How to use referrals to acquire customers at low cost in online education

Different from fission, referral refers to the behavior of old users bringing new users. This way of acquiring customers is based on the former's relative satisfaction with the product/service. So, how do we define old users? How to motivate old users to participate in referral activities? In this article, the author combines practical experience to summarize the methods and strategies for online education to achieve low-cost customer acquisition through referrals. Let’s take a look.

Before sharing, let’s first understand the difference between referral and fission.

Referral: In simple terms, referral means old users bringing in new users, bringing in new users through old users. Generally speaking, old users refer to users who have experienced the product/service and have a certain degree of trust in the product/service. In online education, this generally refers to paying users. New users generally refer to registered users or users who have not signed up for a trial class.

Fission: Fission is a broader behavior than referral. As long as one person can bring another person/multiple people, it can be called fission. There are no requirements for the two parties involved, and the purpose is to bring more traffic.

Summarize:

1. Fission includes referral. Fission is the combination of old bringing new and new bringing new, which is mainly driven by interests. Referral is the combination of old bringing new, which is essentially driven by trust.
2. Fission is to use traffic to bring traffic, which is a traffic thinking approach, while referral is to screen users, which is conversion thinking.

Next, I will share some of my experience in referrals from four aspects: project background, execution process, experience summary, and insights. It may not be correct, and you can discuss it together (due to company requirements, certain data and pictures cannot be disclosed in the following sharing, please understand, but according to the prompts, I believe everyone can get the point).

1. Project Background

After 3 months of exploration and experimentation, the fission of Missionbao has basically been established and has achieved good results, accounting for xx% of the total business traffic. Since the user cost brought by Missionbao is low and the conversion rate is higher than the market, the department decided to increase investment in fission in order to obtain more lesds.

On the one hand, we continue to iterate and optimize the fission of Missionbao to maintain the basic base; on the other hand, we decided to launch a new way to acquire customers: referral. Because at that time our paying users had reached x million, and we had product technical support, we were able to start referrals.

Additional explanation: The business model is to attract traffic through free courses on the front end, then convert high-priced annual memberships through the "community + live large-class courses" model, and finally convert financial services (insurance + funds + securities companies, etc.) during the membership service period.

2. Execution Process

Compared to doing the task treasure fission from 0 to 1, referral is much easier, because there are many similarities between the two. This time I still use the old method: learn quickly - determine the playing method - small-scale testing - find key data indicators - continuous iterative optimization.

1. Phase 1: Rapid Learning

At that time, when learning about referrals, I mainly read articles about referrals on Renrenshidui Product Manager and WeChat official accounts and did case analysis. We analyzed the referral activity cases of products such as VIPKID, Spark Education, Wandou Education, Zebra AI Class, GuaGuaLong, and Jiliwulala (I heard that VIPKID referral leads account for 60%, and Wandou and Spark referral leads account for 80%). By reading articles and analyzing cases, we learned that the current mainstream referral methods include invitation gifts, sharing gifts, and group buying.

2. Second stage: Determine the play style

At that time, through reading articles and case analysis, my understanding of these three ways of playing is as follows:

Invite with gifts: Invite a certain number of people to complete specified actions and give rewards. Generally, the incentive is the result. It can be targeted at paying users and non-paying users. The specific amount can be determined based on the business.

Share and get gifts: Share designated materials to your circle of friends, take screenshots and upload them for review. This incentivizes user behavior. Considering ROI, it is generally only targeted at paying users, and paying users of regular courses.

Group buying: Different from e-commerce group buying, online education group buying has restrictions on the conditions for participating users. Generally, old users initiate group buying and can only invite new users to join the group. The products in the group buying are mainly virtual mini-courses.

Compared with the first two, group buying has another advantage that it gives users a different experience. Group buying is self-interest + altruism, while invitation gifts + sharing gifts are generally self-interest.

There are three ways of referral. Based on the team's manpower and resource assessment, we will first implement invitation-reward, group purchase, and sharing-reward. The ICE model was used for evaluation:

• Impact: the scale of users that can be covered and the contribution made;
• Confidence: How confident are you that you can do it?
• Ease- Difficulty: the difficulty of implementation, including development cost, operational difficulty, etc.

The activity is scored by evaluating its scope of influence, confidence level, and difficulty level. The highest score for each dimension is 5 points, and the lowest score is 1 point. The total score of the activity is calculated and the priority is determined:

• The larger the impact area, the higher the score;
• The greater the confidence level, the higher the score;
• The lower the difficulty, the higher the score.

If the total scores are the same, the item with a higher confidence score will be given priority. If the confidence scores are still the same, the item with a higher difficulty score will be given priority.

3. The third stage: small-scale testing

Compared with the fission of Taskbao, referral is much simpler. I had a clear idea before doing it, and the small-scale test went through 4 times in total.

The first event launched was a single-level invitation-gift event with three prizes. You could choose one of them if you successfully invited three people. In order to bring in accurate users in the early stage, only regular course users could participate. After the event went online, a template message was pushed on the official account to 10,000 people, bringing in 246 people. Analysis shows that the prizes may not be attractive enough.

In order to control variables in the second activity, we simply replaced the financial management book with Xiaomi gifts. We pushed the template message on the official account to 10,000 people, brought in 648 people, and the K value was 1.2. After a week, we got the back-end conversion data and there was no problem with the conversion. We were very satisfied with the data at the time, so we pushed it out in full, generating more than 1,500 leads.

In order to bring in more leads, considering that we have fewer regular course users, even if we reach all of them, the amount we can bring is limited. In addition, as the inventory is consumed, the current output will decline.

Based on this background, we further expanded the scope of the activity and included users who had not converted from the trial classes, which doubled the leads we brought in.

However, the ROI was lower than 1 (the bottom line is 1, and the reasonable value is above 1.5). Later, we took an intermediate value for the activity opening: regular course users + users who completed the trial course, because more than 60% of the unconverted users did not complete the course, which means they had never experienced our product; compared to just targeting regular course users, the number of leads brought in increased, and there was no problem with back-end conversion.

Additional explanation: Later, through analysis of activity data, it was found that there were two factors that affected the conversion of new users brought by referrals: activity prizes and activity openings.

If the event prizes are weakly relevant to the business, choose users who have experienced the product/service, such as paying users; if the event prizes are strongly relevant to the business, there is no need to impose too many restrictions on participating users; different referral activities can be designed for different users.

4. Stage 4: Find key data indicators

Thanks to the previous experience in doing Taskbao fission, it became much easier to find the key indicators for referrals. Since fission includes referrals, the key data indicators can be said to be almost the same, except for the specific definitions and algorithms. The main ones include seed user participation rate, sharing rate, new user conversion rate, task completion rate, K value (new user acquisition coefficient), and ROI.

Of course, if you have never done fission before, you can find out by comparing the data details of multiple referral activities.

• Seed user participation rate = number of old users who click the invite button (the number of old users who generate the invitation poster) / number of old users who enter the event homepage; the higher the seed user participation rate, the more attractive the prize is to old users.
• Sharing rate = number of people who scanned the invitation poster with a number greater than 0 / number of old users who clicked the invitation button (number of old users who generated the invitation poster); the higher the sharing rate, the more attractive the prize is to users.
• Task completion rate = number of people who complete the task / number of people who share. The higher the task completion rate, the more attractive the prize is to users, and it also means that the invitation threshold is set reasonably.
• New user conversion rate = number of people who sign up for the trial class / number of new users who scan the QR code. The higher the conversion rate, the better.
• K value = new users / seed users; the higher the K value, the better, and generally the effect will be very good if it is higher than 1.
• ROI=GMV/cost. The higher the ROI, the better. The higher it is, the more sustainable it is.

Finding the key data indicators actually means finding the corresponding key links. For example, prizes, referral openings, and reach affect the participation rate of seed users; prizes, sharing paths, etc. affect the sharing rate; prizes, invitation threshold settings, etc. affect the task completion rate. Based on the above, we can conclude that the four key links that determine the success or failure of a referral activity are: referral openings, referral incentives, referral product design, and referral reach.

5. The fifth stage: continuous iteration and optimization

After preliminary testing, the key data indicators have been found. The next thing to do is to continuously iterate and optimize, improve the key data indicators, and make the key data indicators reach a satisfactory and stable level, thereby increasing output.

for example:

1. For example, changing the prizes, increasing the attractiveness of the prizes, and improving the participation and sharing rates of seed users;
2. For example, changing the gameplay of the activity to increase the participation rate of seed users;
3. For example, optimizing the design style of invitation posters to increase the conversion rate of new users;
4. For example, through manual outreach on the sales and regular course service side, the outreach effect can be improved and the participation rate of seed users can be increased;
5. For example, combining it with gift-for-sharing can increase users’ sharing frequency, thereby increasing output.

1) Sharing is rewarding

Invitation-based rewards motivate results, while sharing-based rewards motivate user behavior. They give users certain benefits, increase their motivation to share, and encourage them to share.

Invitation gifts and sharing gifts are a combination of punches. The purpose of sharing gifts is to increase the frequency of sharing. If users sign up for a trial class by sharing a poster, the user can also get an invitation gift reward. Generally, in order to control costs, sharing gifts are mainly aimed at users of full-priced courses.

2) Old employees bring new employees to join the group

Since gift invitations are a purely selfish way, where only the inviter gets a prize (prizes in the trial class are not counted), some users feel pressure to share and will make their friends feel that they invited me just to win a prize.

However, group buying is a self-serving and altruistic activity. If you win, I win too. After all, it is truly good if everyone wins. If group buying is implemented, it means that some users who do not participate in the invitation-based courtesy may join the group buying, thereby increasing the participation rate of seed users and the proportion of old users bringing in new users.

At that time, the companies that were doing relatively well in group buying on the market were VIPKID, Wandou Thinking, Spark Thinking, Zebra AI Class, etc. After investigation, it was found that they mainly used virtual small classes for group buying, and all of them restricted only new users to join the group.

VIPKID, Wandou Thinking, and Spark Thinking all use telemarketing models, and the way they obtain leads is to ask users to leave their mobile phone numbers before group buying; Zebra AI Class uses a community training camp conversion model, and they retain users in the public account by leaving their mobile phone numbers and following the public account, and then convert them to experience classes through customer service messages. Like Zebra, we also belong to the training camp conversion model, but the Zebra AI class goes through a traffic pool for sedimentation and then converts into an experience class. The path is too long and the loss is relatively large.

Later, we divided the conditions for successful group buying into two steps: payment and adding the class teacher as a friend. However, this friend is not a friend of the group buying course, but a friend of the class teacher of the trial course. The moment the user pays, the background automatically places an order for a trial course and assigns a class teacher at the same time. After the user pays, he can add the class teacher of the trial course as a friend. New users need to add the class teacher of the trial course as a friend before they can successfully join the group.

We do this for two reasons:

1. Shorten the path and reduce loss.
2. The small classes are strongly related to the business theme, and the users they bring are more accurate, so there will be no problems with conversion. The people joining the group are new users, and the trial class is also a new class for them. New users also need it. Regarding the problem of user understanding and experience, it can be solved by packaging the trial class into the group.

Let me explain here the reason why small classes are mainly used: for cost and user accuracy considerations.

Cost: For example, if a group of 3 invites 2 people to join, the cost of a single prize is 30 yuan, and the cost of attracting new members is 45 yuan = 3*30/2 (if it is an invitation gift, inviting 2 people, the cost of attracting new members is 15 yuan)

User accuracy: Compared with small classes, the correlation between physical objects and business is weaker, and new users are more likely to come for physical prizes, so the accuracy decreases, the back-end conversion rate is low, the ROI cannot be positive, and it is unsustainable.

Summary: This form of group buying is essentially the same as invitation gifts, but the experience it gives to users is different, because the inviter and the invitee get the same thing. To put it more deeply, it is a question of sharing motivation and sharing support. The user wants the prize and has a sharing motivation, but the fact that only his friends don't have it becomes a barrier to his sharing, and eventually he gives up sharing.

This is all I’m going to share about group buying. There are many other ways to play group buying. I’ll write a special article to share them later when I have time.

3. Experience Summary

1. Referral opening

Referral opening: To put it more directly, it is about who can participate in your referral activities, that is, the definition of old users in "old users bringing new users".

So-called old users are generally users who have a high degree of trust in the product/service, or at least have experienced the product/service, such as users of full-price courses, users of low-price courses, users of trial courses, etc.; based on their own business situation and according to the user's trust in the product, start from high to low, and the specific degree can only be known through actual testing.

2. Referral incentives

Referral incentives address the user's motivation for participating in referral activities, which are generally divided into internal and external. Today I will mainly share with you external incentives, which is to give users prize incentives.

The prizes are generally divided into two categories:

1. Prizes that are highly relevant to the product, such as courses, information packages, course coupons, etc., will be used within the product after users participate in the event, thereby increasing user activity retention.
2. General prizes with weaker relevance to products, such as common red envelopes and physical gifts, are more universal and valuable, and users are more motivated to obtain the second type of prizes.

3. Referral product design

Event theme: A good event theme + a list of prizes can greatly attract users' attention.

Activity rules: clearly state the time of the activity, who can participate, how to claim the prizes, and when the prizes will be distributed. Remember to also include measures to deal with fake orders.

Prize arrangement: If there are multiple levels and multiple prizes per level, it is recommended that there should be no more than 3 prizes per row.

Invitation record: The invitation record must be placed in a conspicuous place for users to view.

Invite button: It is recommended to be fixed at the bottom and designed to be dynamic to attract users to click.

Sharing path: It should be as short as possible without affecting the user experience. For example, when inviting a single poster, the invitation poster will pop up directly when the invitation button is clicked, and no more clicks are required to generate it.

Sharing form: If you need to choose between a link and a poster, it is recommended to choose a poster. We hope that users will share it in their Moments.

Share poster: The invitation poster is directly related to the conversion rate of new users and is very important.

• Course packaging: quantify the value so that users can perceive it; externalize the value so that users can feel a sense of gain
• Design color: It is recommended to use warm colors such as red, orange, and yellow as the main colors, which will make users more likely to click.
• Poster theme: The words should be large enough to stand out and catch the user's attention.
• Trust endorsement: brand logo, profile picture and nickname, lecturer photo
• Sense of urgency: price anchor, limited time and limited quantity
• Short-term benefits: Scan the code to get it, free to receive

New user participation path: Let users enter the sales pool through the shortest path. If it is telemarketing, the most important thing is the mobile phone number. If it is social network conversion, the most important thing is to add friends/join the group.

Participation threshold: New users must complete designated behaviors before old users can receive rewards. The behavior path for new users is generally divided into registration - adding friends/joining a group - attending class - completing class - purchasing a class. The later the process, the higher the threshold for users and the fewer the number of invitations required.

Referral plan design: one is to directly reward physical items, but users can only participate once and the prizes cannot be accumulated; the other is to reward points, which can then be redeemed for prizes. The advantage is that users can participate multiple times, and there is no need for multiple development. Prizes can be changed in the points mall each time. In order to lower the user's participation threshold and increase the back-end conversion of new users, a referral plan for point redemption can be adopted. For example, users get 10 points for registration, 20 points for adding friends, and 50 points for attending classes, with rewards in stages.

4. Referral Reach

Referrals are about old users bringing in new ones. If you want to increase the number of new users, you have to encourage old users to share. Before sharing, users need to know about this activity. How can they know? Pushing it in front of them - referral reach can be said to be the most important step.

A new user will probably go through the process of: understanding - experiencing - purchasing courses - attending classes - completing courses - repurchasing.

First, users see the trial class advertisement, then sign up for the trial class, and add the trial class teacher as a friend. In order to make the class more convenient, users will generally be recommended to follow the official account or download the APP. This time is generally within 14 days.

After taking the trial class, some users will purchase the regular course, add the regular course teacher as a friend, and enter the regular course service period. The regular course teacher will generally recommend users to follow the official account or download the APP. This period is generally more than 14 days.

If you are very satisfied after completing the course, you will choose to renew and extend the service period.

According to the above analysis, the contact channels are: regular class teachers, trial class teachers, APP, and official accounts.

Regarding the effect of contact channels: regular class teacher > trial class teacher > APP > official account.

• Regular class teacher: The main force of referrals are paying users. Class teachers have the main base of the company's paying users. Due to their long-term service, they have a strong trust with users and are the best channel for referrals. This channel contributes about 70%.
• Trial class head teacher: The trial class head teacher has a large number of non-paying users. Although the quality is not as good as that of regular course users, the scale is larger, and the channel contribution accounts for about 20%.
• Official accounts and APPs: The 1-on-1 reach effect of friends is higher than that of official accounts and APPs. This is a consensus, needless to say. The decision threshold for downloading APPs is relatively high, and they are generally people who have high trust in the product; the user quality is higher than that of official account users, and the contribution of these two channels accounts for about 10%.

APPs and public accounts generally have centralized reach and are easier to operate. Here we will focus on how to drive referral activities among regular class teachers and trial class teachers.

Regular class teacher: use referrals as a performance assessment indicator.

The business goal of the regular class teacher is to achieve higher course completion and renewal rates based on good user service, which is essentially service. As long as we serve users well and add some renewal measures, the renewal rate will naturally not be low.

Referral activities can be said to be a kind of benefit provided to users, and can be used as one of the contents of regular course user services. It also makes sense to use referrals as one of the quantitative indicators for evaluating regular course service work.

The head teacher of the trial class: The new users brought by referrals will be under your name.

The core goal of the trial class teacher is to sell courses. Their personal income is directly related to GMV. Reaching out for referral activities inevitably requires giving various explanations to users, which will definitely take up the time of the trial class teacher. If it cannot be related to the trial class teacher's income, they don't have much motivation to do referral reach.

The conversion rate of leads brought by referrals is generally higher than the market. The referral leads brought by your own outreach are automatically allocated to your name. You can have a higher GMV and get more commissions, so you will naturally take the initiative to reach out.

To be a good head teacher for regular courses and trial courses, the main way to reach out to the class through referrals is through training and proofing.

Training: Make sure those who participate in the event have a thorough understanding of the event, and conduct unified training and Q&A sessions before each event.

Proofing: Let one or more people make achievements first and let others see them. This is not due to the activity design itself, but my own reasons. In the early stage, you can proof by tilting resources, such as using a public channel with his channel code, and all the users brought are under his name. To do this, you need to find a reliable person, communicate in advance, and don't let the secret slip.

Fixed exposure entrances: public account menu bar, APP personal center, course schedule directory page, etc.

Just now we shared manual reach and fixed exposure entrances. Next, let’s share the automatic reach method. One of the key actions in referral is sharing. Sharing needs to consider three conditions: sharing motivation, sharing resistance, and sharing scenario.

The motivation for sharing is solved through incentives, the resistance to sharing is solved through activity forms and sharing paths, and the sharing scenarios are to find some scenarios that are very suitable for users to share. These scenarios are also the points we automatically reach.

When it comes to finding sharing scenarios, we mainly look for them based on the user life cycle or user behavior path. Since our business is zero-to-high, there are no low-priced course users, and the main users are trial course users and full-priced course users. The corresponding key sharing scenarios are: signing up for a trial course, completing the trial course, submitting trial course homework, signing up for a full-priced course, completing the full-priced course, submitting full-priced course homework, etc. For the above scenarios, referral activities can be exposed through pop-up/floating windows.

4. Experience

1) Good product/service quality is the prerequisite for referrals. If the product/service is too poor, referrals will be difficult.

2) The essence of referral is trust. The primary goal is the quality of leads, followed by the quantity of leads.

3) The key to good referrals is to stimulate users to share, focusing on studying users’ sharing motivations, sharing scenarios, and sharing resistance.

4) Referrals are a form of growth that is highly dependent on products and require certain user resources and product technology resources to initiate.

5) Inviting courtesy is about results, and sharing courtesy is about behaviors. The organic combination of the two can improve the effect of referrals.

6) The frequency of referral activities should not be too high. The recommended minimum interval should not be less than 2 weeks. In the long run, user experience will be better if it is once a month. Sharing gifts stimulate users' sharing behavior. It is essentially a product function. The focus is on cultivating users' sharing habits. Once a week would be better.

Okay, that’s all I have to share about the fission of Taskbao. I hope it will be helpful to you who are on the road to fission. The next article will share with you another way of fission: group buying.

Author: Mr. Tian on the road

Source: Mr. Tian on the road