Growth Hacking: What It Is and How To Do It

three shopping bags: growth hacking

Quality products are the foundation of good businesses, but what are great products without an audience? Customer acquisition—i.e., finding new customers for your products—aims to solve this conundrum, but often at a high cost. This is where growth hacking comes in. 

Growth hacking is a startup buzzword coined in 2010 to describe high-impact strategies for driving user growth, without the price tag of traditional marketing campaigns. Read on to learn the pros and cons of growth hacking and top strategies to try.

What is growth hacking?

Growth hacking is the use of relatively inexpensive strategies to acquire customers. Typically, these low-cost strategies align with the financial limitations of startup businesses. Growth hacking is also characterized by its experimental approach: it prioritizes trying a lot of different things, looking for success, and doubling down on what works. 

Entrepreneur Sean Ellis, who led early growth at file hosting service Dropbox, coined the term “growth hacking” in 2010 to describe strategies for driving inexpensive rapid growth at scale. Today Ellis leads GrowthHackers, a software company and community hub for entrepreneurs focused on growth, marketing, experimentation, and high‑level networking.

Advantages of growth hacking

The primary upside of hacking growth is that it helps companies boost user acquisition on a relatively small budget. Growth teams test an array of new marketing campaigns and growth tactics with the sole goal of adding customers. Since most growth hacks cost less than a traditional marketing campaign (which could involve digital ads, events, and even out-of-home advertising), the growth team may enjoy greater autonomy to experiment in search of breakout success. 

Disadvantages of growth hacking

One important downside of growth hacking is that it may not yield customers of the highest value. Successful businesses seek clients with a high customer lifetime value (CLV)—those who become repeat customers over many years without the business needing to keep spending on customer acquisition. By prioritizing customer quantity over customer quality, growth marketers may end up recruiting low-value customers. These customers might make a single purchase in a one-and-done deal, never to return. 

The best growth hacking framework will carry a company beyond fast-paced startup growth. Sustainable growth occurs when a business keeps adding high-value customers over the course of many years.

5 growth hacking strategies

  1. New customer discounts
  2. Referral campaigns
  3. SEO-driven content marketing
  4. Social media marketing
  5. Encourage growth in your product experience

There’s more than one way to pursue scalable growth for your new business. When building your marketing plan, consider using a combination of these growth hacking strategies.

1. New customer discounts

Build growth into your business model by offering discounts to new customers. Think of a mobile phone carrier offering free or discounted devices to customers who switch from another provider. Ecommerce merchants pursue this strategy by offering special prices to a first-time purchaser.

New customer discounts can quickly increase your market share. On the downside, this is a form of high-leverage growth, meaning your business may have a high customer acquisition cost without a guarantee that you’ll keep your new customers. You could lose money by selling products at steep discounts (or giving them away), so this growth marketing strategy will only pay off if your new clients remain loyal.

2. Referral campaigns

In a referral marketing campaign, you encourage existing customers to recruit new customers for your business. You might email your client base a referral code that grants them a free product for each new customer they recruit; you can also offer discounts to the friends they recruit. This online marketing technique borrows directly from the traditional marketing principle of peer-to-peer referrals.

Referral campaigns rely on your existing users to provide social validation—or social proof—of your product’s value. When they recommend your product, they’re telling others: “I trust this business, and I encourage you to do the same.” Referral campaigns also reinforce brand equity with existing customers who refer their friends. By choosing to vouch for your business, these customers tie it closer to their own personal identity.

3. SEO-driven content marketing

SEO-driven content marketing is an approach to creating content that’s designed for discovery via search engines. The idea is simple: You create content that answers questions your target audience is already searching for on Google. If your content shows up in their search results organically (meaning you don’t pay to place it at the top of their results), you’ve just exposed a potential customer to your brand for free. If 10,000 people per month are searching for that same thing, and they all see your content in their search results, you’ve just exposed all of them to your brand for free.

Operationalizing an SEO strategy involves understanding what your audience is searching for (via keyword research), creating content that will rank on search engines, and moving readers from your article page to a product page where they might buy something. 

4. Social media marketing

Social media naturally lends itself to growth because it offers multiple ways to reach new audiences. Users can post about what they love (including products); discovery algorithms serve content up to users based on their interests; and users can circulate content to their networks via repost or share. If you can create social media content that is some combination of memorable, useful, and entertaining, you can inspire people to engage with and share it. The goal is to create content that goes viral and builds brand awareness

5. Encourage growth in your product experience

The core principle of product-led growth is that your product should create opportunities for new customer acquisition at scale. For example, if you send a free survey using SurveyMonkey, the survey will include a logo at the bottom of the page saying “Survey created with SurveyMonkey.” This helps introduce survey takers to SurveyMonkey, and if they see that the survey is well-designed or easy to use, they may consider SurveyMonkey when they need to create their own survey. 


Examples of successful growth hacking

Some growth experiments turn into wildly successful marketing techniques for businesses both large and small. Here are three growth hacking examples that helped companies rapidly expand their customer bases.

1. Dropbox

The cloud storage service Dropbox uses customer referrals to expand its user base. When existing customers refer new users to the service, they get extra cloud storage space for their own account. This costs Dropbox a bit of money (cloud storage requires hardware and electricity), but it establishes an organic sales pipeline by tapping into word-of-mouth marketing.

2. MasterClass

The online learning platform MasterClass has periodically used a buy-one-get-one-free promotional model, where customers can purchase two memberships for the price of one. The first membership is for the buyer, and the second membership is for someone else. The gift recipient is brought into MasterClass’s sales pipeline and gets a full year to try out the service. If they like it, they pay out of pocket to renew. This growth technique rewards both the gift giver and the recipient.

3. Blume

The health and wellness ecommerce store Blume uses an engaging promotion to entice new website visitors to give their email address: A splash page offers a “mystery discount” of up to 20% in exchange for an email address. 

Growth hacking FAQ

Can growth hacking be applied to any business, regardless of its size or industry?

Yes, growth hacking can aid businesses of nearly any size and in nearly any industry. That’s because most core growth hacking techniques—discounts, word-of-mouth marketing, content marketing—can be pursued on a relatively lean budget. Businesses with expansive marketing budgets can further leverage growth hacking by offering generous discounts, promoting social media posts, and creating viral content.

What skills do you need for growth hacking?

Growth hackers benefit from a willingness to try new things. Many growth hacks start with an experimentation process as companies try to figure out what strategies—discounts, social media campaigns, SEO content campaigns—produce the most desirable results.

How do you measure the success of a growth hacking campaign?

You can measure the success of your growth hacking much the way you’d measure any growth strategy. First and foremost, you’ll track the growth of your user base and the growth of your overall revenue. Then, you may look at average revenue per new customer. You’ll also track metrics that suggest you’re growing brand awareness and your sales pipeline, such as email subscriber growth, social media follower count, and website traffic.