Q: I have heard stories of other tech companies who utilized growth hacking to take their business to the next level. What is it and how can it grow my business exponentially?
Growth hacking has become a popular strategy for organizations to take their operations to the next level. Several famous cases have involved companies in the tech industry. But how can it help managed service providers in today’s marketplace?
To find the answers to this question, Smarter MSP reached out to Kevin Clune. Kevin is a former Director of Operations at a top 500 MSP company and is the Co-Founder/Editor of MSP Growth Hacks. He offered a detailed breakdown of what growth hacking is, how to best implement it, and how it can benefit MSPs.
What is growth hacking?
Growth hacking is the combined use of analytical insight, constant optimization, and unique market positioning to grow a business at a generally low acquisition cost. It is often attributed to the sales and marketing operations of a company, but the focus on continuous improvement can be adopted to other phases of the business. A successful strategy typically results in the accelerated growth of a customer base and the reinvestment of profits earned into top-of-funnel marketing efforts that compound.
Airbnb is a great example of a growth hacking at work. They helped their early users automatically post listings to Craigslist’s housing classifieds. Dollar Shave Club is another popular example. They created a humorous promotional video that initially went viral, and then reinvested their earnings into a cross channel social media campaign that turned them into a billion-dollar company.
The beauty of growth hacking is that it is accessible to everyone. Even something as simple as a salsa company moving their product from the condiment aisle to the chip aisle of a grocery store serves as a great example of the strategy’s benefits. Growth hacking is all about testing things out and taking in feedback to create a new position in the market. It doesn’t have to result in a 10-figure exit, it just needs to work well enough to have a positive impact on your business.
Putting a growth hacking culture in place
Implementing a growth hacking culture has a lot to do with putting egos aside and using data as your compass. Your team will always have varying opinions on what is best, from the color of a banner ad, to how you handle service tickets.
The opinion that really matters is the customer’s and the only way to know what they want, is to present them the options and get their feedback based on performance. When you stop making hierarchal “assumptions” about what is right and wrong and start proving, that is the foundation of a great culture.
The biggest mistake that MSPs make when executing this type of strategy is that they think they do not make mistakes. They are capable of being innovative, but they choose to not be because they are afraid to fail. For every heroic growth hacking story, there are thousands of failures that had to happen for that path to be found. Eliminate the pre-conceived notions of what ideas are “good” and “bad.” If you want to win, then you must experiment outside of your comfort zone. You can do this by trusting your prospects and customers to be your company’s ultimate decision makers.
How this benefits you
The suffocation of profits in the managed service industry is a real problem, but is one that can be fixed with growth hacking. There are a lot of providers in the industry that prefer to just compete on price and lack of creativity can suppress the market.
An easy way for MSPs to implement this strategy is to place ads for other solutions or services in your payment portal. Individuals who are handling invoices from your MSP are likely the decision makers, so placing ads in the payment portal creates an easy path to reach them directly. You are essentially monetizing the attention that they are already giving you — for free.
If you are trying this, you must be willing to experiment with every customer touchpoint, from the marketing funnel to your service and operations. If you know how to measure and increase the lifetime value of your customer, then you will know how much you can afford to spend to acquire a new one. You can also be more competitively priced on net new contracts, knowing you have systems in place to increase that value after you have earned their business.
The last thing you should know about growth hacking, is that it requires the same amount of effort as other ‘traditional’ strategies. It’s not a ‘get rich quick’ scheme — you will have to try ideas that will initially fail. The difference with this approach? When it is done right, it creates a positive impact that is truly felt throughout your managed services business. Just remember that when it comes to growth hacking, to be successful, you must fully commit.
Photo: HAKINMHAN / Shutterstock.
