Growth Hacking Blog How to increase online sales using growth hacking methodology? 
How to increase online sales using growth hacking methodology?
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6 typical situations of company’s revenue growth

growth hacking in online sales

Increasing company’s sales rates is a complex business task that can be solved in different ways at various stages of the company’s development. As a member of Internet Initiatives Development Fund board from 2015 up to 2018, I saw hundreds of different businesses, both online and offline, whose main goal was multiple growth expected by venture investors. Despite the huge differences in the areas and options of business models that I came across, there are two typical situations of increasing profits using digital marketing:

  • Multiple sales growth provided by adding a new traffic source

The point here is that a business does not always use all possible sales channels, or, in terms of the digital marketing, not all possible sources of traffic are engaged. Typical examples are:

  1. There is advertising in Google Ads, but no advertising in Facebook or LinkedIn.
  2. There is search engine marketing, but social media marketing or lead email nurturing is not used.

Numerous similar examples can be provided, since there are many combinations of using traffic sources. However, marketing opportunities of advertising platforms are limited, that is why some sources of traffic and sales are often overlooked by advertisers or are unavailable because of budget constraints.

  • Increasing sales by detailed optimization of the “sales funnel”

What we mean here is the situation when a company already uses the maximum number of traffic sources, so it is not possible to achieve a multiple growth by simply adding another source of visitors. In this case, the focus of work shifts to what happens after visitors come to the website. At this stage of increasing online sales, the goal is to increase the conversion rate, that is, the percentage of visitors turning new customers into a company.

To find a solution to this task, it is usually required to pinpoint “bottlenecks” of the sales funnel and to eliminate them. This is not necessarily connected with the convenience of using the website or usability problems (although this is not a rare case, it does not usually cause a sharp increase in conversion); quite often, it is associated with other factors, such as poor-quality traffic, negative online reviews, lack of trust in the company on the internet, etc. Conversion rate optimization is a very complex issue, which requires an individual study of each specific business case to develop a comprehensive solution. Below you’ll find the 6 typical situations that help companies to achieve the revenue growth:

  • Increasing sales by increasing the average order value
  • Increasing sales by testing pricing policy

Speaking of these two situations, we explain that you can increase profits by working on a unique commercial offer. Let’s take e-commerce industry as an example. Here the mechanics of increasing the average order value often involves introducing automated recommender systems that select products with a higher probability of being purchased; another possibility is adding upsells to various places on the website (usually at the stage of moving to the shopping cart). The same principles can also be used for websites that operate in B2B and services. Startups often experiment with real-time pricing, when visitors are divided into two equal parts and are offered different prices or even a different tariff-setting model, which allows comparing the impact of each model on sales rates.

  • Increasing sales by increasing the number of repeat orders

This method of increasing the company’s revenues is often unfairly overlooked by entrepreneurs and sales directors, even though working with the current customer base, especially in B2B or in a business that is based on a distribution network, is often significantly cheaper than acquiring new customers. The cutting-edge way of generating repeat orders is to cluster the customer base into various small groups (so-called cohorts) according to various criteria (e.g., by the time of the last order, by the last purchased goods, by the value of the last order, etc.) and to deliver different messages through the maximum number of channels. The latter may include sequences of email messages or retargeting in social media by a pre-loaded client base cluster.

  • Increasing sales using the mechanics of referral marketing

Increasing sales without increasing sales costs is nothing short of artistry: even if, for example, you do not invest additional funds in advertising campaigns, but focus only on generating repeat orders or increasing the purchase value, you will still have to invest in tools (recommender systems, email marketing tools, etc.) and in experts who will configure and manage them.

Referral mechanics embedded into the sales system allows using current customers to drive new ones. This network effect — that should not be confused with sales models of selling cosmetic products and weight loss supplements through networks of agents — is an extremely inexpensive way to increase revenues that, with the due level of performance, works efficiently without negative effects on customer experience of existing clients.

Growth hacking and the AARRR model

Quite often the digital marketing industry coins buzzwords that are used to attract the attention of potential customers. Recently, we have witnessed the arrival of “big data”, “artificial intelligence”, “machine learning”, and others. “Growth hacking” also flickered in this stream of new terms. The first time I heard about growth hacking was in 2017, when I was holding the position of Director of Online Marketing at Bacula Systems.

Being curious about newer ways that other digital marketing specialists can use to attract attention, I turned to Wikipedia and other sources. The search was fruitful: according to observers, growth hacking was a certain set of typical cases and techniques that allowed influencing the so-called AARRR model, or the AARRR funnel. So, what is it?

The answer is quite simple: AARRR is a funnel, which describes a potential customer journey including such stages as Acquisition, Activation, Retention, Referral and Revenue. If we add some explanation, here is what these stages are:

growth hacking and AARRR funnel

  • Website/product traffic acquisition;
  • Traffic activation (performing a targeted action, e.g. making a purchase, filling out an order form, downloading a file, watching a video, etc.);
  • Traffic retention (customer retention after the first order for repeat purchases, user retention within the product, etc.);
  • Referral mechanics (current customers recommend the product and bring new customers);
  • Pricing and/or tariff-setting policy testing.

If we compare this funnel with the sales growth cases described above, we will notice that growth hacking is a more comprehensive concept of working with the company’s revenues and profit. Indeed, the AARRR model allows us to influence not only the inbound traffic or conversion rate during the first order, but also more complex metrics, such as the share of repeat orders, the average number of orders generated by the current customer and revenue from them, the average purchase value, and many others.

Features of growth hacking

Back in 2008, WebProfiters was one of the first agencies in Russia to optimize website conversion rate. Along with other data-driven marketing pioneers in Russia, we provided services in the field of improving website performance through usability audit, marketing audit of sales offers and website content, mathematical modelling of factors affecting conversion, etc. WebProfiters became one of the first three certified Google Analytics Partners in Russia.

Over the following 10 years, the landscape of digital marketing services has changed a lot; this was happening especially quickly during my absence from active agency business. Nowadays, consulting services are no longer unique. Conversion rate optimization through website usability audits is offered by any digital agency, and the number of Google Partners has exceeded several dozens.

However, this variety often disguises rather trivial services, and their cost is not based on any real cases or results. The overwhelming majority of recommendations offered by agencies are rather narrow in scope and address only the interface issues of the website or product. At the same time, issues of conversion rate optimization and sales growth are often connected not with an inconvenient interface that doesn’t meet generally accepted standards, but with flaws of the sales offer, the lack of trust in the company, poor reviews – in a word, with external factors that are not related to the interface at all.

If recommendations are limited only to internal factors and primary sales, they do not lead to an explosive sales growth; in fact, they may not result even in achieving the minimum acceptable statistical increase in sales or order generation. And yet, website owners often have to allocate a sizeable budget for the whole project: to pay for an audit with a far-fetched “expert” assessment of the website interface, and then to implement recommendations and spend money on additional work of web developers without any guaranteed results.

Growth hacking as an approach and the AARRR model as a focus area help to avoid all the problems described above. First of all, the advantage of growth hacking is its perception of a business as a holistic organism that requires attention to a set of metrics in its various places. These comprise both internal and external factors, and even the sales offer itself: only comprehensive work on all these factors can lead to a multiple growth in sales rates or the number of leads.

The second big advantage of the growth hacking concept is that it implies not expert knowledge on how to do this or that (e.g., the website interface, lead nurturing or pricing policy), but empirical data, that is, constant iterative A/B tests.

The concept of agile marketing as a continuous process of generating hypotheses about improving AARRR indicators and testing the hypotheses on a limited audience fits perfectly with the growth hacking ideology and allows achieving great results at low costs and risks.

Growth hacking rules

We have come up with several rules that we try to keep to when working with clients who aim to increase their sales.

  1. We do not require any prepayment for “audits”; instead, we offer a free preliminary list of hypotheses for increasing revenues online that can be checked at the first stage of work. We are well aware that we may be left out if the client accepts the list and implements it without our assistance, but we are confident that continuous partnership with us is more useful than a one-time leap in the field of analyzing the website effectiveness.
  2. We do not position ourselves as experts with a clear-cut opinion. Certainly, we could claim that, being in the field of conversion rate optimization since 2008, we know exactly what this or that website should look like or how this or that advertising campaign or business model should be set up. But we are not interested in bragging about being smarter than the business owner or the company manager; instead, we take pride in our vast experience and knowledge in the field of testing sales growth hypotheses. Working with businesses of different sizes and from different industries, we have created a pool of solutions that were applied in certain particular cases and had a positive impact on companies’ sales. Moreover, this pool of solutions was used in various situations; for example, there were projects where we could utilize a comprehensive approach, and there were also cases where we were allowed to change only one single image on the landing page. Naturally, the resulting growth could vary from 300% to 12% in each of these situations.
  3. We do not work with clients who are not ready to trust numerical test data and who rely only on their own experience or “gut feeling”. Over the course of my 13-year-long career in digital marketing, I have seen various companies and their staff members. Growth hacking requires open mind, thinking outside the box, willingness to change, and being able to accept the fact that the opinion, which has been regarded as the only true one for years, could actually hinder sales and revenue growth.

In our opinion, the recipe for high quality “sales growth hacking” includes trust in numerical data, desire to conduct continuous testing in various business processes of the company, and being open to the most unexpected ideas suggested by outside consultants with a fresh eye, unaffected by many years of operational work. We wish you all to achieve a multiple sales growth!

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