Using the AARRR model to analyze the growth and monetization of Fan Deng Reading Club

By breaking down other people's cases, you can become more familiar with their growth ideas and think like an expert.

The AARRR model has been discussed by many predecessors and has been continuously put into practice. I believe everyone has seen many successes, big and small, but today I would like to go into more detail so that you can think like an expert.

Table of contents

1 Overview

1.1 Overview of AARRR Model

1.2 Analysis of knowledge payment and summary of Fan Deng Reading Club products

2 Research on the continuous growth strategy of users under the AARRR model

2.1 Acquisition Strategy Research and Fan Deng Reading Club’s User Acquisition Strategy

2.2 Research on Activation Strategies and Activation Strategies of Fan Deng Reading Club

2.3 Research on retention strategies and retention strategies of Fan Deng Reading Club

2.4 Research on Monetization Strategies and Fan Deng Reading Club Monetization Strategies

2.5 Communication strategy research and Fan Deng Reading Club communication strategy

3 Conclusion

1. Overview

1.1 Overview of AARRR Model

The AARRR model is a cyclical model from user growth to revenue generation. In the Internet industry, growth refers to the continuous accumulation of a certain aspect of a product, such as doubling from 0 to 1, and then from 1 to 100, and 100 to 1 million. It is a sustainable and applicable growth model.

The concept of growth originated in the United States. Today, it has been cited by many domestic Internet companies. Some related companies have established related positions such as growth hackers, growth officers, and user growth VPs, indicating that it has gradually been recognized. Growth is driven by data and uses funnel analysis to test and optimize each link to maximize resources.

The AARRR model is specifically divided into acquisition, activation, retention, revenue, and referral.

Qualaroo founder and CEO Sean Ellis proposed the AARRR conversion funnel model, which is a scientific and effective way of growth. It refers to the five stages of the user life cycle: acquiring users, activating users, improving retention, increasing revenue and spreading recommendations.

1. Acquisition: It is also called new user acquisition and is the first step in the AARRR process. It is the process from user cognition to understanding and then to becoming a product user.
2. Activation: Activation is the motivational process that guides users to discover the value of the product and repeatedly use its features. In fact, what we do at this stage is to retain new users, which is the most important part to some extent.
3. Improve retention: refers to all indicators that can help retain users. After acquiring users and doing targeted retention work, the remaining users become old users and are no longer affected by the previous two steps. The next step is to retain these old users.
4. Increased income (Retention): refers to the realization of cash income through certain means of traffic. The prerequisite for monetization is to have a sufficient traffic base and certain monetization methods. Therefore, the above three links are very important.
5. Referral: Also known as self-propagation, or viral marketing, it refers to a way of acquiring new users by leveraging the social influence of existing users. User referral marketing is one of the most sustainable and effective ways of growth. It is a highly measurable and scalable growth model. A good product must have its own spreading gene, otherwise the product may face death.

1.2 Analysis of knowledge payment and summary of Fan Deng Reading Club products

1.2.1 Analysis of knowledge payment

(1) The number of paid knowledge users will reach 292 million in 2018

According to the data from iiMedia Research, the scale of China's paid knowledge users is growing rapidly, and is expected to reach 292 million in 2018. Analysts from iMedia Research Consulting believe that with the development of mobile payment technology and the society's urgent need for knowledge, the knowledge payment market continues to expand, and users are gradually developing consumption habits of paying for knowledge. With the continuous evolution of knowledge payment market communication and marketing methods in the first half of 2018, the development space of the knowledge payment market is still attracting attention.

The data comes from iMedia Research and was released in 2018.

1.2.2 Overview of Fan Deng Reading Club Products

Fan Deng Reading Club was founded by the former CCTV host "Fan Deng", and the product was named after him. It leads everyone to read a book every week, from the initial sharing in the form of PPT manuscripts to the final simultaneous sharing through a combination of video + voice.

The purpose is to solve the reading difficulties faced by users, who want to read but do not have time to finish a book, and finally compress the essence of the book into a few dozen minutes.

So far, Fan Deng Reading Club has used reading as an entry point to spawn the "I am a Book Teller" program, as well as high-quality courses, peripheral products, and so on.

1. Product slogan: Help 300 million people develop reading habits
2. Date of creation: February 5, 2015
3. Number of members: As of now, it should be over 10 million
4. Number of chapters: More than 1,700 chapters worldwide

2. Research on the continuous growth strategy of users under the AARRR model

2.1 Acquisition Strategy Research and Fan Deng Reading Club’s User Acquisition Strategy

2.1.1 Acquisition Strategy Research

(1) Find high-quality seed users

It refers to the initial stage of the product's establishment, starting from scratch, looking for the first batch of users who will use the product, and providing users with sustainable consumption content, and acquiring accurate and high-quality seed users through user portrait positioning, product positioning, and competitive product analysis.

For example, when Xiaomi mobile phone was first launched, it formed a word-of-mouth effect through the original group of seed users.

(2) Sense of ritual

By announcing to the public what I will do every day, I can establish a sense of ritual. However, this sense of ritual should be vertical, so that the users attracted and the subsequent content provided can be better and continuously output.

For example, the "Internet Morning Reading Course" which was established a long time ago has attracted 300,000 users in a year and a half. It releases Internet information at 8 o'clock every morning, and it will not stop updating regardless of the New Year holiday.

（3）Content Marketing

Providing good content for free that can resonate with users or is the hottest content topic at the moment. Good content itself can attract users, and if it is the hottest content at the moment and what users are most interested in, then naturally the number of users will increase. For example, when KEEP just launched its product, the first batch of seed users were attracted by posting free fitness content in QQ groups, which then attracted a group of high-quality and precise fitness user groups.

There is also a public account with three classes. Each time, the content it outputs is a review of the hottest marketing campaign cases of the moment, and it adds its own insights so that users can learn from them. It is also what users want to see the most, so it naturally attracts a large number of users. In about a year, it attracted 200,000 users.

(4) Viral cycle

Let users join in, and then encourage them to invite friends. When users use the product, they can invite their friends to use it together. Provide enough bait value to create a reason for circular dissemination.

Like WeChat's one-for-one reading promotion, Luckin Coffee, and the original Didi red envelope war, as long as you take a ride, you can receive a red envelope, and while riding, you can send the red envelope to your friends, thus helping users increase reasons to interact with their friends.

LinkedIn adds the current company and position to the registered user environment, and then adds previous companies and positions to form online communication with colleagues in the company. Many old users receive new users' additions, which also promotes the activity of old users.

(5) External traffic

Making good use of external free traffic can allow the platform to save a large amount of free promotion expenses. Now many shares from their own app platforms to WeChat Moments will lead to small tails from Shasha app and Weibo, which are all good opportunities to get free exposure.

In addition, many platforms can synchronize information to certain social platforms with just one click when publishing information. These are all very appropriate ways to utilize external traffic.

(6) Leverage Thinking

By using the principle of leverage to attract a large number of users to join new products, instead of spreading all resources out, it is better to focus resources on one point, and you may see different results. For example: if you are building a platform for paid knowledge, you can invite celebrities in a certain field. This is a good leverage point. If you are on the user side, you can create benchmark users and shape the image of benchmark users. Then, through dissemination, you can attract new users to join and also want to become benchmark users.

(7) Optimize distribution channels

There are two main types of distribution channels: app stores and search engines. Therefore, when it comes to acquiring traffic, optimization is the most critical. As for how to rank to the top and the coverage of long-tail keywords, etc., I believe that these can be achieved through the help of professionals based on their own products.

However, it is best to take some actions to attract traffic and quickly increase the conversion rate so that the traffic becomes real users. This requires ensuring good experience and bait value at every step.

2.1.2 Fan Deng Reading Club’s User Acquisition Strategy

(1) Registration and new customer acquisition steps and strategies

<Invitation method one> Send the VIP poster to your friends directly. After scanning the QR code, there is a trial listening on the page, and then you can choose to open a VIP membership.

<Invite friends to try it for free for 7 days> allows users to try it for free for 7 days and listen to all the audio and video included in the VIP package. There are two ways to try it out, which can be achieved through both the app and the mini program, reducing the user's psychological burden and improving the user experience.

(2) Relying on user fission to attract new users

<Figure 1> After the user finishes the course, a sharing poster will pop up automatically (this also belongs to the last environment refer, self-propagation). Through the poster that the user has completed the course, he or she can give friends a 7-day VIP free spot for free, or directly invite VIP members.

<Figure 2> After guiding users to sign in, a sharing poster pops up, offering free VIP membership to friends. Because the points are of great value in Fan Deng Reading Club, they can be used to purchase paper books and peripheral products.

<Figure 3> is a direct prompt to invite friends, directly invite users to pay VIP, and earn points yourself, and there is also a free VIP gift next to the direct invitation paid VIP button.

<Figure 4> It is about a sense of honor. When users participate in certain activities on the platform and reach a certain level, they will be automatically awarded medals. Users can share them in their circle of friends or communities to gain new users.

(3) Marketing activities

Various online marketing activities, including combining hot topics, free books, social live broadcasts, VIP buy one get one free, etc., can quickly help attract new users.

Among them, the "World Reading Month" event in April 2018 had 4.19 million participants, including 2.19 million old users and 2 million new users. During the Double Eleven event in 2018, the number of paying users reached 600,000 and the number of new registered users reached 2.8 million.

(4) External cooperation

Cooperating with external teaching platforms, such as directly joining Lizhi Micro Courses, being invited by other institutions to give lectures and being authorized to sell Mr. Fan Deng’s own courses or the platform’s courses, and directly entering large platforms such as Chaos University for exposure can also bring a certain amount of traffic.

(5) Attracting new members to the branch

There are various offline reading branches. Currently, Fan Deng Reading Club has accumulated more than 1,700 branches around the world. The power of offline branches is also very strong. They can help Fan Deng attract new members and promote each other.

(6) Programs to attract new users

By producing programs and leveraging the power of television stations and the media, we can create role models for reading, which in turn attracts a large amount of traffic and registered users.

(7) Others

We also collaborate with top KOLs to create high-quality content to attract new customers, as well as product launches, exposure and new customer acquisition activities such as books published by Mr. Fan Deng and business.

2.2 Research on Activation Strategies and Activation Strategies of Fan Deng Reading Club

2.2.1 Activation Strategy Research

(1) A/B test optimization solution

Through a/b testing, we can select persuasive solutions to achieve the best conversion effect and abandon traditional experience concepts, such as whether a certain function should be red or green, and whether it should be placed on the left or right. After a/b testing, we can test the best solution in the fastest way.

The famous Airbnb once changed the collection icon of "Save to Wish List" from a star to a heart symbol, which resulted in a 30% increase in the usage rate of the wish list.

Signals also conducted an A/B test on the title of its CRM product registration page and found that "30-day free trial on all accounts" brought in 30% more new users than the original "start a highrise account". At the same time, important information was placed on the first screen, and a display web page with a height of more than 5,000 pixels was made. As a result, the registration rate increased by 37.5%.

(2) Lowering the threshold for use

Users are often lazy and will not think if they can avoid it, so products for users must be as simple as possible so that users know how to use them as soon as they get their hands on them. It’s just like the joke that “if a product still needs an instruction manual, it proves that you are out of date.”

There is also another type of product that requires payment right from the start. For this type of product, you can provide users with coupons and free trials to reduce their psychological financial burden, which can also be called the trial and error cost. The higher the trial and error cost, the higher the threshold for users to use it.

(3) Gamification of operation methods

Through daily sign-in, monster-killing and leveling up, growth points, medals, etc., reasonable and visible goals are set for users. By signing in every day and reaching a certain level, they can receive a gift.

There is a complete user growth system to continuously stimulate user participation. For example, many of the current mini-programs that exchange steps for money are a good way to operate in a gamified way to stimulate users to take enough steps every day and then exchange them for gold coins or money.

It is best to provide immediate feedback, clearly visible goals, and ensure that participation is interesting and not boring.

2.2.2 Activation Strategy of Fan Deng Reading Club

(1) Daily Sign-in

By signing in, users are guided to log in to the app every day. The points obtained by signing in can be exchanged for goods. In addition to books, the exchangeable goods also include peripheral and related products. The value of the points is made relatively good, especially from the beginning, when books in the mall could only be exchanged with points. Maybe now there are more user groups, which meets the need for books to be exchanged for points + money.

1. One point will be given for each sign-in per day
2. After signing in for seven consecutive days, you will get 7 points for signing in every day.
3. If you sign in for 15 consecutive days, you will be given a book (this is temporary)

(2) Community notification

In addition to satisfying the group members' usual chat and communication needs, the community interaction also provides timely notifications every time a new book is put on the shelves. The group owner will usually @ the group members in the group, so that users can get the latest book notifications in time and open the app to listen to the books.

1. On a weekly basis, a new book will be put on the shelves every week;
2. Through each branch in each city and each sub-group of the branch, it reaches every user in the community.

2.3 Research on retention strategies and retention strategies of Fan Deng Reading Club

2.3.1 Retention Strategy Research

(1) Continuously output good content

For paid knowledge products, there must be continuous content output. If they are aimed at users of different classes, there must be advanced content supply to meet the needs of users at different stages.

(2) Optimize product performance

If a web page can be opened in half a second, don’t drag it to a second. Users like fast and smooth pages. Amazon's statistics show that a 100-millisecond delay in website opening time means an additional $1 million in revenue loss.

Facebook has optimized its photo-taking function, choosing webp format for pictures. Compared with jpg format pictures, it helps users save 25%-35% of traffic, and about 80% compared with png. The quality of the pictures has not changed significantly, but users can open them faster.

(3) Design a wake-up mechanism

The wake-up mechanism refers to a product mechanism in Internet products that is specifically designed to recall lost users. Commonly used mechanisms include: email recall, message push, mobile web wake-up application, etc.

The most common ones now are app push and message reminders from mini-programs. WeChat has a huge amount of user data, and users spend the most time on WeChat every day, so notifications to users are also the most timely.

A commonly used technique to add some emotions, for example: someone secretly has a crush on you, someone is secretly paying attention to you, etc.

Facebook once used the sentence "Someone tagged you in a photo" in an email recall. This is a sentence that arouses people's curiosity, so the click-through rate is over 75%.

2.3.2 Fan Deng Reading Club Retention Strategy

(1) Points tasks and notifications

Points are earned by signing in, and the points are divided into different levels. The content of the activation strategy is basically the same. What is interesting is that the push is turned into a subscription method, allowing users to receive sign-in reminders.

(2) Points Mall

The points mall has evolved from only books being redeemable to peripheral products and now more life-related products, meeting the needs of different users while satisfying users' needs for goods in many aspects of their lives. Users can earn points by signing in, inviting friends to study together, or joining the study session themselves, and then use the points to get goods for free, which encourages users to stay longer while learning.

(3) Continuous content and sense of ritual

Offline activities increase user stickiness to the brand, improve user favorability towards the brand, and satisfy offline communication scenarios. At the same time, offline activities are diverse and not limited to learning. The content of activities is enriched in multiple dimensions. Each branch basically organizes offline activities every week, so that users can open the app every week to view information about offline activities.

The sense of ritual of the content, Fan Deng Reading Club leads everyone to read a book every week. The concept that users remember in their minds is that Fan Deng Reading Club will put new books on the shelves every week, and every Saturday, so users will open the app to listen to the books when they have time on Saturday.

2.4 Research on Monetization Strategies and Fan Deng Reading Club Monetization Strategies

2.4.1 Research on Monetization Strategies

(1) Value-added services

The value-added service monetization model of free use APP + IAP (in-app purchase). In China, most applications are free to use first. In some products, only part of the functions can be used for free. If you want to use advanced functions, you need to pay to become a VIP member. Now many mainstream tool products are the most common.

The QQ level was also well done. At that time, it was upgraded from stars to the moon and then to the sun. Many people followed this process. They went to the Internet cafe every day to log in to QQ, and it took no less than two hours a day. But if they wanted to upgrade faster, they could purchase a membership to speed up the upgrade. In this way, they gained a lot of paying members.

Value-added services can also be called experiential marketing. There are many memberships now that allow users to enjoy a certain number of days for only one yuan. There used to be an airline platform abroad that attracted users for free, and then allowed users to pay one yuan to enjoy more advanced services for a week. Finally, when the users had tasted the more advanced services and the service expired, many users were willing to pay to become premium members.

(2) Cross-subsidy

Cross-subsidy is a method of selling at an extremely low price to users through discounts and benefits, like the Gillette razor back then, where the blade was free but the razor blade was charged. Also, the threshold for playing the game is extremely low at the beginning, and it is free to play, but there is a fee for using props.

(3) Advertising services

The simplest and crudest way is, if you attract a group of mothers, then when you place advertisements, you can directly place products related to mothers to make profits, because the traffic itself is worthless, but after the advertisements are connected through a third party, it can be monetized.

(4) Selling platform

There was once a case of selling a public account, which was sold directly for 3.8 billion yuan, which made many people jealous and hated themselves for not seizing such an opportunity. When you have a certain number of users, you can sell it based on valuation.

2.4.2 Fan Deng Reading Club Monetization Strategy

(1) VIP Member

VIP membership here is for books, and the books here can only be obtained by becoming a VIP member, or enjoying seven days of VIP membership for free without purchasing books separately. Therefore, the value of membership is also realized. If it is free, the content must be very good, and users will be more motivated when paying.

VIP members get 50 new books every year, which is actually quite cost-effective. If you really calculate it, each book only costs a few dollars. At the same time, previous books are automatically unlocked, which is even more cost-effective if accumulated, and there are other related benefits.

(2) Points Mall

By purchasing products with points + money, users actually pay less money, which makes it easier for users to participate and may create a psychological feeling of "getting a bargain".

(3) Knowledge Supermarket

Knowledge Supermarket is an open platform. Anyone can purchase it regardless of whether you are a member or not, but the prices are different. The teachers here are all famous teachers, so it will be easier to facilitate the transaction. In addition, the users of the platform are a group that loves learning.

(4) Offline activities

For offline activities, this is charged by the branch, because the intermediary payment fee is made by a third party, such as platforms like Huodongxing and Weidian. I don’t know whether the platform participates in the charging process. If it does not participate, it should become a branch and a certain fee will be charged. This is also a good place to activate users and develop payment habits.

(5) Activity Monetization

During the Double Eleven event in 2018, the number of paying users reached 600,000 and the number of new registered users reached 2.8 million.

2.5 Research on viral communication strategies and Fan Deng’s reading club communication strategies

2.5.1 Communication strategy research

Kevin Kelly mentioned the "fax machine effect" in his book "New Economy. New Rules" published in 1998. When there is only one fax machine, it has no value. But if there are multiple fax machines, a network effect will be formed. Therefore, the more fax machines there are in the network, the greater its value.

The same is true for managing your own users. Should the company simply disseminate information to users, or should it build users into a network-like form with a dissemination effect? ​​I believe the second option will definitely be chosen.

Communication needs to be self-propagating. If a product cannot spread itself, then this product can basically be sentenced to death, because products that rely on manpower to promote will never be able to do so. Manpower is only an auxiliary lubricant to make the communication effect greater.

(1) Create surprises

There was a saying that was once popular: "Make users scream for the product." Originally you were told that a very good product only cost a certain amount of money, and now it costs a certain amount of money. In the end, you can get it at a very, very low price, which makes users feel that they are getting a great deal, and they will show off everywhere.

Huang Youcan, co-founder of Sanjieke, once shared a story about a friend who bought oranges on a certain platform. After the oranges arrived, he found one of them was rotten when he was halfway through eating them. So he called the platform’s customer service. The solution was that the box he was eating would be free, and another box would also be sent free of charge. In the end, this friend promoted this platform everywhere, saying that the products of this platform were very good.

(2) Setting communication strategies based on core users

This is a low-cost way to maximize dissemination, and it is also a good way to take advantage of people's vanity, greed, reciprocity and other psychology. The medals of honor that we usually see, after a user obtains it, will naturally share it in the circle of friends, so that the platform can get the opportunity to display and acquire users.

The platform has done the best in this regard. Various levels of medals, various honorary certificates before and after learning, holiday certificates, etc., all help users create an identity of loving learning and being motivated, thereby stimulating users to share.

(3) Data-driven

By analyzing relevant indicators through data, we can discover the value points that can be utilized and maximize the traffic resources. Airbnb once mined the recommendation data and found that the recommendations actually brought in millions of dollars in sales. So it decided to restart the recommendation system 2.0, and the number of user registrations and reservations increased by 300% every day.

(4) Group buying

The most popular social group buying app in China is Pinduoduo. Relying solely on the group buying function, a company was able to go public in three years. The current net worth of its founder ranks among the top ten in China.

By group buying with friends, products can quickly spread within the WeChat group, thus acquiring more new users. What is captured in group buying is the acquaintance relationship between users and the mentality of seeking bargains.

(5) Leverage marketing

Through hot events, combined with their own products, related marketing is carried out, including Alipay's Koi event and the most popular "What is Peggy" recently. Among them, a K12 education company gave away Peggy-related materials for fission, etc. For the marketing of hot events, the most important thing is speed, good online sense, and the ability to quickly capture key information.

(6) Mentor-apprentice model

The master-apprentice model, like that of Qutoutiao, took the company public in just two and a half years, and can be said to be a rapidly rising new Internet species.

2.5.2 Communication Strategy of Fan Deng Reading Club

(1) Continue to sign in and the "Share Poster" pops up

Signing in is an activation and retention mechanism, as well as a mechanism to stimulate sharing. Fan Deng Reading Club will provide users with different quotes every day, and each quote is extracted from famous books. It is different every day, which makes it very fresh.

Yang Fei, the author of the famous book "Traffic Pool", once said that the fission of Luckin Coffee actually has a fixed routine, but the sharing copy is different every day, which makes users feel particularly interesting when participating, and many of them are Internet copywriting in the workplace, for example: "Today is Friday, please have a free cup of Master Coffee and get off work early tonight", which is telling the boss that I want to get off work early.

(2) Invite friends to become VIP and earn points

There are two ways here: one is to invite friends to become VIP directly, and the other is to invite friends to be given seven-day VIP. The former will get 600 points, and the latter will get 20 points. The most important thing is what I said before, the value of points is relatively large, so the operation of points is also very important.

The research value of Chaos University is actually similar to points, just with a different name. However, the value of research value is very high and can be used to participate in offline activities, as well as previous Japan cruise study opportunities. Such opportunities can only be exchanged through research value, not money. This is how research value becomes truly valuable.

(3) A sharing poster will pop up after listening to the book

What is tested at this level is the quality of the content. After users learn and feel that they have gained something, posters will pop up to encourage users to share, which is a natural thing.

In fact, Chaos University has another step, which is to rate the courses. After the courses are scored, they can continue to be shared, so that users participate in an action.

(4) Medal of Honor

Here, we seize the users' desire to show off, give them virtual medals, and stimulate them to spread on social platforms, thus giving them opportunities for exposure and user acquisition.

3. Conclusion

This article elaborates on the AARRR model in detail, and also analyzes the user growth of Fan Deng Reading Club. In addition, it also conducts corresponding strategy analysis for each link. There are a total of five links, namely acquisition, activation, retention, revenue, and referral, so that you can have a clearer understanding and application.

In the Internet industry, whether it is a startup or a mature company, user growth is the core and achieving profit growth is the ultimate goal. In order to achieve this goal, the AARRR model theory will be applied, and sometimes even an entire activity will apply the complete AARRR model theory. Therefore, when achieving growth, this model can be applied. When reviewing a project or activity, this model can also be applied to guide user and performance growth in work.

Source: Growth Hacker (yunyingjinsheng)