4 elements to effectively increase user growth!

In the circle, whenever the word "growth" is mentioned, most people will immediately think of a series of methods such as "growth hacker", "North Star Indicator, Growth Experiment, Aha Moment, AARRR", etc.

I believe that when you see the title of this article, you will immediately think that this is another article explaining growth hacking. After all, there are countless such articles now, and they are even a bit flooded.

We are not going to discuss any theories or techniques about "growth hacking" today. I believe that for a business, in addition to "growth hacking", there are some more important understandings about growth that are not valued or understood by everyone.

So, what kind of "growth" is important but often forgotten or ignored by us?

1. Growth in market share and profit margins

Last year, I came into contact with an education and training company, which was established about three years ago. What the company boasts about most is that their sales are getting higher year by year, and they can almost maintain a 10% growth rate every year. Such data seems very good, and the company often uses such data to praise its own growth rate and vision for the future.

But I think this is very dangerous. Why?

The reason is very simple. If we think about the general income of the public in recent years, we will know that almost everyone's income is increasing. From a few hundred yuan ten years ago to now, there are many people who have a monthly income of over 10,000 yuan. But this does not prove anything, because not only your income has increased, but everyone's income has increased.
Likewise, as a business, we cannot just compare ourselves with some fancy numbers, because that just makes us feel good about ourselves.

For example, if we have developed an APP, even if there has been a significant improvement in the data through the "growth hacking" method, we still cannot ignore environmental factors, competitive factors, etc.

Regarding the education and training company I mentioned earlier, leaving aside the sales growth that makes the company proud, if we look at the entire market, we will find that other competitors are doing just as well. The scary thing is that many companies are not as strong as this company in terms of annual sales growth, but their market share and profit margins are far ahead of this company.

The actual situation is often contrary to people's intuition. Sometimes, when everyone's sales growth rate is very fast, the market will be saturated sooner.

Of course, these remarks will make many business managers very uncomfortable. For example, the training company I mentioned is still focusing on sales growth, which is also the company’s most important goal.

Healthy growth does not require deliberate planning. It is the result of increased market demand for enterprises, the expansion and deepening of enterprise capabilities, the outstanding products and skills of enterprises, and the successful innovation, wisdom, efficiency and creativity of enterprises. This growth is not just an industry phenomenon. Generally speaking, healthy growth is reflected in an increase in market share, which is accompanied by an increase in profit margins.

——Good Strategy Bad Strategy

2. Increase in efficiency

For many companies, it’s not that their data is bad, but that their efficiency is low. Does this sound a bit complicated and hard to understand?

For example, those who like to watch the NBA will find that with the development of the times, they have to admit the fact that the NBA already has a large number of stars, and their data in many aspects have far surpassed Jordan's back then. Judging from some data alone, many stars and even third-rate stars have far surpassed Jordan, but many people still feel it is weird, and always feel that these stars are still not as good as Jordan?

It's very simple. Under the existing rules, it is not difficult for many players to achieve good statistics in certain aspects and surpass Jordan back then. The difficult part is to be more efficient than Jordan throughout the limited career time.

In fact, if we look a little more carefully, we will find that various contemporary data analysts are comparing current player data with Jordan's data back then, but almost no one uses efficiency to compare. (Because comparison based on efficiency is meaningless, data analysis experts may lose their jobs).

Jordan does not have as many colorful statistics as contemporary stars, but in terms of efficiency, he is second to none in the entire league. I'm afraid no one in the league can do what Jordan did, and achieve those achievements in just 13 years of professional career.

In the 1,072 games of his career, Jordan averaged 30.1 points, 5.3 assists and 6.2 rebounds per game. In the 1,072 games he played, his average efficiency value was 27.9. He is the only player in history to reach the finals six times and win six championships in his career, and his efficiency value ranks first in history.

Similarly, for enterprises, it is not difficult to improve data in certain areas, but the difficult part is to improve efficiency. For example, if we want to increase the number of fans of a public account to 100,000, we will then think of many methods, such as advertising, fission, forwarding in Moments, improving copywriting skills, etc.

The question here is, will it take 100,000 followers to be achieved in 1 year or 3 years?

I actually encountered such a problem last year. A certain company actually had very good resources and had been operating its official account for many years, but it was difficult to achieve 100,000 followers for the official account. Why?

I found that the problem here is not that learning a certain operational methodology can improve the background data. The problem of this company is that the writing of new media editors is always interfered with by the programmer leaders above, so that they are becoming less and less confident, including a series of problems such as offline staff being unwilling to direct traffic to the official account.

When the company invited me to run the company, I decisively refused because it might take at least 3-5 years for the company to adjust its unreasonable internal organizational structure. This also means that even if the company finds problems, its efficiency in solving them would be extremely low.

Having beautiful data in some aspects does not achieve truly effective growth. Efficiency is very important if you want to maintain effective growth.

For example, in the field of e-commerce, compared with Taobao and JD.com, Pinduoduo's efficiency is amazing.

For example, when we handle customer issues, our response speed has increased by 5% compared to before, which may be more practical than listing some grand goals.

3. Growth in the number of users and purchase frequency

What is scale value?

Scale value = K (single user contribution) * N (number of customers) / R2 (marketing expenses)

When we judge the value of a company, we can use this formula to explain it. Once a company's N (number of customers) and K (contribution from a single user) are growing at the same time, we can say that the company has a "dual growth engine."

Even if this company has been making losses for several consecutive years, many of my investment companies will still invest money in it without hesitation. This also explains why there were still investment companies willing to invest in companies like JD.com back then.

Companies that meet the "dual growth engine" requirements are usually extremely valuable. Just think about the past few years, Alibaba and Tencent are such "dual growth engine" companies.

4. Growth in user recommendations

When a company has been established for a certain period of time, if it is still using various operational methodologies to continuously attract new customers and retain existing customers, then I think this company must be in danger.

Among the customer acquisition channels, everyone knows that one of the most important ones is recommendations from old users. Unfortunately, most companies ignore this item.

For example, when many companies are asked how many of their users were referred by old users in the past period of time, most companies either say they don’t know or give vague answers.

But we can use such data to judge the growth of a company. If the proportion of users recommended by old users in a company's customer acquisition channel is too small, then the company's future situation may be worrying.

Why is it that many companies have learned or perfectly applied all the theoretical knowledge of growth hacking, but still fail to achieve effective growth in the end?

When thinking about this question, perhaps you can refer to the following points:

Given the industry and competitive environment, have market share and profit margins increased?
Is efficiency increasing compared to competitors?
Compared to competitors, are the number of users and purchase frequency increasing?
Are user referrals increasing compared to competitors?

Author: Escape

Source: Taoxuzi