Case analysis: Analysis of Alipay’s bounty operation activities in December!

Thinking patterns involved in this brief analysis:

1. A cross-border thinking that simplifies understanding and connects with things that the public has knowledge of;
2. Dynamic thinking, looking at the changes of things dynamically, and observing the underlying trends under the big trends;
3. Hierarchical thinking is to classify things first and then analyze their characteristics, and is used in combination with the method of first refining the characteristics and then classifying them.

The above is a screenshot of my red envelope bounty, which is divided into two parts: 1) bounty type; 2) corresponding amount.

The following are divided into three pools according to the characteristics of the bounty types for separate observation:

• The first pool: the success pool, where the bounty has been obtained;
• The second pool: the potential pool, where rewards are on the way;
• The third pool: failure pool, invitation failure.

What is our goal? Get bounties and expand your pool of success.

How to expand the pool of success? The only thing related to the success pool is the potential pool. The size change of the success pool is positively correlated with the size of the potential pool and the success conversion rate.

For example: the potential pool has 10,000 (for ease of understanding, assume the number is fixed), and the success conversion rate is 20%, then the success pool is expected to increase by 2,000. If the conversion rate remains unchanged at 20%, and the potential pool size is reduced to 5,000, then the success pool is expected to increase by 1,000.

Mathematical formula: Success pool change = potential pool x conversion rate; According to the formula, there are two directions to expand the success pool:

1. Enhance conversion rate;
2. Expand the potential pool.

It is easy for us to focus on the first measure, strive to increase the conversion rate, and use tools such as A/B testing and funnel analysis to analyze the path conversion rate. This is internal practice; but it is not easy to pay attention to the second measure, to seek how to expand the scale of the potential pool and see how the potential pool changes. This is external practice.

Any thing, as long as it is not an absolute starting point or an absolute end point, will have upstreams and downstreams. To shift from focusing on oneself to focusing on the flow within the system composed of upstreams, downstreams and oneself is to cultivate both inside and outside.

From the diagram above, we can see that the change in the size of the potential pool depends on two factors: the speed of accumulation and the speed of loss.

When the accumulation rate is greater than the loss rate, the potential pool will gradually expand; when the accumulation rate is less than the loss rate, the potential pool will gradually shrink. To expand the potential pool, there are two directions:

1. Increase accumulation speed;
2. Reduce the rate of loss.

The first direction is to increase the accumulation speed. We need to continue exploring from the upstream of the potential pool. We first use hierarchical thinking to classify the potential pool:

From the grading diagram, we can see that the source of the potential pool is the influence or the radiation range of influence. Through this grading diagram, we can see the significance of brand building and marketing, and it also helps us understand several advertising billing methods, such as:

1. CPS: Commission model, you pay a certain percentage of commission based on the users introduced by the advertisement. For example, if the users brought by the advertisement spend 100 yuan, the commission rate is 10%, so you will get 10 yuan.
2. CPM: Display volume model, payment is based on the number of impressions. If the ad is displayed 1,000 times, you will be paid 6 yuan.
3. CPC: Click-through model, payment is based on the number of clicks. If the ad is clicked 3 times, the unit price is 1 yuan, so you will be paid 3 yuan.

According to the potential pool classification diagram, there are three directions to increase the potential pool stock:

1. Enhance the positive conversion rate between potential pools at all levels;
2. Reduce the negative conversion rate between potential pools at all levels;
3. Increase the initial value and expand the impact/radiation range.

Choose the appropriate model based on the stage you are in and the goals you need to achieve. If your goal is to expand your reach, increase the CPM (pay per impression). If the subsequent path conversion rate is too low, there is no need to choose CPC (pay per click). If you want to form a sustainable long-term relationship with advertisers, it is more appropriate to choose CPS (commission model).

Continuing to look at the second direction of expanding the potential pool, there are two ideas to reduce the loss rate:

1. Reduce the rate of loss to the success pool;
2. Reduce the rate of loss to the failure pool.

Transformation into the pool of success is our ultimate goal. The rate of loss into the pool of success should not only not decrease, but increase.

Assume that we are facing a grim reality. When the potential pool (convertible pool) is insufficient, we must increase the amount of inflow into the success pool while reducing the speed of stock loss. This requires us to advance in two directions at the same time:

1. Reduce the total amount of potential pool loss;
2. Increase the proportion of the total churn that flows into the success pool.

If the original total loss is 1000 and the success volume is 200, the total flow is required to be reduced to 700 and the success volume increased to 300.

Mathematical formula: Total loss = total amount flowing into the success pool + total amount flowing into the failure pool.

From a mathematical point of view, there is only one way to achieve both of the above goals at the same time: significantly reduce the amount of flow into the failure pool.

In this Alipay red envelope activity, the rules are: if the red envelope is not used within 3 days, it will enter the failure pool. The rules can be further subdivided and the degree of approach to failure can be graded into three levels of failure pools: red envelopes not used for 1 day, 2 days, and 3 days.

As can be seen from the figure, there are two directions to achieve the goal of significantly reducing the amount of data entering the failure pool:

1. Reduce the conversion rate from a light failure pool to a heavy failure pool;
2. Increase the proportion of each failure pool returning to the potential pool.

Classifying the failure pool helps to design more refined strategies and design separate strategies for finer dimensions.

Taking Alipay’s red envelope activity as an example, the following is a screenshot of the red envelope amount:

When designing activities, Alipay has a very clear hierarchical design, with at least three levels for different levels of difficulty in crossing the threshold:

1. New user level: If you have never used a service, you need to cross the threshold of new use. The 23.18 yuan red packet in the above picture should belong to this level;
2. Establishing a new habit: using a service before, but not habitually. The amount of 1.18 yuan in the above picture should belong to this level.
3. Continuation of old habits level: The original habits can be continued without any stimulation. This poor man with 0.10 yuan should belong to this level.

This is another type of three pools, which are small pools in the big pool. It can be seen that the so-called randomness is not truly equal randomness, but first grading and then setting the random range for different levels.

Due to the existence of classification, for the same user, his or her classification is changing dynamically. The more accustomed one is to using Alipay, the less necessary it is for the user to spend large red envelopes through Alipay. The red envelopes will inevitably decrease as the necessity for spending decreases. This is the trend of changes in the unit red envelope amount hidden under the trend of changes in the number of red envelopes.

The total amount of red envelopes = the total number of red envelopes (shares) X the amount of a single red envelope. It can be seen that to achieve the ultimate goal (total amount of red envelopes), it is necessary to pay attention to the changing trend of the total number of red envelopes (three pools) and the changing trend of the amount of a single red envelope (the proportion of high-yield red envelopes).

The above is my rough analysis of Alipay’s bounty campaign. There are still many details worth analyzing, such as the user’s displayed name, which omits the surname at the beginning and only retains one character at the end, but this is not the focus of this analysis.

Why choose Alipay red envelope activity for analysis?

There are two reasons:

1. This is the basis of a complex concept;
2. To understand complex concepts, we need a carrier that everyone has a basic understanding of.

If it weren’t for the Alipay event, I might have used hydropower to explain the basic principles of the three pools.

After understanding the basics of the principle, you can begin to understand the real three pools theory:

Special note: The following formula only considers the relationship between the three pools and does not take external factors into consideration:

1. The first pool: the change of success pool = the inflow of potential pool + the inflow of failure pool - the flow to potential pool - the flow to failure pool;
2. The second pool: Changes in the potential pool = inflows from the success pool + inflows from the failure pool - flows to the success pool - flows to the failure pool;
3. The third pool: Changes in the failure pool = inflow into the success pool + inflow into the potential pool - flow to the success pool - flow to the potential pool.

These formulas and all the above analysis are based on a basic idea: there are at least two directions for the improvement of anything: enhancing positive flow and weakening negative flow, and clarifying the logic can help us discover these two directions.

All of this is an exploration of the development and changes of things, in order to find out what changes are going to happen, and then explore various possibilities and why these changes are happening. In the constant exploration, we are getting closer and closer to the truth of the trend, and we will be closer and closer to seeing the future.

Source: It’s snowing (skyfollowsnow)