Free Growth Tools: Low Budget Marketing for Startups

By and large, breakthroughs in technology enabled startup growth. Cloud computing eliminated the need to buy expensive servers. There already were open-source databases that put an end to expensive licensing fees. In addition to other important developments, all in all, it became substantially less costly to develop software. However, low-budget startups could not compete with traditional marketing campaigns launched by corporations. For instance, a 30-second Super Bowl ad in 2007 cost 2.38 million US dollars. 

So, low-budget marketing became a new field of innovation and breakthroughs. One of such things is the 2007 framework called “AARRR” or Pirate Metrics Framework. The field of growth hacking in marketing has followed, and now, there is a huge number of tools and tricks in low budget marketing to hack the growth of your startup. 

Growth Hacking: The Fundamental Tactics of Low Budget Marketing

Growth hacking is not a magic bullet. It is a marketing technique geared towards experimentation to discover an impactful but cost-effective way of gaining traction for your product or service. Sean Ellis coined the term growth hacking back in 2010. Eric Ries, the creator of the lean startup, said about it: 

“a compelling methodology… to increase market share quickly”.

Growth hacking is a data-driven methodology focused on customer acquisition, retention, engagement, and return. 

The cornerstones of growth hacking are mainly fast idea generation and A/B testing. And, there is an abundance of free growth tools (or low-cost ones). 

• For instance, you can gain insights into customers with Google Trends or AnswerThePublic for fast idea generation. Free growth tools for this purpose include many others, such as Ubersuggest, AlsoAsked.com, Exploding Topics, Reddit, Quora, Ideamap, and also a range of collaborative tools for brainstorming and idea exploration.
• Split.io has a free tier for A/B testing, while Hotjar has a free plan for A/B testing, heatmaps, and session recordings. Other free growth tools include PostHog, GrowthBook, Unleash, VWO, and others that offer a free tier suitable for startups.

AARRR, or The Pirate Metrics Framework: Foundation of Low Budget Marketing

The growth hacking term was first mentioned in 2010. Before that, the AARRR framework was coined in 2007 by Dave McClure. It is a foundational framework that helps direct the marketing effort in the most impactful way. The first figure shows what each letter stands for in the acronym and what basic actions it corresponds to. The second figure combines it with a wealth of existing sources of impacting the funnel. 

So, how to use AARRR as one of the key free growth tools?

Since you can take different routes to go about each stage of the AARRR funnel, you need to find the one with the highest ROI. For this, let’s model two experiments. One will involve a low-budget paid ads acquisition channel, and the other one will be User-Generated Content (UGC) on TikTok. 

Experiment 1 – Paid Ads

Experiment 2 – Free UGC content on TikTok

While most startups still can allow themselves to pay $2.5k for doubling the revenues, experimenting with other channels (such as UGC) can lead to infinite growth funnels. Startups in the face of uncertainty are tempted to settle for a predictable and almost ‘instant’ paid channel. After all, the UGC route often is a bit stretched in time and requires nurturing. However, the AARRR framework lets you focus on ROI and select only relevant metrics for each stage. Coupled with growth hacking tactics that will be discussed further, you create a culture of structured experimentation in your startup, closely linked to ROI. 

Low Budget Marketing: Preview of AARRR & Growth Hacking Combined

While AARRR leads you to finding the most efficient channels, growth hacking lets you maximize the returns on each stage of the channel. Here is a short preview of how the AARRR framework might merge with growth hacking tools and tricks.

Growth Hacking: Free Growth Tools

Growth hacking is completely different from traditional marketing. 

• For one, it utilizes a blend of expertise in product development, engineering, and marketing. In the list below, you’ll see marketing achieved through building in-app tools. As such, growing your user base relies on zero ad spend. 
• Second, growth hacking has nothing to do with perfecting campaigns over months. In fact, it is often fast, scrappy, and done in tempo. For instance, Twitter, in its fast growth time, increased the frequency of A/B testing from 0.5 to 10 tests per week. The 11 weeks of such intense A/B testing resulted in growth from 90k to 152k MAU (monthly active users). 
• Consequently, the third point is it is all about metrics. These tests must result in gathering relevant metrics according to the AARRR funnel. You’ll see that each one of the free growth tools will be directly tied to one stage or the other. 
• Lastly, traditional marketing is often expensive. The goal of growth hacking is to leverage organic loops whenever possible. 

That being said, growth hacking should complement your go-to-market strategy and not replace it. Applying growth hacking outside the structure of the GTM strategy will bring only quick, temporary wins. Your GTM strategy is the structured way of your value proposition reaching your target audience. Growth hacking is the way to optimize and scale over the channels.

Signature Links or Branded Watermarks – Acquisition Stage of AARRR

Hotmail added a signature to every outgoing email. This line simply invited the recipient to create a free Hotmail account. In 18 months, they acquired 12 million more users with  0 ad spend. When they started it, Hotmail had only 20k users.

Consequently, this type of low budget marketing is all about leveraging the existing users and their behavior. To build this:

• find a point where the existing customers reach users outside your product;
• Create a short CTA “create a free account..”, or “join for free…”, make it under 10 words.
• embed a tag, be it a line with a link or a traceable watermark.

Metrics: number of invites => number of clicks => number of sign-ups, the conversion from invites to clicks to sign-ups. 

A/B tests: trying out different wording, or different incentives, e.g., from simply a free account, you can offer some feature, or a paid plan for a limited time. 

Integrations – Acquisition Stage of AARRR

Airbnb, in its early days, hacked its acquisition channels by building a scrappy semi-automatic flow for duplicating its listings on Craigslist. It worked like a charm, even though later Craigslist curbed this integration. Overall, it was a way of piggybacking on the existing platforms with customer trust and solid traffic. Of course, adding a feature is not totally free, so it can be considered a low budget marketing.

To create this:

• List places where your target users naturally spend time online (social media, advertisements website, or online communities);
• Estimate their traffic and evaluate their APIs/posting rules;
• Design the flow to enable your users to push the data that leads back to your app. You can use free growth tools or ones with free tiers, such as Zapier or Make, to do this;
• If APIs are blocked, limited, or do not exist, design a simple UI ‘copy post to..’ to automate or semi-automate the flow. 
• Add monitoring for metrics. 

Metrics: number of sent-out posts => clicks => number of purchases or other target actions, conversion.

A/B tests: you can test copying the entire post/listing or a shorter ‘preview’ version, different CTA button placements, etc.

Contact importers – Activation and/or Acquisition Stages of AARRR

Facebook built a one tool for two stages: activation and referral. It built a flow for importing phone contacts and email contacts for two purposes:

• connecting to those who are already on FB faster leading to quicker engagement [activation];
• inviting those contacts that are not on FB yet [acquisition].

This is mostly an engineering solution. Again, getting access to users across two stages of the funnel is not totally free – it costs to add this feature to your app. But it is certainly falls within low budget marketing. To build this in a modern regulatory environment, you should:

• Utilize OAuth flow to import contacts from a different app on users’ phones with permission;
• Add a matching algorithm to determine which users are already using the app and which ones aren’t;
• For matches, show the “connect/follow” button;
• For non-matches, show the “invite” button.

Metrics: 

1. For activation: measure engagement increase for users who imported contacts versus those who did not; time to first connection for both categories; track churn for users who import contacts, treating users who do not as a baseline.
2. For acquisition: number of invites => number of sign-ups. 

A/B tests: testing out different prompts to invite users to import their contacts, testing prompt placement at different stages of the user journey, etc.

Referral Program – Referral Stage of AARRR

Organic referrals are the holy grail of virality. The virality coefficient K should be higher than 1 to ensure exponential growth. The Dropbox referral program is a great example. They offered incentives in the form of free storage for both parties: the referrer and referee.

To build it for your app:

• Pick an incentive for your product that will be sustainable to give out;
• Engineer unique referral links;
• Design the UI for invites;
• Develop the tracking logic for fulfilled referral conditions;
• Automate the rewards delivery;
• Put checks in place to prevent fraud.

Metrics: viral coefficient K = (Number of Invitations Sent per User) x (Conversion Rate of Invitations), conversion rate of invitations (percent of invites that turn into paying customers). 

A/B tests: test different rewards, and you might test giving out rewards in stages, such as a smaller reward for inviting, and a bigger reward after conversion to a paid user.

Pricing Experiments – Retention + Revenue Stages of AARRR

Acquisition is the easiest stage of the funnel; retention is the hardest. Acquisition without retention is akin to ploughing the sand. In some case studies, greater retention was achieved through A/B testing of the pricing. 

For Slidebean, raising prices 4 times over achieved a 282% increase in retention. This is a bit of a counterintuitive way to retain users at first glance. However, many startups suffer from ‘perception bias’ when they try to lower the entry barrier (price) so much that the product looks cheap. Higher price appeals to the perception of quality and a premium product. In addition, users want to make use of their money. Consider $9 subscription vs $29. If you’ve paid the higher price, you would not want to suffer the ‘sunk-cost’ effect and will try to utilize the product as much as possible. As such, pricing experiments are a powerhouse of your startup growth strategy. They enable retention as well as drive revenues.

Going about pricing experiments will involve expertise from product development, engineering, and marketing combined. You segment your user base, generate different pricing hypotheses, test them, and measure. The idea is to find the sweet spot where you increase retention/minimize churn and also test price elasticity, e.g., the maximum profit you can make without hurting the rates you’ve just optimized. 

Metrics:

1. For retention: churn and retention by cohorts, customer satisfaction survey;
2. For revenue: average revenue per user (ARPU), revenue growth by cohorts, monthly revenue growth, LTV, and revenue churn.

A/B tests: with pricing, you need long-running tests. For instance, Group A pays $9 subscription, and Group B pays $14 subscription. Which Group has higher 90-day retention?

Final Words

Obviously, there are many more low budget marketing tools and tricks. There can also be mentioned UGC (user-generated content), waitlists, lifecycle emails, notifications, gamification, habit loops, etc. The main idea is to adopt this as a mindset to always seek out free growth tools and growth hacking tactics rather than relying on traditional marketing. 

FAQ: Free Growth Tools: Low Budget Marketing for Startups