3 Keys to Building Sustainable Growth

| January 15, 2014
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Today’s post comes from Sean Ellis, CEO of Qualaroo and Founder of GrowthHackers.com. Sean presented a webinar with UserTesting on January 21 called “The Biggest Growth Opportunity Is Right Under Your Nose.” Watch the webinar today! 3Keys_PostHeader There’s a lot of buzz about startup growth, in particular the phrase ‘growth hacking’. Some love it, others loathe it, still others think it little more than a rebrand of traditional online marketing. The debate is a good one to have, as it finally has all marketers focused on what matters: growth. Companies need growth to survive, and without a clear line of sight to significant growth milestones, many companies, even ones with great products, wilt away and die. But as with most buzzwords, there is a lot of confusion around growth and what driving growth is really all about. In my definition, sustainable growth is measured in the units of utility delivered. Every other key metric follows. Growth is about scaling the amount of utility you deliver to an ever-growing base of users. Sounds good, so how do you do it?

Here are my 3 keys to creating sustainable growth:

1) Deliver a must-have experience

Connecting your product or service with people who get must-have utility out of it is the scorecard for successful, sustainable growth. What is a must-have experience? It’s an experience so good that if you took it away from your users tomorrow, they’d be very disappointed. Think file sharing and Dropbox, or event registration and Eventbrite. These are must-have product experiences.

When 40% or so of your user base says they’d be very disappointed if your product disappeared tomorrow, you’re at or near product/market fit.

Then you can begin to scale your customer acquisition efforts to grow your business—knowing that if you bring in more people like your existing users, they’ll love your product. If you want to know if you’re at that 40% threshold, ask your users to take the survey.io survey and see where you stand. If you’re not at 40%, you’ll want to continue to collect user feedback, conduct customer development, and use that input to iterate your product toward that must-have number.

2) Build a value delivery engine

To drive growth, you need to get as many of the right kinds of people to the must-have experience you are creating above. To do this, you need to drive conversions. I like to keep a simple equation in my head at all times that helps to define effective value delivery engines:

conversion equation

If desire is high, people will jump through all kinds of hoops to get to your product’s must-have experience. If friction is high, it can offset desire, and in low-desire situations, it can kill conversion completely. Part two of building sustainable growth is to continually improve the balance of this equation by reducing friction and improving desire. Often, it can be hard to move desire. You can improve the quality of your traffic sources by better understanding where people like your best customers reside online and how you can reach them. But even the best targeting has no guarantee of improving user desire. Friction, on the other hand, is almost entirely in your court. Through methodical user research, testing, and a thoughtful, ongoing conversion rate optimization (CRO) plan, you can eliminate friction in your conversion funnel and get more of the people on your site to the must-have experience.

When you reduce friction, whether it’s caused by confusing messaging or clunky UX, you immediately make your existing traffic more valuable and get more from your current marketing efforts.

Everything works better when you’re continually improving on your conversion rate. Your value delivery engine gets stronger and stronger. And that’s only accomplished through ongoing CRO.

3) Get more of the right people to your must-have experience

The third key is to get more of the right people to your must-have experience. This is typically the step that everyone jumps to first; but this, in the immortal words of Admiral Ackbar, is a trap!

(He would know.)

(He would know.)

Because sending more people (even the people you think should love what you provide) to a product that is full of friction and doesn’t have a compelling must-have experience is a recipe for disaster. It’s like lighting money on fire. Until you’ve tackled steps one and two, you can’t scale your growth, because you aren’t set up to deliver sustainable value to your target users. There’s too much friction in the experience, and the value delivered isn’t great enough for users to miss it if your company disappeared tomorrow. With steps one and two in place, you can determine where your best customers come from through surveys and analytics to determine where you should invest next to find scalable growth. Identify the most lucrative sources of customers, and find ways to bring more of them in through that channel. Combined with a must-have experience and smart conversion optimization, you can find scalable opportunities to grow your business.

Ready to learn more about creating growth for your business?

    I hosted a free webinar with UserTesting which focuses on step two—how to find growth from your existing traffic. Now available on-demand, “The Biggest Growth Opportunity Is Right Under Your Nose” will show you how to use user feedback to identify the biggest opportunities for improvement, and how sound conversion rate optimization can be your strategic advantage to outgrowing your competition and finding lasting sustainable growth. If you’re on the fence, consider this: if your conversion rate is twice as good, you can spend the same amount of money you’re spending now, and get twice as many new customers. Plus, you can pay more for users and be profitable, letting you find greater opportunities for scale—outcompeting the competition for those users. I hope you’ll check out this free, on-demand webinar. You can watch it here