NetEase Cloud Music AARRR model growth analysis!

A while ago, NetEase Cloud Music ’s annual report was all over the WeChat Moments, and its popularity remains unabated.

1. What is user growth?

Since I started working in the industry 18 years ago, I have witnessed the mobile Internet entering the era of short videos, with users' attention and usage time being divided up by a few giant apps. No matter which stage an Internet company is in, it is racking its brains to figure out how to acquire users in large numbers at a low price.

However, in my opinion, user growth is not simply "accumulating new users" but a complete set of systematic operations for new users. From user acquisition to user activity and retention, multiple links are involved, which requires theoretical and systematic refined operational operations.

As early as when I took the postgraduate entrance examination in 2016, many communication scholars proposed the concept that the Internet had entered the second half. As of 2021, the number of Internet users in China reached 1.011 billion, and the Internet penetration rate reached 71.6%. The growth rate of Internet users will inevitably slow down, and the traffic dividend will gradually peak.

To put it bluntly, it is no longer possible to launch a new app and instantly become a hit. It is no longer the era where you can just go to a traffic concentration portal like Baidu or Tencent and spend some money to buy high-quality advertising traffic. Of course, user growth cannot just focus on customer acquisition.

The idea that a reservoir needs to have a large opening to obtain water is not wrong, but at the same time the water needs to flow, otherwise the downstream will eventually die of thirst and the entire product will be dragged down.

2. What is the AARRR model ?

Therefore, let me introduce a more universal conceptual model: AARRR.

Focusing on the fission diffusion from new users to product revenue and user dissemination. This is an inverted pyramid model, and there will be a certain amount of user loss at each stage.

The approach adopted at each stage does not have a single-point effect, but a systematic impact on users. It’s just that the effects and impacts of different methods will be more obvious at a certain stage.

3. Taking NetEase Cloud Music as an example, applying the AARRR model to analyze growth

1. New customer acquisition

The main issues to be addressed in new customer acquisition are: through what channel, with what content, and what kind of users to acquire.

1.1 User stratification

According to the user's product life cycle and behavioral habits, users can be roughly divided into 6 categories.

During the download, installation and registration stages, they are brand new devices/users and definitely fall within the scope of new customer acquisition.

There are two other types of users: silent users and lost users.

The acquisition of silent users falls within the scope of user growth and should be included in user growth strategies, but I personally do not think it counts as new customer acquisition.

Most of the lost users may have uninstalled the app. When the users are brought back through various channels and content, they are considered to be new customers.

Different customer acquisition strategies need to be formulated according to the different stages of users.

1.2 Customer Acquisition Methods

There are too many ways to acquire customers on the market. This section takes NetEase Cloud Music as an example to look at Cloud Music’s current methods of acquiring customers.

1) Payment channels

Information flow promotion is currently the main means of acquiring customers for applications. By paying to place advertisements on traffic-intensive apps such as TikTok, Kuaishou, and Baidu, the target audience can be imported into the advertiser's app, thereby achieving user growth for the advertiser.

2) Joint Marketing

By cross-border cooperation with products that have a common user portrait, you can achieve brand exposure while attracting users of the other brand to download and use your product, thus achieving the purpose and effect of acquiring customers. For example, the recent collaboration between Cloud Music and Hippocampus is a form of joint marketing.

3) KOL cooperation

Cooperating with KOLs on Weibo, TikTok and other channels to promote activities and songs, thereby directing traffic to the Cloud Music app and acquiring customers, is also a method currently observed.

4) Platform activities

Platform activities with the nature of "sharing" and "dissemination" acquire new users through sharing/introduction by old users.

There are many ways and means to acquire new users, and you are welcome to add to and expand upon your ideas.

1.3 Customer Acquisition Content

According to the brand tone of the product, analyze the attributes and portraits of users, combine the content tone of different channels/methods, and launch a combination of content punches. Let me share one of my favorite activities on QQ Music this year: Fishing Calculator

The Fishing Calculator is an activity that is highly recognizable and memorable. Targeting the mentality of workers who slack off at work, lie down, and fight against involution, and combining it with the hot topic at the time, "Gome's "Notice on Punishment for Violation of Employee Code of Conduct", we launched this activity content. At that time, my circle of friends was flooded with it. Screen-sweeping activities will inevitably lead to breaking the circle. Breaking the circle means that users outside the circle can access this product, which will bring natural traffic and acquire new users for the product.

2. Activation/Activity

There are many ways to promote activation, but I personally think that the essence lies in whether the product design can bring a better user experience to users and whether it meets the users' needs for using such products.

Each product may have a different definition of active user behavior. For music listening apps such as NetEase Cloud Music, music playback is considered a core user behavior indicator to determine whether a user is an active user.

When new users try to use the Cloud Music app, they can choose whether to register immediately. Even if they do not register at the moment, they can enter the app as a visitor.

After opening it, there will be a series of recommended playlists and activity banners. There are also search background words in the search bar to guide users. There are text reminders on the follow page to attract users to click.

I think this kind of personalized recommendation and UI design are guiding users to listen to a song as quickly as possible and complete today's active behavior. But a suggestion is that you can directly pop up a player below to play popular songs, so that users can complete their first song listening behavior without thinking. And can there be a recommended song on the homepage instead of just a playlist? Wouldn’t it be more convenient for new users to listen to the songs directly? !

3. Retention

Improving retention requires more long-term and refined operations. I think the difference between activity and retention is that activity may be the satisfaction of current user needs, while retention is the user's long-term experience and dependence on the product.

Let me share a way I’ve observed that the Cloud Music app uses to retain users: membership activities.

In fact, membership activities are not new. Taobao launched 88VIP and Pinduoduo launched money-saving cards. How much help do these bring to the revenue of their products? You can see from the financial report that for this type of e-commerce app, members account for no more than 10% of the revenue. However, it is very helpful for the retention of such products. In order not to waste a few dollars on membership, users are willing to spend more time browsing e-commerce apps.

For music products, membership definitely accounts for a relatively large proportion of revenue. But at the same time, it also helps a lot in retaining users. Giving new users a free weekly trial card, or allowing new users to purchase VIP membership at a low price, can not only allow users to experience the benefits of membership, but also take advantage of users' desire to take advantage of small bargains and not want to lose sunk costs, and use the app more frequently.

4. Revenue/Payment

Based on the use of the app, I found that the product provides users with many payment points.

It can be roughly divided into: content payment, traffic payment and physical payment

The payment aspect actually affects how far the entire company/product can go, and requires the establishment of a business model and business system. I won’t say much about it.

5. Recommend

Recommendations are mainly divided into user active recommendations and user passive recommendations. The purpose of acquiring users is achieved through sharing and dissemination.

5.1 Active Recommendation

By providing economic and emotional value, old users will be willing to share the product with their relatives and friends, and finally achieve fission-like dissemination and achieve efficient and low-cost customer acquisition.

In fact, the songs that users spontaneously share on QQ Music in our circle of friends are in fact active recommendations from users that help the app gain customers.

At the same time, QQ Music recently released its 2021 annual report. This kind of screen-sweeping marketing activities and users’ active sharing are also a way to acquire customers for the QQ Music app.

Of course, there is also Pinduoduo’s history of success. Old users can get cash rewards for attracting new users, which prompts a large number of users to spread the word, and finally helps Pinduoduo reach its current position.

All of these, in essence, are actually about giving old users of the product certain "monetary rewards", "emotional rewards" and "social rewards" so that old users will actively and spontaneously share and forward the content.

5.2 Passive Recommendation

Personally, I think brand marketing is a very good means of passive recommendation. When a brand occupies the minds of users, users will think of the corresponding product first in a certain behavior/environment, and will look for ways to use and access the product, ultimately achieving user growth for the product.

Take NetEase Cloud Music as an example. It has done a lot of screen-sweeping brand marketing in recent years. Users may not have used or been recommended NetEase Cloud Music, but their minds have been occupied by the NetEase Cloud Music brand. But when they want to listen to songs/release songs, they will unconsciously think of such a music product that they can try.

Author: Coffee is really delicious

Source: Coffee is delicious