This handbook teaches you to attract customers to your site then get them to buy.
It is widely recommended within Silicon Valley — because it actually teaches growth marketing to a professional level. It doesn't waste time with self-evident advice and marketing clichés.
If you're skeptical of marketing advice, know that I am too. This handbook is unique in that I have four years of diverse data: I've run thousands of experiments to grow twenty different — that's the key — startups for my growth agency.
Scroll down to learn which growth strategy will likely work for your company. And for an in-depth orientation to growth hacking.
Who should read this
This material applies to companies of every size and vertical.
I cover both introductory and advanced B2B and B2C tactics. Marketers of every skill level will encounter a lot of new material.
This handbook is dry, however. So I recommend bookmarking it and reading pages as they become relevant to your work.
If you're brainstorming startup ideas+
It is important you read this handbook before deciding which startup idea to work on.
It will save you months or years going down the wrong path. Because you must first assess whether your idea is suited for profitable and scalable customer acquisition.
In this handbook, you'll learn which ad channels you can expect to acquire users from, and how to increase their rate of conversion. To increase your profit and stay alive.
If you can’t foresee this handbook's strategies working for a startup idea you're considering, you’ll have a tough time building a high-growth business.
If you care about that.
If you're a manager+
It's critical that managers know what growth marketing entails so they can facilitate it.
Don't treat growth like a black box of engineering and marketing. It's your most important business function.
This handbook will show you how to prioritize the most profitable and the easiest to implement growth marketing projects. Plus, it'll shed light on a growth marketer's skill set so you can properly assess hiring candidates.
(Many companies unknowingly hire “growth experts” who are actually brand marketers only experienced with creating brand voice and generating buzz. Brand marketers often lack knowledge of user acquisition and conversion optimization. This handbook will help you avoid unintentionally hiring them.)
Growth hacking definition
Growth hacking is simply data-driven revenue maximization.
Growth "hacking" is actually a silly term. (It also goes by performance marketing or growth marketing.) I'm using it because it helps this handbook rank higher in Google.
Practice what you preach, right?
In reality, growth is not a series of "hacks." It's a rigorous methodology consisting of experimentation, data collection, and leveraging human psychology. All in pursuit of maximizing revenue — not raising brand awareness or "generating buzz."
Growth hacking versus traditional marketing+
Growth marketing differs from traditionally undisciplined marketing in that growth focuses on clearly measurable and directly profitable marketing projects.
For example, growth rarely concerns itself with billboards, radio ads, conferences, and other hard to measure channels. (Try attributing a customer to the billboard they saw before signing up. And try doing it when you have multiple billboards in the city.)
Instead, growth leverages the scale and immediacy of the Internet to start small and discover where customer acquisition is measurable and therefore capable of being proven financially viable. It does this through continually optimizing every component of the customer's lifecycle.
Growth marketing knowledge
This lifecycle includes the ads they see, the website they then interact with, and the product they ultimately buy and engage with.
In other words, growth marketing involves three key disciplines:
- Customer acquisition gets people to your site.
- Software engineering improves your site. So that more people buy.
- Product management improves your product using the insights derived from your acquisition and engineering experiments. So that customers keep buying.
Growth marketers must be familiar with all three disciplines. Or, at minimum, a team of growth marketers must collectively span these disciplines.
However, this knowledge alone is not enough. They must also possess three key skills.
Growth marketing skills
To competently span these disciplines, a growth marketer must be:
- Creative when brainstorming new text and imagery for ads and webpages.
- Reflective when discerning what's been learned from marketing experiments.
- Resourceful when scaling customer acquisition. Cleverly piecing together multiple tactics and idle resources can make or break an acquisition channel, such as Instagram ads or traditional sales.
Creativity and reflectiveness are skills that this handbook will help develop.
So let’s quickly elaborate on resourcefulness. It entails being aggressively proactive:
- Resourceful growth marketers never stop finding, testing, and optimizing customer acquisition channels. For example, when Pinterest releases a new ad format, they'll spend an afternoon testing a $500 campaign to see if there’s new, low-hanging fruit to pick. (I cover ad channels on this page.)
- Resourceful growth marketers also never stop running A/B tests to improve signup and purchase conversion rates. They rethink everything from scratch as often as they can. (I cover A/B tests on this page.)
If you're new to growth marketing, you can listen to my podcast interview.
When to hire brand marketers
Counterintuitively, "brand marketing" is typically ineffective at shaping your brand. Its often only effective at keeping your message consistent and self-censored. (And most companies don't need to exercise this restraint early on.)
Why? Because long-term public perception is the result of having a product people love. Consumer love begets organic brand building via word-of-mouth, and word-of-mouth supersedes whatever messaging a company pushes through their marketing.
So before you hire a brand marketer, hire another product manager.
Once you're a mature company, you can consider hiring someone to focus on the aesthetic and tonal consistency of your marketing. This will help you stay singular and differentiated in a crowded market.
But, before that point, brand marketers mostly slow down growth with arbitrary constraints. Consider how if brand mandates that marketing materials must have red backgrounds and white text, growth won't feel empowered to experiment with ad design to assess what the data says are the best aesthetics to encourage ad clicks.
About Julian Shapiro
I spend hundreds of hours researching interesting topics. Then I write concise yet in-depth handbooks. For free.
I release them online because books have to hit high page counts, which results in filler content that annoys readers.
There's more to it if you want to learn more about me.
Succeeding at acquisition
This guide focuses on the first two steps of the funnel: acquisition and conversion.
So let's now introduce the stark realities of acquisition.
Succeeding at paid channels
First, most companies never get paid acquisition channels to work. If they did, more companies would be successful. Because paid acquisition lets you scale big fast.
Specifically, most companies do not profitably acquire paying users through ad networks such as Facebook Ads, Instagram Ads, and Google AdWords.
Why? Consider the criteria that determines ad channel success:
- Profit margins — How much profit you earn per sale. For reference, it's rare to acquire an ecommerce customer for less than $30 USD on Facebook or Instagram, which are typically the cheapest ad channels. And SaaS companies have it worse. They're looking at a couple hundred dollars at minimum to acuiqre a paying user.)
- Addressable market size — This is not only how many people want your product category, but are capable of buying your product (e.g. geographic restrictions), want your product in particular, want it today, and can afford you. The leftover audience is always much less than marketers would believe. And to best scale Facebook and Instagram ads, you want at least a few million people who'd be a fit. (This amount is not required to successfully run ads, it's just ideal.)
- Degree of product demand — How badly does your addressable market currently want your product? It's the job of your ads and landing pages to enticingly pitch so that people on the fringe of your addressable market see the light. And that people who already see the light feel the urge to buy now. Some products simply don't lend themselves well to enticing ads, and are better suited for sales or content marketing.
To succeed at ad channels, your product must cross a threshold for all three criteria:
- Profit threshold — You must earn per customer at least as much as it costs to acquire a customer from an ad channel.
- Market size threshold — You want an addressable market big enough to be identified en masse through an ad channel's targeting capabilities.
- Product demand threshold — You want to sell a product category that people are already buying or otherwise will instinctively understand why they would want to.
Unfortunately, you won't know whether you cross these thresholds until you spend a statistically significant amount of money on each potentially viable channel. This is often roughly $1,000-$3,000 USD per channel.
If you fail these thresholds, you'll be relying on word-of-mouth, content marketing, PR, sales, and other channels that cost less per acquired customer. (But that scale slowly.)
This is completely fine. Successful paid acquisition isn't necessary. It's just very helpful because it lets you easily scale.
Succeeding at unpaid channels
Here's the criteria for success for the four most effective unpaid channels:
- Content marketing — Is your product something people are already Googling for en masse? Then Content Marketing (search engine optimization) is viable for you. In fact, your core marketing competency should now be optimizing content: Hire writers instead of ad experts. A/B Test your blog posts, not just your homepage.
- Virality — Virality requires users to recognize and care that they receive a hugely improved product experience when they invite other people. True virality actually applies to very few companies — namely social networks (e.g. Snapchat) and broad business collaboration apps (e.g. Slack, Dropbox). I cover virality at the bottom of the the upcoming Onboarding page.
- Word-of-mouth — Word-of-mouth is a subset of virality: It's virality that doesn't happen exponentially, but rather one-to-one. Here's its criterion for success: Is your product truly blowing people's minds? Awesome, you will grow from word-of-mouth alone, but it might take years for this to streamroll into a sizable customer base. To accelerate word-of-mouth, make it easy and fun for people to share your product.
- Sales — The criterion for sales success is whether you can get your ideal customers to talk to you via phone, email, or in-person. (I cover how to do this on the Sales page.) Note that sales only applies to companies with significantly high profit margins (typically $1,000+). Because the labor costs of researching, pitching, and negotiating a sale must be recouped.
- Everything else — Other than affiliate programs, most remaining unpaid channels are often a waste of time. Public relations and organic social media, for example, are only effective for a few types of companies (trend exploiters and lifestyle companies, respectively). And those channels are outside the scope of this handbook.
You can browse this handbook using the links at the bottom of your screen.
The importance of unpaid acquisition
Even companies that get ad channels to work don't often get them working at scale for very long. Eventually, ad audiences saturate and diminishing returns kill profitability.
So, you must plant seeds for other channels to succeed in the long-term:
- Build an amazing product people can't stop talking about. Then aggressively experiment with referral and affiliate programs. These programs can work forever, don't saturate, and are relatively cheap.
- Write content for SEO from day one. It takes many months for content to reach the front page of Google.
- Don't rely exclusively on ad optimization to reduce your acquisition costs and increase your scale: Also rely on having the best-tuned website, onboarding flow, and up/cross-selling experience so you get every dollar possible from happy users.
This bring us to the minimum viable growth methodology every company must pursue.
The universal growth methodology
- Build an amazing product that naturally encourages word-of-mouth.
- Kickstart word-of-mouth with a bit of paid ad traffic. Even if temporarily unprofitable.
- Next, spend the majority of your growth marketing resources on optimizing your growth funnel: increase conversion at every step. Do this through A/B Testing, and do it on the test audience you're acquiring through paid ad traffic.
- With your profitable and streamlined funnel in place, it's time to scale. Aggressively test every potentially viable acquisition channel. Some channels that were previously ruled out may be newly viable if your product or your market has changed.
The right growth tactics for your company
With our universal growth methodology in hand, we're missing one last thing: What my experience running growth for more than twenty different companies has concluded is the right tactic for your type of company.
If you sell to consumers:
- B2C ecommerce selling physical goods — You'll most likely succeed with Instagram Ads, Content Marketing, and PR. Pinterest Ads, Google AdWords, Google Shopping, and influencer sponsorships may also be viable.
- B2C mobile app — You'll most likely succeed with Instagram Ads and Apple Search Ads. You might succeed with Snapchat Ads, TapJoy, and referral programs.
- B2C SaaS app — You'll most likely succeed with Facebook Ads and Content Marketing. You might succeed with Google AdWords and affiliate/referral programs.
- B2C (or B2B) bricks and mortar — You'll most likely succeed with Facebook Ads, Instagram Ads, Yelp Ads, Content Marketing, and PR. You might succeed with Snapchat Ads, Google AdWords, Google Display Ads, and affiliate programs.
Don't be overwhelmed by all those links. You can ignore them for now. This handbook will walk you through most of them over the coming pages.
If you sell to businesses:
- Niche B2B with high average revenue per user (ARPU) — For example, enterprise software ($1,000 per month) for professional developers. You'll most likely succeed with Sales (cold email, networking, and LinkedIn messages) and lead generation through Facebook Ads and Google AdWords. You might succeed with Instagram Ads and Content Marketing.
- Broad B2B with high ARPU — For example, modestly-priced software ($100 per month) for small businesses accounting. The previous bullet applies here, with two tweaks: 1. You might be able to defer sales in favor of ads. Ads are easier and faster to scale. 2. Content marketing is likely to work, and should be prioritized.
- Niche B2B with low ARPU — For example, cheap software ($25 per month) for professional developers. 🚨Rethink your business if you're looking to earn more than $2mm USD per year, because you are unlikely to. Niche B2B businesses with low ARPU can't afford ad channels and don't have a large enough market to scale sales.
- Broad B2B with low ARPU — For example, cheap software ($25 per month) for marketing video creation. You'll most likely succeed with Content Marketing and Google AdWords. (And Apple Search Ads if you're a mobile app.) You might succeed with a referral program.