A good start for growth hacking
Identifying which phase the company is in is often step one in our way of a growth analysis. We kick off every partnership with a Growth Review Session where the single most important discussion is to understand your goal and really deep dive into that. Ideally we would want know your goal for the year, performance for the last months and where you are at the moment.
Average growth rate
Say that we got this information from you: Current revenue for January is 500 TSEK and with the results from October, November and December we can calculate your Average Growth Rate.
Target Growth Rate
After that we need to figure out your Target Growth Rate based on your yearly revenue goal.
Next step is to perform a Gap Analysis in order to compare the target to the actual forecast to see how big the gap is between now and the ideal state (gap growth rate). See charts down below.
Conclusions Gap Analysis
- Current avg growth rate is 7,75 %
- Target growth rate is 20,17 %
- GAP growth rate 12,42 %
- Currently pacing -61,4% below EOY target
- The goal of the growth team is to find additional 13 % growth per month
Our analysis is not done there. As growth hackers our job is to take the goals that you have, e.g. budget goal or end of year revenue and translate those goals into user journey metrics. For example if you want to reach this goal of x revenue in December we have to have a conversion rate of x% in June and increase relevant visitors by x.
Growth Formula / System
For most clients we break down the user journey into a growth formula for the growth team to work with. We use the formula to represent the steps a user has to take to create value/revenue for you as our client. As a growth formula is built out and becomes more complex it is usually called a growth system.
Coupled with a sensitivity analysis we can identify and stress test steps in the derived growth formula/system. Based on findings, focus area(s) for potential growth are identified.
As we exemplify above. To reach our revenue target you would need to increase relevant sessions with 239% and increase conversions rate from 1,64 to 2,31% (41% increase).