User operation, how to formulate user rebate strategy?

Since the incentive rebate for reading has been verified, various companies have flocked to it and started a subsidy war. The reward model originally used for the CPA model of the points wall or the CPS shopping rebate model has been used on a large scale for information, videos and even the more popular novels nowadays.

So for non-incentive products, should the incentive model be followed? How to follow up? Here, based on our actual cases, I would like to share with you some of our views and thoughts on incentive models.

In addition to attracting new users, the incentive model is more suitable for two types of business:

1. Realize business value-added through user usage time (number of page visits).
2. Achieve brand exposure (business conversion) by having users complete a specific behavior.

In terms of business type, it basically covers most companies on the market. If your company's business happens to meet these two characteristics or one of them, you can try the incentive model at the right time point for product iteration.

A complete incentive system can be achieved in four parts:

1. Improved new user retention
2. Improve retention of old users
3. Improve the effect of user attraction and new user attraction
4. Improve business conversion effect

1. New User Retention Rebate

Most developers improve new user retention by creating a set of new user guides. After new users open the app, they are guided step by step to understand the product functions.

This approach is more suitable for some novice users, and the effect varies depending on the product. Usually users think they are smart. They usually ignore the onboarding guide and only look for the functions they need most. If this function does not arouse his (her) interest at the first time and is not only satisfied by this product, the user will easily be lost and find it difficult to come back.

New user benefits are a common way to increase new user retention. New user benefits usually have the following practices:

1. New users who sign in for 7 consecutive days can get membership (cash) benefits.
2. New users can get some cash rewards. If they want to withdraw cash, they need to complete tasks to get more rewards.
3. New users can get cash rewards, which can be withdrawn directly.
4. New users can get cash rewards, which can be withdrawn the next day.

In terms of the product cases of the Palm collaboration, when other modules of the product are the same:

The stimulation of method 1 is not so obvious. Spread the stimulation to users over multiple days. If you want users to stay, the rewards for continuous sign-in need to be attractive enough.

The effect of method 2 will also be more prominent, and the product can recover part of the reward cost in the process of users completing tasks to meet the reward standards. It should be noted that subsequent tasks should be as relatively simple as possible. For example: if a new user is rewarded with 0.5 yuan, but the product requires a minimum of 1 yuan to withdraw, if the user finds it difficult to earn another 0.5 yuan in the future, he will quickly lose patience and the effect will be counterproductive.

Method 3 is the most effective. The stimulation provided by method 3 is the strongest for users, and it is easy to quickly establish users’ trust in the product. The prerequisite is to calculate the cost well and do a good job in anti-cheating.

Method 4 will result in higher next-day retention, but users are likely to leave after withdrawing money the next day, and the actual retention data will be distorted, with relatively poor results.

(Method 3: Testing User Retention)

2. Active User Retention Rebate

For old users, they are already familiar with the product functions and have formed product recognition. Generally, a continuous sign-in reward strategy is used to increase active user retention.

In specific implementation, rewards can be given on a daily basis, and additional rewards can be given when a certain number of sign-ins is reached. When setting the number of daily sign-in rewards, you can implement a cycle from small to large and then back to small. This can control costs on the one hand, and give users enough motivation to continue the task on the other.

(Active user reward test)

3. Rebate for attracting new users

The most widely used user acquisition incentive is that many products have an entry point for acquiring new users, usually: "For every friend you invite, you will get xx yuan in cash rebate or xx membership benefits."

When evaluating whether to implement a user acquisition strategy, the main consideration is to evaluate the cost of acquiring a new user from an old user and the cost of marketing. Generally speaking, to obtain the same amount of new users, the cost of user acquisition incentives is lower than the market launch cost. Buying users through users seems to be more cost-effective than buying users through marketing companies, the cost is more controllable, and the effect is easier to evaluate.

Currently, there are two ways to incentivize new customers: one-time rebates and long-term rebates.

One-time rebate for attracting new customers, for example, on Pinduoduo, you can get discounts on products by inviting friends to group buy. If you want to get discounts later, you need to invite friends again.

Long-term new customer acquisition rebates are usually used for reading products. For example, the rules of most reading rebate apps on the market now are that you can get 10 yuan + 20% commission of the friend's income by inviting a friend. The 10 yuan reward is not a one-time reward but a reward in batches. The invited friend needs to open the app and complete the corresponding tasks for 7 consecutive days after the invitation to get the full 10 yuan.

(Actual measurement of natural user growth)

4. Business conversion rebate

All rebates are ultimately for business conversion, such as attracting new customers and retaining existing customers, which are actually all for achieving the ultimate business conversion. The business conversion incentive mentioned here refers to the rebate standard given to users for a specific business.

The first step in setting up a business conversion system is to have a reward standard for each business type, and each reward standard must be based on the specific business situation.

For example, Toutiao’s gold coin rewards for reading news/videos, and rewards for each task on the task page. Because this reward strategy involves product details, we will not elaborate on it. Developers who are interested in this can contact us, and we provide business reward system solutions. Here, we only introduce the rebate business.

(Read the product and test the business rebate)

CPS Business Rebate

Each consumer product will have a relatively clear marketing budget, and the rebates the platform gives to users will be kept within a controllable range of marketing costs. The specific approach will vary:

• One is that users purchase products and obtain product discounts through group buying. This type of product is currently mainly used for group buying e-commerce, educational group buying or customer service.
• One is that users share the order link with friends. After friends place an order, users can get cash rebates. This is the practice of current rebate websites.

Advertising business rebates are mainly CPM/CPC rebates, with a small amount of CPA/CPL rebates

Many catering businesses will tell customers who come to their stores that they can get discounts when they pay by sharing their friends’ circles. This is actually a kind of CPM rebate for advertising business. Users promote the business on their social media and get discounts in return.

The advertising business rebates of the App are divided into two parts: on-site and off-site. The on-site rebates are mainly used to increase advertising exposure or clicks, rewarding users for sharing information or advertising links outside the app to obtain more user visits, thereby achieving more advertising exposure and clicks, and improving overall advertising revenue.

CPM advertising depends on the final conversion effect

Advertisers who bid by click or impression have a complete set of anti-cheating mechanisms. Once the click-through rate of an ad is too high but the conversion rate is average, the advertiser will lower the bid for the ad click or even stop advertising on the product. Therefore, the rebate for advertising business is not to directly guide users to click on advertisements. The usual practice is to guide users to increase the number of readings and length of stay on the advertising carriers through point rewards.

For example, if a user reads xx articles, he can get xx gold coins, and the gold coins can be exchanged for cash withdrawal. Users are likely to click on ads while reading, which increases advertising revenue for the platform and avoids the business risks brought by directly clicking on ads. Currently, the purpose of rebates for information, videos, and even novels is to increase the number of pages users browse, increase advertising exposure, and thereby increase revenue.

CPM advertising cannot provide unlimited incentives

CPM advertising revenue has an exposure-revenue curve. The more users are exposed to ads, the higher the advertising revenue will be. However, if users are exposed to many ads but the subsequent conversion is poor, the CPM price will go down, while the reward cost will go up.

If there are sufficient advertising resources, the PV/UV ratio is usually lowered by connecting to multiple advertising sources. That is, the same user is exposed to advertisements from different companies, and the revenue of a single user is maximized through cumulative billing from each company. CPM type ads usually include information flow native ads, js ads, and the currently popular incentive video ads.

CPL Advertising

CPL advertising usually refers to game advertising download registration, which guides users to try out the game by giving them rewards. The more users who try out the game, the more users may eventually recharge the game.

For advertisers, CPL advertising mainly depends on subsequent recharge conversion. Since it takes a long time to evaluate recharge conversion, developers are generally unwilling to accept revenue sharing based on the final recharge. Therefore, commissions are usually given to users and developers based on the user's game registration and level-breaking progress. The reward cost is usually borne by the advertiser, and the app developer sets the share ratio for the user.

CPA Advertising

It is mainly download and registration. Users can get rewards by downloading an app. This kind of rebate is usually used in the ASO industry. For advertisers, the main purpose is to improve the natural ranking in the app store through task-based user download and registration, thereby driving an increase in natural volume. For developers, they can give users a small amount of monetary rewards to help advertisers achieve the goal of improving ASO effects or increasing the number of users and thus obtain intermediate profits.

Currently, the more common business conversion system on the market is to create a daily task module, which sets tasks for users one by one according to the business revenue from high to low. Users can get corresponding rewards when they complete a task, and they can get an additional reward when the number of tasks completed reaches a certain level.

The above are the scenarios in which the incentive model can be applied and some specific practices. For developers or product managers, the most important thing is to choose a product strategy that suits their own products. It is not necessary to completely convert the product into an incentive model. Incentives can be used in a certain area to achieve more efficient user or business growth, such as increasing users through new rebates and increasing business consumption through business rebates.

Finally, no matter which rebate model is used, the input-output ratio needs to be considered. If the additional income brought by the rebate can completely cover the rebate cost, then the rebate is benign. If it only leads to an increase in costs but does not significantly increase the number of users and business revenue, then the rebate model needs to be re-polished.

Related reading:

1. User operation: new funnel model for conversion analysis!

2. User operation: How to use B-side operation thinking to increase user growth?

3. Product operation: How to use data analysis to drive product user growth?

4. APP user growth: One model solves 90% of growth problems!

5.How to increase users? Take Pinduoduo and Xiaohongshu as examples

6. Triggering user growth: Is user operation just about attracting new users?

7. User operation: What else can you do to attract new users without fission users?

8. User operation: how can financial products awaken dormant users?

9. User Operation | How to perform user behavior path analysis?

Author: Wang Yuqiang

Source: Wang Yuqiang