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Growth hacking is a subfield of marketing that calls for creative and low-cost strategies to help businesses attract and retain customers. Marc Plotkin, professor at NYU’s Clive Davis Institute and Music Industry Essentials contributor, discusses examples of growth hacking within the music industry.
Watch the video to learn about:
- What growth hacking is
- Different growth hacking tactics
- Which companies are embracing and benefiting from this marketing strategy
Growth Hacking and Dropbox
“One of my favorite examples of growth hacking is the cloud storage company, Dropbox. Dropbox was getting started in 2008, and it had a really unique problem. They had created cloud storage before any average person even knew what cloud storage was. Imagine if you were writing a song and didn’t know what music was. So even though the people who had tried their product loved it, the only way they would get new people to see it was to advertise,” explains Plotkin.
“The problem they ran into was Google Ads, which are the paid ads you see on the top of the sides of the screen when you search for something,” said Plotkin. Google prices those ads because if they know it’s really valuable for you to get even one click, they will raise the price of that click because they can. So, Google charged Dropbox $400 per person who clicked on one of their ads.”
Dropbox is a free product. College kids were costing them $400 per click each time one of them tried out their free product, which is not a sustainable business model. How did Dropbox attract new customers? How do they avoid having to pay Google this fee for each click?
“They created a referral system inside their products that said, ‘If I’m using it already, you’ll get two gigabytes of free storage if I invite you. If you join from my link, I get two gigabytes more free storage.’ So, suddenly the few people who loved their product could really go to town and were empowered to go market on Dropbox’s behalf.” Dropbox didn’t have to pay anything to attract these new consumers. They never needed a serious or expensive marketing campaign again. Today, they still have this referral system. Their weakness became their strength, which is what growth hacking can be.
Growth Hacking and Jay-Z
A few years ago, Jay-Z had a new album coming out. Unfortunately, a lot of people weren’t aware of the impending release. Even though his albums were high charters, they’ve progressively sold significantly less than every album. So the question became, how do we find the people who haven’t already heard of Jay-Z and encourage them to check out this album? His marketing team decided to do that via a partnership with Samsung. Partnerships are great growth hacks. Anyone who got a new Samsung phone that year also received Jay-Z’s album. Some people might not have wanted the album, but it improved sales because a much larger group got access to it.
Growth Hacking and Spotify
Plotkin points to streaming giant Spotify as a recent example of a successful growth marketing, “before they came to the United States, Spotify was only based in Europe. They were still an early-stage startup, and they didn’t have money to spend on marketing.” So when Spotify finally got permission to launch in the U.S., it needed to figure out how to get it to market quickly.
“What they did was create a partnership with Facebook for their first few weeks after their product was released in the U.S. When you played a song, it automatically posted on your news feed on Facebook, even without your permission,” explains Plotkin. “For the week that they did this, all of Facebook was just people’s songs being played from Spotify. If you weren’t on it, you asked, ‘What’s Spotify?’ You click on it, and it installs. Now you’re on Spotify. They didn’t have to spend a penny to do that. That’s a growth hack.”
For more information on growth hacking and other music marketing tactics, download Yellowbrick’s Ultimate Music Career Guide.
