This handbook teaches you to attract customers to your website then get them to buy.
It is widely recommended within Silicon Valley — because it bothers to teach growth marketing to a professional level. It doesn't waste time with self-evident advice or 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 (and that's the key) startups for my growth agency.
Read this intro page to understand which growth strategy will work best for your company.
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 new material.
Unfortunately, this handbook is dry — because in-depth growth is technical. So I recommend bookmarking this and reading pages as they're relevant to your work.
If you're brainstorming startup ideas+
It's important you learn growth hacking before deciding which idea to work on.
It will save you years of going down the wrong path. You should start by assessing whether your idea is actually suited for profitable and scalable user acquisition.
In this handbook, you'll learn which ad channels you can expect to succeed for your business, and how to increase customer purchase rates.
When you're done reading this, if you can’t foresee these strategies working for the startup idea you're considering, you should consider scrapping your idea.
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 powered by your engineering and marketing departments. It's your most important business function.
This handbook helps you prioritize growth marketing projects based on their likely profitability and ease of implementation. Plus, it sheds light on a growth marketer's skill set so you can effectively assess hiring candidates.
(Many companies unknowingly hire “growth experts” who are brand marketers experienced only in creating brand voice and generating buzz. Unfortunately, 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 and growth marketing.) I use it because it helps this handbook rank higher in Google.
Practice what you preach.
In reality, growth is not a series of "hacks." It's a rigorous methodology consisting of experimenting, collecting data, and leveraging human psychology. All in pursuit of directly maximizing revenue — not raising brand awareness or generating buzz.
Growth hacking versus traditional marketing+
Growth marketing (which is how I will now refer to the discipline) differs from traditionally undisciplined marketing in that growth marketing focuses on clearly measurable and directly profitable marketing initiatives.
For example, growth rarely concerns itself with billboards, radio ads, conferences, and other difficult to measure channels. (Try attributing a customer to the billboard they saw before signing up. Try doing it when you have multiple billboards in a city.)
Growth leverages the scale and immediacy of the Internet to start small and discover how to make customer acquisition measurable and therefore capable of being proven financially viable.
Growth hacking knowledge
Growth marketing accomplishes its objective by continually optimizing every step of the customer's journey.
This journey includes the ads they see, the website they later 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 from it.
- 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, your team of growth marketers must collectively address these disciplines.
However, that knowledge alone is not enough to be successful. They must also possess a few unique skills.
Growth hacking skills
To competently span the three disciplines, a growth marketer must be:
- Creative when brainstorming compelling text and imagery for ads and webpages.
- Reflective when assessing what has been learned from creative experiments.
- Resourceful when scaling customer acquisition. The cunningness to piece together tactics and idle resources can make or break an acquisition channel's success, such as Instagram ads or traditional sales.
Let’s elaborate on that last point. Resourceful entails being aggressively proactive:
- Resourceful growth marketers don't stop finding, testing, and optimizing customer acquisition channels. For example, when Pinterest releases a new ad format, they'll spend an afternoon testing $500 in spend to uncover whether there’s new, low-hanging fruit to pick. (I cover ad channels on this page.)
- Resourceful growth marketers don't stop running A/B tests to improve signup and purchase conversion rates. They rethink their approach from scratch as often as they can. (I cover A/B tests on this page.)
This handbook will help establish the disciplines of creativity and resourcefulness.
When to hire brand marketers
Counterintuitively, "brand marketing" is typically ineffective at actually shaping your brand. Plus I've already mentioned it's not effective for growth marketing.
So, what is it good for? Keeping your message consistent and self-censored.
But most companies don't need to exercise this restraint early on. Because long-term public perception is more so the result of having a product people love. Consumer love begets organic brand building via word-of-mouth, and word-of-mouth supersedes the messaging your company pushes through brand marketing.
So before you hire a brand marketer, hire another product manager to make your product more enjoyable to use. And by extension more beloved.
When you're a mature company, consider hiring a brand marketer to maintain the aesthetic and tonal consistency of your marketing. This will help you stay singular and differentiated if you're in a crowded market.
But, before then, brand marketers typically slow growth marketing with arbitrary constraints. Consider how if brand marketing dictates that all marketing materials must have red backgrounds with white text, growth marketers won't feel empowered to experiment with different ad designs to uncover what the data says is the best aesthetic to encourage ad clicks that lead to purchases.
Who's Julian Shapiro?
I spend hundreds of hours researching interesting topics. Then I write concise yet in-depth handbooks for free. There's more to it if you want to learn more about me.
You can also have me teach you growth here.
Growth funnel loops+
The growth funnel's linearity — for example, going from A to Z — doesn't need to constrain a user's journey toward conversion.
Their journey may in practice consist of repeatedly looping from A (advertising) to F (e.g. in-app engagement) before they reach Z, which is where paid conversion occurs.
For example, if a user fails to Engage with your app, you might send them an educational email paired with ads pointing to your content marketing. You can do this repeatedly until they're served the right content that propels them to the next step.
I call this the Retargeting Loop. (I'll talk more about retargeting later.)
Here's another loop: the Ecommerce Re-purchase Loop. In it, a user first goes from A to Z. Meaning, they bought your product. Afterward, you then email them a steep coupon to compel them to purchase yet again.
In other words, you're getting them to repeat steps B to Z. (A is skipped because they already know who you are.)
If you can trigger this loop repeatedly, you have a sound business model. And if you repeat this loop on autopilot, you're said to have a subscription business.
The key takeaways are:
- Your marketing efforts should consider where in the funnel each user is, and what type of message will best compel them to the next step in the funnel.
- It's often cost effective to repeatedly message a user ("in a loop") until your pitch or their status in life is finally conducive to conversion.
- After a user has converted, consider how you can restart their loop — or alternatively direct them toward a complementary growth funnel.
This handbook focuses on user acquisition and conversion, so strategies for re-engagement and subscriptions are not covered. But I want you to know they exist.
Succeeding at acquisition
This guide focuses on the first two steps of the funnel: Acquisition and Conversion.
So let's introduce the cold reality of acquisition.
Succeeding at paid channels
Most companies never get paid acquisition channels to work. If they did, more companies would be successful.
Specifically, most companies are unable to profitably acquire paying users through ad networks such as Facebook Ads, Instagram Ads, and Google AdWords.
If they do get one or more of these channels to work, it's a holy grail if paired with strong word-of-mouth: Paid channels let you scale big and fast while (unpaid) customer referrals reduce the average cost of customer acquisition.
Why is paid difficult to make work? Here's the criteria that determine success:
- Profit margins — How much profit you earn per sale is critical. Consider how it's hard to acquire an ecommerce customer for less than $30 USD on Facebook or Instagram, which are typically the cheapest ad channels. If you don't earn at least that amount in the lifetime of a customer, these channels won't be viable. Note that SaaS companies have it worse: It's usually at least a couple hundred dollars to acquire a customer.
- Addressable market size — Your market size matters. This is determined not only by how many people want your product, but are actually capable of buying your product (e.g. aren't geographically restricted), want your particular product, want it now, and can afford it. The resulting audience is smaller than marketers estimate. And to scale Facebook and Instagram, you'll want to advertise to at least a few million people. (This amount is not required to successfully run ads — just ideal.)
- Degree of product demand — How badly does your addressable market want your product? If your product is a non-critical nicety, you're at a disadvantage compared to, say, someone selling health insurance to people urgently needing health insurance. In short, the more people truly need you, or the more people are already buying your product category, the better your pitch resonates.
To succeed with ads, 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 that ad channel. However, you can include the earnings generated from the customers the paid-for customer refers.
- Market size threshold — You must have an addressable market big enough to be identified en masse through the ad channel's targeting. (This depends on the channel.) Otherwise, you'll saturate your small audience and not achieve scale.
- Product demand threshold — You want to sell a product category that people are already buying or otherwise instinctively feel they should buy upon learning of it. To accomplish the latter, you need a product that is extremely appealing.
You won't definitively know whether your product crosses these thresholds until you've spent a statistically significant amount of money on each ad channel. This is often around $1,000-$2,000 USD per channel.
(On the Ad Channels page, I'll walk you through each.)
If you fail to pass these three thresholds and ad channels are therefore not viable, you'll instead be relying on word-of-mouth, content marketing, PR, sales, and other unpaid channels that cost less per customer acquisition.
That's completely fine. Succeeding at paid acquisition isn't a necessity. It's just helpful because it lets you scale easily. And the only other easy channel to scale is virality. So if you can't make either work, you're in for a longer growth journey.
Succeeding at unpaid channels
Here's the success criteria for the four most effective unpaid channels:
- Content marketing (SEO) — Is your product something people are already Googling for en masse? Then Content Marketing (search engine optimization) is viable. In fact, your core marketing competency should now be optimizing content: Hire writers instead of ad experts. Write, write, write.
- Virality — Virality requires users to recognize and care that they receive a significantly improved product experience when they invite other people. This happens rarely. True virality typically only occurs in social networks (e.g. WhatsApp) or broad business collaboration apps (e.g. Slack, Dropbox). I cover virality at the bottom of Onboarding.
- Word-of-mouth — Word-of-mouth is a subset of virality: It's virality that doesn't happen exponentially, but one-to-one. Here's its criterion for success: Is your product blowing people's minds? Awesome, you will grow from word-of-mouth, and it'll cost nothing, but it might take years to snowball into a large customer base. To accelerate word-of-mouth, make it easy and fun for people to share.
- Sales — The criterion for sales success is whether you can get your ideal customers to talk to you (e.g. via phone, email, or in-person). I teach 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 every sale must be recouped.
- Everything else — Of the remaining unpaid channels, most are often ineffective. Public relations and social media, for example, typically only work for a handful of businesses (trend exploiters and lifestyle companies, respectively). And those channels are outside the scope of this handbook.
Tip — Browse this handbook using the links at the bottom of your screen.
Don't just focus on paid acquisition
Even companies that do get ad channels to work don't often get them working at scale for more than a few months.
Eventually, audiences may saturate and diminishing returns can kill profitability. So, you should plant seeds for other channels to succeed in the long-term:
- SEO — From day one, write content for SEO. (If applicable.) It takes months — often over a year — for content to reach the front page of Google.
- Product quality — Build an amazing product people can't stop talking about. Then further incentivize word-of-mouth through referral programs or community building. These programs cost relatively little and can work on autopilot.
- Funnel optimization — The better your funnel performs, the more you can tolerate diminishing ad performance. So don't rely exclusively on ad optimization to reduce your ad acquisition costs; also have the best-tuned website, onboarding flow, and up/cross-selling experience so you receive every dollar possible from happy users.
We're ready to introduce the minimum viable growth plan everyone should pursue.
The minimum viable growth plan
- Build an amazing product that naturally encourages word-of-mouth.
- Kickstart word-of-mouth with paid ad traffic. Even if it's temporarily unprofitable.
- Now, spend the majority of your marketing resources optimizing your growth funnel: At every step, A/B Test conversion on the traffic you're paying for.
- Once you have a profitable and streamlined funnel, it's time to scale. Aggressively test every potentially viable channel.
The right growth tactics for your company
With our growth plan in hand, we're missing one thing: What my experience running growth for 20+ companies suggests is the best tactic for your business model.
If you sell to consumers:
- B2C ecommerce companies selling physical goods — You'll most likely succeed with Instagram Ads, Content Marketing, and PR. You might succeed with Pinterest Ads, Google AdWords, and Google Shopping.
- 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 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) — An example of this category is an enterprise software product charging $1,000+ per month. 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, a software product charging $100 per month to help run small business accounting. The previous bullet applies here too, 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, a software product for web developers that charges $25 per month. 🚨Rethink your business model if you're wanting to make more than $2mm USD per year, because you are unlikely to. Niche B2B businesses with low ARPU can neither afford ad channels nor sales.
- Broad B2B with low ARPU — For example, a software product for marketers that charges $25 per month. 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.