Growth hacking and growth strategy are essential concepts in today’s world of business. While they are entirely different approaches, both have proven to be quite useful in growing enterprises. As a digital marketer or online merchant, the choice of either option should be informed by what you want to achieve, duration of implementation, and budget. The interest in growth hacking, in particular, increased by 3X between 2014 and 2019.
How are these approaches different? The difference lies in three things: the results, speed of implementation, and the number of channels leveraged. On the ground, marketers are more likely to choose growth hacking even if they lack a well-defined unique selling proposition (USP.) It is why rather than slow, but steady growth of the customer base and optimal investment into all channels, the budget is spent on going viral. In the end, only short-term results are realised.
Right below in this article, we will delve deeper into these approaches to help you understand each better. We are also going to compare the two side by side, highlighting the pros and cons of each. In the end, you should be in a position to select the best option for your online store.
Growth Strategy Solves Business Problems
Logically, the definition will start us off on this one, so what is a growth strategy? It refers to a long-term plan of growing a business that requires testing various approaches, each of which factors in key performance indicators (KPIs) essential for an ecommerce venture. A business growth strategy takes all stages of the sales to funnel into account: from Awareness through to Loyalty. Perhaps, an essential thing to note is this approach relies heavily on researched statistical data.
What is a conversational growth strategy? It is an approach that entails leveraging various channels that deliver or spur a conversation that is focused on relationship building. It makes potential customers, and visitors feel valued since they will be conversing with a brand one-on-one. With time, it enables businesses to create relationships with the target audience as they offer appropriate information to each customer at the right time.
Typically, this approach entails engaging with customers through proactive listening, offering relevant information, and developing long-standing connections with prospects. It gives businesses two-fold benefit by helping them to collect useful data on customers as well as developing an emotional bond with potential customers and buyers.
Growth Hacking Focuses on a Singular Goal
What is growth hacking? It is a term used to refer to a collection of strategies aimed at growth exclusively. It is implemented if a business wants quick results and is driven by an exciting product offered by a company at its core. It is an ideal technique for brands that want to achieve a single goal, often utilising one channel.
At first, it was used when talking about startups that want significant growth fast and on small budgets. Nonetheless, big companies have since implemented the approach. The primary objective of this approach is to get the maximum number of customers or users while spending little money.
A growth hacker is often concerned about identifying smarter, cheaper alternatives to conventional marketing processes. They leverage new approaches, such as social media, targeted promotion, or viral advertising. Growth hackers have to test their copy, email advertising approaches, SEO, among other tools, to boost rates of conversion and grow the customer base.
Sean Ellis is credited for coining the term, growth hacker, back in 2010.
Growth Strategy Types and Approach
You must have picked up by now that growth strategy is a comprehensive solution for various business issues. Now, another essential thing to note is that there are four basic types of this approach. Let’s highlight each:
- Market penetration
A market penetration strategy is implemented by a small business when there is a need to promote existing goods or services within a market that the company has been operating in. Increasing market share is the only way of growing existing products and markets. Price cuts are an excellent example of a strategy aimed at boosting market share.
- Market expansion
Also called the market development strategy, it involves selling current goods or services in a specific target demographic. One of the reasons a business might settle on this approach is if the competition is in such a way that there is no potential for growth in the present market. As such, if the brand does not identify other markets for its goods or services, it will not boost profits or sales. A business may also opt to use this approach if it discovers new uses for its products or services.
- Product development
This approach entails expanding a product line or adding other features to boost sales and profitability. When companies adopt this strategy, they keep selling in their present market. Also called a product expansion strategy, it works best when there are changes in technology. It’s because it’ll necessitate a change of products as the old ones become obsolete.
With this strategy, a brand will sell new goods and services to a new market. Given that there is a significant risk, a business will have to tread carefully by conducting market research to understand whether customers in the prospective audience will want the new provisions.
Growth strategies yield an array of goals on different channels at every stage of the sales funnel. Let’s take a look at things we do in each:
- Awareness stage: We drive traffic via website SEO and PR.
- Interest stage: We launch targeted paid-for ads on search engines and social networks.
- Desire stage: We work with remarketing and trigger email marketing, offering discounts based on products/categories browsed.
- Loyalty stage: We work with a discount system for returning clients, with delivery benefits, gifts, etc.
Now, looking at the activities for each stage, it is evident that a multi-channel approach is implemented.
Growth Hacking Techniques
here are different growth hacking techniques, each yielding a different result. Nonetheless, the overall objective of adopting this approach is to meet the goals of the business quickly. Examples of growth hacking ideas include giveaways, limited-time promotions, ad extensions for generating targeted clicks, content upgrade offers, working with the right influencers, streamlining the checkout process, etc.
Amazon, for instance, gives its customers a sense of urgency by using landing pages to prompt a user to view its products using a countdown timer. It is an excellent hacking tactic since about 56 percent of customers are bothered by missing relevant news and events if they do not check out their social media.
To conclude, generally, growth hacking tactics are entirely viable as part of a growth strategy. The essential thing here is to take note of the difference between the two approaches. Overall, a growth strategy is a broader concept that small businesses need to grow their customer base and try out different channels. Growth hacking, on the other hand, is merely executing a particular technique, on a specific channel, that grows the user base at a way lower price.
An internal growth strategy is slow and steady while hacking yields quick results.