The melody of growth: in-depth thinking on the AARRR model

With an obsession with growth, I would like to talk about the AARRR model. This model should be very familiar to Internet operators. It is based on the entire life cycle of customers, divides the entire declaration cycle into five segments, and then analyzes each segment and decomposes it layer by layer. It is a relatively easy-to-use operation analysis tool.

In recent years, the concept of "growth hacking" has become popular. The author has also read some classic books on "growth hacking" and combined them with his own understanding to sort out his thoughts. Welcome to communicate with us~

For some large corporate platforms, growth is not that difficult. For example, WeChat and Taobao can easily generate millions or tens of millions of growth through a single event. Moreover, financial subsidies are also extremely abundant, and red envelope wars can easily involve investments of hundreds of millions.

However, after all, not everyone can be called Zhang Xiaolong, and not everyone has the opportunities of Zhang Yong. Some small companies, or small project teams within a company, are trying their best to figure out user needs, hoping to find some ideas and promote growth.

With the development of the Internet, data has increased exponentially. Those big names in growth programming have begun to pay attention to the value of data, looking for customer needs and growth opportunities from all kinds of data.

1. Acquisition

1. Optimize products

The contact between users and enterprises is often achieved through products. A good product can often quickly capture a large number of users. The speed at which new customers were added when WeChat was launched was almost staggering.

The reason for this is inseparable from the high degree of satisfaction that the product can bring to users. Whether it can satisfy users has become a yardstick for measuring the quality of a product. The extent to which it satisfies users shows how excellent the product is.

When developing a product, even the product manager himself cannot be 100% sure which product will satisfy the user, so the product design plan uses two commonly used tools: data analysis and minimum viable product (MVP).

1) What are the user’s needs? Does the user have a rigid demand or is it a whim?

The product-market fit (PMF) requires a detailed analysis of customer behavior data, transaction data, basic attribute data, and product category attributes to find the answer.

Oftentimes, simple online or offline analysis is insufficient. During user surveys, we found that people who praised an item offline might vote with their feet online, and the difference between the two would reflect the user’s wishes.

Therefore, discovering users’ actual needs through as comprehensive data analysis as possible, maximizing the fit between products and the market, and then placing them at product touch points is often the main means to attract customer clicks and attract new customers.

In the traditional industry, various advertising companies have studied various models and routines in great detail. If you are interested, you can find some marketing information and do in-depth exploration.

2) After rigorous data analysis, can the needs of users be met?

Not necessarily. If things were so simple, the company would only need to keep two departments: analysis and promotion. However, this is not the case. This is a lesson that companies have learned from losses of tens of millions, and it is also a reflection of the complexity of the market.

Therefore, growth hackers have come up with the minimum viable product solution: send it to customers with a touchpoint that is sufficient to express the product concept, and then quickly iterate and upgrade after seeing user feedback, so as to improve efficiency and reduce costs .

In the minimum viable product solution, the four main points to consider are: channel promotion, feedback mechanism, data analysis and rapid iteration.

If you think about these four steps carefully, you will find that this is a common routine for updating Internet products. When promoting Xiaomi's model, Lei Jun proposed the idea of ​​"small-step iteration". After determining a user touchpoint, promote the product through various channels, and then collect user feedback information. Through analysis, determine the shortcomings and optimization points of the product, and achieve rapid upgrades and iterations based on the analysis, which serves as a positive product optimization cycle.

This idea is very effective in the cold start phase of a product. Although it will take a certain amount of time, it will allow the product to steadily converge to user needs. It is a feasible solution with controllable costs.

2. Product design that attracts users

In terms of customer acquisition, in addition to product optimization ideas, it is also necessary to deeply explore the touch points between products and users. Products that can attract customers often have better designs in two aspects:

1. The process of customers entering the product through touchpoints
2. How much valuable content does the product have?

1) The process of customers entering the product through touchpoints

The research on customer touchpoints can actually be divided into two steps:

One is where should our contacts be placed? Which channels can carry our product touchpoints?

For example, the WeChat channel will restrict many promotional articles, so it takes a lot of effort to carry out channel promotion on WeChat. Some other channels also have their own routines.

Soft articles and social links are common ideas for companies to promote their products. Soft articles have three main functions in marketing promotion:

Attract traffic, cultivate potential users and persuade conversions, gain customer recognition by conveying customer value; social chain is an efficient cold start method, recommendations from friends will greatly trigger customer clicks, not only become a topic of conversation for customers but also trigger secondary dissemination.

The second is whether customers can enter the product smoothly through the touchpoints. The smoothness of users entering the touchpoints mainly depends on two aspects: the smoothness of the jump from the channel page to the product page and the convenience of the product login system .

We assume that each advertisement will attract the customer's attention and trigger clicks (the product and demand are highly consistent). At this time, customer interest is relatively fragile, and if there is resistance, it is very likely to cause loss.

Therefore, establishing a sound drainage channel will become a top priority.

As the saying goes: If you want to get rich, build roads first.

The customer's path to the product mainly consists of two modules: jump and login.

Various jump rules will be added to third-party channels. For example, WeChat prohibits adding texts to guide customers to operate, and Weibo limits the number of words that can be filled in. These factors should be taken into consideration when promoting products. Formulating detailed operating instructions and adding certain rewards will become common strategies. The main purpose is to stimulate customers' motivation to operate downward.

When customers enter the login page, I have seen some people trying to log in to the APP but the login rules were too complicated or the page loaded too slowly. There have also been complaints due to information leaks, and many customers have been lost as a result. Alibaba and Facebook have both been on the hot search because of this. Therefore, it is very necessary to establish a safe and efficient login system.

After going through the above two modules, customers can enter our APP and start operating without restraint.

Of course, due to space limitations, this article only lists two common functional modules. There will be many problems for customers from the time they know our product to the time they enter our APP, and we can only adjust them one by one according to the environment. The author suggests that a project team can be set up to brainstorm the information flow of customer access and analyze the specific situation.

2) How much valuable content does the product have?

There are many tricks that can attract customers, but what really retains customers is the value of the product. The more benefits the product can bring to customers, the longer the customers can be retained. This is a question of product activity and retention, which will be explained in detail below.

2. Activation

If a product can easily achieve traffic generation, that is, customers can easily enter the product, and there are entrances everywhere, it is itself a great achievement in attracting new customers and promoting activation. If some welfare factors are added on this basis, it can trigger more frequent customer activity. Of course, these activities are achieved on the basis of the product meeting needs.

Through understanding each product, we can find that product value, game factors, sign-in, friend recommendations and other continuous factors will become the reasons for customers to visit frequently. Let us introduce three models:

1. Game Mode

I think everyone is familiar with "Honor of Kings". Due to the epidemic this year, many people stayed at home, which is enough reason to challenge the Honor of Kings. The author is no exception and played a few more games. From the game we can discover a set of gameplay methods to promote activation: goals, rules, feedback, and voluntary participation.

Customers achieve a certain goal in the game according to certain rules, and then the game will give customers certain rewards. Customers will then play a new round of games based on the feedback and invite more friends to play, and the cycle will repeat.

In the feedback link, many games will set up a growth tree, which is an incentive mechanism. For example, giving a certain amount of gold coins, the accumulation of gold coins can be exchanged for more permissions, etc. Customers can see the accumulation of gold coins. As more and more things can be done with gold coins, customers will become more and more active. In addition, the introduction of the circle of friends will also increase customer stickiness. Since everyone is playing, you will naturally not fall behind.

This process not only achieves frequent customer activity, but more importantly, it can attract new customers. Therefore, attracting new customers and promoting activation have always been a unified issue and it is difficult to consider them separately.

2. Subsidy model

I don’t know how many people have been woken up by relatives and friends in the middle of the night to help bargain. This time when I went home, I felt that Pinduoduo first conquered the market of our parents’ generation. The low-priced goods and even better bargains touched the nerves of our parents’ generation. As a result, there were countless demands for bargaining in groups and on WeChat Moments.

The characteristic of this model is the most direct discount: giving away cash, plus the cooperative relationship with WeChat. For a time, it became popular all over the Internet.

In addition to giving money, many companies also offer benefits under various names to attract new customers and promote activity. For example, Luckin Coffee offers half-price purchases and two cups of coffee for every new customer. This has created a huge contrast between Luckin and Starbucks and attracted a large number of fans. Luckin uses foreigners' money to subsidize Chinese people. Because of this model, Luckin was once hailed as a national brand and its stock price soared.

What’s even more interesting is that if you don’t make a purchase within three days, Luckin’s app will push some messages to you, including some substantive greetings, such as: Give you a cup of coffee to try~

3. Activity Mode

Have you ever seen a company that can generate a lot of activity through various activities? I have seen ~

Throughout the year, there are no less than a hundred active activities on the APP at the same time. Each activity accurately targets a group of customers, and then sends them the activity content in a targeted manner, either through on-site delivery or through text messages and WeChat push, constantly stimulating customers' nerves.

Of course, the two principles of this model are:

First, don’t play tricks. What you promised in the event should be delivered in a timely manner. It is best not to make the event rules too complicated, so as not to challenge the customer’s IQ and patience.

Second, don’t push too many messages. Nowadays, every customer has hundreds of APPs. If every APP pushes two messages, customers will be annoyed. At this time, the more messages are pushed, the sooner the APP will die.

3. Retention improves retention

Once product operations reach this point, the big question will become clear: Is the product valuable? Can the product continue to generate value? becomes a key issue.

Customer retention is the finishing touch in the operation process. Only when customers stay here can the value of the product be reflected. If customers come once and leave, no matter how good the product is, it will be useless.

When it comes to improving retention, I still admire Zhang Xiaolong, not because he founded WeChat, nor because of his effective product ideas, but because of his restraint .

I learned from Liang Ning’s lecture before that every update of WeChat is planned, with one small step every day to gradually attract customers and satisfy its own iterations without hindering customer use. This gradually deepening idea is itself a good retention strategy, which is similar to the growth tree idea mentioned above.

Customers often don’t like the same old products every time they log in. There needs to be some new value points to attract customers. However, too much change often makes customers feel overwhelmed, and the learning cost is high each time.

Therefore, the balance between change and constancy is what a company should consider in product operations. It should make long-term plans, and then iterate in small steps to gradually increase the information gain of the product, allowing customers to gradually delve into the product like walking up a staircase.

We have mentioned several commonly used retention ideas above:

1. Incentive model

Incentives for customers can be divided into two categories:

One is the growth tree incentive, which allows customers to see changes every day, just like the currently popular "Bingo Crush". As a tree keeps growing, customers will be more and more happy to stimulate its growth, and the growth height of the tree becomes a new focus for customers.

The second is coupons. Now there are various forms of coupons, such as gold coins, gold beans, gold bars, a drink, cash, etc.

The biggest problem with this model is whether the gift is valuable. If customers can appreciate the value, they will often automatically participate in receiving coupons. Otherwise, the effect will not be significant.

2. Asset retention

Have you ever been sold on a card when getting a haircut?

If you become a member, Mr. Tony will become your exclusive barber. Isn’t that attractive?

Only those who invest will become high-quality customers. When customers have money to stay on the APP, they will unconsciously think of using these products, at least until their assets are completely consumed.

Bank deposits, Alipay balances, points cards, disposable consumption cards, etc. all play this role.

3. Social Chain

Tencent has mastered the social networking game very well, and because of Tencent, everyone has realized that social networking can be so diverse. The biggest advantage of social networking is that once a social network is established, customer stickiness will be unbreakable and the retention time will be the longest. However, the problem is that the social "0-1" process is extremely difficult, which is probably one of the reasons why Tencent is sitting firmly on the Diaoyutai.

There are many ways to think about retention, but the general principle is to iterate in small steps and not disturb users. Only in this way can the retention rate be improved.

4. Revenue

The problem of revenue is essentially a problem of various business lines, that is, a problem of content. Only high-quality content can trigger user conversion. Companies have their own routines on how to obtain revenue. After all, the profit model is the core part of the entire business model. This section introduces three commonly used profit models in the Internet field:

1. Free + Value-added Payment Model

This mode is a common way to play Tencent games——

Welcome to the game platform, where you can operate the game smoothly; but if you want more skins and better props, you will need to pay.

By spending money to take shortcuts, RMB players have also triggered a wave of discussion on the fairness of the game.

Whatever the outcome of the discussion? This does not prevent Tencent from getting half of its revenue from games. The success of this profit model can be seen from the fact that many companies have followed suit.

Of course, the key point of value-added is not to affect the customer's operation. The cleverness of Tencent lies in that if the customer does not recharge, he can still operate the game smoothly without affecting the user experience. Then, through the growth tree, the user's stickiness to the game is gradually deepened, thereby inducing customers to pay voluntarily.

2. Multi-sided platform model

The characteristic of the platform is that it is multilateral, and the relationships between consumers, suppliers, and advertisers are all connected on the platform.

There was an interesting saying before to express this pattern, which is: the dog pays for the wool, and the pig pays the bill.

The expression is very humorous, but the meaning is very clear.

Let me say something nonsense here. Often, experts can express the essence of the problem in a few words. Only those who don’t understand will speak at length in a hurry, and others still don’t know what he is saying after he finishes.

Off topic, let’s go back to the platform model:

Customers and suppliers place their products on the platform. The platform integrates the products with the advertisers' related advertisements and presents them to the customers. Customers, out of need for the products, download the platform APP, select products, and watch the corresponding advertisements during the selection process. Advertisers pay the platform and suppliers based on the click-through rate, thus achieving a complete cycle.

In this cycle, advertisers obtain traffic and pay advertising fees; suppliers obtain funds and pay for products; platforms obtain funds and traffic; and customers obtain products.

This model shows that the platform is the right-hand man and the key node of the platform model, which has stimulated a large number of Internet companies to devote themselves to platform construction.

The most common ones are cultural and tourism enterprises, such as Toutiao, official accounts, etc., which are presented in a free mode; e-commerce is also a transformation completed on the platform, where the supplier's products are delivered to customers through the platform, and customers will pay some money. The value of the platform is mainly to facilitate customer operations. In addition to the trading platform, payment and logistics platforms can also be built, which is a more complex logic in itself.

The current platform model has surpassed these ideas and has become very complex as it has developed. The ideas in this article should be regarded as basic promotions. I hope they will be inspiring to everyone.

3. Advertisement Surround Mode

Advertising has always been an efficient way to promote products.

There are also various advertising models. With the development of the Internet and recommendation systems, computational advertising has even appeared in advertising models. That is, through precise calculations and personalized deductions of what kind of products customers need, the corresponding advertising content is then promoted.

Professor Liu Peng once wrote a book specifically about computational advertising to describe the logic behind it, namely "Computational Advertising".

In the current Internet environment, customers often feel surrounded by advertisements. After just browsing the mobile phone market on JD.com, when they go back to check the Baidu APP, the page is full of mobile phone advertisements. Many people use this to curse JD.com for information leakage and are very angry.

In my opinion, these insults are not necessarily accurate, but they are not without reason. The information was leaked, but not in the way we usually know it. The information was not sold directly from JD.com to Baidu, but was indirectly obtained through the customers' own mobile phones:

When a customer browses the JD APP, JD will record the customer's browsing information in a cookie on the customer's phone. This cookie is visible to companies that have joined the retargeting alliance, but not to other companies.

When a customer browses JD.com and then browses Baidu, Baidu will first scan the cookies on the customer's phone. As a member of the redirection alliance, Baidu naturally obtains the JD product browsing history in the cookie, and then presents the product in the corresponding position - if the customer completes the transaction here, the two companies will share the profits based on the click-through volume.

This is where the classic part lies. Customers browsing the product proves that they have the intention to buy, and the advertisements surrounding the product constantly stimulate the customers, leading to a higher frequency of purchases.

5. Refer self-propagation

It feels a bit strange to talk with you about the issue of communication when the new coronavirus outbreak broke out, but it is also very appropriate, because the most effective way of communication in operation is viral transmission, which mainly integrates public touchpoints such as social chains, online advertising, and Weibo hot searches, triggering exponential infection of products and then triggering transmission.

Let's first understand the transmission principle of the new coronavirus, which will also serve as a discussion of our transmission methods:

The reason why the virus can spread is because the human body has corresponding receptors. The virus combines with these receptors to replicate itself, thereby affecting human functions.

Many viruses are not highly contagious because it is difficult for these receptors to combine with the virus. For example, the main receptor for AIDS is in the blood, so it can only be transmitted through blood contact.

The receptors for this new coronavirus are on the mucous membranes on the body's surface. The virus can contact the receptors through the eyes, ears, mouth, and nose, and the virus can survive in the air for about 5 days. These two reasons make the spread of new coronavirus extremely powerful.

From the above description we can see two factors that are the main factors in virus transmission: receptor survival location and virus survival period.

In the spread of viruses on the Internet, we can borrow these ideas to study the patterns of virus propagation.

In Internet communication, the receptor is the client, the receptor survival location is the contact point between the client and the outside world, the virus is the content that needs to be spread, and the virus survival period is the validity period of the content.

On the Internet, customers have a variety of channels (touchpoints) for accessing content, but the main touchpoints are still on the mainstream channels, such as:

• Weibo hot search: a loud speaker for information dissemination;
• WeChat sharing: the communication path of the social chain;
• Public news: official communication of formal content;

The accessibility of content to touchpoints, the accessibility of customers to touchpoints, and the content dissemination period greatly affect the speed of content dissemination.

1. Weibo Hot Search: A Loudspeaker for Information Dissemination

Weibo hot searches mainly refer to touchpoints in online public places. Once content is spread to public touchpoints such as Weibo hot searches, it is very easy to cause explosive spread.

It was like a person carrying the new coronavirus suddenly entered the market on the fifteenth day of the first lunar month, and the virus spread explosively at a rate of 1:1000*n.

Such public occasions are mainly channels that many people pay attention to. For example, if you add an advertisement on the Spring Festival Gala, hundreds of millions of people can see it and it will quickly spread to thousands of households. If you promote a video on TikTok, millions of people’s clicks and reposts will generate more traffic.

2. WeChat sharing mainly refers to the touchpoints of the social chain

The power of social interaction was highlighted during this year's Chinese New Year. There was nothing special about greeting each other during normal times, but when the virus is present, it is found that the virus can spread rapidly overnight. I felt shocked when I watched the news every morning during the Chinese New Year holidays, and the number of infected people increased exponentially.

Customers share some corresponding content through WeChat. If the content is highly consistent with customer needs, you will find that the content spreads quickly throughout the circle of friends. The effect of such dissemination mainly depends on the value of the content and its effective cycle.

• The communication effect is measured by how many people the content reaches during its validity period;
• Average forwarding duration refers to how long it takes on average to trigger a forwarding;
• The single-person transmission volume K refers to the average number of people a customer can transmit to;

From this we can see that as long as the content is attractive enough, the spread of social chains will grow exponentially.

If the above two models are integrated, the communication effect will be unimaginable. This is also the reason why various companies are vigorously researching social chains.

3. Public news: official communication of official content

Public news dissemination refers to the touchpoints through which companies promote through official channels. The effect of this touchpoint is mainly to increase the credibility of the content. After hearing some gossip, people have two most common ways to verify it: one is to find someone they trust around them to verify it, and the other is to check the information through official channels.

The process of seeking verification from people around you is itself a form of dissemination, and official confirmation can confirm the authenticity of the content, thereby increasing the credibility of the content. Things that people find credible will naturally be spread more powerfully, directly promoting the speed of content dissemination.

Therefore, if you want to achieve viral communication, you need to find public places and social relationship chains for communication and prove the authenticity through official channels. Of course, the premise of all these things is to have a high-quality product.

Okay, I have written so much without realizing it. Through the above discussion, do you have a basic understanding of the AARRR model and the customer life cycle?

Every customer who enters our company will go through a process from new entrant to active to decline. This is a problem that every company will encounter and a step that every customer will take.

As an enterprise, it is most important to face this step, find new customers by adjusting products, and extend the customer life cycle. It is not advisable to try to change this rule, look for a one-time product, or reduce the number of optimization times when you see that the product is excellent.

Author: livandata

Source: livandata