How can online education prevent the loss of paying users?

How can educational products prevent the loss of paying users ? The author of this article believes that by doing a good job of churn warning, exceeding expectations in service, and recall, the churn of paying users can be greatly reduced. As an observer of online education, the articles I have read either talk more about enrollment conversion and traffic acquisition, or follow the trend in the Internet circle and talk about growth hacking and fission to attract new users. I feel tired of all of them.

In fact, anyone who has worked in education and has a deep understanding of education will reach a consensus: the growth of educational products does not depend on traffic, but on retention.

Especially in online education, which has been very popular in recent years, more attention should be paid to retention. However, many people in the Internet circle directly apply the Internet's strategy after coming in. A typical example is a certain headline. What is the result?

Therefore, as the future development direction of the education and training industry, whether online education can retain users is of vital importance. This article will systematically analyze: How should online education retain users, especially prevent the loss of paying users?

The Compounding Effect of Retention

Regardless of the growth of any product, retention will be more important. This is especially true for online education, especially K12 education. This is because a higher retention rate will be more conducive to long-term and stable growth.

Qu Hui, the author of "Silicon Valley Growth Hacker Practical Notes", once gave such an example in the book:

Suppose Company A and Company B start from scratch. Company A has a monthly retention rate of 80% and 5 million new users per month, while Company B has a monthly retention rate of 95% and 2.5 million new users per month. After 6 months, Company A is still ahead of Company B. After 3 years, Company B will surpass Company A.

This is the compound interest effect of retention, which will ensure that the party that is at a relative disadvantage in development has the opportunity to overtake and exchange time for space. The prerequisite for achieving this strategic goal is to have a higher retention rate.

Therefore, if Company A and Company B are replaced by any online education company, the principle will be the same. As long as the retention rate is significantly higher than that of competitors or the industry average, there is a very high possibility that it will become a leader after a period of time, and with the help of the word-of-mouth effect brought about by high retention, the growth will become more benign. This is one of the reasons why the twin stars of education and training can beat small and medium-sized institutions.

Therefore, retention rate is one of the core indicators that need to be paid attention to in the growth of online education.

Retention is more than just repurchase

When talking about the retention rate of online education, most people think of it as the class renewal rate or repurchase rate (repeat purchase = class renewal + subject expansion). But this is not the case in reality, because there is a lot of room for manipulating the calculation of the renewal rate. It depends on the time node you use to calculate it. Is it based on the first class or the last class, or the time when the renewal reminder starts? There is no unified standard in the industry, and each company can set its own.

Therefore, when I see some online education companies saying that their repurchase rate is 80%, I always question it, even though what they say may be true.

So, how should the retention of online education be judged?

The author believes that it consists of three parts: refund, class renewal and subject expansion, and the corresponding indicators are refund rate, class renewal rate and subject expansion rate.

However, it should be noted that the purpose of expanding courses is to increase the amount of consumption to kidnap users, thereby stabilizing and increasing retention. Moreover, users of expanded courses must also renew their classes later.

Therefore, for the sake of convenience, the retention rate can be calculated from the two aspects of refund and renewal (repurchase), that is: retention rate = "number of users who renew their classes (repurchase) + number of recalled users" / (number of users before renewal (repurchase) + number of refunded users) .

So, how to improve retention rate? The formula already gives the direction.

The author has said that retention includes three parts, namely: refund, class renewal and subject expansion. Therefore, if you want to improve the retention rate, you need to do two things: reduce refunds and actively renew classes and expand subjects. Next, I will focus on how to reduce refunds.

Three ways to prevent the loss of paying users

One characteristic of educational products is their ultra-low frequency and long usage cycle. Students often study in weeks, and the learning time ranges from two to three months to half a year, a year, or even longer. In such a long usage cycle, it is inevitable that users will quit midway. If the attrition rate, that is, the refund rate, can be reduced during the usage cycle of educational products, the retention rate can be significantly improved.

To reduce refunds, you can do three things:

1. Loss warning

Based on students' performance during the learning process and data feedback, predict the possibility of students' refund in advance.

For example: failing to attend classes, punch in, do exercises, or submit homework for several consecutive classes, being unable to be contacted or communicated for a long time, or having a continuous decline in accuracy rate, etc. Once a student encounters any of the above situations, you can remind the student immediately. For example, through app or text message reminders, teachers can take the initiative to contact by phone or WeChat, and communicate and comfort the other party to minimize the risk of refund.

2. Beyond Expectation Service

Generally speaking, it is normal for teaching products to be refunded. The main reason is that the effect is not significant or the demand is no longer matched. For these students, the refund can be reduced through early warning reminders and communication.

However, if students can feel that the experience and service exceed their expectations, the risk of refund can also be reduced, and they can even be helped to renew their classes and continue following the program. This is called emotional stickiness.

Therefore, when formulating service standards for teaching products, you can set minimum and maximum requirements, and link attendance rate, refund rate, and class renewal rate to performance to control and improve the overall service level.

Especially the attendance rate. Both logically and empirically, a higher attendance rate will lead to higher retention and conversion, whether it is a low-priced course or a full-priced course. Therefore, from a service perspective, improving attendance rate should be the focus. As for the specific methods, standards can be set for the time, rhythm, and method of pre-class contact, and game mechanisms such as rewards, redemption, and upgrades can be designed at the product level.

Of course, for many K12 online education products, standardizing the teaching process centered on improving attendance and completion rates may be the best approach, such as the seven-step, eight-step, or ten-step teaching methods.

However, these are actually similar. The key point is that each step stipulates the behavioral standards and frequency of the teacher, such as: how many times must contact before class, how long must accompany during class, how long must answer questions after class, etc. If most of them can be guaranteed to be implemented, a reasonable refund rate is guaranteed.

3. Recall

Recall is a very important task in teaching operations. Although students will leave for a short period of time, they can continue to come back to study in the next learning cycle.

The specific recall work is as follows: at the class renewal node, use push, text messages, teacher phone calls and other means to remind new class registration and discount information. In particular, one-on-one communication with teachers should be the focus of recall work. The best way is to design a unified communication template and communication training to ensure maximum recall effect.

For example: design the logic of recall speech: the first step is to ask about the learning situation, the second step is to recommend classes or expansion subjects based on the results, the third step is to inform about the new class discounts and other benefits, and the fourth step is to guide the purchase.

Summarize

This article analyzes the anti-churn strategies of online education and provides a series of feasible anti-churn solutions. I hope it will be useful to readers. Finally, let’s summarize the key points of this article:

1. The core of online education growth is retention. Retention rate = "number of users who renew their classes (repurchase) + number of recalled users" / (number of users before renewal (repurchase) + number of users who refunded their fees).
2. If online education wants to prevent the loss of paying users, it can do three things: loss warning, beyond-expectation service, and recall.

above.

Author: Ding Zhenjun

Source: Ding Zhenjun