5. Hacking Aquisition Flashcards
What is the main concern when acquiring new customers?
If acquiring customers costs more than the revenue generated from them
This can lead to unsustainable business practices.
What trend has been observed in online advertising spending in the US since 2010?
Spending on online ads has doubled
This indicates increased competition for a slowing audience.
What was Dropbox’s customer acquisition cost before implementing the referral program?
$400 per new user
The premium subscription price was only $99.
What percentage of revenue was Fab spending on advertising and customer acquisition?
More than 35 percent
This excessive spending contributed to Fab’s downfall.
In a ‘winner take all’ market, what strategy might a company employ?
Spend heavily on customer acquisition to secure dominance
This is common for businesses with network effects.
What factors determine how much a company should spend on customer acquisition?
Business model, competitive situation, and stage of growth
Different companies have different needs and capacities.
What is the goal of the growth hacking process?
To discover and optimize cost-effective ways to acquire customers
This includes testing various strategies.
What is language/market fit?
How well your marketing language resonates with your target audience
This is crucial for effective customer acquisition.
What is the average attention span of humans today?
Eight seconds
This is shorter than that of goldfish.
What was Steve Jobs’s compelling message for the original iPod?
1,000 Songs in Your Pocket
This reframed the appeal of portable music players.
What is an effective method for testing marketing language?
A/B testing
Tools like Optimizely and MailChimp facilitate this process.
How did Upworthy optimize their headlines?
By writing multiple headlines and testing them for engagement
They use tools like Facebook and Bitly for tracking.
What simple change did Tickle make to increase user engagement?
Changed ‘store your photos online’ to ‘Share Your Photos Online’
This shift significantly increased user activity.
What tagline change helped Tickle’s dating app grow?
Changed from ‘Find a Date’ to ‘Help People Find a Date’
This repositioning encouraged users to share the app.
What should be the focus when planning initial growth hacks?
Start with language
Small changes can lead to significant impacts.
What was the initial purpose of the product that changed to a hub for connecting singles?
To find a date
The product evolved to connect singles through their friends’ networks.
What tagline was changed to increase user engagement and sharing?
Help People Find a Date
This change encouraged users to invite friends, including married ones.
How many users did the service add within 8 months after changing the tagline?
29 million users
What is the significance of language fit in product development?
It helps hone your product, not just your branding.
What should growth hacking teams consist of?
Product developers, engineers, and marketers
What was the initial messaging for Procter & Gamble’s Febreze?
Febreze cleans bad smells out of fabrics for good.
What realization did P&G have that improved Febreze’s sales?
It should be positioned as part of a regular cleaning routine.
Who is Sophia Amoruso?
Founder of Nasty Gal, a women’s fashion brand.
What was crucial for Sophia Amoruso’s brand development?
Learning what language resonated with her target customer.
What type of fashion items did Sophia Amoruso sell initially?
Secondhand clothes on eBay.
What does finding channel fit involve in contrast to portfolio management?
Focusing on optimizing fewer channels rather than diversifying too much.
What is a key reason for many businesses’ failure according to Peter Thiel?
Poor distribution, not product.
What are the two phases of narrowing down marketing channels?
Discovery and optimization.
What should be done in the discovery phase?
Experiment with a range of options.
What are the three basic categories of marketing channels?
- Viral/word-of-mouth
- Organic
- Paid
What type of marketing channel is essential for e-commerce stores?
Search ads and SEO
What method helps prioritize channels for experimentation?
A method based on six factors created by Brian Balfour.
What are the six factors to consider for channel prioritization?
- Cost
- Targeting
- Control
- Input time
- Output time
- Scale
What is the initial step in narrowing channel options?
Consider the particular demands of your business model.
What behavior should be identified to help narrow down channels?
User behaviors, such as types of searches and shopping habits.
What was Dropbox’s initial challenge in marketing?
Limited effectiveness of paid search ads due to the novelty of their service.
What is a crucial step after selecting channels for experimentation?
Propose specific tactics for each channel.
What does the prioritization process for channel experimentation involve?
Scoring each channel based on a scale of 1 to 10.
What should you do when shifting focus to a new growth lever?
Dive into the data with fresh eyes.
What is the primary focus of the growth team’s new mission?
To leverage the website more powerfully and experiment with new channels for user acquisition.
The team discovered that many of their best customers were coming from the grocer’s main website.
What advertising platforms did the team consider for reaching new users?
Facebook and Google advertising.
They researched user activity on these platforms to assess potential reach.
Why did the team hypothesize that Google AdWords might not be effective?
People are searching for grocery items on retailers’ websites instead of the wider Web.
This insight was based on their understanding of user behavior.
What was one of the main findings from the customer feedback surveys?
A significant number of website visitors were unaware of the app.
Those who knew about the app preferred ordering from their laptops.
What is an app-install roadblock page?
A full page promoting the mobile app that appears for website visitors using phones.
It aims to encourage app downloads.
What are some organic hacks the team considered to promote the app?
- Improve app merchandising on the main website
- Email loyalty card regulars about app benefits
- Implement an app-install roadblock page
These strategies are aimed at increasing awareness and downloads.
What is the purpose of the scoring system during the team’s growth meetings?
To objectively prioritize which ideas to try first based on team members’ suggestions.
It serves as a guide for decision-making.
What were the top ideas for immediate acquisition growth identified by the team?
- Better website merchandising of the app
- Emailing loyalty card members to download the app
- Facebook ads
- Retargeting ads for app downloads
These ideas were based on user research and scoring.
Why was the referral program idea initially given a low score?
It would take a long time to implement and see results.
Despite its potential success, the team decided to slot it into the development roadmap.
What was the outcome of the Facebook ads experiment?
They were especially effective with new mothers and shoppers in their twenties.
This demographic targeting proved fruitful in app downloads.
What did the team learn about the promotion to loyalty card members?
It resulted in nearly 4% of email recipients installing the app.
This indicates a successful engagement strategy.
What is the significance of continuously trying new channels in growth hacking?
To avoid reaching a natural ceiling with existing channels and to achieve additional growth.
Layering on additional channels is crucial for sustained customer acquisition.
Define viral loops in the context of growth hacking.
Mechanisms that encourage users to share a product within their networks for user acquisition.
Examples include referral programs and incentives.
What is a common myth about viral loops?
That they can be set up once and will automatically generate user acquisition without further effort.
In reality, they require continuous optimization and experimentation.
What is the viral coefficient (K-factor)?
A metric that indicates how many new users each existing user brings in.
A K-factor greater than 1 suggests true viral growth.
What are the two types of virality mentioned?
- Traditional word-of-mouth virality
- Instrumented virality (built-in sharing mechanisms)
Both types can contribute to product growth.
What is essential for achieving viral growth?
Delivering true value and a must-have product experience.
Without value, no viral loop strategy will be effective.
What is the formula for calculating the viral coefficient (K)?
VIRAL COEFFICIENT (K) = INVITES SENT OUT BY CUSTOMERS × THE PERCENTAGE OF THOSE INVITED WHO ACCEPT THE INVITE
If 25% of 25,000 users accept an invite and each sends out 5 invites with a 10% acceptance rate, how many new users will be brought in?
3,125 new users
What does a viral coefficient of 0.5 indicate?
It indicates a far cry from the 1.0 definition of true virality.
According to Sean Parker, what three factors control the virality of a product?
- Payload
- Conversion Rate
- Frequency
What is ‘payload’ in the context of viral growth?
The number of people to whom each user will likely send the promotion.
What was the payload for Hotmail’s email signature sign-up link?
Low, as most users sent emails to just one recipient.
What is the conversion rate in viral marketing?
The percentage of invited users who accept the invite.
What defines a successful viral loop?
Optimizing payload, conversion rate, and frequency.
What is a double-sided incentive?
An incentive that offers something to both the sender and the recipient.
What are ‘dark patterns’ in user experience design?
Tricks to get users to take actions they normally would not take.
True or False: Network effect products naturally motivate users to invite others.
True
Give an example of a company that has successfully tapped into network effects.
Eventbrite
What is critical when creating an incentive for referrals?
The incentive should be relevant to the core value of the product.
What was the incentive structure of Dropbox’s referral program?
Getting more storage space for free.
Fill in the blank: The best way to integrate sharing prompts is to make them a ______ part of the user’s experience.
seamless
What mistake do companies often make regarding the invitee experience?
Neglecting to optimize the experience that invitees receive.
How does Airbnb enhance the experience for invitees?
Personalized messages with incentives and clear calls to action.
Why is experimentation important in developing viral loops?
To uncover unanticipated discoveries that improve conversion rates.
What did LinkedIn discover about the optimal number of invites to recommend?
Four invites was the optimal number.
What effect did emphasizing collaboration have on Dropbox’s conversion rate?
It spiked the conversion rate.
