How to use traffic dividends to acquire customers at low cost?

In an environment dominated by traffic giants such as WeChat, Toutiao, and Honor of Kings, there are still many popular products being born. Here we count how the once hotly-watched star products use traffic dividends to acquire customers at low cost. enjoy~

"The traffic dividend of China's mobile Internet is gradually disappearing. The top mobile Internet giants have already formed, and the giants monopolize various traffic sources, resulting in high traffic costs, and the cost of acquiring customers continues to rise. This has become the first pain point for entrepreneurial brands and Internet marketing." - "Traffic Pool"

Take a product that I have been paying close attention to recently, “Xiangwushuo”, for example. Xianwushuo is a platform for sending good things across all categories and using a red flower points system. Currently, it is mainly composed of mini programs + service accounts and APPs, so the experience threshold is very low and it is very easy to get started.

Xianwushuo started with bartering in WeChat groups, and discovered this special business opportunity. Later, through mini-programs, it opened a new channel monetization entrance for official accounts on WeChat: "Click on the official account's custom menu to open related mini-programs" and "Official account template messages can open related mini-programs", thereby linking to mini-programs through official account tweets and their links for fission.

In September 2018, it got celebrity Eddie Peng as its spokesperson for online and offline advertising campaigns.

Xianwushuo has opened up a new model. For the second-hand trading market that advocates value recovery, Xianwushuo is a subversive existence. Its "giving away but not selling" platform model is a complete rebellion and challenge to the usual business model of the second-hand market in the past. At the same time, it has also brought business opportunities and obtained in-depth cooperation with many brands.

More than a year after its establishment, it has over 55 million users, raised funds in five rounds in one year, and has over 30 million monthly active users...

So, how did it become a hit star product and achieve explosive growth by leveraging traffic dividends? Let’s analyze the underlying logic.

1. Seize the opportunity of low-cost customer acquisition brought by new technology/new trend/new tool

Our opportunities to gain low-cost customer acquisition dividends on the Internet in recent years are:

2015: WeChat public account content

2016: Group buying fission

2017: Moments ads

2018: Mini Programs, Short Videos, Offline New Retail

2019: IP+traditional offline?

Xianwushuo’s customer acquisition bonus growth chart

Xianwu said that in 2017 it was through "WeChat group + WeChat public account content", in 2018 it was "mini program + WeChat public account content", and my guess is that in 2019 it will be: "creating IP + traditional offline"?

Why can we accurately gain insight into the annual dividend opportunities here?

The key to Xianwushuo's seizing of opportunities may be the following sentence: "On what important issues do you think differently from others?" - Peter Thiel, "Zero to One"

This is essentially an in-depth reflection on the battlefield and the nature of traffic. When we use traffic dividends to acquire customers, we think about three questions:

1. What battlefield am I on? WeChat, other apps, websites, offline stores...
2. Where is the traffic closest to me? Official accounts, search engines, APP stores, three kilometers around stores...
3. How do I reach this traffic? Public account articles, WeChat friend fission, Moments ads, SEM/SEO, ASO, flyers, site ads...

Based on the business model of Xianwushuo, it is analyzed that its battlefield is WeChat mini-programs and official accounts, and the traffic closest to them is WeChat groups and Moments. WeChat official account operations direct traffic to mini-programs and reach users through group sharing and Moments fission.

Let’s talk about it in detail: What are the differences of Xianwushuo in terms of traffic reach methods?

2. Key points of using traffic dividends to acquire customers

1. The unique value proposition captured the first batch of seed users.
2. Use fission tools to reduce customer acquisition costs.
3. Core channels strengthen the moat.

1. Unique value proposition captures the first batch of seed users

In the early days, Xianwushuo had a clear product positioning and unique value proposition:

1) WeChat official account content, value proposition: "Free goodies deliver happiness and surprises."

Make full use of things, connect people with things, and pass on warmth. Through the transfer of things to things, the emotional warmth between people can be transferred.

There are also other beneficiaries of the traffic dividend of "content": New World Reading Club

"Beijing at 4am", "Escape from Beijing, Shanghai, Guangzhou and Shenzhen", "Book Throwing Campaign", the Internet has frequently discovered traffic-sweeping events. The methods used to create popular hits are:

1. Understand the people, understand the desires and anxieties in urban life, and build a community of values.
2. Find a way to arouse their action.

2) Donating books for public benefit symbolizes the charity, nobility and purity of human nature.

The pure kindness of human nature has prompted users to participate in the charity book donation campaign, forming a loyal user base, shaping the brand's public welfare image, and driving the entire nation to participate in the charity book donation campaign.

3) The product itself advocates a life philosophy of “mutual gifting”.

It’s just giving away, not selling, and it’s fun without spending any money - on the platform it’s not like being a buyer and seller, it’s more like giving and receiving gifts. The category selection of "mutual exchange" of idle items strategically occupies the first place in the minds of consumers.

This industry-opposing strategic model of "mutual delivery" has completely overturned the previous circulation model of idle items and resources in the second-hand market, which was mainly based on "transactions". It allows idle items and resources to reach user needs faster and more accurately, and gives idle items their own "belonging".

The underlying logic implied in this value proposition section is to capture the user's mind by influencing the "reciprocity" psychology of human nature.

“The sense of obligation we feel to accept favors undermines our ability to choose and places control over who we owe debts to in the hands of others.” —Influence

Doing this is helping others - people act out of deep emotions of "mutual gifting" and "public welfare", which not only satisfies themselves but also helps others. As a result, users who do not know each other feel the human care for each other, thus establishing emotional connections between users and users, and users and platforms, and increasing user stickiness on the platform.

Free trial of given products: users participate in experiencing items, the merchant’s brand is promoted, forming invisible help. For brands, no matter what kind of marketing they do, "giving away gifts" is undoubtedly more heartwarming than the simple and crude form of "discounts".

"Xiangwushuo" has therefore created its own new IP while exerting its brand influence. It is precisely because of this that this platform has attracted many brand merchants to come for marketing. It continues to operate on WeChat public accounts and among WeChat users based on free gifts and public welfare, and has gradually attracted tens of millions of users.

1. Use fission tools to reduce customer acquisition costs

What are the common fission forms we have: group buying, bargaining, friends’ help, distribution compound interest, charity help, Taobao password fission, achievement fission, showing off fission, personality/zodiac analysis fission, old customers bringing in new customers, random coupons, brand reputation fission, identity recognition, stored value fission...

Even though there are so many ways to spread the word, based on the business model, Xianwu says that it cultivates the habit of self-propagation and fission among users through the following points.

Several ways of fission of Xianwushuo:

1) Old employees bring in new employees + friends help with fission - under the red flower points system

All transactions on Xianwushuo are based on Little Red Flower points. In order for users to continue to obtain Little Red Flower points, complete transactions on the platform and remain active, we have developed a fission gameplay under the points system.

Help from friends : After a user signs in and gets a red flower, a pop-up window will appear to remind him of other ways to get more red flowers. Among them, you can get red flowers by helping your friends. After the user clicks on it, a poster will be generated for sharing and fission. Both yourself and your friends can get a large number of red flowers. In addition to fission helped by friends, there is also fission helped by old friends bringing in new ones.

Old users bring in new users : by successfully inviting new users, old users can get 50 times more red flower points than signing in, while new users will receive 400 red flower points for free. The threshold for user entry and experience is relatively low, so users can experience exchanging their favorite products on the platform in the early stage. Having tasted the sweetness, old and new users will continue to spread the fission spontaneously.

2) Charity helps fission - donating books and building libraries

Whether it is to satisfy the pure kindness of human nature or to shape the brand image, it will ultimately encourage the participation of the entire nation in the "Book Delivery Campaign" charity event. Most of them are led by philanthropists (institutions) or celebrities, and the fan effect they create is considerable. The spread between users can more easily trigger user fission conversion by generating related content posters.

Other beneficiaries of the public welfare fission game: Alipay

Its "Ant Forest" uses the energy gained from completing tasks to virtually plant trees online, and offline it can plant a real tree in arid areas, greening China's public welfare activities, and obtain a public welfare certificate with its own name printed on it. Users are willing to frequently go to Alipay to complete tasks in order to realize this meaningful wish. Checking in at Ant Forest has become a habit, which is one of the reasons why Alipay users have strong stickiness.

3) Bargaining fission - invite friends to bargain

Since the transaction of exchanging items on Xianwushuo is realized through red flower point tokens, if you don’t have enough red flowers on the details page of the exchanged items, or you think the other party has set too many red flowers, you can invite friends to cut the number. The APP simplifies the fission process by generating posters, and the mini program simplifies the fission process by generating mini program links. Friends can directly see the posters for free items, and driven by "interests", they participate in the fission conversion through bargaining.

4) Group buying fission - Little red flower to start a group, team up to get good things

Rules and gameplay: Join a group for 0 yuan, start a group with a little red flower, invite new groups and meet xx people to form a group within a certain period of time.

What is different from Pinduoduo is that the products here are free to buy. You only need to pay for the points and red flowers obtained by completing tasks. The number of red flowers for group buying here is very low, which is also the reason for the fission of users.

Similar to Pinduoduo, it is decentralized and adopts a long-tail strategy to acquire low-end users.

Pinduoduo is the beneficiary of the "group buying" fission gameplay: its monthly active users increased by 10 times in one year, and in 2018, its monthly active users directly exceeded 100 million.

Its rule is "original price is xx yuan, limited time group buying is xx yuan, and xx people must be able to form a group within xx time." Here we assume that the acquisition cost budget for one new user is 8 yuan. So if an old user can help me bring in a new user, the acquisition cost of 8 yuan will be given to this old user.

The above fission reflects the underlying logic of low-cost customer acquisition: skipping channel commissions, saving commissions on advertising, increasing the stickiness of old users, improving the quality of new users, and acquiring accurate users.

5) Brand reputation fission

Case 1:

In May 2018, Xianwushuo teamed up with McDonald's to promote fruit tea. This in-depth cooperation attracted nearly one million users to McDonald's stores in 192 cities, and collected nearly 10,000 UGC contents about McDonald's on the Xianwushuo platform, including thousands of effective consumer taste survey questionnaires.

The Xianwushuo public platform launched a free coupon and "real fruit, show beautiful photos" campaign with a tweet, which stimulated users' enthusiasm for taking photos and UGC interaction, and brought a lot of exposure to the brand on its own APP platform through the homepage focus picture. At the same time, new product promotion, consumer research and photo sharing are bundled together, and interactive methods are used to receive free coupons, which successfully attracts a large number of users to receive coupons and redeem them in stores, realizing the conversion from online platforms to offline stores.

Big brands like McDonald's have all used the Xianwushuo platform to conduct brand linkage and in-depth cooperation, truly creating an online and offline marketing closed loop. After users complete their experience offline, they return online to share, which helps to build word-of-mouth for the brand.

Case 2:

Another example is the case of Verve and Perfect Diary working together with Xianwushuo. Xianwushuo displays new products to targeted groups of people and directs traffic to the brand's official account. It uses the platform's information flow advertising to push targeted messages to the target group, and guides its users to share product posters to WeChat groups and Moments, forming a social fission communication. The WeChat platform of the brand (Verve/Perfect Diary, etc.) also recommends the Xianwushuo QR code to new users, guiding users to receive it for free on the Xianwushuo platform.

With the help of the fission of the Xiangwushuo community and the spread of the circle of friends, the brand obtained thousands of accurate fans and gave away 10,000 trial packages within 7 days, which enabled the new products to be exposed in a short period of time, achieved the growth goal of planting grass, and laid the foundation for their respective secondary operation conversions in the later stage.

The underlying logic of the mapping: The participation of well-known brands is more authoritative, and loyalty to authority will be highly evaluated (from "Influence"). Users will try out and experience the brand, which will expose and promote the platform and brand in multiple dimensions at the same time, injecting a large amount of traffic into the brand and platform.

There are many ways to play fission. You can use fission tools in a form that suits your business to expose your products in multiple dimensions, acquire more accurate users than expected, and achieve the goal of low-cost customer acquisition.

1. Core channels strengthen the moat

Xianwu said it was done this way:

• WeChat ecosystem’s mini-programs and official accounts are used to strengthen the moat.
• The content operation channel is connected to the mini program, which forms a closed experience loop that directs traffic from the mini program to the APP.
• Through the operation of flagship articles such as "Uncle History, Geography and Literature" and "Xiaoxiang", it has aroused a lot of user interaction and resonance.
• By checking the conversion volume of different types of articles through the operation background, you can obtain user tags and achieve precise operations; and then carry out subsequent continuous operations based on user age, gender, city, etc.
• Topic + advertising-style content operation on WeChat public account platform.
• "People are rushing to buy it...it's free", "It's only given away, not sold, fun and loving", "Eddie Peng holds hands and enjoys things", "Your love story needs a pair of green gloves", etc. have become effective copywriting materials.

The underlying logic here is: WeChat is already the platform with the most concentrated online traffic. Since there are many commonalities between user groups, any new function will gain a wave of traffic dividends in the early stages.

summary:

By thinking deeply and deeply, we can understand what important issues make us think differently from others.

When others think that content cannot be monetized, use unique value propositions to acquire the first batch of seed users; when others think that group buying only serves e-commerce and points cannot be spent as money, use fission tools to reduce customer acquisition costs; when others think that public accounts or Moments ads only serve brands, find a core channel to strengthen the moat.

3. The most fundamental thing is to seize the breakthrough point of traffic that year

The previous section discussed the opportunities and key points to seize in order to acquire customers at low cost by leveraging traffic dividends. In this section, the most fundamental thing is to seize the breakthrough point of traffic. The essence of the traffic breakthrough point is to break the traditional ceiling that has not been reached.

Because now we have more and more ways and costs to obtain traffic, such as: App store-100 yuan, WeChat Moments/Toutiao-30~50 yuan, outbound calls-2000~4000 yuan, others...

Companies that acquire customers at low cost will no longer be able to afford such high costs. However, in such an environment, there are still many hot-selling products that seize the breakthrough of traffic and grow at low cost.

The fundamental reason why they can "break" is:

1. For the existing market: reduce transaction friction and improve conversion rate.
2. Incremental market: reach more unreached market niches.

Next, let’s take a look at the phenomenal hit star products and see which traffic breakthroughs they mainly used in 2018:

1. Mini Programs

In 2018, the application and scenarios of WeChat Mini Programs were gradually formed, and the monthly active user base showed explosive growth, exceeding 400 million. The penetration rate in WeChat reached 43.9% in March 2018, and increased to 900 million by the end of 2018. Among them, mini games and life services are the fastest growing areas in terms of user scale.

(Data from the Internet)

Mini Programs are lightweight and can be used right away without downloading, and are a major reason why they are chosen as cold-start products by startups in the WeChat ecosystem that embraces top traffic.

Xianwushuo is a star company that has exploded with the help of mini programs. Five months after its launch, the "Xiangwushuo" mini program has more than 6 million users, with a user retention rate of over 60%, and the platform generates thousands of transactions every day. Since the transactions are conducted through C2C exchange of the Little Red Flower token system, the mini program is the most suitable for Xianwushuo. Because the independent Honghua points token system can effectively solve the retention problem of mini programs, Xianwushuo is also the most suitable for mini programs.

One of the key growth strategies abstracted from the "Share Things Theory" is to reach the unreached areas of the market through division through points.

In the future, more and more companies will need to better acquire traffic and retention (through the points system), and manage memberships (paid membership system to improve retention). The points system may become standard for most products in the future. This groundbreaking model has also attracted imitation from large companies. Xianyu and Zhuanzhuan second-hand trading websites have also successively launched a new idle item trading model that focuses on "free delivery" and is based on a points system.

However, unlike traditional points malls, whose gameplay is not closely linked to the main business, Xianwushuo's differentiation is mainly based on barter, and its business model revolves around the red flower points as the intermediate currency for barter. Users will not perceive any trace of direct linkage with the RMB on the platform.

In addition, the consumption of points is also based on the main process, and there will be some punitive-type behaviors that the platform does not encourage users to do, such as: after the user places an order, the payment is not made within a certain period of time, or the payment is not made after receiving the goods. Such gameplay is fundamentally different from the traditional one. This is also the reason why Xianwushuo is suitable for mini programs.

Which groups of people (low-lying areas) are not served by the mainstream Internet and which mini programs can reach: low-end user groups (differentiation in age, gender, city, income, education level, etc.)

Xiao Nian Gao: The middle-aged and elderly people over 40 years old are distributed in cities and counties third, fourth, fifth and below. They can create electronic photo albums and community short videos with one click, satisfying their needs to share and learn about new things without anyone around.

It is accompanied by an emotional interactive experience, such as large fonts, users can obviously create albums with one click, and a simple process of swiping up or pulling down. It fits the emotional attributes of the target audience and once ranked 4th in the mini program rankings. It is a product with more than 60% of middle-aged and elderly users.

Her face+: 70% of the female population is between 30 and 50 years old and live in low-tier cities and some underdeveloped areas.

Herface+ is a technology that allows you to tan at will, change your clothes at will, and has a large number of styles. It has a simplified operation process without turning on filters. It can be used right out of the box, meeting the needs of women to change their clothes and turn themselves into the look they like, and has captured a large number of low-end female user groups.

Her face+ exceeded one million DAU within seven days of its launch. In just over four months, relying on word-of-mouth among users, it has covered more than 80 million users and has 25 million monthly active users.

With the changes in the Internet from PC to mobile Internet, to the WeChat ecosystem, in addition to the post-90s young people who keep up with the forefront of the times, users in fourth-, fifth-, sixth- and seventh-tier cities have been activated, and users aged 30 to 40 and above have become the main force. The middle-aged and elderly groups have also gradually joined the ranks of Internet users through WeChat because of the ready-to-use features of mini-programs. This is the "incremental" growth that only exists in the WeChat Internet era.

1. Short Video

With fragmented time, Internet users' vision has shifted from text content to short videos.

According to iMedia Research data, the number of short video users in China reached 501 million in 2018, and it is expected that the user scale of China's short video industry will continue to maintain a steady growth trend in the future. The number of active users of Douyin and Kuaishou, which are in the first tier of short video platforms, remains at around 200 million. The number of active users of Xigua Video and Huoshan Video, which follow them, is approximately 67 million and 50 million, respectively.

(Data from the Internet)

A Douyin video promoted the popularity of "Answer Tea", which has grown from 0 to 249 franchise stores...

Information flow advertising case: Douyin, Chevrolet and Harbin Beer created a new way to play native short videos and jointly launched the first Douyin brand video advertising. Nielsen research found that the brand awareness and engagement of advertising effects were both over 200%.

Now, in e-commerce or brand marketing, JD.com or Taobao have already used the same labels as Douyin. It is obvious that short videos have become a phenomenal entry point, and more and more brands or products are taking advantage of the traffic dividend of short videos. The essence of growth is to find people with traffic resources - platforms with social resources, people with KOL resources, and people who are proficient in algorithms (TikTok, Toutiao).

Xianwushuo’s core channel is in the WeChat ecosystem, and it has not mainly entered the short video market, so I will not explain it here.

1. Offline New Retail

The most important feature of the offline model is: there are always more user interaction interfaces, which also provides more opportunities for product models.

There are various offline and online linkage models, but typical cases such as Super Species and Hema Fresh have emerged recently.

The online-to-offline scenario is a response to different consumer motivations:

1. The APP download is promoted through the "urgent need for functionality + new users" and the enticement of direct discount coupons for first-time downloads of "in-store ordering" and "scan code to purchase". The same offline new species case here, "Hema Fresh", also has the same operating mode, and has obtained different experiences for users who come to the store to download the APP.
2. By establishing an account system through "membership cards", we can solve the problem of passive growth in the traditional offline model, which lacks an account system and cannot actively promote repeat purchases. New offline scene forms have become new breakthroughs for traffic.

Offline transactions give people more ways to interact and provide more inspiration, such as impulse and sudden consumption.

Thanks to the interaction of the HEYTEA GO online mini program - you can place orders in advance without queuing; with the function of locating nearby stores, you may suddenly want to drink a drink, and you can place an order before going to the HEYTEA store, and enjoy the pleasant experience of eating it when you arrive at the store.

Due to the common user base, Xianwushuo has done a small amount of promotion on short video platforms such as Douyin and Kuaishou, in order to obtain traffic dividends from different channels and different baskets. It has also involved social scenarios such as Weibo. However, Xianwushuo's core channel is more inclined to the WeChat ecosystem. Among the breakthrough points of different traffic, find the core breakthrough point that suits you and carry out in-depth operations.

summary:

What is the relationship between the existing market, incremental market and the three traffic breakthroughs mentioned?

——The conclusion drawn from the previous case studies of Xianwushuo, Xiaoniangao, and Taface+ is that mini programs are in line with the characteristics of reducing transaction friction in the existing market, improving conversion rates, and reaching more unreached market depressions in the incremental market, satisfying the needs of the population that were not previously satisfied by the mainstream Internet.

Short videos are also aimed at the unreached depressions of the incremental market, and are more likely to penetrate into the entertainment needs of young people in small towns of third-tier cities and below. The overall user profile tends to be those born in the 1990s or younger, who grew up recording their daily habits through short videos. In the future, they are more likely to introduce content or information through videos.

Offline new retail is also about reaching unreached areas and making up for online repeat purchases. For example, when buying seafood, one can add items to the purchase at the checkout counter and scan the QR code on their mobile phone to place an order and pick up the goods in the store.

IV. Conclusion

On what important issue do you think differently from others?

In order for popular star products to grow by taking advantage of traffic dividends, they need to seize an opportunity to acquire customers at a low cost.

Three key points to leveraging low-cost customer acquisition: unique value proposition to capture the first batch of seed users; use fission tools to reduce customer acquisition costs; and core channels to strengthen the moat.

The most fundamental thing is: to seize the traffic breakthrough point of the year, reach more traditionally unreached market depressions, seize the breakthrough points that are suitable for yourself in these three traffic breakthrough points, and look for new opportunities.

Can the new opportunity in 2019 be to build personal IP, leverage traditional offline activities, and feed back to the online world? What are your thoughts?

Source: Yang