Making Data Simple: Growth Hacking - Not just for start ups
How did companies like Facebook and Airbnb get so big so fast? What can we learn from them? Why is data so important for growth? Nancy Hensley, Director of Strategy & Growth for IBM Hybrid Cloud, has the answers in this episode of Making Data Simple. Learn how you can use growth hacking strategies to build your business and why growth hacking isn't just for startups.
Hungry for more? Check out our previous podcast episodes of Making Data Simple:
- Episode 1: Making Data Simple: The big data problem
- Episode 2: Making Data Simple: End of tech companies
- Episode 3: Making Data Simple: A new definition of client care
- Episode 4: Making Data Simple: Will machines take our jobs?
- Episode 6: Making Data Simple: From 2D to 3D -- Augmented reality data visualization
- Episode 7: Making Data Simple: The 5 areas businesses MUST get right
- Episode 8: Making Data Simple: How data science is helping to improve aviation
- Episode 9: Making Data Simple: Making data fun & easy with Caleb Curry
Moderator: Al Martin
October 12, 2017
2:36 pm CT
Albert Martin: All right. Hey welcome back to the series Making Data Simple. This is Al Martin. Today’s topic is Growth Hacking and I’ve got a person on the call today named Nancy Hensley, native of Chicago, Director of Offering Management, the most positive person that I know. How’s that? Is that pretty good?
Nancy Hensley: That’s great. That’s great.
Albert Martin: And a social champion so as I know it and an advocate of growth hacking, right?
Nancy Hensley: Indeed.
Albert Martin: So look, let’s jump right in if you don’t mind. Growth Hacking – what is it? Where did it come about and why should the listeners on the line here care?
Nancy Hensley: Sure. It’s my favorite topic so thank you for asking me to talk about it. So growth hacking really has its roots in the startup area of Silicon Valley. And if you look at a lot of the companies that you probably said, “How did they grow so fast?” -- Facebook, Uber, Airbnb -- they all had something in common and that was growth hacking.
So you’re probably saying, “Well what the heck is this?” Really what it is is it is the ability to hack growth by doing rapid experimentation across the full customer journey, so at every step of the way learn/discover/try/buy.
There’s opportunities to get traction and growth with every step/interaction/engagement with your clients. And so what growth hacking does is – allows you to have a discipline for approaching this with experiments by measuring it so it’s 100% data-driven.
Everything is scrutinized by its impact to sustaining customer growth and adoption, and it really blurs the lines of product management, product marketing, digital marketing and data science because it really requires everybody to work together across all of those aspects of the customer journey.
Albert Martin: Fantastic. You know, look, I know you’re a huge advocate of growth hacking. Any time I think of growth hacking I think of yourself because, you know, you’re always an evangelist around the concept.
But you got to tell me, you know, how’d you first discover or become interested in it? Where…
Nancy Hensley: Sure.
Albert Martin: …does your passion come from?
Nancy Hensley: Okay so that’s a – actually a great story. So a few years ago I was tasked with bringing one of our first Saa S products to market. And coming from a very traditional background both in software development/software product management/software product marketing, as I was staring down the thought of, “How do I actually convert from thinking about filling a pipeline of opportunities, to filling a funnel that converts at a much lower percentage with a much smaller transaction level?” it was just daunting to think about how I’d change the way we did things to actually achieve the revenue goals we wanted to do.
And so I had that question and I looked at, “Well how did Facebook and Uber – how did all these companies do it?” and I started to do some research. And I came across an article that a lot of growth hackers talk about, which is by a gentleman named Andrew Chen that talked about – the title was – is the Growth Hacker is the Next VP of Marketing and that got my attention.
And he talked about Airbnb and a lot of the famous growth hacking studies, and the fact that really the term was born from a gentleman named Sean Ellis, who has a great book out there called Hacking Growth if you want to read more about it.
When he was talking about approaching this new role of vice president of marketing and that he felt that he didn’t want to be a vice president of marketing, he wanted to do this combination of experimentation and data science and marketing and product management all rolled into one because he coined the term growth hacking.
So I - read about it the more I got excited and passionate about it because it made so much sense to me. I love data. I love product. I love marketing. I love all those things wrapped up into one and the ability to look at things differently and create these small experiments and try things, look at data, our sales data and get to the end state after was extremely appealing to me.
And one of the case studies that I came across was – it gave me even more inspiration and it was – because it was – sounded a little bit like the job I had at IBM and it was something we probably all know.
You’ve all heard of Jagermeister. You – we all had that experience in college. And it – what most people don’t know is there’s an interesting history there and they’re a great growth hacking study.
They – before they introduced something we all know as the Jagerbomb – were basically just not selling any product. It was sitting on the shelf collecting dust.
Their sales were – they were selling about 70,000 bottles a year in the United Kingdom. And after they introduced the Jagerbomb – a year after this they sold 700,000 and then within five years 6.3 million bottles and it accounts for about 40% of the shots in pubs.
And the interesting thing about this is the Jagerbomb was their growth hack because they looked at it and say, “Well how do we create growth? We can’t really change the product.
It’s an 80-year-old product. It’s really difficult to make.” So it was a – it was inspirational to me because we have a lot of products that are pretty mature. But they thought, “Well if we change the way people consume it, we build a conversation around that, we could actually hack growth,” and that’s what they did with the Jagerbomb.
And so I – “This is great. We could probably use this model with our own software,” and that gave me a lot of inspiration for doing the same thing at IBM.
Albert Martin: Well I got to tell you. I try to stay from – away from too many Jagers. I mean, and that’s a great example though - a great example. So you mentioned data a few times. Can you reiterate or clarify further the importance of data for growth hacking?
Nancy Hensley: Well really data is the only way you know you’re achieving something, right. So if you look at what your goals would be whether it’s a percent of growth or whether it’s the number of active users, when you conducted an experiment the data’s going to tell you whether you’re moving towards that goal or away from that goal.
And even the failures – the data that you’re getting from the failures are going to tell you how to get closer to that goal, because it’s going to tell you the direction not to go.
So without data you really don’t know whether you’re doing the right things, and whether the things that you’re doing are going to allow you to hack growth and move closer to those - model that you want to get to and really create that lift.
Albert Martin: Fantastic. Well do you know the story behind the Airbnb because that was your…
Nancy Hensley: So yes.
Albert Martin: Okay go ahead. I mean, and hit that one because I – I’m curious as to that. I mean…
Nancy Hensley: Sure.
Albert Martin: …you know, today they book more rooms than all the other hotels’ chains combined yet they don’t own one room themselves, so what have they…
Nancy Hensley: Right.
Albert Martin: …growth hacking?
Nancy Hensley: So there’s a couple of things with Airbnb. They are often referred to as the original hack/a true hack. What they did was they knew that their targeted customer base were the same people that leveraged Craigslist a lot.
And so what they did is they did a little research and they figured out that Craigslist staged their listing information using a unique URL rather than an actual cookie.
So they were able to build this bot to visit Craigslist, snag the URL and just forward that URL to their users for publishing so they basically hacked into Craigslist.
And then when somebody was looking for a room to rent it would automatically redirect to Airbnb so it increased their traffic dramatically. Now you’ve seen Craigslist.
It’s not a great UI. It’s not pretty and so Airbnb also put up these really nice pictures, and so there was immediate engagement once they got the traffic moved over.
Now of course Craigslist figured this out and shut it down so they had to go on to the next hack, and for them that was their referral program. So if you were one of the early Airbnb adopters you might remember that they would give you this program that you would get - I think it was $25 or something for every referral that you sent out, and they made it really easy for you to send out referrals to all of your friends.
So essentially you could create your own stay for free if you did a really good job of referring and you’re growing their business.
Albert Martin: Awesome. Hey – so – and here’s the thing. Airbnb is more of a startup…
Nancy Hensley: Right.
Albert Martin: …and I know, you know, typically when I associate growth hacking it’s more around coming up with like a unique form of marketing either through social media or otherwise, not your traditional radio/newspaper/television so that you can have the same kind of advertising, maybe even network effects to get, you know, people to your brand.
So, I mean, I’d like a little bit of what your thoughts are there but, you know, what about - company like IBM? Not exactly a startup. But – so from that standpoint, even saying we’ve been around a lot.
You know, it – does it work for IBM and can you give me an example of how easy it is?
Nancy Hensley: Sure. It absolutely does work for larger companies and in fact it was interesting to see the mix changing at the Growth Hackers conference this year, because it wasn’t just the Facebooks and Airbnbs that were there.
It was us and Apple and some of the other larger companies that were more enterprise-focused that are leveraging these new techniques, because it’s a mindset change, right.
It goes from - a growth hacker wakes up every day and thinks about growth and adoption. A traditional mindset might be the, “How do I get to my next revenue goals?”
And the decisions that you make in those two different mindsets are very different, so let’s talk about how we actually growth hack at IBM because this is a great story too.
So taking my inspiration from Jager of a product that was very mature, (unintelligible). I think it’s going to turn 50 next year. This is a product that - we had pretty good recognition.
We have, you know, probably millions of users across a quarter of a million organizations worldwide, mostly academic students, has been traditionally sold through face-to-face and telesales but our growth was generally solved and our NPS was awful because the experience of getting the product was not great.
And our clients were really clear in the feedback we were getting from them. They wanted better pricing, more flexible pricing and licensing. We had an annual perpetual license that we had.
They wanted the – an easy access to mostly students. They wanted a quick way to this because they’re using it for projects and they wanted better support.
They wanted all of those things that we were not giving them today, so we looked at this the same way Jager did it. The – so if we changed the way our clients are consuming the software today, could we actually hack growth?
And so we pulled together the – a team that consisted of a combination of product management, product marketing, portfolio marketing, performance marketing, design, sales development, design – oh sorry.
I think it’s those design (unintelligible) are important. They’re very important – support, of course the digital business group but it really is a team sport to pull together.
And we talked about the full experience from when somebody’s first, you know, does a Google search for statistic software are we easy to find? And when they find us how easy is it to get our software and then once you try – once you get the trial how easy is it to buy the software?
And the answer was not very. We had pretty much a digital scavenger hunt with all the different pages that we had, and so we really streamlined the service so it was – you could find us really quickly.
You got to the marketplace. You hit Trial – Free Trial and you were up and running with the product in like 15 minutes. We also changed the way we license it so we went to a monthly subscription license.
That support was built in. We created a connection right in our marketplace with both the – more support, deeper support and as well as a community, which was a very vibrant community than SPSS and the results were astounding.
I mean, our NPS score immediately started going up. Within weeks of us doing this it went up 50 points. Our trial numbers improved by over 50%. Our digital sales improved by over 50%.
But the most important thing for us, which was one of our North Star Metrics, was the time to acquire every 100 new clients was reduced by 70% so we had our Jagerbomb essentially.
Albert Martin: Yes. No, no. I’m very, very well familiar with it and I totally agree with you. Let me ask you this though. How do I get or how does one listening get into a growth hacking mindset, because I got to believe that some people listening may say, “Hey Nancy you just solved the problem?”
What makes it – the scenario that you just gave me growth hacking and how did you manufacture, you know, kind of that mindset if you will? In other words really make it about, you know, you let growth hacking help drive the solution that you just discussed.
Nancy Hensley: I think it starts with a – it’s like – almost like a cultural change, right, where you get everybody thinking about how – moving away from, “How do I just make our quarterly number or our annual number from a revenue perspective,” but, “How do I get more clients using our software?
How do we get more adoption? How do we grow the number of clients and how do we delight them in the process?” That’s the first mindset change and then to think about a number of experiments you can do at every step of the way.
It might be making the download easier. It might be the pricing and packaging. It might be that the onboarding experience, which we’re also doing a lot of work in as well – making that so much better so that when somebody actually gets the software they know what to do with it.
It’s very easy. You make it as – makes them as self-sufficient as possible. It might be some of the content that surrounds the product that makes it easier for the client to adopt it.
It might be that they want to be a part of the community. It’s all of these little things that create growth along the way that adds to that overall experience, so it really starts with a mindset change that – of coming up with what we call your North Star, which is the one thing that you’re – that one measurement that you’re going for and that’s not always easy to do.
A lot of software products with active users – Facebook struggled with this for a long time until they came up with active users. Their mission was essentially to be really essential to people, and so the way measured it was how many people were actively using it per day.
It – if you look at Uber their North Star measurement was the number of rides because they wanted to make sure that they had both – of the number of people requesting rides going up, but then they also had to have the – a number of drivers available, otherwise they would’ve failed in that first measurement, right.
They wouldn’t have achieved what they needed to do. The number of rides was their North Star. So going after that North Star and coming up with a bunch of things along that customer journey that helps you get there is really – it’s as simple as that.
It’s just a mindset change and it’s an idea to bring a group of people together and come forward with a bunch of different ideas that help promote growth, adoption and a great customer experience, so it seems that people are doing it already.
Albert Martin: Yes fair enough. Fair enough. You know, I like to do lots of experience – experiments but one thing I do is I try to drive one experiment per quarter. I mean, I experiment with purpose.
I mean, that may be a way, I don’t know, that I can help drive growth hacking in my business but that brings me to my last question here. And as a development exec myself what should I be doing?
I mean, what – in the name of growth hacking how should I start? What – how can I get that mindset and charge – start changing that culture in my organization?
Nancy Hensley: So on the development side I think there’s a core principle with growth hacking that you should always have on your mind, which is this concept that we call product market fit.
And that is, you know, this is your guidance for bringing a product to market. You know, is there a market for it? If there’s something already out there on the marketplace and there’s a gap and you can fill that gap with something better, then you could achieve product market fit.
A great example everybody understands of this is if you remember when the iPhone first came out and she took the stage, she talked about having a phone and a music device.
You didn’t introduce a new phone. You introduced this combination because the problem that they set out to solve was that people were carrying around two devices, and wouldn’t it be nice if you could combine those two things?
So their – that was their product market fit and they didn’t go after the phone market. They didn’t just go after the music market. They went after a totally new way to address the marketplace of clients that had both and that was about product market fit.
So if you keep asking yourself, “Do I have product market fit with what I’m bringing to market?” and constantly question yourself from the development perspective you’re well on your way.
Albert Martin: So look, that’s terrific. I’m good. I think I got it. I do have a few questions for you, what I call the lightning round, but before I go there anything else you…
Nancy Hensley: Sure.
Albert Martin: …would leave me with in terms of anything else that was – we didn’t say that should be said or did we – pretty get it done?
Nancy Hensley: I think we got it done but, you know, I’ll just say growth hacking is not just for startups. There are lots of companies looking at this and it really is going to be an evolution of how we combine a lot of the expertise from our different groups, and have that squad approach to doing the best thing for our clients and getting growth from that.
Albert Martin: To learn more about growth hacking is there any direction you’d give…
Nancy Hensley: Yes.
Albert Martin: …the listeners to go to?
Nancy Hensley: There’s a great community at growthhackers.com where there is just an amazing amount of knowledge there. And then I highly recommend Sean Ellis’ new book, which is Hacking Growth.
Albert Martin: Awesome. Got it. All right, so let me jump into the lightning round. This is a bit more personal so folks can…
Nancy Hensley: All right.
Albert Martin: …get to know Nancy. You ready?
Nancy Hensley: I’m ready.
Albert Martin: So you’re a growth hacker obviously. You must have a growth mindset. I’m just curious. What does your day look like? I mean, in terms of, you know, you stay positive.
That’s another thing you got to comment on. How do you stay so positive? What does your day look like? How do you drive cadence? How often maybe do you go to the growthhackers.com Web site? I mean…
Nancy Hensley: Oh wow that’s a huge question.
Albert Martin: I know.
Nancy Hensley: How do I stay positive? Well if you’re a sports fan in Chicago you have…
Albert Martin: Okay.
Nancy Hensley: …to have a positive…
Albert Martin: I knew that would come up. How did I know? She’s a Chicago girl…
Nancy Hensley: You knew it was going to come up, right?
Albert Martin: Yes.
Nancy Hensley: So I’m trying to stay positive for Game 5 tonight of the Cubs versus the Nationals. I actually start my day with – I start it on perusing social media. I like to see what is trending and what’s going on with the conversation that’s going on out there, and what are people talking about and dig deeper into that.
I love medium and reading the blogs on mediums because that also is representative of the conversations that are going on out there. I like to spend some time geeking out on topics, you know, like growth hacking, like machine learning and data science so I spend every morning having coffee doing just that, of course, you know, getting my sports news in there too.
Albert Martin: It is a half hour/hour?
Nancy Hensley: About an hour. Yes I tend…
Albert Martin: Yes.
Nancy Hensley: …to do an hour and not every, you know, every morning doesn’t always give you that much time and, you know, but if need be I’ll sometimes even just wake up earlier just so I can do that.
I think that’s really important to get some reading in, get connected, see what’s going on, you know, engage a little bit on social media. I go to the growth hackers Web site quite a bit.
Albert Martin: Yes.
Nancy Hensley: I’m – oh I have alerts that – for articles all the time that come up either through medium or through Twitter that give me new information about what’s going on out there and what people are doing, because that’s really important to see how people are continuing to move the growth – their growth hacking experience forward and there’s some really interesting stuff going on out there.
And then even within my own – the products that I have, keeping a very close eye I always start off with looking at our stats, taking a look at our NPS, see what’s going on because that really is a good barometer of are we doing the right things.
And then we once a week do a big data download across all of our digital products and dive into that, and that really helps us figure out if we’re doing the right things and what’s going on out there, so my world does revolve around all the data.
Albert Martin: Well that’s good. You and me both. So I – in terms of literature that you read I heard medium. I heard obviously growthhacker.com. Anywhere else you’d have folks, you know, you’d tout, some form of medium that you like?
Nancy Hensley: Specific to growth I think, you know, if you just actually…
Albert Martin: No not growth hacking. Just in general.
Nancy Hensley: Oh.
Albert Martin: In general.
Nancy Hensley: Well let’s see. And I’ll tell you what’s on my desk right now in terms…
Albert Martin: That’ll…
Nancy Hensley: …the books, right.
Albert Martin: And what’s that?
Nancy Hensley: So right now – and I haven’t started it yet but I’m so excited to start it - is a book called Hooked: How to Build Habit-Forming Products by Nir Eyal, E-Y-A-L, and Ryan Hoover who is a pretty famous growth hacker himself. He writes a lot. Or actually Ryan Holiday does.
Albert Martin: Yes.
Nancy Hensley: So this one – this book I’m really excited about. I got a book that I’ve been reading a lot and listening to some podcasts on - from a Chicago guy and the book is called Rework and it’s by Jason Fried and David Heinemeier Hansson.
And it’s about creating innovative work environments and this is a – actually a guy who’s in Chicago but he’s an entrepreneur for a company here that focuses on productivity software similar to his book.
Albert Martin: Did you say Rework?
Nancy Hensley: Rework. Yes.
Albert Martin: Yes. Okay.
Nancy Hensley: And I love the slogan on the book because it says, “Ignore this book at your peril.”
Albert Martin: And you immediately draw them in then.
Nancy Hensley: Absolutely. And then of course I have my Hacking Growth book here by Sean Ellis and Morgan Brown, because it’s kind of like my bible. I am always going back and pulling stuff out and referring back to it because not only does it tell you about what growth hacking is and it gives you a bunch of case studies, but there’s a pragmatic approach to setting up your team, running experiments, how you track them and so I literally feel like this is my everyday manual and so it really never leaves my desk…
Albert Martin: And what was the name of that book? Sorry.
Nancy Hensley: Hacking Growth by Sean…
Albert Martin: Hacking Growth.
Nancy Hensley: …Ellis and Morgan Brown.
Albert Martin: Hey where can the listeners reach you too? I want to make sure we get that out.
Nancy Hensley: Well they can follow me on Twitter at N-A-N-C-Y-K-O-P-P-D-W.
Albert Martin: Yes.
Nancy Hensley: And I also have a medium blog too where I write everything from data and growth hacking and so you’ll see my story about when I discovered the growth hacking there as well.
Albert Martin: Oh great. Now I got one last one on then we’re done.
Nancy Hensley: All right.
Albert Martin: I know – I’ve known you to be positive even before the Cubbies won the World Series. So how did that feel when they finally won the World Series?
Nancy Hensley: Oh my god.
Albert Martin: Didn’t you like take off a week?
Nancy Hensley: You know what? I did. The day of the parade we had a big leadership meeting that day and I remember I flagged (Rob) and said, “I’m sorry but I have to take a Ferris Bueller day because this is that – this – I’ve been waiting for this my whole life.”
And it was such an amazing experience to go down with the millions of other people. Like I think they called it the largest human gathering or the largest human gathering in the history of humans, which I believe.
We’ve been waiting for this a long time so it was amazing. And actually I think most of us in Chicago don’t feel much pressure this year, because we finally got there and it’s really all we wanted.
Albert Martin: Fantastic. Nancy thank you. I’ve learned a lot of growth hacking. Everybody go out there and learn some more. Thank you for taking your time today and thank you for listening. Nancy until next time I’ll talk to you later. Thank you.
Nancy Hensley: Thank you. It was great. Thank you.
Albert Martin: All right. See you. Bye-bye.
Nancy Hensley: Bye-bye.