Growth hacking is widely misunderstood and commonly referred to as simply glorified marketing. Some professionals have gone as far to suggest that growth hacking is BS while others have proclaimed that growth hacking is one of the most important shifts in thinking for marketers since the rise of social media.
After spending time studying the habits of some of the best, I’m not as quick to draw the line in the sand and state that growth hacking is a load of crock. In fact, I’m a believer that the idea of growth hacking and a marketer’s ability to leverage the growth skillset is a differentiator for marketers looking to have a sustainable career in the future.
While marketing and growth hacking might be different by definition, they share one thing in common – driving results. And one of those results more times than not tends to be linked to a marketer’s ability to influence the behavior of humans As distribution and communications channels continue to be reinvented, it’s those that understand how people behave online that will have the power to influence where they end up.
Growth hackers have a unique knowledge of product development, distribution, and the talent to unlock technology-based opportunities for growth that often go beyond traditional expectations. The best growth hackers think like a marketer as it relates to influence but obsess over the idea of driving user growth. And the best marketers of our time lean on psychology to help them influence and convert prospects into paying customers.
In both roles, human psychology plays a big part in achieving success. If you don’t understand how people think, customers’ react and what drives attention – you’re likely to fail as a marketer and a growth hacker. Here are five psychology studies that expose key insights to help growth hackers achieve real results:
1. Regan’s Reciprocity Experiment
Let’s begin with the simple concept of reciprocity. I give something to you and you feel obligated to return the favor. Marketers have been using the idea of reciprocity to influence human behavior or years.
In 1971, Professor Dennis Regan at Cornell University demonstrated the power of reciprocity in an experiment where subject were asked to rate the quality of chosen paintings as part of an experiment on “art appreciation.” In the experiment, subjects were asked to rate paintings with a partner. Unknown to the subjects, their partner, Joe, was in fact the research assistant.
In each exercise, Joe would behave the exact same, including leaving the room for a brief period of time and returning a little while later. For some, he would bring back a soft drink. For others, he would return with nothing.
At the end of the exercise, Joe asked the subjects to do him a favor and purchase raffle tickets from him for a quarter each. The subjects who had received a soda were far more likely to purchase tickets, even though the tickets were far more expensive than the value of the soda.
Growth Hacking Takeaway
The concept of reciprocity is just as important for growth hacking as it is in marketing. You can do this easily by developing product features that your clients want and using distribution channels that your clients expect, such as social media. Without a value offering, how do you expect to successfully move users through the growth funnel from visitors to active members?
You must first give something of value in order to receive something in return. One reciprocity tactic that works well for growth is the idea of providing a “value add” whenever a user signs up or registers for your product. Once you’ve provided this value, the customer will feel connected and potentially fall into a similar situation as the subjects in the Regan Reciprocity Experiment.
For example, if a user signs up for the free plan associated with your business; take this as an opportunity to provide value they didn’t expect in the form of an eBook or an extra seven-day trial of your product. Communicate this surprise value add either through email or directly on your website when they sign up.
2. Freedman and Fraser’s Compliance Experiment
(Via Persuasion & Influence)
Many years of psychological research demonstrates that when people are asked to make a small commitment first, they are more likely to comply with a larger request down the road. In psychology, this is called cognitive dissonance.
Once a person has committed to something it becomes part of who they are, how they see themselves, and how they want others to see them too.
In 1966, Jonathan L. Freedman and Scott C. Fraser conducted one of the first studies that effectively demonstrated the foot-in-the-door method. In this study, researchers contacted California housewives by telephone to ask them to answer questions about the household products they use. Three days later, the researchers called back. This time they asked the same housewives if they could send a number of men to the house for two hours to manually take account of the cleaning products in the home. The women who initially agreed to the smaller request were more than 2x as likely to agree to this larger request.
Growth Hacking Takeaway
When developing growth hacking strategies for your business, think about the customer lifecycle. Consider the moments within the customers’ lifecycle such as considering and develop a content marketing strategy that will deliver requests in the form of emails or call to actions at the end of blog posts. The more frequently a customer opens your emails, downloads your content or goes along with your request, the more likely they are to comply with a larger request like sharing your content & inviting their friends.
3. Kahneman’s Framing Experiment
The framing effect is a good example of cognitive bias. It says that people will react to a situation differently depending on whether they perceive the situation to be a loss or a gain.
Daniel Kahneman and Amos Tversky are attributed with discovering the existence of many cognitive biases in the 1970s and 1980s. In one experiment, Tverksy and Kahneman asked two different groups of participants to choose between two treatments for 600 people infected with a deadly disease.
In Group 1, participants were told that with Treatment A, “200 people will be saved.” With Treatment B, there was “a one-third probability of saving all 600 lives, and a two-thirds probability of saving no one.” The majority of participants chose Treatment A because it was guaranteed to save lives.
In Group 2, participants were told that with Treatment A, “400 people will die.” And with Treatment B, there was “a one-third probability that no one will die, and a two-thirds probability that 600 people will die.” This time, the results were opposite. The majority of participants chose Treatment B.
In both experiments participants were presented with the same outcomes, the only thing that changed was the way in which the outcomes were framed.
Growth Hacking Takeaway
The way your frame your information influences how people will react to it.
Growth hackers will have more success when context is considered and you’re strategic in the language used in your content and messaging. How you frame your product needs to be a key consideration during all aspects of growing your business, from development, to design, to marketing.
An example of this in the wild is the approach LinkedIn takes to onboard their users. During the sign up stage, it’s essentially forced on you to fill out your profile, upload your photo, share your skills, insert your experience and upload or invite your contacts to LinkedIn with the hope of having a 100% completed profile. The growth hacking insight is found in the act of forcing invites before giving a user the 100% completion screen. Framing at its finest.
4. Kahneman, Knetsch, and Thaler’s Loss Aversion Experiment
Loss aversion is another commonly referenced cognitive bias in marketing. Essentially, people tend to feel the negative effects of loss more strongly than they feel the positive effects of equivalent gains.
For example, if you won $500 in a community raffle, you’d be pretty happy. But if instead you lost $500 in a community raffle the level of sadness you’d feel would be more intense than the happiness you’d feel on the flip side.
According to Daniel Kahneman, and his colleagues Jack L. Knetsch and Richard H. Thaler, loss aversion can be applied even on small-value goods. In their 1990 experiment on loss aversion, they randomly assigned participants to either a “buyer” or “seller” group. Sellers were each given a mug. Buyers were given nothing. Later, participants were asked to trade with each other. The researchers found that the sellers required significantly more money to part with their mugs (around $7) than the buyers were willing to pay to acquire them (around $3).
Growth Hacking Takeaway
Growth hackers, using their unique knowledge of product and distribution, can use creative technology-based tactics to alleviate a customer’s aversion to either parting with their money, switching to your product, or both.
Loss aversion can be achieved by offering risk-free trials, rebates, and pricing products strategically; avoiding additional surcharges, usage fees, and other additional low-cost expectations. Again, it comes back to your responsibility to ensuring the user experience is positive, demonstrating value for your product, and meeting customer expectations.
Dissolve their fear of what they might lose by first understanding what those losses might be and creating a product that alleviates those fears from the start.
5. Asch’s Conformity Experiment
Humans are social beings.
We aim to fit in and want to be liked. Psychologists call this conformity.
In a famous 1951 experiment, Solomon Asch showed that group pressure can influence people to make the wrong decision even if the right decision is obvious. Asch had college students participate in a “perceptual” task along with a group of other students, who were actually hired actors.
The participants were shown a card with a line on it, followed by a card with three lines on it, labeled A, B, or C. The college students were asked to say aloud which of the three lines matched the length of the first line that had been shown.
In each of Asch’s experiments he instructed the actors to give the wrong answer. The result? A large percentage of participants followed the majority and chose the wrong answer. Only when one acted as a “dissenter” and gave the right answer did the power of the majority influence weaken.
Growth hackers can use the idea of conformity to their advantage.
Conformity is one of the oldest growth hacking tricks in the book. If people see other people using a product, they are more likely to also consider the product and adopt. For example, when Fab.com was first released in the wild, it was evident in their ability to spark users to send invites with the hope of earning early access that they figured out the right formula. Users from all over the world were sharing Fab.com links and on the hunt for invites.
Identify key influencers and industry leaders and get them to use your product. Encourage them to tell their network about the value in your product and take their advice and critiques and make adjustments and improvements as needed.
The more authority you can attach to your product the more likely you are to achieve growth from the start.
No matter if you’re looking to acquire users for B2C industries or B2B industries, the fact that you’re speaking to humans cannot be ignored. As such, the study of human behavior and psychology must be understood to truly recognize the opportunities that exist for converting strangers into customers.
Growth hacks that leverage human insight and psychological triggers are those that can result in significant result. The studies we’ve discussed are just the tip of the iceberg as it relates to the other psychological influences that can help a growth hacker go from developing a mediocre idea to developing a great one.
Ross Simmonds is the founder of Foundation, a b2b & enterprise content marketing agency located in Eastern Canada. He’s been featured in publications such as Forbes, CBC, Huffington Post and is the author of Stand Out: A Content Marketing Guide For Entrepreneurs. Set up a call with Ross to talk about marketing, content marketing and generating traction in b2b industries.