Why Your Digital Agency Needs a Growth Hacker Now
In case you haven’t realized it yet, growth has become the new marketing. And we are not only talking about startups. Just last month, Coca-Cola became the latest company to appoint a Chief Growth Officer, replacing its CMO.
The company’s decision to have a dedicated C-level focus on growth is an evidence of a trend that is fueled by the concept of growth hacking.
Dismissed a few years ago by the marketing community as an irritating buzzword, the mindset of small bets, quick iteration, and creative thinking has become the new marketing hallmark.
This shouldn’t come as a surprise. Neil Patel predicted it back in 2013, when he published his seminal guide on the topic:
For now, growth hacking is relegated to startups, but eventually growth hacking will be part of Fortune 500 companies.
The traditional digital agency model is also being disrupted, some even say it is dead. With clients focusing on outcomes and metrics as opposed to processes and campaigns, agencies must deliver faster growth on tighter budgets than ever before.
Growth hacking, growth marketing, or agile marketing, whatever you want to call it, is the way to address the new marketing reality, and agencies no longer have a choice but to embrace it in order to succeed.
Traditional Digital Under Pressure
According to the latest research from Econsultancy, predicted growth for digital agencies in the UK has reached an all-time low. The proportion of agencies expecting their businesses to grow by 50% or more has shrunk in the last two years, from 24% in 2014 to 11% in 2016.
UK agencies cite uncertainty over Brexit and difficulty in finding the right people as the primary factors for the subdued outlook, but it’s deeper than that.
For one, a growing number of companies are taking digital agency services in-house, according to a research report from the Society of Digital Agencies.
More importantly, companies are finally waking up to the ineffectiveness of the conventional approach to marketing and are looking for new ways to drive growth in their business.
In a recent report by Accenture, CMOs acknowledged they spend 60% of time on traditional marketing activities which aren’t delivering, and only a third of their time on innovation.
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What does this mean for digital agencies? It means that clients will be spending less money on traditional marketing tactics and more on new ways of marketing that are testable, measurable and scalable.
Companies that are hungry for growth will be looking to hire agencies with growth hacking or growth marketing expertise, not just digital marketers.
A few dedicated growth marketing agencies have been very successful, and their number is growing. Therefore, traditional agencies must build growth hacking capabilities or risk being outpaced by their more agile competitors.
Growth Hacking Revisited
Is growth hacking a totally new way to do marketing? Not really. Growth hacking in many ways is a natural evolution of marketing.
So, what makes a growth hacker or growth marketer distinct from a traditional marketer? Let’s quickly run down the main points.
- Creativity. Growth hackers search for truly innovative ways to drive growth that may not be obvious to others.
- Learning. Growth hackers are not afraid to try and fail and regard failure as an opportunity to learn and grow.
- Curiosity. Growth hackers stay on the cutting edge and are always on a hunt to discover new growth strategies, tactics, and tools.
- Focus. Growth hackers are relentlessly focused on getting better and compounding small wins; they always see growth as a work-in-progress.
Growth Mindset vs. Fixed Mindset
Growth hackers were born in the startup world and had to deliver growth fast or become extinct. They have learnt to operate in sprints and experiment small before scaling bigger.
Obsessed with data
Data and metrics are paramount to the way growth hackers discover a path to growth. Yet they are not getting buried in the numbers. They look for insights in large data sets, but they also do a great deal of raw-level data analysis and qualitative research.
Growth hackers ignore vanity metrics, such as leads or new users, and instead focus on metrics that matter for long-term business growth, which mostly have to do with activation and retention.
Growth hacking is not just data-driven marketing; it’s orchestrating the whole user experience across all marketing and product touchpoints to drive growth.
While traditional marketers focus on external levers and filling the top of the funnel, growth hackers work along the entire funnel and often start at the product to drive growth.
T-shaped skill set
Growth hackers are digital marketing generalists with a broad base of knowledge and channel expertise, which allows them to design and run experiments without having to rely on the ‘specialist’ in a particular area to support them.
Growth Hacking Grown-Up
The concept of growth hacking has gained an almost universal acceptance in the startup community and among Silicon Valley behemoths, yet, until recently, digital agencies and their clients have been slow on the uptake.
This is rapidly changing, and here is what’s driving the change.
Emergence of best practices
Growth marketing has evolved from its hacker roots into a rigorous and systematic process with well-defined objectives, time frames, and methodologies.
What’s often overlooked behind the hype around the specific tactics is that there is a critical strategy element to all of it. As Pierre Lechelle puts it:
Getting the strategy right comes before the growth hacking process.
Growth hacking hasn’t always been that way, and it is one of the reasons why agencies, used to working with clear, repeatable frameworks, have not bought into it.
And with growth hacking having matured into a more structured approach, there are now best-in-class tools for managing the process of ideation, testing, and learning.
Expanding talent pool
There is a growing pool of growth talent for agencies and companies to tap into.
Over the last few years, an entire cohort of accomplished growth hackers have emerged with a proven track record of driving growth in different types of businesses and industries.
In addition, a number of training programs have been set up where best growth hacking practices are being taught in a structured way. These programs draw professionals with analytics, engineering, and business backgrounds, as well as traditional marketers who want to upgrade their skills.
Success beyond tech
Initial growth hacking success stories were not a fluke. Growth hackers and growth teams are continuing to hit the ball out of the park for Uber, Slack, and hundreds of other startups.
What’s really driving the point home for traditional marketers is that many startups are using growth hacking principles to rapidly and successfully exploit opportunities on the home turf of established companies in non-tech sectors.
The Tipping Point
With traditional marketing channels being expensive and saturated, there is now greater pressure than ever on CMOs to deliver on digital growth.
For one, companies as well as agencies are becoming more data-centric and looking at the ROI of their marketing activities. But this is not enough.
A recent CMO Council survey found that only 7% of marketers deliver real-time, data-driven engagements across physical and digital touchpoints, and a tiny 3% contend they are aligned across technology platforms with regard to data, metrics, and insights.
What’s not working? One huge hurdle for traditional organizations in achieving a growth focus is their siloed approach.
That is why companies are increasingly taking a page out of the startup playbook and defining a dedicated growth role charged with aligning product development, marketing, and sales to respond to constant shifts in markets and customer behavior. This cross-functional growth champion role has now been installed at Mondelez, Colgate-Palmolive, and Kellogg, to name a few.
The boardroom acceptance of the need to make growth a centralized function signals the call for greater marketing agility.
It means companies can no longer rely on traditional marketing approaches and are looking for new ways to maximize the results of their marketing efforts. Growth hacking is a way to address these needs.
Don’t just take our word for it. The client list at TrueUp, London’s leading growth hacking agency, includes Mercedes-Benz, Regus, O2, Telefonica, and other global leaders.
The adoption of growth hacking by digital agencies will be much like the earlier wave of social media marketing – going from nice-to-have to must-have. It means that an increasing number of agencies will be looking to develop growth hacking capabilities in the near-term.
Otherwise, if they continue to position themselves as experts in advertising, brand positioning, and customer experience – instead of being growth drivers – they will see business disappear.
The Growth Hacking Opportunity
Although born out of the startup world, growth hacking is now something that is applicable to companies of any size. As George Deeb of Red Rocket Ventures aptly put it,
Perhaps, the term “growth hacker” should be renamed Marketer 2.0 to better emphasize its importance for all organizations, startups or otherwise.
What can growth hacking do for digital agencies?
Execute specific projects
For digital agencies, growth hacking approach can be applied to specific projects for established clients. Growth talent could be deployed for new product launches, new market entries, and activation campaigns.
Grow internal startups
Large companies are increasingly looking to incubate startups, both internally and externally, as a way to find new sources of growth. John Lewis’s JLAB and Sony’s Seed Acceleration Program are just a few examples of how established companies are using a startup model to develop and launch new products and services.
Digital agencies can use growth hacking to help clients scale their startups once a proof of concept is established.
Improve campaign performance
Growth hacking can be a new way for digital agencies to execute ongoing campaigns quickly and efficiently. Many agencies often overlook the improvement in campaign ROI they can achieve by applying the growth hacking mindset.
With paid ads, for example, agencies can test the creative copy and channels to find what drives high-value customers to the product or service. Once they find what works best, they can double down and dominate that channel.
Understand customers better
Agencies are doing a lot of customer research mostly to validate media spend. Growth hackers can mine this data for insights about customers to help clients optimize their product, message, and growth model.
Revitalize client relationship
Growth hacking services offer a way for agencies to stand out from the competition and add proverbial value to the client. As clients are looking for new ways to grow, agencies can preempt the opportunity to become the growth engine beyond what’s already expected.
What Does the Future Hold?
The future is clear. However uncomfortable the truth may be, growth hacking is here to stay.
Forward-thinking digital agencies have recognized the shift in client mindset and needs and are already bringing growth talent on board to lead the way. Those that develop growth hacking capabilities and the track record first will be in a prime position to capitalize on the massive near-term opportunity.
Growth hacking is transforming digital agencies. If you aren’t adopting growth hacking practices, you can be sure your competitors are. And this could be all the difference for you between getting ahead and being left in the digital dust.
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