principles Bring to Marketing

Growth Hacking: What Lean Startup Principles Bring to Marketing

A talk prepared for Bend WebCAM, a creativity and marketing conference in Bend, Oregon. Presented on October 13, 2014

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The Difference Engine

October 13, 2014
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Transcript

  1. Hi, I’m  @farrahbostic

  2. None
  3. None
  4. Growth Hacking! What Lean Startup Principles Bring to Marketing

  5. 3 things What is Lean & why should it matter

    to marketers? What’s all that got to do with “growth hacking”? How do we do it?
  6. #1

  7. What is ‘lean’?

  8. It’s a reaction to waste, superstition, and bias.

  9. what is the purpose of  a lean organization? 1.

    To specify customer value. 2. To identify & implement the actions that create value. 3. To remove anything that doesn’t create value. 4. To analyze the results (and repeat).
  10. Requirements Design Implementation Testing Maintenance The traditional software 
 development

    model
  11. The problem with waterfall Full management teams Assuming the customer

    is known Assuming the features are known Assuming growth happens by execution High burn rate Swinging for the fences The results for start-ups:
  12. Principles of Lean Start-ups Assume customer and features are unknowns

    Continuous customer interaction Revenue goals from day one No scaling until revenue Low burn by design, not crisis
  13. iteration is for learning, empathy & intuition

  14. startups do experiments!! Build Measure Learn

  15. “A start-up is designed to grow fast” Which begs the

    question, can larger, more established companies grow fast?
  16. why should this matter to marketers?

  17. i come from advertising.

  18. creative We expect this guy to be a genius. 


    Every time.
  19. None
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  21. http://www.rswus.com/survey/2011-survey-clients-look-ahead-at-agencies how marketers choose their partners

  22. why marketers fire their partners Bad strategy, bad creative, bad

    service. http://www.rswus.com/survey/2011-survey-clients-look-ahead-at-agencies
  23. we have a product-market fit problem http://www.rswus.com/images_and_uploads/2014-RSWUS-Agency-Client-New-Business-Report1.pdf

  24. how (a lot of) 
 marketing people deal with data

  25. marketers want roi, 
 but avoid defining what that is.

    You’d think it might be cost per acquisition, or customer lifetime value, or revenue. But often, KPIs are less about business results, and more about media performance.
  26. exhibit A: 
 “passion” is a kpi. http://www.cmo.com/content/cmo-com/home/articles/2013/9/26/KPIs_CWTK.html

  27. agencies hate testing. ! and marketers test the wrong stuff.

  28. http://apgsweden.typepad.com/apgsweden/files/TESTINGTODESTRUCTION.PDF

  29. IT’S EASY TO FOCUS ON VANITY METRICS “Numbers that make

    us look good but don’t really help make decisions.” 
 Eric Ries, 
 The Lean Start-up
  30. marketers rely heavily on vanity metrics * *

  31. this is not a new problem. “What do you want

    from me? Fine writing? Or do you want to see the goddamned sales curve stop moving down and start moving up?” 
 - Rosser Reeves
  32. thinking like this 
 shows how marketing 
 is not

    like growth hacking. http://smithery.co/making/make-things-people-want-or-make-people-want-things-my-slides-from-idejax/
  33. the product trap

  34. building something people want isn’t enough.

  35. Build something people want, but… Sometimes there’s no market. Sometimes

    the market is too small. Sometimes the market is too hard to reach. Sometimes the market is too competitive.
  36. “Poor distribution - not product - is the number one

    cause of failure.” — Peter Thiel
  37. true story.

  38. the moral of the story… Most failed startups had a

    product. But ALL failed startups didn’t have enough customers. Same goes for big companies, too.
  39. Principles of Lean marketing Assume marketing strategies are hypotheses to

    be tested. ! Continuous customer interaction - with both client & consumer. ! Establish clear goals for marketing from day one. ! Start simple, iterate on successes and learn from failures. ! Create right-sized, integrated teams, 
 and use the right resources & tools as they are needed. ! Keep score with clients, vendors & partners.
  40. #2

  41. what is growth hacking?

  42. Growth hacking is a marketing technique developed by technology startups

    which uses creativity, analytical thinking, and social metrics to sell products and gain exposure. It can be seen as part of the online marketing ecosystem, as in many cases growth hackers are simply good at using techniques such as search engine optimization, website analytics, content marketing and A/B testing which are already mainstream. Growth hackers focus on low-cost and innovative alternatives to traditional marketing, e.g. utilizing social media and viral marketing instead of buying advertising through more traditional media such as radio, newspaper, and television. Growth hacking is particularly important for startups, as it allows for a "lean" launch that focuses on "growth first, budgets second."
  43. growth hacking is hawt

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  46. Growth hacking is about distributing the product, 
 not marketing

    the brand.
  47. startups look for evidence 
 of customer demand Startups (should)

    focus on how many people are using and/or paying for their product. ! Marketers often assume demand already exists 
 - and focus instead on preference, loyalty, enthusiasm, participation, etc.
  48. growth hackers experiment with channels and messages Like many marketers,

    some founders spend most of their effort on channels they are familiar with, or think they should be using. Which means marketers in a sector tend to use the same channels & methods.
  49. the law of shitty click throughs “Over time, all marketing

    strategies result in shitty click- through rates.” 
 - Andrew Chen That is, all marketing channels eventually become saturated.
  50. don’t go chasing customers. Growth hackers start by asking… Does

    this channel have enough users to be meaningful?
  51. true story.

  52. facebook • youtube • linkedin • instagram • slideshare •

    Pinterest • snapchat • tinder • oculus rift • buzzfeed • upworthy • twitch • soundcloud • smart tv • yahoo! • gmail • seo • sem • adwords • atlas • twitter
  53. I blame hockey-sticks

  54. creative and this guy.

  55. he is the mascot for all the things we think

    are true about marketing 
 because tradition.
  56. None
  57. read this book.

  58. Buyer behavior varies.

  59. Your customers are pretty much the same as your competitors’

    customers.
  60. The lower your market share, the less ‘loyal’ your customers.

  61. Loyalty is mostly habit.

  62. to consumers, 
 you and the rest of the category

    are mostly indistinguishable.
  63. People know and talk about brands they use and ignore

    the rest.
  64. People like 
 what they buy (rather than buying what

    they like).
  65. so…

  66. the only thing that matters is growth.

  67. the path to growth Attain Sustain Gain Make something people

    want Find product/ market fit & fine-tune the product Get the product into people’s hands (aka, “scale”)!
  68. #3

  69. how do we get started?

  70. growth hacking & product development can not be silo-ed.

  71. beta test ideas & products simultaneously Product Development Product Distribution

    =
  72. Why? 
 Because growth hacking gets customers, 
 and product

    keeps them.
  73. What matters is value creation CONVERSION ENGAGEMENT To your 


    BUSINESS To your 
 CUSTOMER
  74. CONVERSION = business value Acquisition - drawing people into the

    brand experience Revenue - converting visitors into customers Referral - converting customers into advocates
  75. engagement = customer value Activation - people enjoying the experience...

    Retention - enough to come back often... Referral - and recommend the experience to others
  76. so, um, yeah.
 big data.

  77. “The Data Will Tell Us What to Do”

  78. theory v. information “Who needs theory when you have so

    much information? But this is categorically the wrong attitude to take toward forecasting, especially… where the data is so noisy. Statistical inferences are much stronger when backed up by theory or at least some deeper thinking about their root causes.”
  79. How to Hypothesize

  80. What’s a hypothesis? ὑπόθεσις “to suppose” ! It’s a proposed

    explanation for something. You have to be able to test it. The simplest explanation should (usually) be the best. It should apply to more than one instance of the thing happening. It should help explain other things in the future. It should fit with the evidence.
  81. The main flaw in marketing hypotheses: We’re usually focused on

    explaining the brand, 
 not understanding the customer.
  82. We should explain what creates value for customers We test

    hypotheses that: Help us make decisions Help us create value for our customers Help us develop empathy for people so deep we can anticipate solutions to problems they can’t yet express * with apologies to Arthur C. Clarke
  83. Cool story, bro.

  84. We need to understand 
 people and behavior 
 to

    make better predictions 
 and measure outcomes more effectively.
  85. how do we know if it’s working?

  86. metrics!!

  87. awesome!!

  88. metrics are awesome because… 1. Metrics reduce arguments based on

    opinion. 2. Metrics give you answers about what really works. 3. Metrics show you where you’re strong. 4. Metrics allow you to test anything you want. 5. Clients love metrics. http://bokardo.com/talks/metrics-driven-design-sxsw.pdf
  89. which metrics matter? Acquisition Activation Retention Referral revenue Users from

    channels come to site, 
 landing page, etc. Users have a successful first experience. Users re-visit multiple times. Users refer others via email, links, blogs, widgets, word of mouth, etc. Users buy, download, register, etc.
  90. What should you test for? What is the cost to

    acquire a customer? How many customers are available here? How well do they convert? How long does it take to convert?
  91. tests should be specific First, you’re testing to assess the

    potential of the strategy (the context + the content). Optimization comes later. Too often, marketers skip to optimization metrics before we’ve properly assessed the potential of the strategy.
  92. tests should be continuous & evolving A ‘law’ of growth

    hacking: Which tactics move the needle tend to evolve, 
 as your customer base evolves.
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  94. BUT WHAT DO YOU DO  WITH WHAT YOU MEASURE?

  95. FIND EVIDENCE OF CUSTOMER DESIRE ! MAKE DECISIONS ABOUT WHAT

    TO CHANGE ! LEARN WHAT TO DO NEXT ! GROW
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