Millions of dollars were stolen from Pinduoduo. What is the trick behind the coupons?

The e-commerce "Internet celebrity" Pinduoduo was exposed to have a major bug, and users can receive a 100 yuan no-threshold coupon. For a time, countless people flocked to Pinduoduo to get free deals.

As the incident escalated, rumors spread on the Internet, with one rumor claiming that Pinduoduo had lost 20 billion yuan. In fact, it is not that exaggerated. Pinduoduo officially revealed that the stolen coupons were worth tens of millions of yuan.

This incident triggered heated discussions among users. Some felt sorry for Pinduoduo, some condemned the "freeloaders", some were jealous for not getting any advantage, and some questioned whether this was a marketing campaign directed and performed by Pinduoduo itself.

In fact, the issuance of coupons is a science. Putting aside the truth behind the incident, let’s talk about what are the fatal mistakes of Pinduoduo’s coupons ? What tricks do merchants use with coupons to trick you?

01

The fatal mistake of Pinduoduo coupons

To be honest, as an "old driver" in operations, I could see at a glance that there was something wrong with Pinduoduo's coupons this time. Unless Pinduoduo did not operate it, the official would never issue such coupons.

What are the specific vulnerabilities? Let me explain one by one.

1. No threshold restrictions

First of all, there is no threshold for the amount. Coupons with no threshold for the amount can be regarded as directly giving money to users, which is a real discount.

Currently, we have seen that many no-threshold coupons require users to spend a lot of time and effort to obtain them. For example, the energy gained by collecting likes and pk on Double 11, and the red envelopes exchanged for energy have no threshold.

In most cases, there is a threshold for using coupons. The most common one is a discount for purchases over a certain amount. For example, the Tmall shopping allowance we are familiar with is basically a 50 yuan discount for purchases over 300 yuan. You must have a total of 300 yuan to use the coupon.

E-commerce companies are very cautious about issuing coupons with no threshold for the amount of money, because once issued, it means giving away real money, so there must be an identity verification strategy when issuing them to prevent freeloaders, such as: restrictions on the same ID, the same device ID, the same IP, etc.

2. No user restrictions

In addition to issuing no-threshold coupons through activities, there is another situation where the platform will also issue no-threshold coupons, which is the first-order discount for new users.

If you don’t believe me, think back and see whether you, as an old user, have never enjoyed the direct “free bill” treatment again?

But even for new users, there are generally limits on the amount.

The no-threshold coupons "distributed" by Pinduoduo this time are available to all users, and the amount is as high as 100 yuan, which is equivalent to giving 100 yuan in cash to every user. Even Alibaba is not so generous! The author expressed deep sorrow.

Pinduoduo bug coupons

3. No category restrictions

Secondly, it is applicable to the entire store without any category restrictions, which means you can buy anything.

Sometimes when we use coupons, we find that we can only buy products of a certain category, such as furniture, maternal and child products, and fresh food.

Why? Because coupon merchants do not give you "free". Although they give you discounts, they do so with a purpose, which is to make you purchase across categories. They hope that you will become familiar with their platform as soon as possible and fall in love with it.

This time, Pinduoduo's coupons are actually valid throughout the store, which means that there are no restrictions when using them. You can buy whatever you want, and you can buy together (buy fresh food, snacks to make up the amount), without having to spend a lot of time selecting products.

In this way, it will be more convenient for those who want to get the free coupons. There are no category restrictions and they can use up the coupons quickly, which increases the speed at which they are actually being taken advantage of.

4. Expiration date is too long

Finally, the validity period is too long, a full year. Why is this also a Bug? Let’s think about what is the purpose of issuing coupons? Either it is to encourage new users to consume as soon as possible, or to recall lost users, or to organize activities, etc.

JD.com’s coupons are only valid for a short time

In short, no matter which one it is, e-commerce companies hope that you use up the coupon as soon as possible, because a long validity period means that many users may be lost (they get the coupon but don’t use it, and finally forget about it), so a validity period of one year is a bit abnormal.

There is no threshold for the amount, no category restrictions, the amount is so large, and the validity period is so long, even the richest merchants would not dare to do this... So there is a problem at first glance.

02

How do merchants use coupons to trick you?

A user has a life cycle on the platform. Smart operations will set up coupons in a targeted manner based on the different stages of the user on the platform. So how do you distribute coupons based on the different life cycles of users?

1. Use coupons to get new users to place orders on the platform

For novice users, our operational goal is to increase the user growth rate. Correspondingly, we need to give these users some incentives so that they cannot stop shopping once they come to this platform, such as first-time purchase incentives and multiple-purchase incentives.

For example, exclusive coupons for novice users.

Coupons like this are set up without categories. The underlying logic is to complete the user's first purchase and quickly help the user get through the novice period. Of course, special attention should be paid to the time setting. In order to prevent freeloaders, the time setting cannot be too long, otherwise people who know how to buy will buy it quickly.

It must be mentioned that the validity period of Pinduoduo's Bug coupons is one year. Not only does the price make users feel that they have made a fortune, but the validity period is also so "humane". It is natural that it attracts a large number of wool parties.

2. Use coupons to get growing users to spend more money

For users in the growth stage, our operational goal is to improve the loyalty of this part of users, and to increase their purchase frequency and shopping amount accordingly. For example, you can consume reward red envelopes and so on.

In addition, in the e-commerce industry, users generally reach a turning point when they use it for the 5th or 6th time (magic number). What does this mean? It means that when users make their 5th or 6th purchase, merchants will often spend more money.

Based on this logic, we can issue 5 coupons first, but how should we distribute them? Let’s first take a look at the red envelope settings for JD PLUS members.

It looks simple, but there are deep tricks hidden behind it. We carefully calculated the discount and found that the coupon for 10 yuan off for purchases over 200 yuan has the largest discount (5%), which means that users have a hurdle when spending 200 yuan. In order to help users overcome this hurdle smoothly.

JD.com deliberately gives more discounts on the 200 yuan mark, so that users feel it is worthwhile when they spend 200 yuan to buy things, thereby increasing the amount of users' purchases. (This section is excerpted from the user operation course that will be launched soon)

3. Use coupons to improve the loyalty of mature users

For mature users, our operational goal is to increase the user's ARPU value (average revenue per user). The corresponding operational strategy is to increase the number of times users visit the platform and allow users to conduct cross-category transactions.

For example, category red envelopes, store red envelopes, etc. The purpose of setting up coupons like this is to enable users to purchase across categories.

The richer the product categories a user buys on this platform, the higher his loyalty to the platform. (Based on RFM model)

4. Use coupons to prevent users from leaving during the recession

For users in the decline stage, we need to take measures to extend the user life cycle, such as setting up a churn warning mechanism to prevent user churn, and the main operating method is based on interest incentives.

For example, low-threshold red envelopes, large reward red envelopes, etc. Just like Meituan and Ele.me, when I logged in again after not placing an order for several days, they gave me large red envelopes for discounts.

5. Use coupons to get lost users back immediately

For users in the churn period, we need to take some measures to regain high-value users. We can offer discounts to recall users based on some past content that the users may be interested in.

Commonly used recall channels include App push, EDM, Push, SMS, Weibo private messages, etc.

Common recall content generally involves setting up discount red envelopes, or pushing red envelopes of stores and products that users frequently consume from based on their past purchase history.

Just like platforms like Hema Fresh and Meituan Waimai, they always send me a few recall text messages from time to time to remind me that I need to claim the red envelopes.

03 Conclusion

There is a saying that "the wool comes from the sheep", in fact, most of the actions that can "fleece the sheep" are just tricks used by merchants to trick users into spending more. This is true for almost every coupon that appears in daily life.

According to the different cycles of users (novice stage, growth stage, mature stage, decline stage, and churn stage), merchants will issue different types of coupons to stimulate users to consume as much as possible.

After reading today's article and looking back at the Pinduoduo coupon incident, you will find that it is impossible for a 100 yuan red envelope with no threshold on the entire platform to exist. It can only be a bug.

Source: Operation Research Society (ID: U_quan)