What is growth hacking?
Growth hacking is the use of innovative marketing tactics or technologies to rapidly improve a brand’s performance against objectives such as sales, customer acquisition, social media engagement and brand recognition.
The term ‘growth hacking’ was coined by Sean Ellis, a marketer renowned for his role in growing brands such as Qualaroo, LogMeIn and Dropbox. In a blog post published 2010, Ellis identified growth hackers as people “whose true north is growth”, and who are capable of identifying scalable growth techniques that lend themselves well to repeated use and optimisation.
In this collection of growth hacking case studies, we’re going to highlight examples of B2C growth hacking, where the business aim is to sell to consumers, as opposed to other businesses. We’ll look at three very different success stories – from Airbnb, Monzo, and the fashion label Stutterheim – to learn how innovative marketers are hacking their way to exceptional growth.
How Airbnb used Craigslist to grow its userbase
We all know Airbnb is a big deal. As of 2019, the accommodation rental platform has about 150 million users in over 65,000 cities. What some of you may not realise is that a controversial growth hack helped kickstart the brand’s userbase towards today’s impressive figures.
In 2009, Airbnb was a promising startup, welcoming about 20,000 guests in a year. At that time, the classifieds site Craigslist was in a totally different league, with 42 million unique monthly users, many of whom used Craigslist to list or book rental properties.
Airbnb hacked into this huge market by creating the functionality for Airbnb hosts to replicate their listings onto Craigslist. The host simply had to select a few options including the Craigslist post title, category and market area, and the post would then appear on Craigslist as well as Airbnb.
Craigslist customers who wanted to book the Airbnb properties had to click through from the Craigslist post to the Airbnb website. So, the hack didn’t just funnel bookings from the larger platform to the smaller; it also converted Craigslist users into Airbnb users.
This effect was reportedly compounded through a surreptitious email campaign targeting people who advertised their rental properties on Craigslist. The emails complimented the user on their Craigslist listing, before recommending they try listing the property on Airbnb. They were sent from addresses which seemed to belong to ordinary web users (specifically, female users), rather than people explicitly associated with Airbnb.
Dave Gooden, co-founder of the rental property business LakePlace.com, did some research into Airbnb-related emails on Craigslist after receiving an email resembling the one shown above.
Gooden posted several dummy rental listings on Craigslist under different aliases, and consistently received emails recommending Airbnb shortly after posting. The sender and location specifics differed in each case, but all the emails pointed through to Airbnb. You can read Dave Gooden’s full account in this carefully worded blog post.
Airbnb may have exhibited some questionable business ethics in this case, but the outcome seems to have been favourable. Between 2009, around the time of the growth hack, and 2012, guest arrivals rose from 20,000 to 3 million a year.
Lessons to take away
This case study demonstrates the potential for startups to grow their userbase by tapping into established markets – especially ‘alternative’ marketplaces like Craigslist, which might not have been targeted at scale by other startups in the same space.
The technical requirements of Airbnb’s growth hack were complex, as this excellent analysis from growth specialist Andrew Chen attests. Craigslist did not offer an API for third-party reposting, which means Airbnb must have engineered a bespoke solution.
Brands that want to replicate Airbnb’s use of Craigslist should carefully monitor alternative/underground marketplaces where users deal in relevant goods and services. Where are the opportunities to convert users of a large but under-optimised channel into users of a new and more sophisticated alternative?
If you’re planning on going down this route, we suggest you bear the following points in mind:
- What made this growth hack so effective was its built-in mechanism for transferring users from Craigslist to Airbnb.
- While aggressive tactics like the email campaign recommending Airbnb to Craigslist users can fly under the radar when used by a startup like Airbnb in 2009, they would likely be viewed in a different light coming from a big company with widespread brand recognition.
- This approach could not have succeeded were it not for the fact Airbnb offered a better user experience than Craigslist for people on both sides of the rental relationship.
How Monzo generated buzz with a viral waiting list
From its snazzy coral-coloured current account cards to its analytics-enhanced user experience, Monzo has thoroughly differentiated itself from traditional personal finance brands since launching in 2016. At the time of writing, the brand has over 2 million customers and a valuation of £2 billion. Reaching these figures so rapidly required a combination of innovative product, strong branding, and a clever growth hacking element, shown here:
This is a prime example of a viral waiting list, which is a common type of growth hacking mechanism used to capture user engagement and generate referrals.
After signing up to Monzo’s current account waiting list, users could see how many people were ahead of them in the queue for an account, and how many were behind (see the numbers in the image above).
A CTA button labelled ‘Bump me up’ gave users the opportunity to move further up the queue and get an account sooner – but only if they could successfully refer other people to join the list by sharing a unique referral URL that would appear after they clicked the CTA button.
This unique referral link was shown with a share button, which the customer could use to post their URL to social media in the space of a few taps. Whenever a user shared their personal link, the brand benefitted from visibility on social media or other channels, plus the prospect of further waiting list sign-ups, and deepened engagement with the user who shared the link.
Monzo’s viral waiting list attracted 200,000 signups ahead of launch, forming the basis for the brand to start its growth from a position of strong brand recognition, marketing reach and customer engagement.
According to Monzo’s former head of marketing, Bailey Kursar, the viral waiting list wouldn’t have been viable if it weren’t for the fact Monzo’s USPs had been effectively communicated to potential customers through supplementary marketing.
In an interview with simpleweb, Kursar said “I think a lot of people out there doubt that people would refer their friends to a financial services product. It’s not something that people are generally very desperate to try and add to their lives.
“[But] I think that at the moment, it’s working for us [because] Monzo is so different to what is out there. It’s an entirely different experience in terms of your banking.
“I think [that’s why] people are really scrambling to get a hold of a card.”
Lessons to take away
Monzo’s pre-launch campaign achieved a fine balance between creating a sense of exclusivity around the brand’s current accounts, and harnessing that sense of exclusivity to generate interest and account signups on a mass-market scale.
Achieving these two outcomes, each of which seemed to contradict the other, was reliant on the psychological effect and behavioural influence of Monzo’s viral waiting list.
The key lesson to take from this is that strategically limiting access to a brand can increase consumer interest and demand. Used with digital technologies that enable referrals, viral social media reach and online signups, this classic psychological marketing hack can deliver significant growth to a new brand’s customer base.
How embracing melancholy gave Stutterheim something to smile about
Not all growth hacks require a tech-centric approach. Sometimes an innovative approach to marketing strategy more broadly can bring comparable gains.
Swedish rainwear label Stutterheim pulled off just such a hack when it defied marketing orthodoxy by placing melancholy at the heart of its brand. This was a classic growth hack, insofar as it replaced conventional marketing tactics with an equally valid alternative that has been overlooked by rival brands.
Where most fashion brands would religiously avoid associating themselves and their products with melancholy, Stutterheim wrote about it on their product packaging, played melancholic jazz music in-store, and even handed out a brilliantly tongue-in-cheek ‘Most Melancholic Person Of The Year Award’ every year from 2010-2014.
“Melancholy is an essential part of being a human being, and you shouldn’t fight it,” founder Alexander Stutterheim told the BBC.
“And that is the analogy with the raincoat, you should go out and embrace the rain, enjoy it.”
Stutterheim turned over £4.3 million in 2016. The brand’s celebrity patrons include Jaz-Z and Paloma Faith.
Lessons to take away
While it’s true that the safest route to growth might be to follow the example of other successful businesses, the surest route to fast growth is likely to involve taking risks and going against established logic. Lots of businesses are taking a conventional approach already, and there’s a good chance some of them will be better resourced than your business.
Stutterheim’s success story is a classic example of how brands can thrive by taking the road less travelled. Other factors have also played a part here – not least the high quality and attractive design of Stutterheim’s rainwear – but embracing melancholy has clearly helped the brand to quickly grow its global customer base.
More growth hacking case studies
We’ve chosen to use this article to thoroughly analyse just a handful of highly effective growth hacks. No doubt some of you would like to read some more examples, so here are some other case studies from around the web that will give you a flavour of the scale and variety of marketing that can be classified in the growth hacking bracket:
- Growth-hacking via news-jacking: Kronenbourg 1664 serves contextually relevant messaging alongside online and print news reporting (The Drum)
- Facebook, PayPal and Dollar Shave Club growth hacking examples (CLOUDWAYS)
- 7 growth hacking examples (Mention)
- Subversive FMCG marketing: Captain Morgan’s targets consumers planning big nights out with responsible drinking messaging (The Drum)
Elements of growth hacking
Most examples of growth hacking – including the ones featured in this article – involve one or more of the following elements:
- Strategic growth hacking: new marketing tactics are identified to achieve rapid growth.
- Technological growth hacking: IT systems are created, modified or used in novel ways to achieve rapid growth.
- Illegal or rule-breaking growth hacking: laws or guidelines are broken to achieve rapid growth.
Clearly, most businesses will stick to strategic or technological growth hacking elements, as these usually carry a relatively low legal or regulatory risk.
While illegal growth hacking techniques are completely out of bounds, there are some cases where rule-breaking growth hacking is arguably acceptable, although it could bring negative consequences.
One such example is the use of black-hat SEO techniques to achieve rapid growth through search engine visibility. Search engines like Google and Bing are opaque, for-profit brands, and breaking their rules should therefore be thought of not as a moral failing, but rather as a very high-risk strategy. Black-hat SEO practices have become rarer and less successful as search engines have gotten better at identifying them. The flower delivery company Interflora fell foul of this trend in 2013, when Google identified its use of black-hat tactics and consequently removed its webpages from search results.
With cases like Interflora’s in mind, our advice would be to stick to growth hacks that are based around technological and strategic innovation, rather than bending the rules. Nevertheless, it is undeniably the case that some of the best growth hacks are close to the boundaries of acceptable practice. Just ask Airbnb.
How to use growth hacking case studies
The problem with growth hacking case studies is that they can’t simply be used as a roadmap for other brands’ success. Every brand, every sector and every moment in marketing history is unique, and this means growth hackers need to come up with bespoke ideas to suit their situation. Yesterday’s clever growth hack could be outdated and irrelevant today.
In light of this, we suggest you use growth hacking case studies as a source of ideas and inspiration, rather than as models for your own marketing strategy. Try to identify transferable tactics and ways of thinking that you could apply to a new type of growth hack – whether that means borrowing from the opportunism of Airbnb’s Craigslist hijack, the clever psychology of Monzo’s viral waiting list, or the nonconformity of Stutterheim’s branding,