Car rental travel platform user operation system (1): channel promotion

This article builds a complete user operation system for EasiestCarRental, a car rental platform, to solve the problems of high user churn rate and low repurchase rate.

There are three articles in the series "Building a User Operation System for a Car Rental Travel Platform", which will analyze from the perspectives of channel promotion , user life cycle operation, user stratification and group operation. This article is the first one.

Note: The data in this article has been anonymized.

1. Basic information of the product

1. Basic information about products and markets

EasiestCarRental is a car rental platform for American users and has been online for two and a half years. Users can rent vehicles from vehicle providers (dealers) such as AI VS, Hertz, and Enter prise on the platform, and users can choose to travel in the United States or other countries around the world. As a car rental platform, EasiestCarRental focuses on the low-price market and targets price-sensitive people.

After years of development, the U.S. car rental platform market has gradually become saturated. In the car rental platform market, in addition to the largest RentalCars.com, there are also numerous small long-tail platforms. As a country where everyone drives, the penetration rate of car rental business in the United States is very high and is close to saturation. Therefore, in the United States, the car rental platform market is a stock market and also a fiercely competitive red ocean market.

The business model of the car rental platform is to connect users and car dealers and make profits by earning commissions provided by car dealers. The key to the success of the car rental platform:

• First, obtain vehicles with lower prices, higher commissions and better quality from the B-end (car dealerships);
• The second is to obtain more user orders on the C-end.

According to Growth Hacker , the "Aha Moment" of a car rental platform is when users are satisfied with the car after renting it at a low price. This "aha moment" includes two aspects: the first is renting a car at a low price; the second is satisfying use of the car .

If the car rental price is not lower than the market average, users will not feel that they are getting a good deal. Car rental is a service with a long process, complex links and many service pain points. If users are not satisfied with the car rental experience, this dissatisfaction will offset the value brought by the price discount and make users no longer choose this platform for their next travel.

Since the demand for car rental is a low-frequency, high-motivation demand, users will only look for a car rental platform when they have travel needs, and will inevitably leave after using it. Therefore, the key to the success of a car rental platform is to ensure that users think of us first when they need to rent a car.

Specifically, it is:

1. When potential users want to rent a car, they can think of us or search for us → improve channel delivery efficiency, build brand awareness, and enhance word-of-mouth.
2. Next time old users want to rent a car, they will think of us and be willing to use us again → cultivate user usage habits and improve satisfaction and loyalty.
3. Users are satisfied with our products and services and are willing to repurchase and spread the word → polish products, improve service quality, and encourage users to spread the word.

2. Problems in current operations and future work plans

Facing the competitive red ocean market, as a new platform, EasiestCarRental’s operating strategy should be:

1. In the first year after launch, we focused on market testing and product and service optimization to maintain a small but steady growth in the number of users;
2. From the second to the fourth year after the launch, after completing the market test, the user base grew rapidly, reaching a scale of one million users. At the same time, a user operation system was quickly established to improve user retention and activity.
3. After the fifth year since its launch, we optimized growth methods, sought new user growth points, reduced customer acquisition costs, and completed the overall construction of the user operation system to comprehensively improve user operation efficiency.

At present, the number of registered users of EasiestCarRental has reached 500,000, but the user operation system has not yet been established, which leads to a high user churn rate and a low repurchase rate. Therefore, the focus of the platform's future operations should be to build a systematic user operation system as quickly as possible while ensuring rapid growth in the number of users.

Specifically:

• In terms of channel acquisition of new customers: Currently, EasiestCarRental relies heavily on CPC paid promotion , which makes the cost of acquiring users and orders remain high. Next, the platform needs to expand non-paid promotion methods to reduce the cost of acquiring orders. In addition, the platform’s current strategy for attracting new customers is relatively simple, acquiring customers only through paid promotions, without any subsequent supporting operational strategies. Therefore, the strategy of attracting new customers also needs to be optimized. In addition, EasiestCarRental also needs to conduct regular monitoring of the channel's customer acquisition costs and quality, but the platform currently does not have such a system.
• User retention and activation: At present, EasiestCarRental has not yet established an operating system for platform users, and there is a lot of work to be done in this regard. First of all, the platform needs to design the core growth path for users based on its own business characteristics and build a user life cycle operation system. Secondly, for the purpose of refined operations, the platform needs to stratify and group users. The corresponding operation models include membership system , RFM model , user tags, etc. Again, the platform needs to establish a churn monitoring and early warning mechanism, and recover lost users.

3. Core indicators breakdown

The above is the general plan for EasiestCarRental’s future operations. Next, we break down the core indicators to determine more specific operational goals:

The core indicators of the car rental platform are: profit, number of orders

Profit = Sales × Profit Margin – Cost

Further breakdown of sales:

Sales = Number of orders × Average order value

To increase sales, you need to increase the number of orders, attract more users to place orders, and at the same time increase the average order value. Increasing average order value and profit margin can be achieved by guiding users to purchase high-priced or high-profit products.

For number of orders:

Number of orders = number of orders from new users + number of orders from old users

Number of new user orders = traffic × order conversion rate × 1

Number of orders from old users = number of users × repurchase rate × average number of purchases by repurchase users

To increase the number of orders, on the one hand, we can increase the number of new user orders by increasing website traffic and order conversion rate; on the other hand, we can increase the number of old user orders by doing a good job of user retention , increasing repurchase rate and number of purchases.

Let’s break down the costs:

Cost = Customer Acquisition Cost + Operating Cost

Customer acquisition cost = total promotion cost ÷ number of new users = total promotion cost ÷ (traffic × order conversion rate)

Customer acquisition cost refers to the cost invested in acquiring new users through various promotional activities. While keeping the total promotion cost unchanged, it is necessary to increase traffic and the conversion rate of ordering users.

Operating costs mainly include the costs of promoting user growth and retention, caring for old users, and recalling lost users . Operating costs have a leverage effect. Operating on old users can increase the number of purchases and retention rates , thereby increasing sales. Therefore, it is necessary to find the operating cost value with the highest input-output ratio.

2. Channel promotion strategy and effect monitoring

1.Choice of promotion channels

The main promotion channels for overseas tourism products are as follows:

Let’s compare the pros and cons of each channel:

(1) Search Engine Marketing (SEM ) and SEO

Advantages: The traffic is relatively accurate. Search engine SEM and SEO mainly target users who are accustomed to using search engines for information search and consumption choices. When users go to search engines to search, they already have a considerable willingness to buy, which makes the traffic from search engines relatively accurate. Because SEM is displayed in the form of "advertisements", the user click-through rate will be lower than that of naturally displayed SEO.

shortcoming:

1. Users have a low awareness of car rental platforms. They enter the platforms through search engines, do not know much about the platforms, and lack trust, resulting in a low purchase conversion rate.
2. The cost of SEM delivery is high. Due to the low purchase conversion rate, the average order acquisition cost is high, even exceeding the gross profit of the order.
3. Some users who enter the platform through search engines have already formed stable search habits. This means that before they travel next time, they will visit search engines instead of us, which greatly increases the cost of acquiring users again.

(2) Vertical search platform

Vertical search platforms provide users with search and price comparison functions, and the main advertising pricing method is CPC.

advantage:

1. The flow is very accurate. Compared with search engine users, users of vertical search platforms have clearer needs for car rental.
2. Low-price platforms have more advantages, and the main purpose of many users using vertical search platforms is to compare prices. If the prices of products on our platform are lower than those on other platforms, users are more likely to choose it. In addition, because users are more sensitive to prices and pay less attention to brands, it is easier for small platforms to acquire customers.

shortcoming:

1. The average order value is lower. Since they are a group of price-sensitive users who enter the platform by comparing prices, we cannot expect their average order value to be very high.
2. Lower awareness of the platform. First, similar to search engines, some users of vertical search platforms have formed stable usage habits. Secondly, because the user landing page is a list page rather than a homepage, users only care about placing orders and leaving after purchasing, without even looking at the name of the platform.

(3) SNS paid promotion and non-paid maintenance

advantage:

1. Brand communication. SNS is an important place to spread brands and enhance user perception and trust.
2. The promotion effect of the event is good. After accumulating a certain amount of fans, the SNS channel can be used as a promotion venue for various activities on the platform. It can be imagined that the conversion rate of SNS activities should be relatively high.
3. A place to place and cultivate new users. Because car rental is a high-motivation, low-frequency demand, car rental platforms cannot rely on high-frequency usage by users to keep users on the platform like content and social products can.

Therefore, the car rental platform can only direct users to the SNS channel, let users become fans of SNS, and place and cultivate users on SNS. This is similar to the function of WeChat public accounts and Weibo official accounts in China.

shortcoming:

1. SNS paid advertising traffic is not accurate, and what is mentioned above are all non-paid maintenance. SNS platforms all provide paid advertising promotion methods, but because the demand for car rental is highly motivated, widely used paid advertising cannot attract many users who really need to rent a car.
2. It is time-consuming and labor-intensive. Maintaining an SNS channel requires the continuous output of high-quality content, which requires a lot of manpower investment.

(4) Community and review websites

Like SNS channels, the maintenance of travel communities, question-and-answer websites, and review websites also plays a role in brand building and word-of-mouth communication.

Advantages: Brand building and word-of-mouth communication are more efficient. Community and review websites are third-party UGC platforms and therefore have higher credibility.

shortcoming:

1. Like SNS channels, community and review websites also have high maintenance costs.
2. For communities, it's easy for content to get lost.

According to the specific situation of EasiestCarRental, we need to optimize from the following aspects:

1) Expand non-paid promotion channels, reduce dependence on paid channels, and reduce user acquisition costs.

2) Design a combination of measures to attract new customers, guide and retain visitors and new users, and prevent them from leaving too quickly.

The places where new users are stored can be divided into on-platform and off-platform:

• Within the platform: guide users to register, become platform members, and subscribe to emails to facilitate our subsequent operations. In addition, users’ purchasing behavior can also keep them on the platform. We can use pre-sales, sales, and after-sales service nodes to operate and convert users.
• Outside the platform: guide users to follow our SNS homepage and become our fans.

3) Carry out good brand communication for the platform. There are many ways to spread a brand, including: SNS account maintenance, community soft articles, review website content maintenance, APP rankings and homepage recommendations, and encouraging users to spread the word .

4) Improve the quality of user services, provide good user care, promptly appease complaining users, and promote user self-propagation. User self-propagation is the best and lowest-cost way of word-of-mouth communication.

2. Design of promotion strategy

Above we discussed methods of attracting new customers through channel promotion operations. In addition, we can also attract new customers through products, activities, advertising, etc.

Common ways to attract new customers include:

1. Celebrity endorsements;
2. Internet celebrity / KOL promotion ;
3. Traffic exchange;
4. Cross-industry cooperation;
5. Promotions;
6. Invite friends rewards;
7. Hot-selling products attract traffic .

Among them, influencer/ KOL promotion, promotional activities and hot-selling products have low costs and guaranteed efficiency, and are the most suitable strategies for the platform to use at this stage. Due to space limitations, we will only briefly introduce the hot-selling traffic-generating strategies below.

Hot selling products are a common way of attracting traffic for e-commerce companies . Hot-selling products (or traffic-generating products) have the following characteristics: high sales volume, low unit price, user price sensitivity, strong versatility, high frequency of demand, and meeting popular needs.

Platforms with multiple product categories can make one or several of them into hot-selling products. For example, Qunar has made its airfare price comparison search a hit, driving traffic to categories such as hotels and attractions, while EasiestCarRental only has one category: car rental services. Therefore, we need to select some products in the car rental service category as hot-selling products.

We classify and compare car rental products based on rental period and model:

It can be seen that the average order unit price of small cars with a rental period of 2 days and 3 days is lower, and the average daily sales volume is higher. The combined daily sales of the two products account for more than 50% of the total sales, making them suitable for being built into a hit product.

We then compare the profit margins of the individual products:

Based on the profit margin, we select small cars with a rental period of 8 days or more and large and medium-sized cars with a rental period of 5 days or more as profit items. In addition, insurance and value-added services (baby seats, GPS, etc.) also have high profit margins and are also profitable items.

After selecting the best-selling products and profitable products, we can focus on promoting the best-selling products, use them to attract users' first purchase, and guide users to purchase the profitable products to achieve profitability.

3. Channel cost monitoring

After determining the promotion channels and strategies, we need to determine the channel delivery costs. The channel placement cost is reversed through the order acquisition cost, which is determined by the user lifetime value.

For a platform to be profitable, it needs to satisfy the user lifetime value (LTV) > user acquisition cost (CAC) + user operating cost (COC). According to industry experience, a company can develop most healthily when LTV/CAC = 3.

Currently, EasiestCarRental’s CAC is approximately $90. However, because the operating system has not yet been established, the user churn rate is high and the repurchase rate is low, resulting in an LTV of only US$50, and the platform is in a loss-making state.

At the current LTV, CAC must be below $50 if the platform needs to be profitable. However, the platform is in a stage of rapid customer acquisition, and channel promotion costs cannot be halved immediately. What should I do?

This can be solved by reducing CAC and increasing LTV. First, strengthen the development of non-paid channels and gradually reduce CAC. Secondly, strengthen operations for old users, gradually build an operation system, and gradually improve LTV.

As can be seen from the above table, in the short term, LTV can be increased to US$75 by issuing coupons to promote activation. After the operating system is established in the future, LTV will gradually increase and the platform will become profitable.

After determining the CAC, we monitor the costs and benefits of different channels.

From the table, we can see that Google CPC has a lower cost for acquiring each UV and acquires a larger amount of UVs, which is suitable for use when the platform needs to quickly increase traffic. However, Google CPC has a low order conversion rate, resulting in a higher acquisition cost for each order. Therefore, attention should be paid to improving the delivery accuracy and order conversion rate of Google CPC.

AutoRentals CPC has a high order conversion rate, which makes its order acquisition cost low, and is suitable for use when the platform needs to quickly increase order volume. But users from AutoRentals have a lower awareness of the platform, which is reflected in the lower user registration rate . Moreover, because users “buy and leave”, the repurchase rate is low, resulting in a low LTV.

Therefore, we should pay attention to strengthening prompts and guidance for users, increasing the registration rate, and strengthening follow-up operations for users to stimulate user repurchase.

• Users from the APP show strong stickiness, with high user registration rate and repurchase rate. However, the traffic of APP is relatively small, so we need to strengthen the promotion of APP .
• The overall quality of traffic from Facebook is poor, so we need to strengthen Facebook content operations and fan cultivation.

4. Channel conversion effect monitoring

In addition to monitoring channel costs, we also need to track and evaluate the conversion effects of the channels.

Based on the traffic of each channel, the number of registered users, the number of purchases and other data, we can draw a channel funnel:

As can be seen from the above figure:

Search engine Google CPC contributes more than half of the traffic, and the registration conversion effect is acceptable. However, since the users entering the platform from search engines are relatively mixed and of low quality, the first-purchase conversion rate is relatively low.

The vertical search platform AutoRentals CPC has a very good first-time purchase conversion effect. This is because users from AutoRentals have a strong willingness to consume. However, AutoRentals CPC has poor registration conversion and repeat purchase conversion effects. This is because users "buy and leave" and do not stay on the EasiestCarRental platform.

The registration and repurchase conversion effects of the APP and Organic channels are relatively good, but the traffic is small, and the traffic of these two channels should be increased.

Facebook's traffic is very small and the conversion effect is not good, so Facebook operations need to be strengthened.

5. Visit the pop-up survey of non-purchase users

Although we can understand user behavior through data, the in-depth interpretation of the data depends on qualitative analysis of users, and survey questionnaires are the most commonly used method for conducting qualitative analysis.

For users who have registered on the platform, subscribed to emails, and placed orders, we have obtained their email addresses and can send them user survey emails. But how do you survey users who leave without purchasing after visiting?

"Growth Hacker" provides a method of pop-up questionnaires, that is, when the user finishes browsing and is about to leave the website, a pop-up window with a questionnaire will pop up, allowing the user to complete the questions.

Now we design how to trigger the pop-up window. Users who enter the platform through different channels will have different usage trajectories:

1. Users who enter the platform through search engines will first land on the platform homepage or SEO page. Users can choose to search in the search box, browse the home page discount information or SEO page information. The user path is more complicated and the stay time is longer.
2. Users who enter through the vertical search platform and land on the list page usually open multiple car rental packages to view. Because the platform does not have a shopping cart function, half of the users will save the alternative car rental packages to their browser favorites.
3. Users who enter the platform through promotions will land on the promotion page. Users may first interact with the page (such as drawing a lottery, playing games , etc.), register and log in to receive discounts, and then search and purchase.

There are three main ways to trigger pop-up windows: timed triggering, triggering when switching back from a competitor's web page, and triggering before closing the window. Based on user scenarios, we set some pop-up window triggering rules:

We design different questionnaire questions according to different scenarios. For example, the "Why not buy" questionnaire is mainly aimed at the situation where users still decide not to buy after making a more careful purchase decision. After making a decision, users may decide not to buy the product because the price is not cheap enough or the brand is not well-known.

Therefore, the following questionnaire can be set up:

Question: Why don’t you buy from our website?

Options:

A. Other websites have cheaper ones.

B. Can't find the car you want

C. EasiestCarRental is not well known as a brand

D. The car does not have enough information to make a decision

E. I'll check back later.

For the content displayed in the pop-up window, in addition to the questionnaire, you can also add coupons below the questionnaire to stimulate users to buy.

Author: Xuan Wenhao, authorized to publish by Qinggua Media .

Source: xiaoxuan