Analysis of traffic patterns in online education!

Many new Internet companies that have entered the education industry have accumulated a large amount of traffic through products such as high-frequency tools under the Internet mindset. After rapid development and commercial exploration, they have formed direct competition with old traditional education institutions such as New Oriental. Now that the traffic dividend has disappeared, these Internet companies have to seek other ways to obtain traffic.

Every summer vacation is the enrollment competition season for K12 educational institutions. This summer vacation is particularly fierce, and many educational companies have launched a marketing war in the education industry.

It is reported that as of July this year, the total marketing expenses invested by online education companies in summer enrollment exceeded 4 billion yuan, and the marketing expenses of Xueersi Online School, Zuoyebang and Yuanfudao accounted for 50% of the total.

01 Why should we start this battle for traffic now?

Since last year, the capital winter has arrived, investment has become more cautious, and the traffic dividend has disappeared.

• Online education companies that can raise funds are usually only the industry's leading players. Once they have raised funds, they need to quickly seize the market, widen the gap with other players, and maintain their advantages in order to win favor in the capital market.
• Summer enrollment often determines the annual revenue of the entire education enterprise to a large extent. The online education courses of various companies are often designed in a systematic way and have a certain degree of learning continuity. Changing institutions midway often has a great impact on students' learning, and education institutions only need to ensure good teaching results and renewal rates. Secondly, grabbing new first-year junior high school and first-year high school students often determines to a large extent that these students are likely to study in this institution in the next few years.
• The traffic dividend has disappeared, and the enrollment costs of various institutions are increasing. The customer acquisition cost has even reached 7,000-8,000 yuan. Except for institutions such as GSX, most online education companies are still in a loss-making state. If they want to obtain traffic, they must either rely on their own brand and word-of-mouth effect, or spend money on marketing investment to quickly grab traffic and end this war. Only then can they reduce their own enrollment costs and then make profits. If the stalemate continues, all parties will only continue to lose money. The O2O war, the taxi war, and the thousand-group war all require burning money on subsidies to quickly end the war in order to have the possibility of making a profit.

02 How to understand online education traffic

1. The ultimate goal of traffic is profit, and it is also the initial link to complete the business closed loop

The essence of Internet business is products, traffic, and conversion rate, and the ultimate goal of business is profit.

For traditional leading educational institutions, they have strong brand and word-of-mouth effects, and their natural communication capabilities are sufficient to bring in a large amount of student traffic.

However, most of today's online education companies lack brand influence and word-of-mouth effects, and do not have sufficient teaching, research and teacher training capabilities to crush their competitors. In addition, the education industry has the characteristics of high user decision-making costs and long decision-making time, so their ability to acquire natural traffic is seriously insufficient. Traffic plays a vital role in the business model verification, business operation, and product course effectiveness verification of online education companies, and determines whether the company survives or not.

Online education companies need to complete a business closed loop. Traffic is the initial link of the business closed loop. They need to acquire traffic and convert it into paying learning users to obtain monetization. Then they use the profits from courses to improve teaching and research capabilities and teacher training capabilities, improve teaching effectiveness, gradually build a brand and word-of-mouth effect, and attract natural traffic. A portion of the profits will be used for marketing investment to achieve positive business operations. The traffic cost also determines whether the business closed loop can operate healthily and sustainably. Once high marketing investment is required, the company’s own hematopoietic capacity is insufficient and financing is difficult, the company will face great risks.

2. Differences between education traffic and traffic from other industries

For common Internet products, the user and the decision maker are usually the same entity. If this product is useful to me and I enjoy using it, I will use it and even be willing to pay for it. The entire process from decision-making to use and then to payment is participated by one person.

K12 online education products are different. Children who have no ability to pay, and even many children who have no desire to learn, are the real users of education products, while the decision makers and payers are their parents. Therefore, education traffic needs to be broken down, and the value delivered and needs met by education products are largely just the needs of parents.

Therefore, online education advertisements are placed towards parents, influencing their decisions and gaining student traffic.

I saw a story: There was a parent who had beautiful ideals and was determined not to enroll his child in any classes. He wanted his child to be healthy and grow up the way a child should, but he was ultimately defeated by reality. All the classmates in the child's class signed up for classes, but his child did not. During an exam, the training class teacher had explained the same question before, and other children answered it correctly, but his child ranked last in the class because he did not know the answer. He cried and blamed his parents. The parents could not sleep all night and felt heartbroken. After the pain, they could no longer bear it and finally had to sign their child up for a class.

I have heard a "very reasonable" saying: The world is a big stage. If the people in the front stand up to watch the show, the people behind will have to stand up and watch as well.

How disheartening! Despite this reality, educational companies cannot just treat traffic as cold numbers or merely satisfy parents' anxiety. They must also let parents and students see the teaching results and see hope. This is also the key to the sustainable development of an educational company.

03 Common ways to obtain traffic

1. Tool products

Tool products are common in online education companies that started out on the Internet, such as Zuoyebang and Xiaoyuan Search Questions. Among them, the most noteworthy is the "question search" function. In the early stages of development, they quickly grabbed student traffic by providing students with the question search function. What exactly is the composition of this traffic? What is the purpose of students using the question search function?

This issue has always attracted much attention among teachers and parents. When teachers and parents buy tutoring materials for their children, they almost tear up the answers and take them away. Would teachers and parents feel comfortable letting their children use such products?

Students who use the question search function either want to solve questions or learn problem-solving ideas, but due to lack of self-control, they can easily become a tool for copying homework.

Secondly, products with question search as the core function have gradually developed into one-stop functions and services of "question bank + question search + question and answer". The question bank is also the most critical data support for question search products. The quality and quantity of the question bank are the core competitiveness; question and answer are responsible for the subsequent profit conversion.

Question search tools may have more advantages in the subsequent development process, but they also face many problems that need to be considered:

• The traffic composition of question-searching tools depends on whether there are more students solving questions or more students copying questions, more primary school students or more junior high and high school students. The different proportions will further determine the quality of the traffic and the subsequent commercialization.
• Parents and teachers recognize the brand. Parents are a paying group, and teachers also have a strong influence on parents to a certain extent. Therefore, tool products need to pay more attention to the specific ways students use the products to dispel the concerns of parents and teachers. Secondly, as parents are a paying group, this part of the traffic should also be paid more attention. This is also the purpose of many products using question-searching technology to launch parent versions for correcting homework.
• As a high-frequency function, there is a huge amount of student data. These question search data, corresponding academic stages, students and other structured data have a lot of room for imagination. Whether it can provide personalized teaching and services for subsequent teaching, as well as optimize teaching and research and curriculum design, has a certain possibility. This is also a huge advantage compared to traditional educational institutions.

2. Content products

Education is teaching content + teaching model. Content products play a very important role in the teaching process, and question bank and homework products solve the students' practice needs. Learning requires not only seeing with the eyes, but also writing and practicing. Only by constantly practicing questions can you improve your speed in answering questions, discover the real problems encountered in the process of answering questions, and improve your learning effect.

As a high-frequency and urgent learning scenario, students used to prefer doing paper exercises, but the question bank digitizes the exercises, allowing students to access massive resources for free at any time.

But what problems and opportunities will this approach face?

• Doing exercises online requires a high level of concentration from students, which also affects their learning efficiency to a certain extent.
• When students do exercises online, a large amount of data such as their wrong questions is accumulated. These data can be associated with specific students, which is helpful in subsequent personalized learning recommendations and commercial conversions. However, the accumulation of a lot of data is not perfect now. For example, most of the data accumulated is only for multiple-choice questions, while student data such as calculation questions and problem-solving questions cannot be well collected and analyzed to form structured data.
• In order to allow students to continue using the question bank for practice, teachers are provided with the function of assigning electronic homework through the question bank. However, from 2018 to 2019, the education department issued a series of policy and regulatory documents to prevent myopia among primary and secondary school students and prohibit harmful apps from entering primary and secondary school campuses. These documents have had a serious impact on such companies and even on their business models. Therefore, policies must be paid attention to during the development of enterprises.

3. Low price discount

The above functions may be able to obtain traffic quickly and at low cost in the era of traffic dividends, but with the integration of Internet product technology talents and traditional educational institutions, these functional technologies are likely to become the infrastructure and low threshold of the education industry. So how can online education institutions obtain traffic?

Online education companies that started from the Internet and education companies that started from traditional educational institutions have, after long-term development and multiple rounds of verification of their business models, begun to compete directly online and offline in large-class courses. The most direct way is to launch a number of low-priced courses in summer and winter classes, using low prices or free courses to grab traffic.

Low-priced classes generally use a lower price to allow users to experience the same service and experience as full-priced classes, thereby converting users of low-priced classes and enrolling them in long-term classes.

What needs to be noted about low-priced courses is that they are discounted but must be charged. The customer acquisition efficiency and retention conversion of 0 yuan courses, 1 yuan courses, 9 yuan courses, and even 49 yuan courses are completely different. Users do not pay anything, which can easily lead to two results:

• There is no charge, but when placing advertisements, there will be concerns about the brand;
• Without any charges, users have no sunk costs and do not suffer any losses even if they do not learn. However, they cannot experience the effects and services of the course, which has a serious impact on the subsequent conversion to full-priced courses.

4. Telemarketing/social media operations and advertising methods

All internal links are ready. What is needed is to expose the product and bring in traffic. In the current environment, the role of marketing and operations in acquiring customers is more important.

Nowadays, all educational institutions have invested most of their profits in marketing expenses. Before the summer vacation every year, the costs of various channels have skyrocketed, and the cost of acquiring customers has become increasingly higher. The cost of acquiring customers for one-to-one services is even over 10,000 yuan, and large-class courses also face a cost of less than 10,000 yuan. Various agencies placed advertisements everywhere to obtain sales leads and used various means such as telemarketing bombardment.

Secondly, GSX went public in 2019. Relying on the WeChat ecosystem, GSX achieved profitability at a lower customer acquisition cost. However, the traffic dividend disappeared, and the WeChat ecosystem and even other product ecosystems eventually became calm. Without the communication effect generated by a strong brand reputation to bring in natural traffic, online education companies will sooner or later face a traffic crisis.

04 Are there new opportunities for traffic exploration in the future?

Currently, online education companies are generally facing a traffic crisis and slow traffic growth. Even many online education companies have begun to optimize their personnel and business lines. So, are there any traffic opportunities worth exploring for online education companies?

1. Traffic is sinking. Currently, even the offline institutions of New Oriental and TAL Education Group only cover a limited number of cities. There are still many "local" education institutions in third- and fourth-tier cities and below that control the source of students. The advertising of online education companies does not have a good reach, so the sinking of third- and fourth-tier cities and below will still be a growth point. Online education companies can bring high-quality educational resources to students in third-tier and fourth-tier cities and below, and compete with offline education institutions for students through low-priced educational courses.

2. Secondly, as the current traffic dividend has disappeared, many of the tools that students use frequently have become infrastructure-based, making it difficult to quickly and cheaply acquire customers through such tool products. So, are there any other opportunities for this method? I think it's still worth a try.

For example, although information-based teaching has been developed for many years, the school's information level is still very low. It is the school leaders who actually purchase the equipment on campus, but it is the teachers who actually use it. The teachers' level of informationization, the practicality of the equipment, and its help in teaching effectiveness have resulted in a generally low acceptance of information equipment among teachers. So is it possible to accumulate teacher traffic and rapidly expand parent traffic by creating convenient class management and home-school interaction tools for teachers, such as student performance analysis, homework notifications, and sending student learning reports to parents? As decision-makers in the education industry, parents have a very high voice and can accumulate enough student data through tools, which also has great commercial possibilities.

1. When operating your own brand traffic, the traffic brought by advertising is short-lived and unsustainable. Therefore, major educational institutions need to operate their own brand traffic. By observing the Douyin accounts of TAL and New Oriental, we can see that New Oriental Online Japanese and New Oriental Family Education both have more than 1 million followers. The scores of CET-4 and CET-6 and IELTS are getting lower and lower, with New Oriental having 100,000 followers and TAL having only more than 7,000 followers. However, it is still worth a try whether the low-priced and short-term classes in K12 that are more suitable for low decision-making costs are worth investing in.

05 Conclusion

Nowadays, it is becoming increasingly difficult for online education companies to accumulate traffic through high-frequency tools. Only by doing a good job in spreading word-of-mouth of their own brands can they lower their own enrollment costs and gain greater competitiveness when traffic costs are becoming more and more expensive. Perhaps only when the war among online education companies ends can the entire market become healthy.

Let’s escalate it a little bit at the end of the article.

Behind every traffic number is a child's future, every parent's hope, and a living person. Online education companies need to shoulder their own responsibilities, take education seriously, and not become a company that only knows how to make money. Only then can they develop and survive sustainably.

Finally, I would like to end with the words of Professor Liang Ning: The weakness of human nature drives the traffic of the Internet, but the brightness of human nature builds the civilization of business.

Author: Big Bun

Source: WeChat public account: mantousay