Nov 29, 2018 Nick Larsson
Growth requires a combination of Product, Marketing, Analytics and Business Development and to grow a product effectively you need competences to take ownership of both internal and external factors. Internal in terms of product and user experience and external in the sense of having a consumer-focused approach that understands the market.
In the end, it’s all about:
The Growth Funnel
The major difference between traditional marketing teams and the new way of structuring growth teams is that a growth team takes ownership of the complete funnel from start to finish and therefore has a holistic view of what improvements will impact conversion the most.
Truecaller’s Growth Model
As a mobile app that provides a full suite of communication our North Star Metric is Daily Active Users (DAU). We’ve chosen daily usage, compared to weekly or monthly, since our services include a dialer, SMS inbox and instant messaging which are features you’d be likely to use on a daily basis.
Some growth practitioners consider linear channels less valuable since they are not always repeatable and scalable like other growth loops. In our case, a combination of partnerships, PR and marketing has proven to be a key part of our strategy to break through in new markets.
Partnerships with Industry Leaders
Since our Business Development team was formed, we have worked with mobile operators, device manufacturers and strategic partnerships to make Truecaller an integrated part of phones around the world that has brought Truecaller tens of millions of users in new markets. Read more about some of these partnerships here:
Viral loops have played a major role in our growth thanks to the fact that our product solves a burning need for the consumer. Whether we identify an unknown call or block a spammer, the gratitude our users feel from saving time or avoiding a nuisance call makes it compelling to pay it forward by telling their friends about our product. Make sure to trigger sharing behaviors right in the moment when you have solved a problem for the user.
When to Buy Growth
To have long-term sustainable growth, you need a positive return on investment with a Customer Acquisition Cost (CAC) that is less than your users’ Lifetime Value (LTV).
However, when market conditions are extremely competitive and it’s crucial to win the market first, it does make sense to temporarily buy growth to get that initial traction. A classic example of this is when Uber was seeing stiff competition from Lyft among others. As they believed they were facing a winner-take-all scenario (or at least winner-take-most), they decided to consciously:
Read more on Uber’s growth strategy in Simon Rothman’s blog post here: Why Uber Won
For a user to become active, you need to get them hooked on to your core value proposition as quickly as possible. This needs to happen within seconds, it can’t take hours or days before a user understands your product. For Truecaller, the AHA moment happens when we successfully identify three unknown calls for a user.
Another example of this is Facebook’s AHA moment that was defined as reaching “7 friends in 10 days”, since if you don’t have any friends in a social app and enter with an empty news feed, you’ll most likely churn straight away.
We mainly focus on tracking DAU/MAU ratio for measuring engagement, since stickiness and daily usage has the biggest impact on any ads-based business model.
Depending on what service you offer you could also look at tracking:
After proving core product value, the aim is to continue proving value over and over again. Either with the same use case or by layering the cake and solving other problems for the user. These are five areas our product team worked on to boost engagement within our app:
With a clear focus on driving daily usage and implementing the above measures, our teams managed to increase DAU/MAU ratio by 30% in two years’ time. This work made us excel on this metric and stand out as one of the apps that score highest on this globally.
Retention loops are normally time-based or action-based and if they are smartly designed and configured, they will automatically bring back passive users to your in-app experience depending on certain user behaviors.
Retention with Product-Market Fit
Most users decide which apps to keep within 3-7 days from downloading them. Depending on what type of service you provide, you’ll need to focus on different time periods. In any case, it’s a good exercise to plot your full retention curve from day 1 to day 90 or longer. Ideally, your retention curve should flatten out to prove a healthy retention. If it doesn’t, you have not yet found product-market fit and need to reconsider changes on product side before focusing on growth.
Read more on retention in Brian Balfour’s blog here: The Never Ending Road To Product Market Fit
A north star metric should aim to:
Once you have set your north star metric for the whole company, you can break down that goal into sub goals for each team that are supporting the bigger mission. One way of doing that is to use a metrics hierarchy tree to plot out priorities where each team can add the most value to the overarching goal of the company.
Building your Growth Machine
Growth is rarely the result of one big breakthrough. It’s the sum of many things coming together over time. Instead of looking at growth hacks only, agree on a systematic process for how you work to achieve long-term growth with your team. These are some steps to get started and you should always try to refine and improve your process over time.
In the end, you need to keep experimenting to see what works. You can always get inspiration from others, but you need to find a way of working that suits you and your product.
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