What is Growth Engineering

Wednesday, June 30, 2021 by Louie Bacaj

A while back, I ran the growth engineering team of a successful eCommerce startup.

We acquired 10 million customers in one year from launch. We got to 1 million customers faster than Instagram; they did it in 3 months, we did it quicker. We had a world-class marketing team spending dollars. But we couldn’t spend enough money in existing marketing channels to acquire that many customers that fast.

You might be asking, why not? That’s because all of the Ad channels have diminishing returns on Ad spend. We can bid on every Ad on Google and Facebook, but eventually, all we do is drive up the price of Ads and won't get more customers. Google loves that.

So how did we do it? We needed to build our own growth tools.

Growth tools are features we baked inside our product to help the product grow. These were marketing channels we control that scale. For us, that included Promo codes; we built the most advanced promotion engine in eCommerce. We built a referral network, where people spread the word and earned something automatically. An affiliate channel with APIs so our larger partners could promote our extensive catalog and earn a cut. Among many other growth tools.

Ads are good at driving traffic to our website, but Ads don't help us convert the customer. Conversion rates are critical because we pay Google and Facebook each time they bring someone to the door even if they don’t buy. This is called pay per click.

To increase conversion rates, we need a great product with features that show people things they want to buy. Segmenting customers and personalization help save people more time and increase conversion. Great search and discovery help customers find what they need fast.

After the customer shops, the email channel is great for keeping and growing the relationship. Customers hate spam emails, so we have to be useful. Building a fantastic CRM and not wasting customers' time is the next critical step.

Some of the most successful modern companies created their own marketing channels to grow faster. And if they paid, they paid per conversion, not per click. For dropbox, it was a great referral network; it was a great email channel for LinkedIn, etc. For amazon it was their affiliate APIs.

Although all of the growth tools I mentioned above worked, some work far better than others. Depending on what you are trying to grow, the same will hold true for you.

For us it was the promotion engine that worked the best. But we discovered how powerful this was by accident, we didn't set out knowing it would work so well.

Promo codes we learned, when used right, could completely shift customer behavior. They served as an acquisition and a retention channel . They served as an acquisition channel because seeded promotion codes would end up all over the web getting shared by niche communities and bringing traffic in. Of course we didn't pay for that traffic, only for the conversion. We designed a complex promo engine that would allow customers to use codes by a time duration, and come back and shop more, or for their next few orders. We could aim at exactly the kinds of customers we wanted by gating promotions by segments. The list of features on this is so long it deserves another post. But the point is it worked incredibly well.

In the end though, Growth Engineering is all about building these sorts of things. It is about discovering what growth tools will work best for the specific product and business we are building. Then doubling down on what works and expanding its feature set to help the business grow faster.