User Activation: Breaking Down Luckin Coffee’s New User Activation Process

There are many ways to attract new customers to your product. After your product’s word of mouth spreads, the importance of converting traffic is how to activate new users.

1. Aha Moment

There are many ways to attract new users to a product. New users may come from new channels built by the business department, new activities planned by operations, new advertisements released by planning, new customers negotiated by sales, new groups promoted by the market, as well as word-of-mouth spread of the product itself and natural traffic brought in by feature updates.

This is a process of collective wisdom. Different teams are responsible for different KPIs to attract new traffic. Product managers face these results and need to take over the follow-up work to convert this traffic into value. This is the importance of new user activation. The Aha moment is the breakthrough point in this link.

Aha is the emotional expression of surprise when people's needs are met, which will leave a strong impression in their minds. When you take a sip of iced Coca-Cola from a glass bottle after playing a ball game, when your smart home draws open the curtains in the morning to let you bathe in the first rays of sunshine, when you are having dinner in a restaurant and your favorite music happens to play; you often can't help but exclaim "Aha".

It’s no exaggeration to say that Aha moments are the little joys in our lives. If we compare small happiness from a business perspective, it is more like the user's itch points. Today, when the service system for rigid needs is becoming more mature and the barriers are getting higher and higher, the satisfaction of itch points means that more and more segmented groups are being noticed and more and more new scenarios are being explored.

The Aha moment of a product has the following meanings:

• The moment when the user first confirms that using this product can bring benefits to himself;
• If a user can reach the Aha moment when using a product for the first time, it will leave a good first impression and there is a high probability that the user will continue to use the product and become a retained user.

The goal of new user activation is to allow users to reach the Aha moment.

2. User Behavior Formula

With the baptism of concepts and trends such as the first and second half, PC and mobile, classical and blockchain, the division of labor and responsibilities of positions in the Internet industry have become increasingly clear and serious. Especially in product and operation, these positions, where you don’t know how to explain your work content to your relatives when you go home for the New Year, have become more precisely divided after long-term exploration and research. As we analyze positions and skills more and more deeply, some metaphysics are gradually turned into science, and inspiration and luck become rule-based after review.

Product managers gain a deeper sense of accomplishment and enjoyment when they design products to subtly guide users through their insights and reflections on users.

The user behavior formula is not only a way of thinking and means to understand the activation of new users, but also a ubiquitous way of thinking that can form SOP reuse in product design.

Behavior = (motivation - resistance) * nudge + reward

• Behavior: The behavior you want to guide users to complete;
• Motivation: Demand intensity, the urgency of the user to complete the behavior (own needs & push);
• Resistance: the cost of completing the behavior (own ability & obstacles);
• Nudge: Prompt users to complete a behavior;
• Reward: The feedback that users can get after completing a behavior.

Factors that affect motivation:

(1) Product positioning & user group matching

The higher the match between product positioning and user groups, the more accurate the user groups are, and the more users can feel the value of the product.

(2) Product function process perfection and coverage

The more perfect the product's functional process is, the wider the coverage is, and the higher the barriers are. Make users feel safe and clearly realize that using this one product is enough to solve the problem, without having to jump between multiple products.

(3) Scene attributes

The higher the frequency and more rigid the demand corresponding to the scenario, the more urgent the user's need is.

(4) Operational means

Grasp a certain psychology of users through operational means to enhance motivation. Conformity: such as reminding users in community products what other content the users you follow are following; Scarcity: such as flash sales and limited sales in e-commerce products.

Factors affecting resistance:

(1) Product features

If it takes too long for users to reach the Aha moment in a product, it is easy for the lack of positive feedback to increase the resistance to completing the behavior. For example, in community products, platforms usually provide incentives and support to content producers in the form of money, traffic, etc. This way, when high-quality content has not yet been discovered by a large number of users, the platform can reduce resistance and allow content producers to persist through incentives and support.

(2) Cognitive cost and operational cost

What are the user's own abilities and qualities, and whether he is familiar with Internet products.

Whether the information displayed in the product's copywriting, interactions, etc. is clear, consistent, and logically coherent.

The influencing factors can be used on this macro basis to raise different questions for different analysis objects.

3. Case: luckincoffee APP

1. Product Overview

Luckin Coffee was founded in 2017. As of the end of March 2019, it has opened 2,370 stores in 28 cities in China.

Luckin Coffee sells beverages and light meals. The beverages are divided into master coffee, latte zero, Rena ice and classic drinks, and the light meals are divided into fresh salads and healthy light meals.

Luckin Coffee is committed to promoting the commercialization of boutique coffee and advocating a more convenient and fast "new retail coffee" experience. Various coffee stores will be located in business districts and office buildings in major cities. Users can freely purchase through mobile terminals, consume in stores, and pick up and deliver by themselves.

Change the traditional coffee business model and solve consumer pain points.

On April 18, 2018, luckin coffee APP ranked first on the free list of food and drink in Apple mobile app store.

2. Determine activation targets

(1) Analysis of key issues

Ask key questions:

• Who: White Collar
• What: Buy drinks and light meals
• Why: Drinking coffee can refresh you, improve your working state, fill your stomach quickly and conveniently, and coffee is a lifestyle & social language
• VS: Order takeout, buy at convenience stores, bring your own lunch box

List the possible activation behaviors:

• Place an order
• Receive the product after placing the order
• Share products

What actions can new users complete quickly?

all.

(2) Clarify the long-term value of the product

Luckincoffee's brand vision is "Starting with coffee, making Luckin a part of people's daily life.

High quality:

• New product development
• Full product quality control

High cost performance:

• Pricing strategy
• Subsidy strategy

High convenience:

• Online purchase process
• Production efficiency
• Distribution system
• Store coverage

Focusing on the APP, the focus of product value is the online purchasing process . It can be defined as: allowing users to purchase products conveniently and quickly on mobile devices .

(3) New user activation goals

New user activation goal = Aha moment = the moment when a new user first experiences the value of your product

The first time I bought a product through the APP (I received the product after placing the order)

Online: first order; offline: received the product

3. Sorting out the new user process

We chose Ele.me, which is also an O2O life service platform, and KFC, which is also an independent catering brand APP, as references, and conducted a more intuitive disassembly and analysis through comparison.

luckincoffee:

KFC:

Ele.me:

• Luckin’s new user coupon pops up after the user logs in, with the focus on guiding the user to place an order. However, after receiving the coupon, the user is redirected to the homepage without recording the selected items. The user needs to re-operate, which is a very poor experience. KFC's new user coupon pops up when entering the homepage as a visitor, focusing on guiding registration/login. However, if the logged-in account is not a new user, the new user coupon cannot be received. There is no explanation for continuing the process after logging in (why the coupon is gone), and the experience is poor. Ele.me forces users to log in by restricting functional permissions.

• Ele.me and KFC will record the items selected by users regardless of whether an order is placed; Luckin Coffee does not have any records. Recording user selection traces can better support repeat purchase scenarios.

The same idea is:

(1) The payment countdown for Ele.me and KFC is 15 minutes, while Luckin’s is only 5 minutes; Luckin focuses more on allowing users to complete the ordering process in one go, and for interrupted orders, Luckin is more inclined to start over.

(2) Both Ele.me and KFC allow customers to choose the delivery time, but Luckin Coffee only has the option of “order now, pick up immediately”. As a self-operated restaurant, the experience is higher and the process is simpler than that of KFC. KFC's self-service ordering process moves the pick-up time (order now, order by reservation) and dining method (dine in, take away) to before selecting the items, which is somewhat putting the cart before the horse.

Choose delivery or pick up:

(1) Ele.me is a platform that defaults to the user selecting the delivery method. Products that are out of the delivery range will not be displayed in the product list or search results page. If users want to see stores that are farther away, they need to switch the granularity to detailed address positioning; when submitting an order, let users choose delivery or self-pickup.

(2) KFC is self-operated and clearly divides the two functional entrances of delivery and self-pickup on the homepage. A clear division is made from the beginning of the process, and there is no intersection later. The two functions cannot be re-selected on the order submission page.

(3) Luckin Coffee is the best in this regard. It is also self-operated, but both the homepage and the order submission page allow users to choose between delivery or self-operation, leaving the choice of which step to take to the user and reducing the operational cost of changing the user's attention.

Select specification:

(1) Products on Ele.me are selected in specifications through a pop-up window and added to the shopping cart by default. The page stays on the product list of the current store, and the page is coherent, so users will not feel that the page is popping out.

(2) There are two ways to select the specifications of KFC products, and they are added to the shopping cart by default. For drinks, you only need to choose cold or hot through a pop-up window; for customized combinations of meal sets, you will be redirected to a new page. KFC's meal sets are highly customizable, and each meal set has an average of 1-2 items that need to be selected (snacks, drinks), but there is no meal set template as a default option, and each one needs to be selected manually by the user; there is no obvious guidance, and the prompt will not pop up until the user submits; the process is lengthy and the experience is poor.

(3) Although Luckin’s selection specifications involve page jumps, users can choose to purchase immediately or add to the shopping cart, which not only gives users choices but also ensures a clear path and a simple process.

When a user exits the ordering process, KFC will pop up a second confirmation window to retain the user.

When Ele.me is not logged in, a pop-up window will appear when entering the homepage to remind the user to log in; the 10 function entrances and the 6 operation positions of the discount area below (jump to the activity page) can be jumped, and other operations require login. Compared with Luckin Coffee and KFC, Ele.me requires login first to ensure a smooth ordering process. The possible reason is that Ele.me has a longer path in selecting products, so it tries to minimize other paths.

When entering the store page of Ele.me, a login reminder pops up again when the user is not logged in. If the user cancels the login reminder, the default page of "Network Abnormality" will be displayed with a reload button. The page graphics and text do not match the scene, the process stops, and a closed loop is not formed, resulting in a poor experience.

The product FEED flow changes before and after logging into Ele.me, resulting in users being unable to find the products they wanted to choose after logging in, resulting in a poor experience.

4. Review Activation Process

User behavior formula: Behavior = (motivation - resistance) * boost + reward

(1) Action: Placing an order

(2) Power

Self-demand: How strong and urgent is the user's need to use the product?

Do users have any other options?

Luckin Coffee has become the first choice of more and more users through the following main ways. When they want to buy coffee, they think of Luckin first:

• Celebrity endorsements, advertising exposure, benchmarking against Starbucks, etc., to enhance brand awareness;
• Through the concrete brand image of the "little blue cup", a strong association is formed in the minds of the audience, reducing the memory cost;
• The new retail model that combines dine-in + self-pickup + delivery achieves full coverage of all consumption scenarios for users;
• Offline stores have achieved 100% coverage within a 500-meter radius, and users can reach them in just 5 minutes on foot;
• Online new user acquisition and fission with social attributes emphasizes sharing and post-reward, combined with a high level of brand awareness, stimulates users' herd mentality, and guides users to quickly complete the closed loop from registration to purchase.

Decision cycle:

When a user decides to buy coffee, the estimated decision cycle is about 15 minutes.

The usual countdown for takeout orders is 15 minutes, but Luckin’s is only 5 minutes, highlighting the urgency and guiding users to make decisions as quickly as possible.

(3) Resistance

Difficulty and Ability: How difficult is it for users to perceive the value of the product?

1) Are the product’s functions easy to understand and use?

The overall purchasing process is clear and easy to understand and use:

• Two login methods are provided: WeChat login and mobile phone verification code login.
• Luckin’s new user coupon pops up after the user logs in, with the focus on guiding the user to place an order. However, after receiving the coupon, the user is redirected to the homepage without recording the selected products. The user needs to re-operate, which is a very poor experience and needs to be optimized.
• On the home page and the order submission page, you can choose to have the order delivered or operated by yourself, leaving the choice of which step to take to proceed to the user and reducing the operational cost for users to change their mind.
• Although Luckin’s selection specifications require page jumps, users can choose to buy immediately or add to the shopping cart, which not only gives users choices but also ensures a clear path and simple process.
• Luckin’s order countdown is only 5 minutes; and no matter whether an order is placed or not, there is no selection trace in the product list. It focuses more on allowing users to complete the ordering process in one go. For interrupted orders, Luckin prefers to start over.

2) When does the user reach the Aha moment?

Compared to other takeout products that allow you to choose a reservation time, Luckin Coffee only has “order now and pick it up immediately”. Prominently display available times on the submit order page. Under the premise of ensuring production efficiency and store coverage, the Aha moment is expected to be within 15 minutes on average.

3) What are the user’s own abilities and qualities?

Luckin mainly focuses on social spaces related to office scenarios. Its main target audience is white-collar workers, who have low learning costs for subsidy methods and ordering processes and can quickly accept new things.

(4) Boost: Subsidies

• Actively distribute coupons in the APP
• Get coupons on WeChat fission event page
• Coffee Wallet: Charge 2 and get 1 free, charge 10 and get 10 free

(5) Rewards: Subsidies

"Free first order for new customers" and "Free cup for each friend" emphasize sharing, acquiring new users through the method of old customers bringing in new ones, and rewards are only given after the users complete the task (place an order).

Author: Murasakihara Shinnosuke

Source: Murasakihara Shinnosuke