Systematically looking for growth opportunities and growing your business in a data-driven way: in a nutshell, that’s what growth hacking is all about. Especially for fast growing start-ups, growth hacking can be a good method to find out what drives customers, how you can optimise the customer journey and stimulate growth.
How satisfied are your customers? And how can you continuously improve the customer journey, so that ultimately more and more people are willing to pay for your product or service? To find the answer to these questions, companies are increasingly choosing so-called growth hacking: a structured way to grow your business based on insights from data analysis. The ultimate goal: product-led growth, or the product as the engine of your growth.
Visma | Onguard recently organised an online session on how to use growth hacking to accelerate growth, particularly within the finance department. This resulted in six interesting insights and advice, from which start-ups can certainly benefit.
#1 Testing like a pirate: analyse your customers’ behaviours
Growth hacking is all about testing, testing, testing. What works and what doesn’t? As a framework for dissecting the customer journey, growth hackers often look at the so-called pirate metrics, also knows as the AAARRR funnel: Awareness, Acquisition, Activation, Retention, Revenue and Referral. Regardless of your product or service, almost every customer goes through the same six steps; from the first time your customer comes into contact with your product as a possible solution to his or her problem (awareness) to the moment a satisfied customer recommends your product or service to someone else (referral).
For finance professionals, the revenue phase is particularly interesting. How many people actually buy your product? And at what price? In this phase it can be enormously interesting to investigate how a different pricing strategy and price elasticity affect your turnover.
#2 Research the payment behaviour of your customers
Another important aspect in this phase is the payment behaviour. Especially in the start-up phase of a company – where financial reserves are often minimal – it is important that customers pay on time. Growth hacking can help refine the work of the credit management department. For example, it can be interesting to have regular discussions with customers; not only with those who pay late, but also with those who do. What factors within the customer journey ensure that people do or do not pay on time? And how can you translate these insights to your payment process as part of the total customer journey? After all, the smoother the process, the more customers will pay on time.
You can also experiment, for example, with offering a discount to customers who pay within a few days. Does that stimulate growth in regard to your cash flow? In parallel, you can also choose to experiment with a longer payment term. How will that affect your cash flow and the relationship you build with your customer? Perhaps providing a longer payment period for more customers?
#3 Also look at the other AAARRR phases
The other phases are also extremely important. Often the willingness of the customer to pay (on time) is related to the overall customer experience. In case of a positive experience, customers are usually more willing to pay than with a less positive or even downright negative experience. This makes it all the more important to keep investigating how certain choices affect the overall customer experience throughout the customer journey.
#4 Provide variety in your experiments
Most companies collect an enormous amount of data about their customers at every stage of the AAARRR funnel. To keep an overview in this ‘data soup’, it is wise to split up experiments. What does it mean if I announce message B in period C in customer segment A? By varying this, you get several datasets that you can compare with each other and you get more insight into the optimal configuration.
#5 Work in sprints
Growth hackers generally prefer to work in short sprints of several weeks. That way you can immediately take the knowledge gained in previous sprints into the next sprints, for maximum agility.
#6 Seek a multidisciplinary team
Finally, it is advisable to include several disciplines in your growth hacking team. From someone with product knowledge to someone who understands data, and from a programmer who can build websites to a copywriter who can shape different messages. This way you can be sure that all relevant aspects are included in your experiments.
To an optimal configuration
In short, growth hacking to stimulate growth is about a different mindset, where you also learn from things that don’t work. All of this with just one goal: to better understand your customer and his (payment) behaviour, as a basis for continuously improving your services.