There are two main types of growth:
- Short term – growth hacking, users are encouraged to buy products by incentives which ensure new users but not necessarily retained users.
- Long term – users buy into your product or business because they value your product and want to stay with you.
Data Analytics allows you to experiment and the verify hypothesis by running controlled growth experiments and capturing the results, following the example of organisations like facebook and twitter.
Growth accounting suggests that there are four main types of users:
- New users
- Resurrected users
- Users churned
- Users retained
By breaking down the active users by segments then you can observe over time and see if your business is generating new users, if they’re staying, if you have a leak problem with a high churn rate of active customers and how they are distributed within your products and services.
You can then use AB testing to hypothesis and determine the most effective way to increase growth in a controlled manner on the different types of users.