Ten thousand words of useful information | What is the logic behind "Growth Hacker"? (superior)

If you plan to test growth hacking techniques, start with language. Because this is where it all starts.

This article is a series of articles, divided into two parts, the directory is as follows:

1. What do we talk about when we talk about “ growth hacking ”?

2. Application of Marketing Theory in the Internet

3. The method part of the disassembly of "Growth Hacker"

4. Analysis of Growth Hacker: Customer Acquisition Stage
1. Promotions to acquire customers
2. Customer acquisition channels
3. Customer acquisition products
4. Customer acquisition price
5. Summary of the customer acquisition phase

5. Analysis of Growth Hacker: Activation and Retention
1. Activate the retained products
2. Activate the retention promotion
3. Activate retention channels
4. Activation and retention price
5. Summary of activation and retention

6. The Monetization Part of Growth Hacker
1. Realization price

VII. Conclusion

1. What do we talk about when we talk about “growth hacking”?

The full name of "Growth Hacker" is "Growth Hacker: How to Achieve Explosive Growth at Low Cost". The author Sean uses the cases of rapid user growth of many Silicon Valley companies to extract for us the methods and practical skills on how to achieve user growth , and provides us with detailed ideas for sorting out user growth ideas.

Although this book is divided into two parts: "method" and "practical application", it is still obvious that the whole book is biased towards "practical application". The "method" part is relatively short and can be summarized in three sentences:

• Good products are the prerequisite for growth
• Identify growth levers
• Fast iteration

The practical part is much more detailed. The author cites many experiences of Silicon Valley Internet companies to tell us the techniques of each step, but it still feels like something is missing. After careful reading, I found that this book focuses too much on practical skills, and does not examine the entire growth process from a higher-dimensional holistic perspective, telling us how to prioritize. One of the more obvious priority tips in the book is in the customer acquisition stage. The author tells us: If you plan to test growth hacking methods, start with language first. Because this is where it all starts.

With this priority statement, we have a practical direction to work towards. But what about other processes? Other processes only have methods and techniques of various dimensions listed in a parallel structure. Where should we start the investigation and which one should we use first? The book does not give us the answer.

It seems a bit harsh to have such requirements for a practical book. For product managers and operations personnel, many of the contents and techniques in this book can be used directly. But as an analyst, since we need to find out the problems in the business, we are more concerned about how to understand the current business problems. We need to understand our business from a higher-dimensional perspective, find the problems with the most value for improvement, and then find the best solution path. This is where the value of analysts lies.

So, I spent a long time thinking, is there a hidden clue in "Growth Hacker" that can connect all the methods and techniques? This article is a summary of the thoughts on this issue.

2. Application of Marketing Theory in the Internet

What knowledge can we use to explain Growth Hacking?

Growth hacking techniques are actually a series of marketing methods. Since it is a marketing method, it should be able to be explained by existing marketing theories. The content of growth hacking is the application of marketing theory in the Internet environment.

The most famous marketing theories are 4P and 4C theories. However, with the advent of the Internet age, these two models seem to have become outdated and cannot adapt to the development of the new era. So more new models emerged, such as 4R, 4I, 4V, etc. However, a closer look at the 4R, 4I, 4V and other models reveals that these emerging models are incomplete. They only focus on a specific execution level, rather than the overall picture. For example, the 4V marketing theory of differentiation (Variation), functionality (Versatility), added value (Value), and resonance (Vibration) can mostly be summarized into the product ( product ) in the 4P theory.

Therefore, these emerging models are effective tools for executing a specific marketing direction, but they are of little help in analyzing the entire marketing scenario. We still have to go back to the source of 4P and 4C to find the answer.

Some time before reading the book "Growth Hacker", I read Professor Bai Weiliang of CEIBS's masterpiece "Details Marketing". This book is said to be worth half of the tuition of CEIBS, which is worth 3,000 US dollars.

The new understanding of 4P and 4C in "Details Marketing" gave me a new understanding of these two relatively old marketing models. There are a few sentences that impressed me:

• 4P and 4C are like the atomic structure of marketing, universally applicable regardless of industry.
• Every P brings any C
• Price is the last P.

It turns out that the 4P and 4C marketing theories are applicable to any industry, and each P has a priority. We need to give priority to the important Ps in our marketing work.

So what is the order of these?

Unfortunately, Professor Bai Weiliang did not say this in the book. I think this kind of core knowledge can only be found in the classroom of CEIBS. After all, this book is said to be worth half of CEIBS’s tuition, so the other half of the knowledge must be kept, otherwise no one will go to class!

Just kidding, I think the real reason why Bai Weiliang didn’t mention it in the book is probably because the rankings of different industries are different, and it is impossible to give a specific answer in the book. Since Professor Bai Weiliang did not mention the specific order of the 4Ps in the book, let us find the answer ourselves.

I tried to use the 4P/4C thinking to sort out the various techniques in "Growth Hacker" and found some clues. Before explaining the order of 4P and 4C, I think it is better to first explain what 4P/4C are respectively.

4P means:

1. Product: Focus on the functions of development, require the product to have a unique selling point, and put the functional demands of the product first.
2. Promotion: Many people understand Promotion in a narrow sense as "sales promotion", which is actually very one-sided. Promotion should include a series of marketing activities such as brand promotion (advertising), public relations, and sales promotion. In order to make up the homonym of four Ps, McCarthy used the word Promotion. In fact, I think it should be more accurate to say propaganda.
3. Channel (place): The company does not directly face consumers, but focuses on cultivating dealers and establishing sales networks. The connection between the company and consumers is through distributors. Broadly speaking, channels also include factors such as sales location and environment.
4. Price : Different pricing strategies are formulated based on different market positioning. Product pricing is based on the company's brand strategy, focusing on the brand's value.

4C means:

1. User: Customer mainly refers to user needs. Companies must first understand and study their customers and provide products based on their needs. At the same time, what enterprises provide is not only products and services, but more importantly, the customer value generated by them.
2. Communication: Communication is used to replace the corresponding Promotion in 4Ps. The 4Cs marketing theory believes that companies should establish a new type of company/customer relationship based on common interests through active and effective two-way communication with customers. This is no longer a one-way promotion and persuasion of customers by the company, but a matter of finding a way through communication between the two parties to achieve their respective goals at the same time.
3. Convenience: Convenience means providing customers with the greatest shopping and usage convenience. The 4Cs marketing theory emphasizes that when formulating distribution strategies, companies should consider customer convenience more than their own convenience. We need to provide good pre-sale, sale and after-sale services to ensure that customers can enjoy convenience while shopping. Convenience is an integral part of customer value.
4. Cost: Cost is not only the production cost of the enterprise, or the Price in 4Ps, it also includes the customer's purchase cost. It also means that the ideal product pricing should be lower than the customer's psychological price and enable the enterprise to make a profit. In addition, the customer's purchase cost includes not only their monetary expenditure, but also the time, physical strength and energy consumed, as well as the purchase risk.

We should focus on the following aspects:

• Customer needs, not product needs
• Cost, not price
• Communication, not promotion
• Convenience, not channels

For example, 4C means that "convenience" is a better word than "channel" because "convenience" pays more attention to customer value. However, providing convenience to customers can not only start from channels, but also provide convenience to customers in other aspects, such as products (easy to open packaging) and promotions (providing maps on flyers). Professor Bai Weiliang also mentioned in his explanation at the end of "Detail Marketing" that "any P will bring about any C", which also shows that 4C and 4P are not completely one-to-one corresponding. Just like the example of our APP, product changes can not only meet user needs, but also provide convenience, increase operational channels and so on.

Even a problem and its solution may not necessarily be in the same category of P. Bai Weiliang gave an example of a friend who bought a large house and divided it into five two-bedroom apartments, but it attracted the most annoying visitors. His time was spent sending away visitors and repairing damaged room facilities. Finally, Bai Weiliang gave him a suggestion, to put the rental advertisement under the "single room" column instead of "apartment". His room was the most expensive among the single rooms, so he would attract serious people. Redefining a product through promotion is much cheaper than directly changing the product.

Professor Bai Weiliang suggests that companies can use the following framework to guide marketing mix decisions. This interwoven framework tells us that investment in any one P will affect all Cs.

It can be seen that 4C is the purpose and 4P is the means.

What we should focus on is how to improve 4C, and the means we can use are 4P. Moreover, improving any C among the 4Cs can also be achieved through any P among the 4Ps.

During company training discussions, if managers are stuck on the problems facing the company and cannot think outside the box, we can ask everyone to ignore those problems and instead look at the 4Ps, thinking about which improvements can be made one by one to improve the 4Cs and, in turn, the company’s performance.

Case

Let’s simply select a few cases to analyze this idea, such as whether the four Ps can all affect the “user needs” in the 4Cs.

(1) Cases where products influence user needs

The users in 4C correspond to the products in 4P, so this is the most common situation. The purpose of product design is to meet user needs. WeChat meets people's social needs on mobile devices, and search engines meet people's needs to quickly find target information on the Internet. This case is the most basic and will not be elaborated here.

(2) Cases where sales promotions affect user needs

As mentioned earlier, the promotion here actually refers to publicity. What is the most successful advertisement in China? I believe the answer in most people’s minds must be Melatonin. Although the brainwashing advertisement "I won't accept any gifts this year, the only gift I will accept is Melatonin" is annoying, it is really effective. Melatonin is a health product, but he never mentioned its health effects in his promotion, but repeatedly mentioned the concept of gift giving. Since the demand for gifts is much greater than the demand for health products, Melatonin used this promotional strategy to change user demand without changing the product.

(3) Examples of channels influencing user needs

Experiments show that when customers’ attention is divided, they tend to follow their feelings rather than listen to rational guidance. Therefore, if you want to take advantage of people’s emotions such as greed, fear, desire, etc. and hope that customers will make irrational rather than rational decisions, then you must first distract their attention so that they cannot concentrate on thinking. American car insurance salesmen will tune the radio to talk shows or rap music, and will never play relaxing and soothing music. Then introduce him to three different people within five minutes, which will make him overwhelmed and unable to think, thereby increasing the probability of closing the deal. In such a Place (channel), users' needs are strengthened, or their motivation to refuse is weakened.

(4) Cases where price affects user demand

For example, if you buy a razor for 69 yuan on JD.com , but it is less than 79 yuan, you need to pay a 5 yuan shipping fee. In this case, you will generally buy something else to make up the 79 yuan to get free shipping. Moreover, you may not really need these supplements. This is how the price threshold of free shipping affects user demand.

The above simply lists some cases to verify the statement of 4P4C theory in "Detail Marketing". It can be seen that in order to achieve a certain C, it can indeed be achieved through 4 different Ps. When sorting out a specific problem, we can fully apply this kind of thinking.

However, we still have a problem that has not been solved, that is, which P and which C should we focus on first? In this way, in actual work, we can find the problems that should be solved first and formulate a reasonable work plan.

In order to better fit the Internet environment, we still use the content of "Growth Hacker" as a clue, and try to sort out whether 4P/4C can connect the content of "Growth Hacker" and find the priorities between different Ps and Cs in the Internet environment.

3. The method part of the disassembly of "Growth Hacker"

As mentioned earlier, the “method” part of Growth Hacker can be summarized in three sentences:

• Good products are the prerequisite for growth
• Identify growth levers
• Fast iteration

Here, let’s put aside the first point and look at the general meaning of points 2 and 3.

Before we start the growth in the customer acquisition phase, we first need to define what we want to grow?

The ultimate goal of this issue must be the company's revenue growth. However, the answer we need is what kind of indicators can drive the growth of final revenue. Such indicators are called "operational levers" in China.

Different companies have different growth indicators. For example, eBay's basic growth formula is:

“Total number of merchants who publish items × number of published items × number of buyers × number of transactions = total increase in goods”

Therefore, eBay's growth metric is the number of products posted. Enterprises can achieve revenue growth through such an operational lever.

The same enterprise has different operational levers at different stages. Currently, domestic startup apps often pursue user growth at the beginning. When the number of users reaches a certain scale or the market share is relatively high, they will begin to consider how to make a profit. At this point, a new operational handle will be created.

Peter Drucker, the godfather of management, once said: "If you can't measure it, then you can't grow it effectively." Therefore, before we grow, we must first determine what this operational lever is.

This is the “Identify Growth Levers” in the “Methodology” section of Growth Hacking.

With operational levers, or growth levers, we can measure this indicator through data and find better solutions to improve this indicator through rapid iteration. We can all understand this part easily, so I won’t go into details here.

4. Analysis of Growth Hacker: Customer Acquisition Stage

The practical part of Growth Hacker is divided into five stages, namely:

• Customer acquisition: optimize costs and expand scale
• Activation: Getting potential users to actually use your product
• Retention: awaken and retain users
• Monetization: Increase revenue per user
• Virtuous cycle: sustaining and accelerating growth

This chapter will first analyze the first step - customer acquisition.

The content of the customer acquisition section is roughly divided into three parts:

1. Language-Market Match
2. Channel-Product Matching
3. Viral Marketing

1. Promotions to acquire customers

Language-market matching is the first method in the customer acquisition stage and it is also the method that needs to be prioritized. Author Sean even mentioned in the book, "If you plan to test the first row of growth hacking methods, start with language. Because this is the starting point of everything." This is the only place in the book that points out the priority method, which shows how important it is.

Language-market fit refers to the extent to which the language used to describe and promote your product can impress potential users and encourage them to use your product. The author gave an example: Tickle is a photo social company (the PC version of Instagram, founded in 1999 and acquired in May 2004), and its initial slogan was "Store your photos online." It seems to be fine, but users just can't do it.

So the founder James Currier (also a god-like growth expert) suggested changing "storage" to "sharing" - so that users will be happy to recommend it to those around them. With just one word difference, the number of users increased by 53 million in 6 months.

They then developed a dating app and changed the product's slogan from "finding a date" to "helping others find a date", which resulted in the app gaining 29 million users in 8 months.

(1) Promotion-User Demand

Does the above example sound familiar? Think back to the 4Ps and 4Cs mentioned earlier.

• "I won't accept any gifts this year. If I do, I'll only accept Melatonin."
• “Share your photos online.”

Are they a bit similar? They both change the target users through "promotion", or change the demand direction of existing users. Why did Sean say this was the first method to try? Because changing user demand is equivalent to changing the market, and changing the market will completely change the user scale. It is much easier to find a market that is ten times larger than the original one than to fight in a niche market.

Therefore, the language-market matching method is actually the "promotion" in 4P, and its core purpose is to meet or even change the "user needs" in 4C. As shown in the following figure:

As can be seen from the graph, currently we only see the impact of promotions on user demand. So what should we pay attention to in our promotions regarding the other three Cs: communication, convenience, and cost?

(2) Promotion-Communication

In addition to meeting user needs, "Growth Hacker" also provides some suggestions on meeting user "communication" needs.

The language used must directly appeal to and further ignite their needs and desires.

Advertising slogans, promotional slogans or similar languages ​​must be based on igniting user needs and desires in order to achieve the purpose of communication with users. Let’s review the slogan in the case - “Share your photos online.” This sentence is from the user’s perspective. "I won't accept any gifts this year, and the only gift I'll accept is Melatonin." This is also thinking from the user's perspective. Good advertisements can resonate with users immediately and ignite their needs. This fulfills the purpose of "communication".

So what does a negative example look like? Luo Zhenyu has a course called "Public Relations Traps", and the third lesson "Flower Basket Trap" is basically the same as this situation. There are many cases in it, and friends who are interested can go and have a look. It said that in life there are a lot of advertisements filled with product thinking, piling up a lot of concepts, just like compiling a book of compliments, piling up a lot of nice-sounding words, the kind of words that you imagine can arouse excitement in consumers' hearts, on a product, but in fact, nothing is expressed.

This statement is of course a bit extreme, but there must be a difference between promotion from the product perspective and promotion from the user perspective.

How to determine the communication method of the product? We can spend more time here to introduce the FCB grid.

There is a well-known analytical framework in advertising called the FCB grid. This chart is based on the common sense that different advertising is suitable for different sales situations.

Different products are placed in the four quadrants of the matrix above according to their motivations and importance. The advertising principles applicable to these four different situations are very different. Passive motivation refers to things that users have to do. No matter how well the product is made, users will not feel excited. For example, no matter how good the laundry detergent is, it can only solve your laundry problem. Positive motivation refers to products that can bring positive feelings to users, such as cola, cars, etc.

Due to space constraints, I will not explain this in depth here. I will use another picture to illustrate how to deal with these four different types of products.

The content about FCB grid is not the focus of this article. I will write another article to explain it in detail when I have time.

Due to the length limitation of the website, this article will be sent in two parts.