How can product operations keep users spending money?

The idea of ​​increasing order volume is shown in the figure below. We still have two parts to supplement. One is how to increase the display rate of paid functions, and the other is how to increase the renewal rate of old users' orders.

Let’s first talk about how to increase the display rate of paid functions . Many products that already have a certain number of users don’t know where to start generating revenue. This is the first step you can try, from which you can know what your users really need.

This time we will discuss each one in detail according to the user's product life cycle.

1. User Product Life Cycle

1. New users: "I'll pay you if you help me solve the problem" within the first 3 times or within 24 hours

Let’s first talk about the time when new users are most likely to convert to paying - the first three times a new user opens the app or within 24 hours of opening the app . This is the golden time for new users to make purchases. Generally, 30% to 50% of new orders are generated in this stage.

At this stage, if users download your APP with clear needs, such as people who want to lose weight downloading Keep, and people who want to book a hotel downloading Ctrip, once there is a payment point that hits the user's pain point and helps the user solve the problem that he thinks is very important at the moment, the willingness to pay will be very strong.

Therefore, we should use all possible means to let users know that you have paid functions and what problems they can solve without affecting the user experience, and use some specific means to create a sense of urgency, so that users can quickly complete the psychological process of cognition-recognition-subscription .

(1) Cognition: Actively inform

When we first started investigating why users didn’t pay for advanced features, they asked us in surprise, “Does this feature exist?”

Later we realized that there must be a place for users to feel it. The saying "good wine needs no bush" is only limited to those enthusiasts. For ordinary users, you must actively tell them what paid functions you have. Don't let users find it themselves; treat them as novices who are just learning how to use an electronic device.

"Support paid functions to these new users? What about educating and guiding new users? Which one has a higher priority?" This is what many people want to ask.

My answer is that both are possible. For example, there can be a paid guide page when a novice first comes in. This does not conflict with guiding key behaviors after entering the app. So the key is timing, where you want users to do what, and remember: don’t have more than two guides on the same page or process at the same time .

We should not be afraid of telling users that paying will cause churn. In psychology, if you want to make more friends, you have to accept the possibility of interpersonal relationships breaking down. I think this also applies to products that want to generate revenue. The good news is that we haven’t found any signs that telling users they have to pay will cause retention rates to drop.

There are many ways for an app to provide notifications, such as guide pages, pop-ups, ad spaces, bubbles, etc. These are added in a rather abrupt way and are disturbing to users. There is also a very natural and most effective way to inform users, which is to remind them when payment is required during the use of free functions.

This is very important. Don’t just consider getting users to click less frequently, but care about the smooth flow of users’ usage . That is, at each step, there is a clear guide that conforms to user cognition, so that users can continue to complete the entire process.

(2) Recognition: What functions does it have and what problems does it solve?

After there is a place for users to perceive, we need to consider what content to display and how to display it. Here are a few methods:

1. The best-selling products with the highest sales volume should be highlighted. E-commerce emphasizes best-selling products, and the same logic applies to apps. The most purchased function is the function with the highest purchase conversion rate among your users. Of course, you should inform users about this function more often.
2. For users who are attracted by advertisements, they come in to find the functions displayed in the advertisements, so it is necessary to target specific sources, introduce specific functions in detail, and enable them to experience them as quickly as possible and guide them to pay as soon as possible.
3. Functions that are useful to users are divided into short-term and long-term functions. When new users come in within 24 hours, we will promote short-term functions that can quickly solve user pain points. For example, cloud space, which needs to be used for a period of time, can be recommended later.

Functions can be displayed in the form of text, pictures, videos or trial processes. Each has its own advantages and disadvantages and needs to be viewed based on the specific functions. But overall, watching is more vivid and easier to understand than reading.

(3) Subscription: Why should I buy?

After scratching the user's itch through recognition, you just need to give the user a reason to buy now, and the trigger for the user to pay will be pulled. This can be found in the first article in this series.

1. Free users who use the service more than 5 times within 30 days

The function is good, continue to use it and gradually turn it into an active user.

In the early stage, try to show and inform users of paid functions. Users have not paid but are still using your app. This stage is when users gradually become familiar with your product, slowly produce content, and form dependence.

There are two situations for this user:

• The first type indicates that the free features are sufficient to help him solve the problem, so there is no need to spend money.
• The second category is those who have tried the paid features but felt that the cost-effectiveness was not high, so they did not pay.

If we take the psychology of the second type of users into consideration, we can use limited-time discounts to inform users and thus achieve paid conversion.

There is no need to force the paid function at this stage, and the advertising display should be weakened as much as possible to increase the number of this part of users. The main purpose is to make this group of users become active users.

1. Free users who continue to use the service for 30 to 180 days: Active users

At this stage, users are already familiar with the app, have produced some content within the app, are quite active, and have formed habits, so the possibility of churn is greatly reduced.

From this point on, we can start to push some long-term paid features to users, such as cloud space and encryption. These features will solve the worries of some users who hope to use the product for a long time and further increase user activity.

1. Free users over 180 days: "Give me a reason to pay"

When you create value for users, users will also trust you. This is a two-way complementary process.

At this stage, users will feel grateful for your product, and some users who are willing to donate are basically in this group.

For this group of users, there are several opportunities for display:

1. Education on life and work scenarios for specific groups: Create user portraits through user personal and behavioral data, promote APP usage methods in related scenarios, and expand the usage boundaries of the APP. This will increase the chances of users using paid functions and thus making payments.
2. Introduction to new feature version updates: After a new feature is released, the version upgrade update will be introduced only once per version, which is also a good time to showcase it.
3. Trigger points for long-term paid functions: Taking cloud space as an example, times when the cloud space is about to be full or when synchronization is completed are trigger points.

When making recommendations to these users, you need to exercise restraint, and make it your first priority to avoid causing offence among them .

Let’s talk about the increase in renewal orders from old users .

Increase in renewal orders from old users

1. "Make renewal easier and more convenient for me"

Our product was initially only available for single-month and single-year purchases. We originally thought that users could buy a single month to try it out, and if they wanted to use it long-term they could choose to purchase it annually. But this is our own idea. In fact, after we removed single-month purchases and changed the default to continuous monthly subscriptions, after trial users began to feel the benefits of paid functions, their willingness to cancel became weaker, and they were in a stage of continuous use and continuous enjoyment , and the renewal rate more than doubled.

Of course, there are also some orders that are forgotten to be cancelled after purchase, which will cause complaints and bad reviews from users, which requires the APP to provide a reminder of automatic deduction in a prominent position in the subscription. This is also a requirement of the App Store and Google Play application market.

In addition to the simplicity of renewal, there is also the convenience of the channel. Take China as an example: we initially only supported Alipay, and later added WeChat. We thought the improvement would be limited, perhaps only those who originally used Alipay would switch to WeChat. However, from the actual results, very few people migrated, and the orders brought by the WeChat channel seemed to be purely new orders. So one conclusion is that each payment channel will have a specific main group of people, and we should try our best to give them the opportunity to pay in the most convenient way.

2. “Give me a reason to renew your subscription”

Users will not give you money for nothing. When it comes time to renew, the user’s original payment needs may have already been met. If you want users to continue paying, you must always give them a reason to renew.

These reasons can be roughly divided into three categories:

1) The need for payment still exists

Products that allow users to continue paying must be products that users can use for a long time. The most common one is cloud storage space, such as icloud. Once you stop paying, you can no longer use it. Tool products can consider this idea, but this is the most basic and has no obvious barriers. Haven’t you seen that a large number of online storages in China have gone down?

Therefore, it is important to integrate the product into the user's daily life or work and make it an essential part of the process. For example, Slack, which is used for work collaboration. Once everyone in a company is enjoying the efficiency of Slack, can they go back?

A high initial willingness to pay for a product only means that it can help users solve temporary problems, while renewal is the embodiment of the true value of a product. If we want to increase the renewal rate, we must constantly look for ways to help users improve efficiency in their lives or work. Making the product a way of life or work is the meaning of the product's existence.

If a paying user has already spent money on your product once, the probability of him spending money a second time is much higher than that of others who have not spent money. So even if users no longer renew their subscriptions, you still have to maintain these users. We can develop more features that keep users paying for a long time, and when you have new or optimized paid features, you must let this group of users be aware of them. As long as these users are touched, they will be willing to continue paying.

2) A sense of privilege that you don’t want to lose

The fourth level of Maslow's hierarchy of needs is the need for respect. People hope to have social status and be recognized by society. Even if it does not exist at this stage, people will pursue it ridiculously, such as buying an LV bag, or borrowing money to apply for a Centurion Black Gold Card. These are all very costly ways of showing off. The cost of becoming a VIP in the game or the app is relatively low. If you can show off to others, why not keep renewing your subscription? Some people may still remember vividly the row of dazzling diamonds in QQ.

The sense of privilege comes from two aspects. One is perceptibility , which means users should be aware of it at all times. For example, when watching VIP videos on Youku, users will be reminded to remove advertisements and enjoy VIP-exclusive HDR, etc. The VIP skins in QQ Music and the playlist containing VIP songs will remind users that there are several VIP songs. These practices are all to remind you that you are enjoying different services.

Let's summarize. To perceive this, there are several ways to do it:

• VIP unique skin, this is applicable to any product
• VIP level, reaching a new level will give you additional privileges, once you cancel the renewal, the level will drop
• Every time you use a VIP function, you can properly inform the user that it is a paid function.

The second is for showing off , which usually appears in social products. The QQ diamonds I mentioned above belong to this category. For example, the royal token in the game "Clash Royale" will turn your name yellow. I haven't come across this specific use much, so I won't go into details.

3) Maintain low cost

Sometimes some users do not renew their subscriptions, and they will be in a dilemma: on the one hand, there is a chance that the paid functions will be used, but on the other hand, they wonder whether it is necessary to spend so much money for this chance. Changing mobile phone numbers is a common thing in life. On the one hand, you will consider that someone may call you with the old number, and on the other hand, it costs money every month to maintain the old number. In this case, users generally choose the lowest package and keep the old number for a period of time to avoid missing important calls.

Back to the APP, you can actually use specific discounts to retain these paying users. Of course, you should avoid sending specific discounts to users who are about to renew their subscriptions, and the conditions for issuing discounts should be considered carefully.

Conclusion

The series of articles "Product Ideas for Continuously Doubling the Revenue of Billion-Level Apps" has come to an end. I originally wanted to write it in more detail, but it involves some information that is not convenient to disclose, so I wrote it in a relatively rough manner. If some of the content is not comprehensive enough, I hope you can understand. "First consider whether it exists, then consider whether it is good or not." This is a principle of this writing, which will be continuously refined and updated in the future.

This can also be regarded as a review of my own work experience. The overall feeling is that most domestic product managers still communicate more on methodology. Everyone understands the general principles, but many executable operational methods can be put into practice. I will continue to summarize the output, hoping to help everyone improve their product capabilities.

Insert information: Our team is currently exploring and implementing new products for the global market. We are in urgent need of recruiting PMs with experience in implementation from 0 to 1. We are located in Shanghai. We have enough money to take you flying. If you are interested, please leave a message~

Author: Product is thinking

Source: Product Thinking