Savvy shoppers wait in anticipation, while Australian retailers are gearing up for the onslaught. Amazon’s arrival is imminent.
The decision to embrace ‘growth hacking’ and recruit hybrid marketing, product and data skills is not only helping Hipages bridge the marketing and technology divide, it’s also fuelling rapid growth.
Hipages is an Australian digital service finding business that connects consumers with relevant tradesmen in their local area. Starting initially as a directory, the company has expanded to incorporate a range of products and recently received $6 million in capital funding.
CEO and co-founder, David Vitek (pictured), told CMO that as the business grew, he saw the need to fill the gap between traditional brand marketing staff and digital and data-driven marketing, as well as marketing and its engineering and product development teams.
While traditional brand marketers are great at building awareness and positioning, online and direct marketing required new data and technology capabilities, he said.
“Then there’s product on the side. Without a good product, there’s nothing to market,” Vitek said. “The marketing guys are saying to the product guys ‘build great products and I’ll tell you what the market thinks’. But the product guy is saying to marketing ‘tell us what the market wants and what will blow their minds, and we’ll build it’.”
Product teams, in turn, inform Hipages’ engineers on what to build including features and advancements to its online portal.
“So you have product and marketing trying to work together, and at the same time you’re trying to grow a business and understand how all these functions work,” Vitek said.
To cross the wide chasm between marketing, product development and engineering, Hipages has recruited three new functions over the past 18 months: Product management, data science and product marketing. Vitek said these capabilities bridge the language barrier that exists between marketing and technology, while delivering much higher levels of customer insight.
The company also appointed a new CMO, Fraser Taylor, in June.
“Data scientists know how to work with engineers and the information they need from the platforms, and marketers know how to talk to data scientists to get the information they need,” Vitek explained. “Data scientists become a massive enabler for marketers to get into the engineering team.
“Product managers know how to build product, and they can explain and specify that to the engineers so we can build the exact product we’re after. They also know how to talk to marketers. They are the business people with technical capabilities.
“Product marketing is a new function and basically it’s about recognising that product and marketing still have a language barrier and we need to close that gap.”
Growth hacking mentality
Hipages’ internal structure is based on ‘growth hacking’, a practice that’s gaining increasing attention because of its huge success in the startup space.
‘Growth hacking’ as a term was coined by tech startup advisor, Sean Ellis, in 2010 to describe a marketer who utilises analytical thinking, data insight, product engineering and creativity to drive core growth metrics within a startup organisation. The model has been used by a range of high-profile and fast-growing digital technology companies including Atlassian, LinkedIn and Facebook.
While Hipages was getting a lot of traction with its product offering and good growth, Vitek said he recognised the functions weren’t going to scale.
“It was myself and the development manager coming up with great ideas, then developing them and achieving growth. But we knew we needed to find a methodology to do this,” he said.
Vitek stumbled upon ‘growth hacking’ and described it as a process for breaking down revenue opportunities into an equation with metrics, which can then be farmed out to the team and adapted to find pockets of growth. He and his team started attending seminars to understand how other companies were using the practice and decided to jump on-board.
“If revenue equals A, B times C, you might have a particular metric then figure out a way you can drive growth that by making changes to the website, or improving conversion rates,” he said.
“We started looking at processes and saw [with] this model of data scientists and product managers working with engineers… there was a lot of data science, A/B testing, concepts, and trying 30 things to find the five things that work.
“But to get to that, you need a good hypothesis for the things you’re going to try, and that’s where marketing comes in. They suggest ways people feel, and we try concepts along those lines. Otherwise the engineers may not have a good starting point from which to try new things, and it just ends up random.”
Data scientists focus on measuring those activities and share which things, such as landing pages or features, are working particularly well and are worth keeping, Vitek continued.
“As long as you keep with the better page every time, you’ll get growth,” he said.
As an example of its success, Vitek pointed to the rise in the number of jobs posted to the Hipages site a key business metric. Over the past six months, job posts have doubled from up to 3000 per week to more than 6000.
“In the early days, we got a lot of fast growth by focusing on metrics, looking inside the results and acting on those,” Vitek commented.
Hipages vice-president of product, Dino Talic, said the success of its product offering is driven by increased numbers of both customers as well as tradespeople using the site, making growth an inherent part of its product strategy, not just marketing.
“From there, we develop a strategic vision and how we execute around that,” he said.
Hipages’ new staff competencies are positioned as ‘centres of excellence’, with each then contributing to the core growth teams established around user growth and engagement, marketplace quality, and tradesman products. Each one of those teams represents a piece in the growth hacking equation, Vitek explained.
“We know if we get more users into the platform it means more revenue, so that team will feature our data scientist, marketing, product managers, and whatever is required and functions as one unit,” he said.
“They’ll look at remarketing, landing page testing and see where missed opportunities are. Everyone needs to agree in the team as they have to be on-board. Then they work towards a plan based on what they’re seeing in the data.
“They’ll test it, see what it’ll cost, and if it turns into results, move on to the next thing. But they’re also trying lots of different things.”
Sitting together with a common target makes this process so much quicker and more informed decisions are being made
According to Talic, one of the biggest strengths of the growth team model is that cross-functional staff work together on a day-to-day basis, sharing the same core business metrics. This means they also share accountability if work fails to meet their core objectives.
“A project is deemed a failure if it doesn’t meet these targets even if the engineering work was sound,” he said.
“In the online word you have to move quickly as things are changing so fast. We have a very iterative process of test and development and look at the bare minimum product we can launch with, then iterate from there.
“Sitting together with a common target makes this process so much quicker and more informed decisions are being made.”
Taylor said the biggest challenge is now prioritising resources around the work on user growth, for example, over market place quality or experience. On the plus side, multiple growth teams are running in parallel – an important counterbalance in development when you have both consumer and tradesman using the site, Talic said.
The biggest indicator of the growth hacking model’s success is the rate at which iterations are happening, he continued. As a more specific example, Talic pointed to current work around conversion rate optimisation of traffic to its landing page to highlight its success.
Previously, an agency or marketing team may have looked at how to improve conversion as a silo then fed information through to engineering. As a cross-functional team involving product, marketing, data, design and engineering, initiatives are launched faster and more collaboratively and have resulted in a 10 per cent increase in core metrics on user growth so far, Talic said.