Want a Million Customers? Become a Growth Hacker

Marketing guru Ryan Holiday explains why traditional marketing tactics are dead--and what has taken their place.

Some of the fastest-growing start-ups have one trait in common: They achieved rapid success without doing any of the things companies usually do to get the word out about their products.

"They've thrown out the traditional marketing playbook," said Ryan Holiday, director of marketing for American Apparel, and author of " Trust Me, I'm Lying," in a speech at TheNextWeb USA conference earlier this month. Instead, he said, they've become "growth hackers," a term made popular by angel/advisor/entrepreneur Andrew Chen about a year ago. Rather than fall back on such standard tools of the trade as magazine advertising, billboards, and press releases, growth hackers look for provable ways to grow. Holiday added that growth hackers are replacing traditional marketing executives at the smartest companies.

How can you become a growth hacker? Here's Holiday's advice:

Broaden your definition of marketing.

"Anything that gets and keeps customers is marketing," Holiday said. He added that the smartest companies think beyond the traditional marketing and promotion boundaries. For example, he said, Dropbox found it cost a few hundred dollars per new customer to build its customer base through Google AdWords. "That's not sustainable," he said.

Instead the company began offering added storage as an incentive for getting a friend to sign up or taking a brief tutorial that would teach customers how to use the service more effectively, thus increasing the chances that they'd stay customers. At one time, Holiday said, the storage-for-referral program generated 40 percent of the company's growth.

Ask better questions.

Traditional marketers try to zero in on the target customer, Holiday said. "They ask, 'Who is it for?'" Instead, he suggests asking "'Why would someone use this? Why do I use it?'"

Figuring what your product's greatest appeal is will get you to rapid growth more quickly than identifying a target customer, he said. Once you've done that, and you know you have a good product, "You want to find early adopters quickly and cheaply." Uber did it, for instance, by giving SXSW attendees free rides.

Focus on results.

"Growth hacking is a mindset, not a tool kit," Holiday said. There's no simple how-to for growth hacking but he did have one specific piece of advice: Focus on gaining actual customers not just generating leads.

For example, he said, Twitter saw many that many people were signing up for its service. But the ones who followed between five and 10 accounts shortly after signing up tend to become the most active. "So they quickly wrote some code to suggest accounts to follow," Holiday said.

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