If you build it, they won’t come #117: Hotmail

Growth-hacking.

Overused term? Yes. Potentially obsolete professional title in the near future? Yes. Marketing buzzword with little merit without grit and determination? Yes.

But… fundamentally sound mindset that nearly every founder, co-founder, CMO, marketing manager, media buyer, and acquisition analyst should be aware of in order to potentially juice their conversion rate? Absolutely… yes.

As 2015’s Q1 nearly completes, startups and small businesses alike have a fundamental opportunity to not only drink digital acquisition buzzword cool-aid, but also do something with that knowledge. Yeah, I said it. Do something with all of those.

Google growth-hacking. Seriously. Do it. You will be flooded with an abundance of SEO optimized, link-bait content plays in order to either: #1 get your email address; or, #2 register for a white paper (get your email address). In the end, why is it such a saturated term to date? Well, because the general concept is sound. Without thorough execution you either have to “get lucky” or be extremely disruptive.

Thus, here’s an example of how to do it right. Next month I’ll share an example of how to do it wrong, iterate, repeat etc. ☺

Hotmail & why it started cold.

The arguably first “big” growth hack to date was Hotmail. Created as a way to ensure that their bosses wouldn’t read their private emails, Sabeer Bhatia and Jack Smith decided to create the first web-based email platform. Lo and behold $300k was raised and Hotmail’s debut was extremely unimpressive. They were going to focus on traditional media buys – specifically billboards and radio ads.

Simply, it didn’t work. One day, they decided to run with Tim Draper’s (an investor at a time) idea to include “P.S. I love you. Get your free email at Hotmail.”

Everything changed. Literally overnight.

Shortly they were averaging over 3,000 new users a day, and within 6 months they were up to 1 million users. 1.5 years later, they sold to Microsoft with a sum total of 12 million users. Yep, they made it. Time for mai-tai’s and sunscreen.

How did they do it? Well, to be honest, they probably got pretty lucky. However, understanding what they did is more important. If they were living in the post growth-hack to break this down, here’s the first step to growth hacking success (and also why Hotmail would never be successful today):

Step #1 Lifecycle Mapping:

What’s the path? Mapping a user’s lifecycle isn’t rocket science. It typically can be broken down into 4-5 different parts, namely:

HotmailBlogImage

Perfectly illustrated by the wonderful guys over at Soyez, the marketing funnel is a tricky beast. Note, the illustration get’s the visual message across, yet it’s not exactly accurate. Hardly are these steps easily attained, but by having a solid framework about how you can review your consumer’s path to conversion seriously helps. Here’s a description of each step along with some KPIs to look out for:

• Acquisition:
Definition: Arguably, the user is acquired in some fashion, and is able to be re-marketed to. Simply visiting a site can be considered enough due to a simple cookie and display retargeting.
KPIs to look out for: New v. Returning Users and Bounce Rate. Don’t know what they are? If you are using the Google Analytics (commonly utilized), here’s a great definition of new v. returning sessions ref: https://support.google.com/analytics/answer/2731565?hl=en

Also, Bounce Rate defined: https://support.google.com/analytics/answer/1009409?hl=en

• Activation:
Definition: A user is activated post-submission or post-acquisition. For example, a user receives an email with a 10% off discount paired with a limited opportunity to redeem. Upon clicking on the message the user visits the site again.
KPIs to look out for:
New v. Returning Users is another good one to look at… but be really careful. In the words of jar jar binks, it’s a trap. Note: a user’s session expires (according to google analytics) after 30 minutes of inactivity or at midnight every night.

Read more here: http://analytics.blogspot.co.il/2007/01/absolute-unique-visitors-versus-new.html
Site Behavior by UTM Source: If you don’t know what a utm is, read this: http://blog.hubspot.com/marketing/what-are-utm-tracking-codes-ht
You tag more = you get more measurable data.

Focus on New Sessions, New Users %, Pages/Session, and Avg. Session Duration for this step.

• Retention:
Definition: The user visits the site repeatedly engaging with the brand in an increasing pattern.
KPIs to look out for: Again, typically behavioral KPI’s like Pages/Session and Avg. Session Duration come into play. Delving into some type of Content Drilldown is handy, and tools like ClickTale are really helpful.
Don’t want to pay for click tracking CRO tools? Use Google Analytics’ “In-Page Analytics” tool gives a visual representation what people are clicking on. Download the chrome extension here: https://chrome.google.com/webstore/detail/page-analytics-by-google/fnbdnhhicmebfgdgglcdacdapkcihcoh

• Referral:
Definition: My personal favorite. Referral is the bread and butter of any digital acquisition campaign. Users refer another user through social media, word of mouth, or through more formal means vis-à-vis a referral app or system like Referral Candy.
KPIs to look out for: Measuring referral stats is a bit squishy. There are a lot of sophisticated social listening tools e.g. Sysomos, Visible Technologies, Oracle Social Cloud, Salesforce Radian6, Social Mention, TweetReach, ViralHeat, and Datasift to name a few.

Most if not all of these tools are fairly overpriced, yet one key metric drives their success – engagement ratios. A user can have millions of followers, yet if they do not have engagement on their posts it either means: #1 their content has gone stale; or, #2 they’ve acquired users from non-white-hat means.

Oh, again, UTMs are super important here as well as general referral metrics. For example, some links you simply can’t set up with UTMs. People share what they want. However, utilizing multi-channel reporting tied with a properly tagged account is really, powerful.

Don’t know what multi-channel funnels are? Ref: https://support.google.com/analytics/answer/1191180?hl=en#Video

• Revenue:
Definition: Yep, self explanatory. The green stuff, mula, cash. A user converts into a paid sale.
KPIs to look out for: Conversions, Conversion Rate, and Revenue. Some of the most important KPIs in the digital marketing game, these are the end all be all of any digital marketing effort. Conversions are the amount of successful sales (or in other cases the attainment of the specified monetary or non-monetary goal). Conversion rate is the # of conversions/sessions or the percentage of visits that resulted in a conversion. And revenue, yes, itself.

Revenue deserve’s it’s own paragraph not because of the obvious, but also because of one extremely important factor: revenue pass back. When setting up tracking software, it’s incredibly important to pass back revenue, or else you may be only seeing the tip of the iceberg.

More information here: http://singlegrain.com/blog/how-to-track-your-websites-revenue-with-google-analytics/

In the next article, we’ll look at the other reasons why Hotmail wouldn’t grow today.

#2 Saturated Markets:
#3 Overused Growth-hacks: The wiggle/wag enigma:
#4 Vanity Metrics v. Real Metrics:

This had to ruffle some feathers… come on, what do you think? Hotmail would have been great even in 2015? Bring it on.

About: Hawke Media is full service outsourced CMO and digital advertising agency with clients in Santa Monica, Los Angeles, San Jose, San Francisco, Chicago and New York.

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