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Why it’s worth running a growth experiment for your business

A growth experiment is a systematic method for testing a strategy to scale your business. Let’s say you want to conduct a marketing campaign, or you want to transition your business from freemium to pay-per-use. These decisions are costly — and they are often leaps of faith. Why? Well, confirmation bias is a psychological tendency where we seek information that validates our existing beliefs as well as avoiding contradictory information. This bias often causes teams to waste resources on initiatives that validate existing views but are ineffective in the real world.

Nevertheless it is possible to run your own growth experiment quickly and cost effectively if you stick to four simple steps.

  • Hypothesis
  • Trigger
  • Action
  • Measure

Hypothesis

Formatting your hypothesis in a struggle-explanation-solution framework is effective tool at this stage if you have the time. It’s as simple as this; start by identifying a customer struggle and business outcome of what you are trying to achieve. Form your own explanation as to what is causing the customer struggle and come up with a solution as to what could ease that struggle.

Trigger

Establish a trigger point to communicate with your customer around their struggle and your proposed solution. The most effective mediums are email and calling customers directly. In-app banners, notifications and user flows are expensive if you do not already have the infrastructure in place. As this is a growth experiment we do not need to worry about solutions that don’t scale yet.

The three most important components of a trigger:

  1. Audience: identify your target audience. Start with bigger groups, segmenting at this stage will be time consuming and take longer to gather results
  2. Message: keep consistent with your original hypothesis. There is no need to A/B test on a small scale but avoid message variation overkill
  3. Timing: identify the best time to contact your users to get their attention. Be sparing for when you trigger again due to lack of response

Action

An action is a way to measure the effectiveness of the trigger and is the step where, arguably, growth is measured the most. This can include opening a link to an article, registering interest via a form, logging in to the platform to perform an activity, emailing or calling back to respond.

Without creating an action it will be difficult to measure the success of your growth experiment.

Measure

This is the overview where you literally measure the effectiveness of the brand communication via the action to the trigger. tart simple and use a spreadsheet to track key results. Free or cheap email tracking plug-ins are an effective way of tracking email open and click-through rates.

Once you feel you have gathered enough insight (can take a few weeks) assess the results and determine if your hypothesis was correct. Within the same experiment you can go back and modify the trigger and action to gather more data if needed.

Measuring leads to metrics which are super important in assessing business strategies. Important metrics encompass the following:

  • Total users contacted 
  • Average contact count per user
  • % email open rate
  • % click through rate
  • % users creating new template

Your growth experiment is successful if: the % click through rate and % users creating a new template is good. We have quickly validated that knowing the right questions to ask can help boost form creation. We now have an improved business case for investing more resources in-app to build onboarding tours in the form creation stage.

Your growth experiment needs work if: the % open rate is poor after adjusting for message and timing then the solution of our hypothesis is likely incorrect. We can go back to our original hypothesis and form a solution for our second explanation (e.g. already know what questions to ask but don’t have the time to create a new form). 

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