Analysis of the underlying logic of the user incentive system!

Background of the User Incentive System

The user incentive system can be said to be a part of user operation. Establishing a user incentive system can use a series of means to enable users to complete the actions we want them to complete and make users become users with profitable value to the product.

From the perspective of user operations, users are usually operated in layers:

1. Disseminators, loyal users, and have communication and discourse influence
2. Ordinary loyal users
3. Normal User

The user incentive system is actually aimed at all users, mainly ordinary users, and guides ordinary users to become advanced users. (In addition to the high-level permissions in the user incentive system, advanced users naturally require more refined operations and more special operations, which are not described in detail here.) By using the user incentive system, most users can consciously complete product interaction behaviors and distinguish and expose potential ordinary users or loyal users.

Understand the underlying logic of the user system and the basic issues that need to be clarified

As mentioned in the previous article "Are you still worried about retention? After reading these 4,000 words, let your users stay. The user system is actually divided into:

1. Bottom layer: Use benefits to get users to complete specific behaviors. Let users feel the value of the product and let the product gain continuous user value.
2. Linking layer: points/growth value/behavior (i.e. using these forms to link product value and user behavior value).
3. Surface: Points mall, honor system, user level system...

Further analysis of the purpose and underlying structure of the incentive system will reveal several common problems:

6 common basic questions for building a user system (clarifying value and clarifying magnitude)

1) Clarify the value:

Are our users valuable to us? How much incentive can the corresponding value be converted into?

• Will there be a longer retention period and personal portrait information (gender, region, age, interests, habits, etc.)?
• If users pay, what is the average unit price?
• If users do not need to pay, what are the key user behaviors? How much is this behavior worth?

For what features/value are users willing to pay in our product?

What derivatives/features of our products do users not pay for but are willing to devote time and energy to?

Can the interaction between users and products generate social value recognition?

2) Clarify the magnitude

Do we have a large user base?

Will users use our product multiple times?

There are reasons why the above questions need to be answered:

Q: Are our users valuable to us? How much incentive can the corresponding value be converted into?

Answer: User value is the ceiling of the cost you can pay for the user's corresponding behavior (excluding spending money to attract new users).

Q: Will there be a long retention period and personal portrait information (gender, region, age, interests, habits, etc.)

Answer: If users stay for a long time and leave personal portrait information, when user traffic reaches a certain level, you can charge for advertising space. For example: Toutiao, Douyin, and WeChat. In this way, advertising fees can, to a certain extent, give back to users through simple retention behaviors (such as signing in).

Q: If users pay, what is the average unit price?

Answer: If the user pays, the value of a single user's behavior can be reversely calculated through the average payment unit price and payment rate. (For example: profit per day = average payment unit price * number of paying users = average payment unit price * active volume * paid page browsing rate * payment rate. When the paid page browsing rate and payment rate are relatively constant, knowing the average payment unit price and profit per day, the value of a single active page can be calculated.)

Q: If users do not need to pay, what are the key user behaviors? How much is this behavior worth?

Answer: If the user does not pay, it is usually other platform users who pay the user. For example, in the recruitment industry, it is usually the company that pays for the user. The price of this user's key behavior can be used to reversely infer the price of his daily retention or a certain behavior.

Q: For what features/value would users be willing to pay for our product?

Answer: These functions or values ​​may be the basis for product monetization, and are also obvious incentives to motivate users to complete certain behaviors.

Q: What derivatives/functions of our products do users not pay for but are willing to devote time and energy to? Can the interaction between users and products generate social value recognition?

Answer: These two questions are also about finding zero-cost or low-cost user incentives. Some products would be great if they provided valuable (social value, self-identity value) and other honorary derivatives, or some special activities/activity experiences with entry barriers, or other valuable resource materials (such as IELTS materials for English learning users; such as postgraduate entrance examination materials for postgraduate entrance examination users, etc.). Then perhaps there is no need to use monetary benefits to attract users to complete relevant actions.

Q: Do we have a large number of users?

Answer: The number of users is not large, and users can be managed directly through means such as community operation or other simple incentive activities. There is no need to invest a lot of costs to develop a complete incentive system.

Q: Will users use our product multiple times?

Answer: If a user does not use the product often, then what you need to do is not to retain or activate the user, but to convert him while he is still there. The incentive system is more of a "development-oriented" system.

Small Exercise

Think back to your own products, apply the above questions, and anticipate the problems you may encounter in establishing the incentive system for your own products, as well as possible solutions and ceilings.

How to establish a user incentive system

Let’s start from the underlying logic mentioned earlier (Operation Advancement: Analysis of the Bottom-Level Logic of the User Incentive System). Let’s look at the pyramid from bottom to top:

First, sort out the value

Value is a two-way value: user value to product, product value to user.

The value that users place on a product, in the incentive system, points to certain key user behaviors, which will be explained in screenshots later. The value of the product to the user (or the value that the user needs to redeem with points/behavior).

Generally speaking, there are at least two types: the value that the product itself can provide and external value (value not related to product functions/services).

Let’s talk about the angles from which we can explore the value of the incentive system to users:

The above figure summarizes some thinking dimensions and auxiliary thinking questions. When exploring value in the early stage, you can follow the dimensions in the above table.

It should also be noted that the value provided by the product is not necessarily cheaper than external value. Sometimes, it takes a lot of manpower/money to discover value that meets user needs but that users are unwilling to pay for.

example:

Below, we take the value content of JD.com’s paid membership system, keep membership & growth & points system, and Fliggy’s incentive system as examples to consolidate the above thinking points (there are differences between the paid membership system and the membership incentive system, but I think using the paid membership system to break down the value will be richer).

After talking about the dimension of mining product value to users, let’s briefly talk about mining user value to products .

Example (user task list for Taobao’s stacking cats and Taobao gold coins):

In fact, for the user value layer, you basically just need to list all the behaviors you want users to do.

The behaviors that you want users to do can be roughly classified into the following categories (summary items, not exhaustive):

Then, comb the connection layer

At this level, we need to consider how to connect the two values ​​just mentioned. Generally speaking, there are three types:

1. Direct connection: There are some particularly valuable behaviors that will be directly rewarded. Common ones include getting XX cash for inviting new people.
2. Points connection: users earn points through behavior and then use the points to redeem value. (Commonly a points system)
3. Growth value/level connection: Users must reach a certain level (accumulate a certain growth value) before they can receive the rewards that can be provided by that level. (Commonly known as growth system)

Based on the above three major directions, you can also plan the connections in terms of frequency and time.

example:

Users can earn 10 points if they browse page A for 10 seconds, 3 times a day.

Users share the activity with friends, and friends can get 10 points if they like the activity, 5 times a day.

As for what behavior is worth how many points/growth value, it is recommended to use the budget (upper limit) and the value of the resulting behavior as the basis, and use the behavioral funnel to gradually calculate forward. At the same time, in the later stage, based on the data feedback (how many people earned how many points in how long and at how much cost), the point value corresponding to the adjusted behavior or the point value corresponding to the product will be adjusted.

Finally, the presentation layer

The changes in the presentation layer are quite rich.

Based on the inducing factors, the performance layer is divided into: points system, growth system, honor (medal) system, etc. I won’t go into detail, but if you’re interested you can check out the article: “Are you still worried about retention? After reading these 4,000 words, your users will stay.

From the perspective of gameplay, it is quite varied. Several gameplays are generated based on the main purpose, with points/behaviors as connecting items and the final benefits as the main attraction, inducing users to complete behaviors.

Example (points system):

First understand the background:

(The following figure is still an inductive logic, not complete without duplication or omission, welcome to add or correct)

What the points system wants to do is to use rewards as an attraction point and points as a bridge to encourage users to complete certain necessary behaviors and cultivate user usage habits. So in terms of gameplay, changes usually occur in how users earn and spend points.

Common basic versions include: task + product list

It simply expresses what prizes are available, how many points are required, and what you can do to redeem the points. You can earn points by completing tasks and consume points by exchanging goods. The advanced version provides a gamified experience that allows users to earn points.

Here is an example of a certain treasure:

Stacking cats

Tmall Farm

Gold Coins

There are even nurturing types , which means you can raise a pet in the cloud. He may need food, cleaning, medical care, etc., and each tool needs to be exchanged for virtual currency. To obtain virtual currency, you can only complete certain tasks.

Imagine that during the frog journey, your frog son is put into the points system and needs you to train him. In addition to logging in every day to harvest crops, you also need to complete a series of specific actions, purchase travel tools for your frog son, etc. This form will be much more interesting than simple tasks + mall.

You can also use points to do more activities, use them in multiple scenarios, and enrich the ways to obtain and consume points, such as:

There are many ways to play, and if the points system is well-built, the mall rewards are attractive, and the perceived value of points is high, points can be used as rewards for various activities. How to play depends solely on the imagination of the operator (and technical support).

In addition, I personally believe that for activities that meet the platform's main KPI requirements, it is better to use a combination of methods rather than a single method.

For example: For the purpose of retention, many people may do simple continuous sign-ins, but in fact, sign-ins can have many variations. Basically, it is to encourage users to come and do something every day, such as watering the farm, exchanging steps, checking in for learning, etc., which are all forms of promoting daily logins.

The advantage of a combination of methods is that if one method fails to impress users, there is always another method that can; retention can be increased through an overall combination of methods, rather than pinning hopes on one activity.

Other necessary steps

1. Data Monitoring
2. Risk Control

I won’t go into detail about these two aspects, but I will try to increase the granularity of the data and observe every step of the user conversion like operating a regular product. In terms of risk control, the main focus is on controlling the overall budget and guarding against freeloaders.

Final Thoughts

We once established and operated an incentive system for a product. Because a competing product in the industry introduced an incentive system, we were required to introduce it at the same time. Data at the beginning of the introduction showed that users within the system had higher retention rates than general users and generated more valuable behaviors.

But later on, it was discovered that the system was in a state of burning money. Not burning money would reduce the stimulation to users, while burning money would easily affect the platform's profits, leading to an embarrassing situation.

In the end, it was discovered that users actually did not need to pay on the platform, user retention was low, and the benefits brought to the platform by a single valuable behavior were low. Therefore, based on user characteristics, it is not completely suitable for an incentive system (of course, it is a different matter if the product needs to spend money to attract new users and retain them during the growth stage).

Therefore, we also hope that before establishing an incentive system, we should think more about whether the product status and user characteristics are appropriate.

Related reading:

1. Review: How to effectively build a user incentive system!

2. Advanced operations: Analysis of the underlying logic of the user incentive system!

3. How to build a user incentive system to enhance stickiness?

4. Random draw, an addictive way to motivate users!

5. Case analysis: How to build a user incentive system?

6. From an operational perspective, let’s talk about the user incentive system of financial products