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Context on my question: We’re about to publish our 4th growth study and each time the major growth driver has been word of mouth. We didn’t set out with any agenda to prove anything. We simply wanted to understand the engine of growth. This time we actually surveyed users of the product and 72% said they found out through word of month (vs press, invites, ads…). I’m really curious what people think about this question. I’ll post my thoughts after I hear from a few others.

  • SE

    Sean Ellis

    over 3 years ago #

    Context on my question: We're about to publish our 4th growth study and each time the major growth driver has been word of mouth. We didn't set out with any agenda to prove anything. We simply wanted to understand the engine of growth. This time we actually surveyed users of the product and 72% said they found out through word of month (vs press, invites, ads...). I'm really curious what people think about this question. I'll post my thoughts after I hear from a few others.

    • BB

      Brian Balfour

      over 3 years ago #

      I disagree with the premise of the question. WOM is the primary growth driver in the cases of Uber and a couple others you did case studies on. But it wasn't for some of the fastest growing companies in the past 5 years. 3 examples off the top of my head:

      Zynga - Virality was the kindle but paid FB ads were the gasoline that accelerated that fire.

      Groupon - WOM of was the kindle but once again paid ads were the fuel that made Groupon the fastest company to $1 Billion in valuation ever. At one point they were in the top 10 of spenders on both FB and Google Display Network.

      Fab - Once again, WOM was the kindle but paid was the accelerator. At the inflection point on their growth curve they were auto-sponsoring a user's post purchase fb share so that it was guaranteed their entire network would see the post.

      In all cases the companies took a very structured, data driven, creative approach to growth typically around hacking virality and paid.

      • SE

        Sean Ellis

        over 3 years ago #

        Hi Brian, Premise didn't mean to state that all fast growing companies are primarily driven through word of mouth. Just the three that we've published and the 4th that we plan to publish tomorrow morning.

        Interesting side note that all three you listed have hit major growth challenges in the last year. I wonder if a focus on improving natural word of mouth would have helped them achieve a more sustainable growth trajectory?

        • AH

          Andree Huk

          over 3 years ago #

          Quick site note: "sustainable growth"? Well, for how long? For a few years. To my understanding growth cannot be really sustainable. Companies are having quite a few good years of "constant" growth which then eventually flattens out or at least decreases substantially compared to the early years.

        • BB

          Brian Balfour

          over 3 years ago #

          I guess I was responding to "is growth hacking irrelevant if WOM is primary growth driver?" And my response to that is no, it is still relevant even when WOM is a one driver of growth.

          Agreed it is interesting that all are having growth challenges. While most of us spend our time on figuring out how to grow at all, there are those that face challenges to growing TOO fast. Good problem to have :)

          But I think in all three of these cases they just hit saturation in the market with their existing product which is why you see them flat line. I think they all probably over estimated where the ceiling was with their existing offering. Just like any mature company it takes new product/offerings to keep raising the ceiling and make room for growth.

      • AH

        Andree Huk

        over 3 years ago #

        Good take Brian.

    • GG

      Gab Goldenberg

      over 3 years ago #

      I think this ignores a lot of the point behind growth hacking - it's creative tricks to grow, regardless of the channel. FB's translating into local languages was a growth hack. Them buying an email integration service was a hack to get members to invite more contacts. Their SEO, split testing, giving away ad coupons, participating at AffiliateSummit were all growth hacks...

    • NP

      Nilan Peiris

      almost 3 years ago #

      NPS driven growth means - you grow by having a net promoter score > 50%. If promoters > detractors - then you grow through WoM. The challenge is that your growth rate is determined by: frequency of use, and relevance of your product to your customers network. To speed up the growth rate you need to figure a clever way to amplify relevance / frequency. Some more thoughts here: http://www.slideshare.net/pnilan/5-principles-for-product-driven-growth

    • JQ

      Jamie Quint

      over 3 years ago #

      The three existing case studies you mention all have more people discovering the product everyday by nature of its existence. Square has people experiencing the Square reader, Belly has people seeing an iPad sitting in front of a cash register, Uber has people riding in cars with others.

      Each of these companies were viral to some degree because of this. Uber probably the most so, then Square, then Belly. Belly's userbase grew because they succeeded at selling into small businesses (no small task). Square's grew because merchants were looking for a solution and square actually fulfilled an unmet need. Uber was simply textbook viral, although they probably had an LTV high enough to support paid, even though they never needed it.

      This doesn't make growth irrelevant. It does display that product market fit can be extremely important, and is especially paramount if you're working on a business with a publicly facing interaction component that could contribute to k>1 growth.

    • SC

      Shana Carp

      over 3 years ago #

      Question:

      What is the breakdown of consumer facing vs b2smb vs b2enterprise startups.

      I'd argue that for the two poles, WOM is a huge factor, but for b2smb, it depends on the smb. Paid ads may do much better.

  • JA

    joe Anderson

    over 3 years ago #

    Are tweets/status updates included in WOM? When I hear companies like Flipboard signing up 200k accounts a day consistently, there's only so much press that can get you even close to that. As companies reach really big scale I think WOM is ultimately what carries them forward. This is why a ruthless focus on engagement and product quality feels very important, even as an early stage company.

    You do need the kindle though to get the WOM engine going. I think that WOM ultimately increases your chances of your product hitting "super nodes" or influencers, which keep the engine going.

    • SS

      Sheikha Saidi

      over 3 years ago #

      I totally agree!!!

    • DL

      Dylan La Com

      over 3 years ago #

      You could argue that tweets/statuses are part of the aggregate WOM. They're certainly easier to measure than offline WOM, which often relies on these online signals (tweets/shares/organic searches) to serve as proxies.

  • MB

    Morgan Brown

    over 3 years ago #

    Good growth hacking fuels word of mouth. Word of mouth is full of friction. To tell someone something traditionally takes a fair amount of effort.

    When this statement is true, no word of mouth occurs:

    effort to tell someone > value of telling them

    When this statement is true, word of mouth does occur:

    effort to tell someone < value of telling them

    Therefore, a growth hacker's job is to make it easier for people to tell others about the product or service, so that equation #2 is always true.

  • JC

    Jeffrey Chew

    over 3 years ago #

    Word of Mouth is the key to any companies "true growth". The best WoM is based on early users having great experiences with a product that solves a true need in a unique and simple way. The commonality in every hyper growth story I can think of is - 1. the product provided utility in a simple way 2. it was delivered in a unique way and 3. the experience for the user was really great - meaning the value they got back was huge, andmore importantly CONTINUED to be huge.

    One phrase I learned a long time ago in Spain is "la gent anar on van les persones" - it's an old Catalan phrase meaning "the people go where the people go" and what it means is so rediculously obvious...but hidden behind that simple line is something profound from a business standpoint - 1. you have to start with the right people (mavens/connectors) and 2. they'll stop going if its not worth it anymore.

  • LM

    Lincoln Murphy

    over 3 years ago #

    My answer to this question was just too long to post here... so I turned it into a mediation on WOM and Growth Hacking and posted it on Medium:

    https://medium.com/growth-hackery/2cc029e18afe

  • DM

    Dave Marcello

    over 3 years ago #

    Funny timing on this, as I'm currently working on a piece (probably for Slideshare) about the GH / WOM love story. It's a match made in heaven, two skill sets and disciplines that work with each other rather than against, IMO. Don't mean to be spammy, but here's a Medium piece I wrote on this specific topic: https://medium.com/on-startups/c5c034a24d82. The gist of my take is that as I learn more and more about GH, I'm seeing WOM principles built into its foundation, clear as day. And for the record, it's freaking fantastic. As a WOM guy, I'm a creative tinkerer, constantly evaluating and responding to human behavior. Sounds a lot like GH, to me at least. I'm smitten with the intersection of these two guys.

  • PT

    Pedro Maria Teixeira Duarte

    over 3 years ago #

    I believe that no, it isn´t irrelevant. More than anything, WOM is the fastest and most effective way of spreading a message, an idea - but someone must put that idea in the market and that's where GHs plays an essential role. WOM is always based on something, there is always an ignition event, person or campaign, and it is the GH mission to make sure this growth gets bigger and reaches the audience it is meant to reach.

  • JD

    Josh Dance

    over 3 years ago #

    If word of mouth is the primary growth driver, you want as many mouths talking about your product as possible. Growth hacking techniques can help you find and activate those 'mouths'.

  • TS

    Ted Sindzinski

    over 3 years ago #

    You still have to have people to spread the word and still have to have a flow that gets those who hear about it to stick around.

    And done right, the two overlap anyways. Case in point: your tweet about this (and my reply to it) lead to my signup. WOM or slick marketing?

    • SE

      Sean Ellis

      over 3 years ago #

      That probably is more about slick marketing.... But if you end up getting value from GrowthHackers.com and telling other marketers about it, then I would classify you spreading the word as natural word of mouth. So slick marketing will have seeded natural word of mouth (like Josh suggested).

  • GP

    Greg Pietruszynski

    over 3 years ago #

    For me word of mouth is one of the marketing channels you can optimize with growth hacking methods. Referrals should be the most important part of the users acquisition, however wouldn't say it all just happens "naturally". Virality of the product has to be properly designed to push users to spread the word and then without working engagement mechanics all of the conversion would just go for nothing. Imho channels optimization is important (you can argue if it's more of customer development than growth hacking), but the real growth hacking magic happens inside the product itself.

    • SE

      Sean Ellis

      over 3 years ago #

      Thanks Greg. I agree getting engagement right is a huge part of getting word of mouth to be a sustainable driver of growth.

  • AA

    Akhil Anumolu

    over 3 years ago #

    Word of Mouth should be amplified with Growth Hacking. GH alone should not be considered a sole method to create growth; it simply get the "conversation started."

  • AT

    Amanda Thomas

    over 3 years ago #

    My experience has been that what appears to be effortless WOM, is actually fuelled by high performing growth engines. WOM thrives in frictionless environments, which rarely happens naturally.

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