• Patrick Burge

How can SMEs use growth hacking to supercharge their Covid-19 recovery?

In 1997 the largest companies in the world were General Electric, Royal Dutch Shell, the Coca-Cola Company, and ExxonMobil. Today none of them are near the top five spots, replaced by Apple, Google, Microsoft, Amazon, and Facebook. The rise of tech has enabled these companies’ growth, but another reason for their scale is the tactics and strategies that these new behemoths used, often called growth hacking. However, growth hacking can happen outside of the tech industry and in much smaller companies. And at the moment it is even more important to understand how SMEs can use growth hacking to supercharge their Covid-19 recovery.


The commonality in all this is a willingness to embrace uncertainty and risk while prioritising speed over efficiency.


But what is Growth hacking?


The term was coined by Sean Ellis in 2010, after using it to ignite breakout growth for early stage start-ups, such as Dropbox, LogMeIn, and Eventbrite, who needed massive growth within a short time, but on very tight budgets.


A growth hack is a clever kind of shortcut that can get you better results, faster; often using modern tools and technology to put hacks into practice. Growth hacking strategies generally aim to increase the customer or user base as quickly as possible while keeping the spend to a minimum.


It is all about taking fast steps to improve a ‘North Star’ metric. A metric that translates actions into business growth. This can happen by finding new ways to reduce customer acquisition costs, to build a better first experience, to create new revenue streams, to get users to return, and to create brand promoters. And there are leaves you can take out of the big boys’ books to implement in much smaller businesses.


What can we take from the growth hacking of tech start-ups and use in the non-tech SME business world?


Let’s be clear, growth hacking is not just for tech businesses, or just about your sales and marketing people. The goal is to involve people across a business, maybe in a working party, to rapidly test ideas that can improve the business. You want cross fertilised ideas, replicating and scaling the ideas that work, modifying fast or abandoning the ones that do not work before investing a lot of resources. It can be applied to new product innovation via well-known innovation and evolution methodologies such as Scrum and Agile, continuous improvement of products, and is equally useful to everyone from product developers, to engineers, designers, salespeople, and managers.


It is useful to highlight examples, mostly from within customer acquisition, by now well-known brands, bearing in mind that they were not always well-known brands.


What is an example of growth hacking?


Here are a few, taken from companies that were often small at the time, but are now globally recognised brands. Calling growth hacking ‘strategic’ might be doing it a disservice. Tactic or strategy, the thing in common is speed, ambition, embracing risk, and not always worrying too much about something being perfect before taking action to execute it.


Finding a beachhead. In their book, ‘Blitzscaling’ Reid Hoffman and Chris Yeh explain how LinkedIn's initial strategy consisted of focusing on a sector they knew, tech, in an area they knew, Silicon Valley. They used this familiarity to test the concept of business networking. Once it worked, the company was able to expand to other sectors and areas. Learnings from this are all about working out where you can spend your limited resources best at first, and what that might lead to. The beachhead analogy is all about landing your marketing on a beachhead audience from where you can expand or invade other customer segments rather than landing your marketing on an island from where it is harder to get to another market segment.


Scarcity. The bank Monzo and the start-up lender Plend, both use this technique based on the social psychology principle that no one likes a queue jumper, unless it’s us. Although no one likes a queue jumper we generally like knowing we are ahead of the people behind us. Seeing how many people are in the queue ahead and behind you, and offering a queue jump if you invite other people to sign up drives growth in signup numbers.


FOMO. This is another type of scarcity marketing. When Gmail launched, it used an invite-only system to drive growth, and it worked. The fear of missing out [FOMO] is a powerful marketing technique if you have a defined deeply understood customer profile and a product people really want. At the time, Gmail offered great email search capabilities, including many of the features we now common in most email services.


Groupon also used FOMO combined with urgency to great success, working on the principle that you need enough people to buy into a deal in order for the deal to go ahead. If you don’t share, then everyone potentially misses out, because the deal will expire. However, be aware it works both ways and this all-or-nothing approach can backfire on you if not enough customers buy-in.


Marketing channel growth hacking. Dollar Shave Club used a marketing channel that was well known but not used much by marketers. At the time YouTube was known for connecting video creators and consumers but was at an early stage in terms of being used as a marketing channel. Dollar Shave Club used a quirky video to promote the service of sending people new razor blades monthly for just $1. The video went viral, quickly gaining 19 million views and making the company a household name. Two years after launch, Dollar Shave Club had made more than $20 million in revenue, achieved partly by using a medium that meant they could get an audience incredibly cheaply.


Learnings from this in my view are all around the opportunities, unknowns, testing, and risks of being an early adopter of a new marketing channel; if you want to find out more about how YouTube can help you, I would recommend the book ‘Bullsh*T, Privacy, Toasters, Videos And YouTube Marketing’ by Simon Young and Andy Price.


Building a community. Consider Airbnb, the more that people offer their properties on the company’s website, the more it becomes the go-to marketplace for guests seeking homestays. And the more that guests flock to the marketplace, the more people want to offer their properties on it. Network effects create a positive feedback loop. If you really know the profile of your customer at a deep and emotional level, this can be a powerful strategy.


Spreading the product and spreading the word. Distribution is also a growth hack, distributing a product or service on a massive scale. Netflix tapped into an existing distribution partner when it launched its original rent-a-DVD-by-mail service by teaming up with the US Postal service who had the distribution network already.. Amazon takes advantage of it too, striking a deal with USPS that allows it to ship small packages for only about $1 each. The key to this is that you need to understand what benefit this relationship brings to the partner, turning a supplier negotiation into a partnership is all about walking in the other person’s shoes.


Incentivised distribution growth also works. The early days of PayPal provides an example. Every time a buyer wanted to send a payment via PayPal, the seller had to set up a PayPal account to receive it. This led to more users of the service, this is viral distribution. But PayPal also incentivised the distribution, actively providing users with an incentive to spread its service by getting a friend to sign up, rewarding both you and your friend with $10. Combining these two varieties of distribution, PayPal was able to grow at an astounding 7% per day. Then the next huge breakthrough happened when it became the go-to payment method on eBay.


Being a place that people come to. A platform or a marketplace not only brings buyers and sellers together but also lets them set their own prices through the market forces of supply and demand, just as Airbnb and eBay do. The marketplace owner sits in the middle, making money from all sides. Again, this is largely about understanding your customer segments.


Growth strategy hacking. There are many ways to grow a business, but many of them need great financial resources and put a significant strain on the people, cash flow, and other resources in the business. Often, if a company wants to expand you would not think of franchising, unless you are in an industry such as the restaurant sector where franchising is common. But why not? It is a low-risk, low expenditure way to grow a business. It also gets you a highly motivated set of managers, called franchisees, who work for themselves but work with you, strengthening and growing your brand. Learnings from this include understanding that done correctly, you will keep great control over your brand and your business, but the legalities and positioning of the business involved in franchising will require expert advice. It is also interesting to understand that innovation often comes from franchisees. It was a franchisee, not McDonalds, who created the Big Mac.


Would you like fries with that? Train and educate your staff to cross-sell in the same way as a well-known burger bar chain trained their staff to ask a simple question that results in a huge uplift in cross selling and up selling revenue. One domestic electrician business I know simply trains all their electricians to put a business card through the letterbox of two neighbouring properties when they are visiting a customer. Newey and Eyre, the electrical trade counter business, turned the business around by using the same technique as the burger bar chain.


Learnings for all these growth hacking techniques are that you take adapt what has worked elsewhere and use it for your own devices.


How might you find the best growth hack for your business?


So imagine you have been inspired to go growth hacking. You have pulled your team together and just had an incredibly productive brainstorming session where you collectively came up with dozens of ideas. While you would usually find yourself stuck in analysis paralysis and unable to choose which idea to go ahead with, you have decided to take a new approach using growth hacking methodologies. I applaud you. Remember that you will not always succeed, but at least you might fail fast and fail cheaply.


This is what Health Catalyst did. They used a portfolio approach to try 12 ideas and whittled them down to two viable projects. One of those two projects was then turned into a new product and marketing growth engine, which now generates 5%-8% of their annual revenue.


If you want some help, well, you know where we are. We run a growth hacking webinar as part of the Government supported Fit for Business Programme, or please do just get in touch.

And just so you know, writing this blog is part of our growth hacking strategy at Smorgasbord.




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Patrick Burge is a specialist in business growth having helped build online and offline businesses in many sectors including tech start-ups, apparel, sport, fitness, health, printing, retail, coaching, and consulting. Apart from specialising in the brand licensing and franchising sector, he has also advised numerous businesses on getting their strategy and funding in place as an advisor and Delivery Partner CEO on The Government Startup Loan Scheme. He can be contacted at patrick@smorgasbord.tech or patrick@limelicensinggroup.co.uk

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