In the previous post of our Growth Hacking series titled, Growth Hacking for SaaS, SMB & Startups Bootcamp Part IV - What is CONVERSION - Getting the MOST from Every Encounter’ we discussed about Conversions, A/B testing and how to get the most from every encounter a business has with the customer.
We are now in the fourth week of the Perfect Funnel Challenge series. This week, we will learn about building a growth program, culture and mindset. If you haven't already, take a moment and sign up for the "Perfect Funnel" CHALLENGE so that you can see firsthand what a best-practices Funnel looks like.
Inculcating a growth culture in your organization is essential for building a growth engine and boosting your business. As a business you need to find the fuel for your growth engine and that is not a simple process. Companies that consistently show top line growth have an investor mindset. Basically, they squeeze funds from underperforming areas and allocate these funds to areas with high scope.
Growth culture starts at the top. The leadership team must ensure in creating a culture of growth by making experimentation a part of everyone’s jobs. Only when individuals are motivated to experiment and try out different things, they would know which are the high performance initiatives and which areas have higher potential.
Such experimentations would result in continual improvement across the organization. Emphasize the importance of experimentation, constant improvements to all the stakeholders of your organization.
GROWTH HACKING TEAM
Companies have started embracing a new role, Growth Manager or Growth Hacker and also a growth hacking team. Their role in the organization would be to define company’s growth plan, implement growth programs and optimize the sales funnel.
An internal growth team is important but having said that fresh outside perspectives and expertise are also necessary to enhance business growth. As it’s rightly said, homegrown is good but sometimes they ‘can't see the forest for the trees’.
However only larger enterprises hire a dedicated Growth team or seek growth consultants who charge a fortune. Small businesses should integrate the growth culture into every role. New ideas and experiments by employees should be given embraced. Bonuses could be announced to motivate them to experiment different initiatives. Successful initiatives could be highlighted and rewarded.
KPIs or KEY PERFORMANCE INDICATORS
Defining the right KPIs is critical for a company’s success. Top management should identify the important goals for the company. Once the overall company’s primary goals and KPIs are identified, the next steps would be cascading down the KPIs to groups or Line of Business (LOBs); then to individuals and then finally to campaigns or initiatives.
Cascading could be through functional structure of your organization or through business processes of your organization. It is important to cascade KPIs to support functions like finance or HR too.
While cascading KPIs the management should ensure that everyone in the organization should have one primary KPI against which their performance is measure. It is equally important to make sure that businesses should not cascade by duplicating the efforts or measure, instead they should cascade by building the cause-effect chain.
All marketing or sales campaigns and initiatives should also have one primary KPI to measure their success. Businesses should create a visual model of how the KPIs relate to business goals at each level in the organization. The KPI flow should be such that every individual’s KPIs feed up to groups’ and LOB’s KPIs and then these finally map on to the KPIs of the organization.
SET UP BASELINES AND DECIDE ON THE LIFT %
Establish baselines for your business goals and these baselines will act as a starting point. Before you begin implementing actions that would help your business improve growth, you must first establish a baseline. Baselines are metrics that show your business performance. For instance, if you consider your social media profiles, number of fans, likes, comments, shares are the metrics you should set baselines for.
Once you set baseline values, decide on the lift you want to achieve. For example, if your baseline Facebook fans is 20000 and you want to lift it by 10% to reach 22000 fans in 6 months.
Post your KPI metrics along with the baselines and expected lift at highly visible places in your office, so that everyone knows what are the higher level KPIs for the organization as a whole and what are the KPIs for their respective team like the marketing team, etc. It is a great idea to have a whiteboard or a video screen to report baselines, results, positive or negative changes on the key metrics.
Online KPI dashboards like Geckoboard also make it easier for organizations to create tailor made dashboards for different teams. These online dashboards can then be displayed on a TV with minimum fuss.
GROWTH EXPERIMENT TRACKING TOOLS
Tracking various growth experiments is critical in knowing how different experiments have performed and which are the ones that yield desired results. One of the best options for tracking your experiments would be to build your own tool in Google sheets. This doesn’t involve any costs and you can customize as per the requirements of various teams in your organization. You can learn more about how to keep track of your growth experiments with Google sheets here. Airtable’s Growth Experiment Chart is a brilliant example that you could refer.
Trello is also yet another popular tool for tracking tasks. You can track all your growth experiments from inception to completion without spending a dime using Trello. Their growth template is quite popular. You will be able to monitor experiments real time to get an idea of how they are performing.
Asana is another tool that can be repurposed to track growth projects and tasks. Asana facilitates connected work with your teammates, saving time and improving collaboration.
Northstar by GrowthHackers.com is an amazing tool that aids discovering new and better ways to accelerate growth. However this is an expensive tool and large enterprises are ones who predominantly use this tool.
A/B TESTING AND MULTIVARIATE TESTING PLATFORMS
Businesses could analyse various platforms where they can track their growth experiments. Google Optimize is Google’s new website testing and experimentation platform, a free tool that facilitates tracking and testing your experiments. Watch this video to see an overview of how the tool works. It is definitely great to get your feet wet and A/B test your experiments to optimize performance.
GROWTH PROGRAM PROCESS AND PRIORITIZATION
The growth engine process is simple. You start by indicating the metrics you want to focus on improving. Then evaluate how your growth engine is impacting the selected set of metrics. And finally validate the experiments based on how successful they were and focus on scaling your best opportunities.
Businesses may have several growth experiments that they have to run and test. Hence it is important for businesses to prioritize experimentation tasks based on their expected impact and level of efforts required. Certain tasks have higher confidence levels based on their likelihood of success while the rest may have average or low confidence.
DURATION OF GROWTH EXPERIMENTS
Now that you have a wide range of ideas to set up growth experiments, what is the ideal recommended duration for growth experiments. The majority of experiments won’t reach statistical significance. Generally, they yield only directional results, so you should specify with certainty (e.g. 95%) as to whether the particular experiment can be declared as a success or failure. The recommended duration for running various tests is around 4 weeks or 28 days. This is the suggested best practice that is followed by large businesses like Google.
Businesses could opt for hypothesis testing for various growth experiments. It is of utmost importance to share the results of the testing with the team so that they can understand the impact of the initiatives taken. It is also equally important to talk about the recommended follow up actions that have to be taken.
Employees should know what these tests proved and what you’ll be doing next or what are the kind of tests to run in future. While explaining the outcome to the team members, always tie impact with the identified KPIs like revenue growth, CPA etc. Results have to be reported to the organization using whiteboards or geckoboard.
Growth culture is important and has to be imparted across various levels in the organization. This mindset will drive experimentation attitude among all individuals in your team and successful experiments in-turn would fuel business growth.
This is the end of this 4 part series on growth hacking for SaaS, SMB's and Start-ups. We hope this was helpful.
Hurry and sign up for our Perfect Funnel Challenge. In our next article , we will be starting a 3 part series on the AMEX Small Shop 2018.