At the start of 2013, 1 year after starting a new job at a cloud storage Saas company (www.justdevelop.it), specialised in creating cloud storage and backup softwares, I have realised how much uncapped potential was in growth hacking. Following years of successful product launches of new softwares, the company was working to increase dramatically the number of sign ups and software downloads via our affiliates relationships. We wanted to grow not only our number of affiliates but also improve our conversion rate.
With a global sales force made of affiliates and networks, we could grow our reach as quicker as possible in every latitude and with better conversion rates, we could spend better out marketing budget. Without two elements, we feared that other well-budgeted cloud storage softwares could easily offer great commissions and take our affiliates away from us.
We have started investing our marketing budget in bigger campaigns with our affiliates, financing more than 300 of them and ask to promote our software with media buys, display ads, email marketing, banner ads, search and PPC. We believed that the reason why affiliates worked hard in producing more sales for us was simply to pay them more. We have offered up to $200 per sale, even for a small software sale of $6.95 (for 75GB of online space), and $5 for a free software sign up, which is a crazy high affiliate commission! In the first half of 2013, we have raised the number of affiliates from 450 to over 800 and spent over $2 Million/ month in commissions paid. But after making new relationships and recruiting hundreds of new affiliates, I had nothing more than 150 sales per day (totalling 500 sales for the entire company).
Until one day, one of our dormant affiliate accounts from India turned to us with an offer for typical "growth hack" model (we didn't call it that in 2013). That growth hack, in the form of bundle software download, brought in a tremendous amount of new customers and new revenue, we have reached 1,200 sales a day on a good day (not to mention thousands of free sign ups every day). The second hack was in the form of email automation. But over time, I wish I haven't started them at all. At least, not in the way we did.
Details of the first software download hack
The first hack started from the idea of an Indian company called Systweak (https://www.systweak.com/registry-cleaner/), which was one of the most downloaded Antivirus software back in 2013. Their product was very different from ours. We were a cloud storage software and they were an anti virus software and their specialty was to protect computers from viruses. However, their business was very close to ours and it's easy to see why: both softwares are created to protect users' files, one by uploading them on the cloud (www.mypcbackup.com) and the other software to protect a PC from viruses (RegClean Pro). So if you want to protect both your computer and your files you need 2 software, not just one.
Our Indian affiliate worked with us on one thing: a bundle offer of two software within the same installation process. This process sounds simple but it's both ingenious and very effective. These are the steps:
Systweak asked us for a unique download affiliate link, by which we could identify and attribute downloads, sign ups and conversions to that company. They also asked images of the promotional download offer window (see screenshot below). Normally, we gave our affiliates a unique URL, but we have worked with our developers to create unique download links in .exe (for Windows) and .dmg (for Mac) to give away to our affiliates in the software industry.
Systweak included our download link within their download process of RegClean Pro. All of their downloads were also offered our software www.mypcbackup.com, as you can see in this screenshot below:
3. Those users who downloaded RegClean Pro could opt-out from downloading and installing MyPCBackup as you can see in the image below. But the devil is in the details: we ticked the "Install MyPCBackup" box by default so people didn't actually realise they were downloading a second software. This trick boosted our installs and sign ups.
4. Systweak then required to be paid per install. At that time we didn't pay anyone per install, our commissions were sales based and up to $200 per sale. So we have agreed with Systweak to pay them $0.20 per install because we were not sure about the number of conversions generated and we wanted to test the whole trick.
Note: the payment per install model became the norm after 6 months within the Saas affiliate space and everyone was calling it PPI (pay per install).
The bundle offer was a big win for us. When we compared the software download conversion, the bundle converted visitors into buyers twice the rate of previous marketing efforts (emails, media buy, PPC, SEO). To this day, I am a huge believer of conversion optimisation marketing techniques and growth hacks. I huge marketers use it for improving their conversion rates.
The second growth hack
This is when the second growth hack comes to play: email marketing automation. We would identify all of those RegClean Pro customers that also signed up for MyPCBackup for the free trial, without upgrading, and we would send a number of automated emails. The automation responded to behavioural rules, i.e. when someone became a lead (free sign up) we would send a welcome email. Then we would send a second email after 1 day, if we noticed the person still didn't upgrade to a paid account.
Our obsession with making a sale was so desperate that for each day of not converting, we would send a special offer that started with a 20% discount up to a 70% discount of day 15 (when the free trial finished). So each user would receive offer after offer from our automated email system.
In the classic "growth hack" format, we made offers with limited quantities to leverage scarcity bias, used a massively discounted price way below our normal price ($6.95/month for a paid account and 75GB of online space) and time boxed promotion with an expiration date. Through the bundle offer of RegClean Pro we collected more than 2 millions free sign ups and for each of them we had an email address, because obviously to open an account and sign up to a free trial you need an email address. Many users upgraded as a result of our massive discounts, especially the 70% OFF offer, which offered 75GB of online space for just $1 dollar/ month.
The reason why "hack" is called "hack"
Hacks are called this for a reason. It was until late that we realised these hacks didn't make our product better, didn't help people save their files quicker and more efficiently, didn't make our subscription "stickier". It simply created a short term boost of attention (sometimes unwelcome) that led to a lot of complex, long-term problems:
Subscribers who signed up for the $1/ month offer and 70% discount had a much lower retention rate that subscribers who upgraded through non-promotional offers.
As a company, we loved the quick boost in conversions and the impact this software bundle had on revenue and growth. We have tried to replicate the process with many other affiliates in the same way, without much luck. We shifted focus from improving our marketing and product to finding the next hack.
Tricking users in making them think they download a software and they actually get two of them on their PCs, it triggers an emotional response. It creates an impression that the second unwanted software is a virus or a malware and that, rather than using it for the reason of backing up your files, you, as a user, try to uninstall it. This led lots of subscribers into malware forums for years after the hack, where they were trying to ask questions on how to remove "MyPCBackup" from their computers.
I can understand why marketers use growth hacking techniques. There is plenty of information on blogs and forums on how to build growth hacking. But if you look at how a company is built and growths, you have to embrace the complexity of doing 360 degrees marketing, not just looking for the next hack. Growth hacking can't replace digital marketing, it's just a very effective shot term technique that feed into it.