Taking P2P as an example: How to build a points system from 0 to 1?

Why do we need to build a points system ? What is the essence of integration and what is its function? The author of this article uses P2P as an example to explain these issues and elaborates in detail how the points system is built.

This article is organized as follows:

• The background of points demand and the essence of points
• Discover the role of points from different perspectives of platforms and users
• How to obtain, consume and record points
• Data analysis, detection and risk avoidance

1. Demand Background

When working as a product manager or operator in the Internet industry, you will often encounter a demand like this: Let’s do points?

Regardless of whether the demand for “making points” comes from operations, products or BOSS, we need to trace the source and determine one question: Why do we need points/points system?

Generally, the sources of demand for points are as follows:

1. The current operating methods have not achieved the expected results

What this means is that a lot of work has been done but no results have been seen, and there is an attempt to change the current status quo or to increase presence by creating a points system.

1. Benchmarking against competitors, I want to have what others have

This applies to all Internet products. Domestic Internet people have a famous saying that they believe in: "Don't reinvent the wheel."

For most small and micro-sized startups that do not have such strong capabilities, learning and copying competing products can indeed reduce a lot of time and manpower costs for the company.

1. Prerequisites for fulfilling other requirements

I didn't consider creating a points system at first, but when planning some requirements and clarifying functions, I found that I must have a points system before I can move forward.

For example, common operating methods include: sign-in, clock-in, lottery, roulette, and points mall.

2. The Essence of Integration

Before getting started, you need to understand the nature of points. The understanding of points by the designers of the points system will seriously affect the depth and breadth of the application of points.

The essence of points is a medium for the platform to price user behavior . Based on this integral, there are two properties:

1. Currency attributes

The role of this medium is to measure the value of user behavior, and after measurement, the user behavior will be rewarded, so at this time it can be understood that points are a specific currency.

After understanding this, you can call it Q coins, Q points, gold coins, experience points, impression points, green energy...it can be anything you can imagine.

Here, points already have some currency attributes. This property is crucial for us to develop a points strategy later.

1. Debt attributes

When points are generated, rewards are not necessarily distributed immediately. Most of the time, they need to be accumulated in stages to reach the reward threshold, and users can choose the reward time by themselves. Therefore, points are a debt for the issuer (i.e. the platform or enterprise), so financial costs and financial health need to be considered during the design.

3. Integral function

Regardless of whether the points demand is reasonable, we must first reach a clear consensus that the points system is not a panacea.

After reaching this consensus, we objectively and rationally analyzed the role of the points system.

The points system is built in two steps. The first step is to build the basic points framework, and the second step is to apply the points.

1. From the platform perspective, the functions are as follows:

Enriching operational diversity

Taking the P2P industry as an example, in the development of the industry, the marketing activities of various platforms are mostly: issuing investment red envelopes , issuing interest rate coupons , giving away physical objects , cash rewards , etc., which are small in number and old-fashioned in style.

The establishment of a points system can integrate "points" as a medium into the platform operation system, and serve as the basic structure for other operating methods to establish a multi-dimensional and three-dimensional operating ecology.

Establish a connection channel with the user

The value of the Internet lies in establishing connections between people, people and information, people and products, and people and services. Only after establishing connections will there be more opportunities.

In the Internet finance industry, P2P investment does not require users to perform frequent operations and pay constant attention like other types of investments such as stocks, funds, and Bitcoin .

Usually in P2P, there is a long time gap between the completion of investment behavior and the receipt of returns. During this period, users lack reasons to actively connect with the platform. By building a points system and supporting marketing methods, the opportunities for connecting the platform and users can be increased. As shown:

Eliminate operational discontinuities

The participation threshold created actively or passively in event operations is intended to screen specific users, but it does not mean that users who fail to meet the threshold are worthless.

For users, such activities create resistance to their participation, and in a certain period of time, they cause discontinuity in user participation.

The incoherence can be understood through an example:

A certain activity - invest 100,000 to get a Dyson hair dryer as a reward. The threshold of this activity is that you must invest 100,000 at one time to be rewarded with a Dyson hair dryer. For some people who do not want to invest 100,000 in a single investment or cannot invest 100,000 in a single investment, this activity means they will not be eligible for it from the beginning.

However, if we have points, we can set it up to earn points according to the proportion of investment, and redeem Dyson hair dryers by accumulating points through multiple investments, with 10 investments of 10,000 yuan each. All we need to measure is the campaign purpose and two customer values.

Another common scenario is: P2P platform activities are frequent, with once a month being the most basic configuration, and there is no correlation between most of the activities.

For example, the National Day, Mid-Autumn Festival and “ Double Eleven ” events in October are very close in time intervals. When a single variable is used to measure user choices, three situations will occur:

1. The intensity of National Day activities is greater than that of Double Eleven activities. Users who participate in Double Eleven activities will feel that they are at a disadvantage.
2. The intensity of National Day activities is less than that of Double 11 activities. Users who participate in Double 11 will feel that "once you have seen the sea, nothing can compare to it".
3. The intensity of the two activities is the same - there are activities every month anyway, so there is no need to rush;

These three situations will definitely lead to different understandings among users, and in fact, there is a high probability that we cannot control them.

Increase user silence cost and cultivate user loyalty

Every action and choice people make has a cost. The more actions users take on the platform, the more costs they pay, so the cost of giving up their current choice is also higher.

The feeling was most obvious when shared bicycles were rampant. In the early stages of the industry, when deposits were required, the two first movers, OFO and Mobike , basically monopolized the market. Based on their first-mover advantage, they were favored by capital, and it was difficult for latecomers to break the monopoly because users had to pay a deposit again for each bicycle they chose, and there were also discounts from various activities.

These are all practical benefits, and it is obvious that there are no greater benefits that impact the user's choice. Therefore, subsequent brands learned their lesson and began not requiring a deposit, of course at the cost of a large amount of money.

As long as users do not leave, there is a chance for them to create value, so it is said to "cultivate user loyalty." Rather than cultivating user loyalty, it is better to say that it is to increase the user's "defection weight."

1. From the user's perspective, the effects are as follows:

From the user's perspective, points bring more benefits to users and have a certain probability of increasing the frequency or activity of users' key behaviors.

The specific benefits need to be analyzed based on the specific products and how the platform uses points to bring real benefits to users. I will not go into details here.

Special Notes:

Because of the nature of points, all points paid are taken out of the company's profits, and each point is equivalent to increased costs. Moreover, this part of the cost is relatively invisible, and it is difficult for users to add this part of the cost into the revenue.

The points earned from shopping on Taobao and JD.com can be used as cash after accumulation, but the most fundamental problem can be solved by increasing the unit price of goods. However, lenders in the P2P industry will always pay attention to the rate of return, and the apparent rate of return of the loan subject or product will attract blind investors to invest.

In this case, can the invisible cost addition of points still attract users? How can we use points to attract users more than directly increasing the rate of return?

IV. Points Earning

1. How to get it

Points acquisition refers to the ways and methods for users to obtain points. Usually, after sorting out the user's activity path on the platform, the point rewards are added to each node of the user's activity path.

In actual application, point rewards can be added to the links with unsatisfactory data based on product user data in order to change the situation, that is, to prescribe the right medicine for the disease; or they can be set or adjusted according to phased business goals.

It should be noted that the P2P business model is different from Internet content production (such as the content products under Toutiao ). The length of time users stay in P2P products cannot be clearly and quantified to estimate how much commercial value they bring.

The process from downloading to spreading the product is a linear one. If you use points to attract users to add other links in order to increase the time they stay in the product, the user flow will be interrupted in the process and the users will be "distracted". If you want to add "copies-side quests" to the platform to extend the user's stay time, remember not to interrupt the user's main task, because there will definitely be user loss in this link.

For example, as shown in the figure above, some processes can only be completed once, such as registration, real-name authentication, and bank card binding. These three links have the highest user churn rate , so the rewards we give in these links can be higher than those in other links.

If cash rewards and red envelope rewards are replaced with points in the P2P industry, an additional benefit is that it can limit the freeloaders to a certain extent; some processes are routine and require multiple operations, such as investment and dissemination, so at the beginning of the points design, we'd better calculate the costs clearly and solidify them, and continuously optimize them through subsequent data and feedback.

1. Weight distribution

Different from the platform perspective, from the user's perspective, the existence of points is essentially to establish a user incentive system, that is, a system set up to motivate users.

The fundamental purpose of motivating users is to stimulate the development of platform business, so there is a judgment on whether the behavior of rewarding users is directly related to the platform business, which is called "strong correlation and weak correlation" here. When giving users points rewards, it is necessary to distinguish the different task weights through the points reward ratio. Here we take the behavior of P2P platforms as an example, and other industries will consider triggering their own considerations based on their main business.

Because the article contains a lot of content, it is divided into two parts.

Source: One Thought