Behind every explosion in users and sales is a catalyst. Although your days of high school chemistry may be far behind you, the central concept of a substance that speeds a reaction – a catalyst – is integral in understanding how to increase your company’s growth rate. For many companies, growth hacking can be that catalyst.
Growth hacking’s creative approach to marketing, as well as its low-cost nature, can make it a great process for businesses that are hoping to attract more customers and leads. It might best be defined as an approach of breaking down your business into modules and seeing if you can achieve “quick wins.” Each tactic might only increase your revenue by 1-5%. However, do a similar improvement 25 times that successively nets you 5% revenue growth each time, and the end result will be a tripling of revenue.
Learning how to string together quick wins has been a tremendous help for my company, Varsity Tutors, and along the way, we’ve learned our lessons and continually honed our approach. Here are two pieces of advice applicable to businesses of almost any size:
1. Implement scalable systems that utilize feedback loops
Establishing a feedback loop is simply the first step in building a growing pipeline of leads and customers. The next step is implementing effective systems that do impact your numbers. These systems draw on two principles:
A. Remove all obstacles to sharing
In mathematics, there is a classical wheat and chessboard (or rice and chessboard) problem. You start with one grain of rice in one corner square of the chessboard, and then place two grains of rice on the next square – and then four grains of rice on the next square, and then eight, and so forth. This straightforward illustration lets you begin to truly grasp the power of referrals. If one (1) person tells two (2) acquaintances about your company, those two referrals can reach four (4) more individuals. The effect continues to multiply, until you reach the solution to the chessboard problem, 2^63, which would be the number of grains of rice on the last square. (This number is approximately equal to 18 followed by 18 zeros.)
What does this all mean? In addition to sustaining your current relationships with customers, aim to make it as easy as possible for them to tell their co-workers, family, friends, etc. about your products and services. You can use your existing networks (i.e. email newsletters and Facebook), as well as any other social media platforms that your clients frequent (LinkedIn, Twitter, etc.). Having a brand presence on multiple social networks makes it easier for customers to share your company’s posts, photos, and other content that you distribute. The easier it is for your clients to refer your brand, and the more you prompt them to do so, the sooner you can draw on the power of networking and watch your lead pipeline grow like the grains of rice on that chessboard. Sales and marketing channels that were not previously profitable will become viable if you apply a referral rate onto each customer, effectively decreasing your customer acquisition cost per user.