October 07, 2019

The ‘Hack’ in Growth Hacking: A Cautionary Tale

Everybody loves a quick win. Making money fast is what all early-stage startups on small budgets want. But so-called ‘growth hacking’ can actually be damaging. 

What is growth hacking, anyway?

A simple growth hacking definition is using tactics that drive rapid user/customer base growth and quickly boost revenue. Growth hacking might be measured with metrics like number of sign ups, leads, sales, website visits or video views in a short period of time.

Why growth hacking can do more harm than good

Growth hacking comes with risk because it can encourage people within the company to put all their focus on short-term goals. This means the longer-term strategy sometimes gets overlooked. 

Think about it like cultivating a garden. Let’s say you put lots of effort into growing roses in one flower bed. You have success and enjoy lots of beautiful blooms, but in the meantime, the rest of the garden has become overgrown with weeds. 

If, on the other hand, you spread your efforts across the garden, you might not yet have an impressive display of colour, but everything would be neatly pruned. And there would be green shoots and buds appearing all over. 

A steady and consistent growth rate is usually a better indicator of overall brand health than one that has more peaks than the Himalayas. Incremental improvement eventually builds into something big and solid, but volatile gains can just as easily shoot up as they can fall off a cliff.  

So, are we saying there’s no place for fast growth and you should chuck your copy of Hacking Growth in the bin? Not entirely. Short-term growth hacking strategies can achieve great results – but they need to make sense in the context of longer-term goals. The one thing they shouldn’t do is take away from the customer experience.

When growth hacking causes companies to crash and burn 

There are plenty of examples of growth hacking gone wrong. Tactics that seem like a good idea at the time often come back to bite marketers, and the results can be catastrophic. Take the messaging app Path, which attempted to grow its user base by sending out invites to contacts from users’ phones – whether they’d given permission or not. One unhappy user described how his entire address book received a text (or bot-narrated voice call) at 6am one morning claiming he had pictures he wanted to share with them on Path. With this kind of customer experience, it’s no surprise Path is now a thing of the past. 

Then there’s the brand damage caused to the BBC by clickbait accusations. You wouldn’t expect a long-standing, publicly funded corporation like the BBC to need growth hacking strategies, but earlier this year Ofcom said the broadcaster was using clickbait-style headlines to chase online traffic. The TV watchdog will soon publish the findings of its investigation looking at how the BBC has betrayed its charter.

It’s really bad news for a brand when they let customers down, but even when the end-user isn’t affected, growth hacking can backfire. A case in point is the website Rap Genius (now known as Genius). It tried to hack the search engines by launching an “affiliate program” which actually asked for fake links. When it was exposed, Google came down on the startup like a ton of bricks and practically wiped it out of its search results. Ouch.

Swapping growth hacking for growth experimenting

We think it’s possible to use growth hacking to complement long-term success by taking a more considered approach to it. Let’s call it ‘growth experimenting’. It’s about embracing the ideas and curiosity that can lead to growth, but without staking the success of the company on them.

With growth experimenting, a marketer becomes a scientist in his or her own lab, trying things, testing out hypotheses, and observing the results. It’s great for learning what works, as well as what doesn’t. Failing fast is good because you can pull the plug on unsuccessful tactics before wasting too much time and money. 

You can also avoid upsetting customers. If common sense tells you a strategy could be risky (i.e. sending unsolicited invitations to a person’s entire address book) you can test them on a small scale. 

It’s something the CEO of now-defunct social network Circle wishes he’d done. The app growth hacked its way to 12 million users with overzealous and misleading text invitations that drove people to despair. “We found that with SMS invites, that quickly became annoying. I should have thought it through” Evan Reas lamented afterwards.

Crucially, with growth experimenting, techniques are not introduced as part of the strategy until they’ve been proven – just like a pharmaceutical manufacturer wouldn’t start marketing a new drug until they’d completed trials, knew it worked and understood the side effects. This means you can be sure new tactics make sense as part of long-term brand building.

Listen to your customers 

When you hit on a growth hacking tactic that’s getting great results it’s really important not to get over-excited and stop to do a sense check. Let’s say you’ve just introduced auto-renew billing and suddenly revenue has surged. The stakeholders are happy but how about your customers?

If you don’t talk to them, you won’t find out what’s really going on. What if they’re actually angry you’re making them jump through hoops to cancel, and they have no intention of staying with you? Or maybe that thing you thought was useful is, in fact, really annoying. Like when Facebook launched Facebook Live and flooded users’ feeds with live stream notifications. While it initially pushed engagement figures, people didn’t like it. Soon, everyone was pleading for a way to switch them off. 

And while you’d think Facebook would be happy with its two billion active users, the platform is still coming under fire for spamming users with notifications that aim to increase engagement. The amount of time users spend on site and the number of visits they make are clearly important measurements for Facebook, but how costly are these KPIs in reality?

Which metrics actually make sense?

We’ve seen how growth hacking for short-term results can satisfy some immediate demands but easily destroy the customer experience and growth in the long run. 

Chrissy Totty, Founder of The Big Thinks, a consultancy that works with startups and scaleups, told us it’s a problem for many brands. “In general, most companies are incredibly focused on the short term,” she said. “That filters down into marketing when they look at objectives. But building brands is a really long-term game and it’s very hard to measure in the short term.”

Ultimately, short-termism can be an exercise in vanity – for real results, we need to look at metrics that span a longer period. “Look at brand metrics like brand awareness, consideration, intent. Those kinds of metrics can really help measure that more intangible stuff. It at least gives you some numbers that help you optimise over a longer term,” said Totty (you can read the full interview here).

Shifting focus away from how many people viewed your ad, for example, towards how many people actually intend to buy your brand after seeing the ad, will tell you much more about how successful the next quarter is likely to be. Likewise, consistently increasing your net promoter score (which measures how likely people are to recommend your brand) is more reliable proof of brand equity than a spike in sales. 

The bottom line is, never overlook the satisfaction of your customer when chasing results. We’ll let you in on a secret… long-lasting results come from strategies put in place for the long-term!

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