APP promotion: How to use traffic pool to acquire customers at low cost?

Traffic pool thinking is the guiding thinking for operations. It is worthy of study and thinking by every operator and has considerable guiding significance for actual work.

I think the traffic pool thinking is the most suitable thinking for Chinese operators at present. It is better than growth hacking, because data is very important to operators, but it only has a guiding role. After all, what operators need to do is to communicate directly with users and understand user psychology.

So, what new interpretation does Mr. Yang Fei have on traffic pool thinking? I have summarized it into two core insights, and then I will explain it based on my personal understanding.

Insight 1: Distinguish between traffic pools and traffic sources

For the first time, Professor Yang Fei gave the definitions of traffic pools and traffic sources, including: traffic pools include APP, WeChat, DMP, communities, and brands; traffic sources include BD, social marketing, digital advertising, and traditional advertising.

Why do we need to distinguish between traffic pools and traffic sources? Personally, I think the goal is to reduce traffic costs in the long term. How to achieve it? Perform different actions on traffic pools and traffic sources.

A traffic pool can achieve long-term sustainability and continuous flow of traffic through operations. For example, a parent community can promote word-of-mouth communication among parents by setting rules and thresholds and providing content such as academic advancement and family education.

Traffic sources are one-time and very precious. They can either be converted directly or introduced into traffic pools for operation, such as placing headline information flow ads. The leads obtained must be converted the first time. If they cannot be converted, they must be labeled and other strategies can be tried later.

So, when do we generally use traffic sources? The answer is the initial stage of accumulating seed users and the rapid expansion after surviving, and short-term goals are often set at this time. As for the traffic pool, it will only be used in the long term.

In other words, one focuses on the long term and the other focuses on the short term. This is one of the more obvious differences between traffic pools and traffic sources.

Furthermore, the cost of the traffic pool is controllable, while the cost of the traffic source is not controllable, which is another difference.

For example, products that use apps as carriers can freely split, invite friends to give free lessons and discounts, and use the invested money directly to reward users. If the effect is good, it can continuously reduce customer acquisition costs.

If you place traditional advertisements, first of all, the price may be very expensive, and you have no bargaining power and can only act according to the requirements. Secondly, the effect may not be verified. Can you guarantee that passers-by will remember you when they see the billboard you designed? If not, it's a waste.

Therefore, in the long run, traffic pools must be the first choice, but the work of distinguishing them from traffic sources still needs to be done.

As for how to build a traffic pool, Mr. Yang Fei’s suggestions that “brand is the most stable traffic pool” and “fission is the lowest-cost way to acquire customers” are the best answers.

First of all, it’s about branding, we need to do “one increase” and “one decrease”.

• "One upgrade" means occupying the minds of users and doing a good job of positioning. There are three types of positioning in the traffic pool thinking: competitive positioning, functional positioning and dimensional upgrading positioning. Among them, luckincoffee uses dimensional upgrading positioning.
• "One reduction" means actively contacting users and strengthening their memory of the brand by creating strong memory symbols and scene marketing. For example, luckincoffee designed a unique deer head and royal blue to attract young people, and chose a location near office buildings, focusing on office scenes.

The second is fission. It is necessary to design a good social relationship chain. Based on this, Mr. Yang Fei gave his first classification of fission gameplay, namely compound interest, crowdfunding, and sharing.

The characteristic of compound interest is mutual benefit, such as luckycoffee's gamified fission gameplay, where you can get coupons in various ways with your friends.

The characteristic of crowdfunding is that everyone helps me, such as Pinduoduo's group buying fission, where you can get products at a low price only by inviting friends to join the group.

The characteristic of sharing is that I help everyone, such as the family account of Shenzhou Special Car, and you can make purchases by binding your family members' accounts to your own.

Of course, this is just a rough classification. Different products are suitable for different fission methods, and the specific social relationship chain design requires careful consideration.

In short, the first core insight of traffic pool thinking is to distinguish between traffic pools and traffic sources, and traffic pools must make good use of brands and fission to achieve long-term reduction in customer acquisition costs.

Insight 2: Retention First

Of course, reducing customer acquisition costs does not lie in building a traffic pool. Retention is also important. Retention is the first thing that Professor Yang Fei mentioned when interpreting the traffic pool thinking. It is also the second core insight.

Everyone is familiar with the AARRR model. Retention is between activation and monetization. It is hard to imagine that it is at the core position, but after careful consideration, you will find that growth must rely on retained users, because only they will pay and spread the word, and only then will they have the value of being activated.

So how do you ensure retention?

The first point is to change your mindset, that is, from customer thinking to user thinking.

What is customer thinking? Spend money to buy volume, make a one-time deal, and don’t have your own data. A common example is companies that used to rely mainly on advertising. They have high marketing costs and it is difficult for them to survive for long.

What is user thinking? Self-built traffic, multiple conversions, and own data. A typical example is Baby Playing English, which uses communities and trial classes as conversion methods and has over 300,000 paying users.

It can be seen that only under the guidance of user thinking can we have our own traffic, retain existing stock and create more increments.

The second point is the most core sentence in the traffic pool thinking: existing stock brings incremental growth, and high frequency brings high frequency.

How to increase the existing stock? It’s very simple, just let users share. The premise of sharing is that users use the product frequently, but not all products are used frequently. What should we do? Increase frequency by creating more contact points.

What kind of products have more touch points? The answer is low-priced, high-frequency products.

Therefore, if you have a product with high frequency and high price, low frequency and high price, or low frequency and low price, you can transform it into a product with the characteristics of "low price and high frequency" through special design. For example, Weibao is a typical high-priced and low-frequency product. It significantly increases the frequency by giving away free insurance and publishing personal monthly reports, thereby increasing user retention and sharing.

The third point to ensure retention is to use DMP and PBL to operate and tap users.

The so-called DMP is a user data labeling platform that can implement more precise actions based on user tags, such as precise targeted delivery, personalized message reminders, and personalized activities for old customers to bring in new customers.

However, I don’t want to discuss how to use DMP, but the application logic behind it - user segmentation.

For example, community users can be divided into three tiers based on points. The first tier grants management rights to new groups to help form new communities. The second tier designs point reward activities to help activate existing communities. The third tier provides regular benefits to awaken silent users.

Therefore, whether with the help of machine or manual analysis, user segmentation is beneficial to retention. As long as different operational actions are implemented for different types of users, operational efficiency and retention effects can be significantly improved.

In addition to stratification, another tool that can be used to improve retention is the gamification model PBL, namely points, badges, and leaderboards.

Points can increase user stickiness. For example, in Panda Mini Class’s training camp, users can earn gold coins that can be exchanged for prizes by checking in, commenting, and sharing.

Badges can give users a sense of accomplishment. For example, Zhihu users can obtain matching titles and achievements by completing corresponding tasks.

Rankings can increase users’ desire to share and repurchase. For example, luckincoffee’s million-person event ranks users based on the number of items they consume.

In short, by changing user thinking, increasing user frequency, user segmentation and gamification operations, retention can be significantly improved and the stock can be turned into incremental growth.

Summarize

As an operational thinking, traffic pool thinking is worthy of study and thinking by every operator, which is very instructive for practical work.

To summarize the basic content of the two core insights:

1. The core is to distinguish between traffic pools and traffic sources and ensure the construction of traffic pools. Among them, the brand should be built from three aspects: positioning, symbols and scenarios, and the fission method should be selected according to the design of the social relationship chain.

2. Retention comes first. This can be implemented from three aspects: changing customer thinking to user thinking, using high frequency to bring high frequency, and using DMP and PBL to operate users, so as to realize the transformation of existing stock into incremental growth.

If the above two core insights can be well combined, it will not be difficult to acquire customers at low cost.

Finally, I would like to share Mr. Yang Fei’s latest traffic pool thinking methodology model, hoping to inspire all operators:

Source: Dugu Operation