SaaS growth hacking: even though it may be perceived as a buzzword, I can assure you that it is much more than that. Unfortunately, the term has been used so much in the marketing industry that it has lost its true meaning.
Many LinkedIn posts from self-proclaimed thought leaders write about concepts such as scaling quickly, failing fast, getting to IPO in 3 weeks, etc. The claims are then followed by some examples of generic marketing tactics or channels presenting them as SaaS growth hacking ideas.
So, let’s deep dive into what growth hacking should be, and how to develop a growth hacking mindset.
What is Growth Hacking?
Growth hacking is a multidisciplinary approach that involves people from various departments to achieve sustainable growth for a business. The goal of growth hacking is to find innovative, unconventional, and cost-effective ways of attracting and retaining customers.
In the article Find a Growth Hacker for Your Startup, Sean Ellis described a growth hacker as “a person whose true north is growth”. In more recent years, this type of profile was described as a T-shaped marketer.
But the ideas shared online nowadays revolve mostly around testing new channels, A/B testing within the channels, and continuously improving the processes you have in place for those channels. And people will rightfully look at this and say: ‘But that’s just good marketing!’ And that’s totally correct.
This LinkedIn post I found exemplifies this type of content that is being shared online. But again, this is not growth hacking.
SaaS Growth Hacking is much more than that. You need to have a holistic view of the whole company and the customer journey. The focus is not only on customer acquisition and rapid growth by implementing hacks or quick fixes.
The focus is on the entire customer journey, on how the company is attracting customers, how they use your product or service, what impact it has on their business, how well your company retains these clients, etc.
Key Principles of SaaS Growth Hacking
Implementing growth hacking in a SaaS business is not an easy task. It requires not only the right people to do this but also a significant cultural change within the organization.
If the company already has a traditional, process-oriented mindset it can be difficult to embrace the rapid experimentation and risk-taking associated with growth hacking.
The Growth Hacker’s Profile
A growth hacker is more than a marketer. They are a catalyst for rapid growth. So in order to do a good job in this role they need to have a blend of skills and attributes:
Data-Driven and Analytical: Growth hackers are obsessed with numbers. They rely on data to make informed decisions, generate hypotheses, and measure results. This analytical mindset allows them to spot patterns, gain insights, and suggest improvements.
Experimentation and Iteration Focused: A growth hacker is always looking to try new things. They understand that most experiments will fail, but they embrace this as a learning opportunity. The iterative approach allows them to become smarter, work better, and refine their tactics to achieve breakthrough results.
Customer-centric: At the heart of growth hacking there is a deep understanding of the customers. Growth hackers need to build strong customer empathy, put themselves in the user’s shoes, and identify the issues customers might face throughout the bowtie funnel.
Entrepreneurial Spirit: Growth hackers need to have a start-up mentality and know how to take calculated risks. They are self-starters and ambitious people who always seek new opportunities to make a greater impact.
Resourceful and Creative: Given the goal of fast experimentation, growth hackers usually find the quickest and least resource-intensive way of achieving results. Being creative and thinking outside the box is one of the most important traits, especially if working with limited budgets.
The Growth Hacking Process
Before you even begin the fun part and start experimenting, you will need to know what should you go after. For this, you will need to have something called the North Star Metric.
The North Star Metric will allow you to make meetings simpler, document less, and will allow your teams to focus on one common goal.
This metric should be the direction you or your business wants to move towards. However, keep in mind that it must be something that leads to revenue, reflects the impact it brings to the customers, and can be easily measurable.
Here are some examples of B2B SaaS North Star Metrics:
- Number of trial accounts with X activity in their first week
- Percentage of accounts retained for more than X years/months
- Number of customer interactions
- Number of teams active in the account
One important thing to note is that revenue is not a good option. The North Star metric should be focused on the customers and the value you provide to them. Revenue is the result of that value.
After the direction is set, it is time to choose the team’s focus. And this comes in the form of the One Metric That Matters (OMTM). This will help your teams concentrate on one thing at a time and work on improving it.
The OMTM is not time-bound. You can have multiple at the same time. But you need to have a maximum of one for a funnel stage. Once you have depleted the experiment ideas or the focus shifts from that metric, you can replace it with a new OMTM.
The growth hacking process is a cyclical process that revolves around constant experimentation and optimization. So let’s break it down into core stages.
- Ideation and Hypothesis Generation: To gain inspiration for your experiments you can look at the historical data, organize brainstorms, or do market research. Based on this information you can spot ways to improve some of the efforts or processes in the company and formulate hypotheses.
- Prioritization and Experimentation: You will find that there will be many ideas floating around, but you will have to decide on which ones should be tested first. For this, you will have to use a ranking system and prioritize them. One of the most common scoring frameworks is ICE which stands for Impact. Confidence, and Ease of implementation. The ideas with the highest scores will be the first ones tested.
- Measurement and Analysis: data is the bread and butter of any growth hacker. Every experiment generates data that needs to be carefully analyzed to get the experiment’s conclusion. If an experiment is successful, it can go through to the next step. If not, which will be the majority of them, then you need to figure out why it did not work and learn from it.
- Optimization and Scaling: Whenever an experiment is successful it will need to be implemented. And because growth hackers usually look for the simplest solution of testing, it might not be the most elegant. So, the final implementation needs to be polished and rolled out at scale.
Practical steps to SaaS growth hacking
If you work or own a SaaS company and you want to assemble a team in your company, you need to understand the requirements.
Give the team room to experiment
Many people think about growth hacking as something belonging to one team or a specific department, but that’s not the case. A growth hacking team is cross-departmental, involving people with different skills and specialties ranging from graphic design, marketing, and data analytics to programming and UX/UI design.
This team should have the space and resources to do their work: alignment with all the stakeholders, access to the right tools, the right data, etc.
Know your customers
But you should also know where to start: and that is with your customers. If you don’t have the data yet, this is the best starting point. You need to know what makes your audience tick. And a very simple method to extract this information is through a survey.
You can set up a simple one-question survey:
How would you feel if you could no longer use this product?
- very disappointed
- somewhat disappointed
- not disappointed
Then, you take the people who reply ‘very disappointed’ and talk to them. Find out:
- what is the key benefit of the product?
- how would they recommend it?
- how would you describe it to people when you recommend it?
- what were you using before this product?
- if this product wouldn’t be available what would you use instead?
Study the data
You will have to study both the soft and the hard data, so the qualitative and quantitative data.
Because the quantitative data will tell you if an experiment worked or not, and the qualitative data will tell you the reason why it did.
Create psychological safety
Many people have an inherent fear of failing. And in companies, this will translate into being hesitant to take risks as the results might have negative consequences. But if you cultivate the right culture, and present failure as an opportunity to learn, things might just change.
Everyone on the team (and in the company, I may add) should be comfortable with testing ideas without being fearful of negative results. This way, everyone gets more shit done in the end.
Make sure the team has the right skills
If the growth hacking team comes up with a lot of experiment ideas, but can’t implement them, there might be an issue with the skill sets or tools they have at their disposal.
So keep in mind that they will need constant training to keep their knowledge up to date and to improve their skills. Additionally, you want to expand your tool stack to close the gap for some of the missing skills (e.g. no code landing page builders).
