Case Analysis: How to use the AARRR model to increase user growth?

This article takes Luckin Coffee as an example. It first briefly analyzes its exposure methods, then analyzes its conventional customer acquisition and growth methods, and finally uses the AARRR model to summarize Luckin Coffee’s Double Eleven customer acquisition and growth methods.

Today, we will take a preliminary look at Luckin Coffee’s entire customer acquisition process, and combine it with Luckin Coffee’s Double 11 gameplay to see what we can learn and draw lessons from Luckin Coffee’s growth operation methods.

At first glance, Luckin Coffee’s communication logic is very simple: advertising is the first communication, and sharing by old customers is the second communication.

However: in these simple logics, every conversion step is optimized, and behind every payment amount, there is a concept of growth and new customers .

01

• Advertising: Luckin Coffee’s online advertising is mainly targeted through WeChat LBS .
• Core channel : WeChat Moments advertising
• Advantages: It looks like the Moments posted by real friends
• Use Tencent backend user tags to implement precise delivery testing: city, gender, age...
• Exposure price: (WeChat Moments ads, starting at 50,000 yuan, CPC)
• Core cities: 150 yuan/thousand impressions (Beijing, Shanghai, etc.)
• Key cities: 100 yuan/1,000 impressions ( Chengdu , Xi’an, etc.)
• Ordinary cities: 50 yuan/thousand impressions

Rising Coffee is the first domestic company to use LBS for large-scale marketing . They basically start investing as soon as they open a store and repeatedly attract traffic around the store.

This is Luckin Coffee’s first step in acquiring customers, in terms of the scale and accuracy of its communications.

Just having quantity and accuracy will help users find your ads, but if they don’t click on them, then the placement will be in vain.

Therefore, in order to increase the click-through rate of WeChat Moments ads, Luckin Coffee invited Tang Wei and Zhang Zhen as brand spokespersons.

The slogan is: Who doesn’t love the little blue cup?

At this time, most users may click on this advertisement in the circle of friends because of the celebrity effect.

However, Luckin Coffee found that celebrity endorsements alone were not enough.

Therefore, they invited WBC champion Andrea Lattuada to be the spokesperson for Luckin Coffee. The promotional point is that the WBC champion will select beans for you, blend flavors for you, and roast coffee for you, further enhancing the reliability and professionalism of Luckin Coffee.

WBC stands for World Barista Championship, and its full name is World Barista Championship . The World Barista Competition (WBC) is an internationally leading coffee competition.

By exposing this step, the first battle was won.

02

So, how can we let users experience our own products?

Luckin Coffee adopts the strategy of “new users, free drinks”.

Register with your mobile number and you will get a free drink coupon (valid for all drinks, RMB 21-27)

However, the minimum delivery price for the entire store is 35 yuan, and a cup of drink does not meet the delivery standard. At this time, the user needs to spend 6 yuan on delivery. (Since the first order of drinks is free, which is equivalent to 6 yuan for a drink, users will feel it is a good deal. People who have purchasing needs will pay, while those who are trying to get the best deal will stop here.)

If you want to waive shipping costs, you have two options:

1. Add some light snacks (bread, cake, etc.) to the order to get free shipping. (Increase average order value)
2. Buy with friends. (Sharing, bringing in new members, and promoting communication)

At this point, the user completes their first experience of buying coffee through the mini program /APP.

So, how to retain these customers, encourage them to make secondary purchases, and make them loyal users of Luckin Coffee?

A: Recharge your coffee wallet.

The picture above shows Luckin Coffee’s regular recharge discount.

Luckin Coffee’s pricing system is divided into three price levels: 21, 24, and 27 (yuan).

According to this preferential policy, let's calculate the purchase cost of a single cup of coffee: recharge 2 get 1 free and recharge 5 get 5 free:

Top up 2 get 1 free

• If a single person purchases and does not place a group order, the purchase cost of a cup of coffee (delivery) is RMB 20, RMB 22, or RMB 24.
• If two people split the bill, the cost of a single cup of coffee (for delivery) is 14 yuan, 16 yuan, or 18 yuan.

Top up 5 get 5 free

• If a single person purchases and does not place a group order, the purchase cost of a cup of coffee (delivery) is 16.5 yuan, 18 yuan, and 19.5 yuan.
• If two people split the bill, the cost of a single cup of coffee (for delivery) is RMB 10.5, RMB 12, or RMB 13.5.

Based on this purchase cost, it is more cost-effective to charge more and to group purchase. Luckin Coffee educates its customers on pricing and product rules, telling them that they need to make multiple purchases and that they need to attract new users to make multiple purchases.

In addition to the first purchase, there is a new customer acquisition policy of free first cup. In order to increase the frequency of user sharing, Luckin Coffee also issued discount coupons to help attract new customers.

• Sharing channels (old customers bring new customers): WeChat friends, WeChat Moments
• Title : Here are 20 coffee coupons! Come and join [l uc kin carnival], recharge 1 and get 2 free》
• Description: Found a lot of coffee and juice coupons

03

After looking at the conventional methods of customer acquisition and growth, let’s take a look at Luckin Coffee’s Double 11 event.

• Theme: luckin carnival
• Event time: November 6th to November 12th (one week)
• Activity rules: Buy 1 drink coupon of any type in [Coffee Wallet] and get 2 same drink coupons for free (limited to 5 coupons)
• Usage details: Both luckin coffee APP and luckin coffee mini program can participate in the event

The beverage coupons you purchase can be used in all stores nationwide (the beverage coupons are valid for 3 years)

Calculate the limited-time benefits:

If a single person purchases and does not place a group order, the purchase cost of a cup of coffee (for delivery) is 13 yuan, 14 yuan, or 15 yuan.

If two people split the bill, the cost of a single cup of coffee (for delivery) is 7 yuan, 8 yuan, or 9 yuan.

The price of the Double 11 event is more favorable than the usual buy 5 get 5 free.

Limiting the purchase of 5 coupons per person is to prevent some users from hoarding coupons (reducing profits) and to increase the sense of scarcity, creating a topic for users to share: "This is more favorable than usual, do you want to try it?"

Combining the AARRR growth model, let’s summarize Luckin Coffee’s customer acquisition methods:

Reduce customer acquisition costs

For advertising, the initial testing costs are relatively high, but after multiple tests of the creativity and content, the customer acquisition costs will be controlled within an affordable range for an enterprise.

*Please note that the delivery of information flow requires long-term optimization + a certain scale. If you only want to get very good results for a few thousand yuan, I advise you to do door-to-door marketing.

Bringing new customers to old customers is a method used by all products. Combining the characteristics of one’s own products, providing customers with benefit points, repeated testing, and optimizing the conversion rate of each link are the key points in bringing new customers to old customers.

Promote conversion in a shorter time - Activaction

Luckin Coffee successfully brought a new user experience by “giving you a free cup of coffee”.

For many new brands and new products, the first thing to do when they are first launched is to let users experience it, let them go through the entire purchase and experience process, let them let down their guard, and feel confident to buy and recommend it.

Extend user usage time - Retention

Recharging wallets is Luckin Coffee’s effort to retain users.

If you don’t finish the coffee you recharged, you lose money; if you drink the coffee coupons you get when you recharged, you earn money.

Luckin Coffee can be said to have perfectly grasped this trend of user psychology.

Increase customer spending/increase consumption frequency——Revenue realization

If you carefully read every step I wrote above, you will find that every step taken by Luckin Coffee is goal-oriented towards "monetization." But please note that the goal orientation is monetization, not every step needs to be "monetized" . There is a huge difference in between.

Bring in more new users - Referral communication

Regarding Luckin Coffee’s “giving you a free cup of coffee”, I forgot to mention one point.

That is: if a new user logs in through the link you forwarded – mobile phone number, then when he uses his free coupon, the person who forwarded the link will also get a "free coffee coupon".

In other words: the more new users you bring in, the greater the preferential benefits Luckin Coffee will give you. This is a behavior that benefits both others and yourself, and it is the most important point in the communication process of bringing in new users from old customers .

Source: shengxiaolue