Okay, Here’s a fact to get you started on this article: “According to the latest SBA study, more than 627,000 new businesses are launched every year, and at the same time, about 595,000 businesses shut down per year.” If we segment our research into tech-startups, it turns out that in every one hour, 80 new companies are launched in the UK alone. These numbers are a testament to two facts:
- There are plenty of opportunities for new companies to start.
- There’s such fierce competition that most startups fail to make it big.
Why tech startups are making ‘Growth Hacking’ a big dealEvery aspiring entrepreneur wants to know the secret recipe for having an omniscient approach that can help them scale their business higher up into the commercial market. Growth hacking is a marketing technique that provides an exclusive way of marketing a business. Predominantly, it is associated with accelerating the growth of the company. And of course, one cannot think of growth without utilizing the different domains of product design, development, target market analysis, and product marketing. To sum it up, Growth Hacking offers a comprehensive package built around all the effective tactics a company needs to use for accelerating their business.
- For a tech startup, it’s daunting to compete with established brands and big companies through a traditional approach.
- It’s more of a rapid experimentation that helps a startup to identify an efficient way of growing its business.
- The tech industry is very competitive, and growth hacking offers new startups a way to think outside the box and try new possibilities that can help them create an identity among the established names.
5 Stages of growth hacking for tech startupsTypically, there are five main stages in the growth hacking funnel of a tech startup. Each of these stages is important in terms of accelerating growth and accomplishing business goals.
Stage 1: Customer Acquisition“Customer acquisition lives in the attract phase, where consumers become readers and visitors.” – Hubspot If you are heading a tech startup, it is crucial to learn about customer acquisition strategies. Since you’ve just stepped into this industry, it’s apparent that you are struggling to find the right audience for your product. To promote customer acquisition, here are the top three proven strategies you need to know:
Learn about your end-userThe first step begins with identifying the right users and finding what they really need. Chances are, because of the nature of tech products, there is a certain group you’d be targeting.
- Conduct surveys and opinion polls to communicate with your target group and learn what they need.
- Tailor your products to best suit the needs of this group.
- Avoid promoting the products directly, and instead work on creating brand value by sincerely engaging with these users.
Pre-launch email listTo acquire customers, you have to spread the word and to spread the word, you need to create a pre-launch email list. However, building an email list is not a cakewalk. You need to find a way to collect the email addresses of your potential customers, and send them frequent updates about your product’s launch date, specifications, discount offers, and bonuses. Here’s how you can create buzz:
- Start guest blogging and invite visitors to your product/service website’s leading page.
- Write epic blog posts on your targeted niches.
- Create mini projects and promote them in groups most interested in your topic, and implement pop-ups to collect subscribers.
- Implement lead generation ads on social media sites to collect emails of interested users.
Stay active across all social media platformsSo, here’s a trick for faster customer acquisition – Be where your customers are at all times. No hard and fast rules. And no short-cuts.
- Develop your promotional content depending on where your target users are.
- For example, if they use Facebook, you have to create a Facebook Page for your brand to maintain contact with them.
Stage 2: Product ActivationThis stage is where you need to generate your customer’s interest by allowing them the chance to use your product or solutions. It results in increasing brand value.
Offer a free versionWho doesn’t like a free product? Tell a customer you are offering a free version of a product that meets their demands, and they are 99% likely to give it a try.
- Businesses offer free versions of their products to show their target customers the value they might get if they decide to choose their product.
- A free version or trial makes perfect sense if your product can show product value within a reasonable time frame.
- It is also a great opportunity for startups to collect feedback so they can further improvise their offering.
- To get our target customers started on Troop Messenger (an office chat application), we started offering it for free.
- Well, technically it wasn’t completely free because we limited the free version with selected features – yet made it tempting enough to make our free users switch to paid versions.
- Our Freemium pricing strategy worked in our favor and got us the desired results, as we witnessed a significant increase in the visitor’s conversions and collected revenues.
Create a workable content marketing strategy63% of startups who fail in the first year of their launch don’t have a workable content marketing strategy. Without a strategy, failure is evident, and you should certainly not risk your efforts.
- Start with deciding on the content types. You have to know what works for you.
- Create a calendar for all your content. This way all your content will be scheduled.
- You can use Project Management tools for sharing your content immediately or at a scheduled time.
Keep your product page optimizedNo matter how much traffic you get or how well you are marketing your product, you are unlikely to get sales without optimized product pages. Analyze your product page to check loading speed, graphics quality, and user ease.
- Use impressive photos of high-quality, giving attention to details.
- Add a clear CTA (Call-to-Action) that can increase conversions.
- Make sure your product page has sufficient information about features, prices, and instructions.
Stage 3: Customer RetentionThe difference between startups that grow and those that collapse is customer retention. The more customers you keep, the more likely you are to accomplish your goals.
Observe churn signs
- To increase customer retention, you’ve got to prevent them from leaving. If you observe properly, you can find signals of your user’s departure in advance. Hence, always be attentive and capture warning signals in advance.
- Follow-up on these users who’ve left and find out the reasons that made them leave your product.
Target users with special offers
- The churn rates are an indication for you to offer special offers to your users.
- Using your CRM, create a list of users who haven’t used your product in a long while, and send them a special deal.
- Personalized communication is one of the most effective ways of initiating a conversation with your customer.
- As per Econsultancy research, the impact of personalized follow-ups is 90% higher than generic messages.
- There are plenty of CRM tools that a tech startup can use to maintain personalized information about their customers, and later use it in their follow-up strategies.
Stage 4: Revenue GenerationOne unbreakable rule for every startup and established business is to keep generating revenue. There are over hundreds of things that a startup needs to look after but revenue generation has to be at the top spot.
Leverage your existing customer baseWhile new customers are important, old ones will always be gold. And thus, you need to consider them as a reliable source of revenue generation.
- The key is to strengthen existing buyer relationships by continuing to offer improved services to your customers.
- You can do this for improving previous products or upgrading your old services for free.
- Or you can offer a new service that follows something you’ve sold before.
Cross-promote to new audiencesCross-promotion is more of a partnership where multiple businesses join hands for a joint promotion. Using this strategy, each partner benefits because of the exposure to a new audience.
- It’s never a wise option to focus all your resources on leveraging existing customers. You’ve got to look out and find a larger audience. By joining a cross-promotion with an established brand, you can get your product the exposure it needs.
- It is an affordable way for tech startups to gain traction because the cost of advertisement is shared between all the businesses that have joined.
- Exploit cross-promotional sales strategies to reach more customers and increase brand reach.
Repurpose an existing productYes, repurposing an existing product is a growth strategy that has been around for a while, and yet, most businesses underuse it.
- If you want growth, you can utilize what you created in the past.
- If it’s an application, combine it with more features, and if it’s a product, add more specifications so that you can sell it as something new.
- The key is to find a different perspective on an existing product and figure out ways you can generate revenue from it.
- As long as the service or product has value for the customer, you can sell it over and over again.
Stage 5: Revenue ChainOkay. Here’s something I bet you know – revenue generation never happens by accident. You have to keep adopting new strategies to create a revenue chain.
Encourage viral sharingThere’s a reason why everyone is trying to make their product and services go viral. Tap into your user network and make them share your offerings.
- Encourage your existing users to share your tech products.
- Reward your users in exchange for positive customer reviews.
Referral programsReferral programs are trending because they offer a two-way benefit to the company and the customers as well.
- Develop a referral strategy that has the potential to encourage your users to refer your product to other users.
- Tech startups may offer their existing users a bonus or discount on additional features if they refer the product to others.
Hone your pricing strategySome of the most promising growth strategies include honing the pricing strategy. You need to find the right strategy to price your product. As a tech startup, you can separate your plans into multiple categories, where each plan has something different to offer to a different category of users.
- Find the balance between product value and revenue, and your product’s ability to help users, and charge fairly for that.
- If you undercharge you’ll cripple the startup with poor development and uncompensated delivery cost.
- If you overcharge, you are likely to drive away customers and restrict growth.