How can cash loan products effectively improve conversion rates under high traffic costs?

To improve conversion rate is to improve user experience . As conversion rate increases, user experience will also improve. Similarly, if the user experience improves, the conversion rate will not be much different.

This article analyzes how cash loan products can improve the conversion rate of each link. The writing logic is carried out using the common "3W1H model", namely:

• What- What is conversion rate
• Why-Why should cash loan products improve conversion rate?
• Where-At which nodes do cash loan products need to improve conversion rates?
• How-How to improve the conversion rate of each node of cash loan products

What- What is conversion rate

Conversion rate, literally speaking, means "the efficiency of successful conversion." Improving the conversion rate means improving the efficiency of users completing operations from A to B, allowing users to complete operations from A to B smoothly and quickly, thereby reducing loss in this link.

Everyone knows what conversion rate is, but we can further expand the connotation of conversion rate to have a deeper understanding of this term.

1. Any transaction related to "operation and process" has a conversion rate

For example, the operation of product functions has a conversion rate, and participation in operational activities has a conversion rate. A very important part of product operation is to ensure that the process is simple and the operation path is short.

For example, there is a conversion rate for leave approval, expense reimbursement, and permission application. These are necessary operations in the work, and the "conversion rate" is very high. If the process is cumbersome, it will extend the operation time and reduce work efficiency.

2. Information transmission and conversion rate

Normally, what a person thinks in his mind is 100%, but what he says is only 80%. Others hear 60% of what you think, and only 40% is understood, and only 20% is executed. In this way, each layer misses 20%, which is like a conversion funnel. This is why often what you are offered is not what you want. If you want to improve the conversion rate of communication, you need to make improvements by specifying the content of communication and reducing the number of communication links.

3. In general, as long as there are steps and a time sequence, there will be a conversion rate.

Cooking on a daily basis requires tedious steps such as buying vegetables, steaming rice, washing vegetables, cutting vegetables, and cooking, which is time-consuming and laborious, and has a low "conversion rate", so we choose to eat out with a high "conversion rate", but we find that going out and choosing a restaurant is also troublesome, so we choose to order takeout to be delivered to our door.

To do a certain task, although both method A and method B can complete the task, the conversion efficiency is different.

Going from point A to point B, whether riding a bicycle, driving a car, or taking the high-speed rail, the conversion efficiency of different means of transportation is also different.

…

Although several of the examples here are not suitable to be described by the term "conversion rate", the underlying principles are similar, which are all efficiency values ​​for successfully completing a task.

Why-Why do cash loan products need to have a conversion rate

1. The focus of products at different stages is different

Different stages of a product's life cycle have different focuses, as shown in the figure below.

1) Introduction period

This is the stage of attracting customers, focusing on retention rate . That is, the core functions of the product must hit user pain points and solve user problems. Only products that can solve user problems can retain users. Therefore, what is needed at this stage is to identify market opportunities, confirm product positioning, realize the core functions of the product, encourage users to use the product, solve user problems and keep them.

2) Growth and maturity stages

This is the customer reception stage, focusing on growth rate and conversion rate. After verifying that the product is feasible, the next thing to do is to promote it , acquire more users, and maintain rapid growth in the number of users or transaction volume. This is necessary to capture the market on the one hand, and to obtain further financing on the other. The premise of growth is that the product usage threshold must be low and the conversion rate must be good, so that users will not be lost after entering your product. Cash loans are in their growth stage and need to continue to increase their growth rate and conversion rate.

3) Decline

This is the customer retention stage, focusing on user activity. That is, after the user growth slows down, it is necessary to encourage the remaining users to use the product more frequently and for a longer period of time. At this stage, more energy needs to be invested in user operations and content operations .

2. To reduce operating costs and increase profits

There are thousands of cash loan companies in the market and the competition is very fierce. However, the user base of cash loans is limited. After rapid growth from 2015 to 2017, cash loan platforms have already served most of the target users , and it is becoming increasingly difficult to acquire users.

The consequence of fierce competition is that traffic is becoming more and more expensive. The cost of acquiring a loan customer is between 150 yuan and 300 yuan, and it is still rising.

In addition, with the tightening of supervision, the excessively high interest and fees of cash loans have always been the focus of supervision. Although no detailed rules have been issued yet, various cash loan platforms are actively moving towards supervision. Lowering interest rates has become a trend, and profit margins have been compressed.

At the current stage, it is difficult to acquire customers, traffic is expensive, and profit margins are compressed. Reducing costs is a very core task for cash loan companies in the future. Increasing the conversion rate is a very effective way for cash loan platforms to reduce costs, increase profits, and is a controllable thing for them. If the promotion budget and other conversion links remain unchanged, a 5% increase in the loan application rate means a 5% increase in the loan amount.

The improvement of conversion rate at any node will eventually be reflected in user experience, cost control, and profitability. The higher the conversion rate, the better the user experience, the lower the cost, and the stronger the profitability.

Where-Which nodes are needed to improve the conversion rate

Here we provide some general ideas to determine which links should be used to improve conversion rates.

1. Determine core indicators

Generally speaking, what is KPI is what the core indicator is. There is no doubt that the KPI of cash loan products is "loan amount", so the core indicator is "loan amount". The increase in conversion rate will ultimately be reflected in the improvement of core indicators.

2. Disassemble the product process based on the user behavior path

The user's behavior path can be divided into two parts: functional experience and emotional experience.

1. Functional experience refers to the user's operating experience. Taking the common cash loan operation process on the market as an example, the product process is broken down as follows:

Why do we need to break down the product operation process? Because the core indicator (loan amount) is closely related to the conversion rate of each step of the operation. We take the core indicator of the APP channel , “daily loan amount”, as an example and break it down as follows.

Daily loan amount

=First loan amount for new users + re-loan amount for old users

= Number of new users * average number of items + number of old users * average number of items

The further breakdown of the "number of new users" is similar to the breakdown of the number of old users, so I will not go into details.

Daily loan amount

= (browsing users * download conversion rate * activation conversion rate * registration conversion rate * identity authentication conversion rate * Sesame credit authentication conversion rate * operator authentication conversion rate * contact authentication conversion rate * audit pass rate 1 * card binding conversion rate * application submission conversion rate * lending platform verification conversion rate * audit pass rate 2 * loan rate) * average number of items + number of old users * average number of items

In this way, the core indicator (loan amount) and the conversion rate of each link are linked. From the formula, we can see that the core indicator (loan amount) is directly affected by the conversion rate and average number of items in each link.

Each part is related to product positioning and risk control rules, and the conversion rate of each link is related to the product operation process and experience.

2. Emotional experience refers to the user's subjective feelings about the product during or after the operation.

For example, application approval or rejection, security, performance, waiting time, attractive copywriting , interaction details, UI design, etc.

Users are delighted when their application passes the review, but frustrated when their application is rejected, leading them to leave. The waiting time for review and loan issuance is a pain point. If the waiting time is long, users who are in urgent need of money may choose to leave and seek other platforms. Product safety, performance, attractive copywriting, interactive details, UI design, etc. can all give users a professional feeling and give them the confidence to continue using the product.

3. Analyze the conversion rate of each node

Only when you have a clear understanding of the conversion data of the entire product process can we guide you to make improvements to the entire process.

If you are only responsible for or know the data of certain links, it can also guide you to make local optimization improvements, but there is no comprehensive and inference ability from the overall vision.

For example, the conversion rates of each link of a certain product are as follows (this is just an example and does not represent the actual conversion rate of a certain product). The conversion rate indicator is actually related to time, such as the first-day conversion rate, the next-day conversion rate, etc. For simplicity, the time factor is ignored here.

4. Discover problems and identify key improvement links

Judging from the conversion data of each link in the previous step, as long as it is not 100%, there is room for optimization. However, when it comes to conversion rates, we need to focus on the key points and prioritize them. We need to screen out the links with greater room for improvement and make breakthroughs in those areas.

For example, the download conversion rate (20%), registration conversion rate (50%), identity authentication conversion rate (70%), operator authentication conversion rate (70%), card binding conversion rate (80%), application submission conversion rate (80%), verification conversion rate (80%), etc. The conversion rates are relatively low and there is a lot of room for optimization.

We can boldly assume that the reason for the low conversion rate in these links is process and experience problems.

Although the review pass rate 1 (15%) and the review pass rate 2 (60%) are also very low, this belongs to the credit review strategy in the risk control link. It is difficult for product managers to promote improvements in this area, so it can be put aside for the time being. However, as a responsible product manager, you still need to continue to pay attention to this data. For example, if the review pass rate suddenly drops a lot compared to the past in a certain period of time, there may be a problem in the risk control link, and the risk control personnel need to analyze and locate the cause.

How-How to improve the conversion rate of each node

After finding out the problematic links in these conversions, the next step is to figure out how to improve them.

1. Four general principles: simplicity, efficiency, emotion and expressiveness

1. Simple

1) To keep it simple, first consider doing subtraction and see if this link can be cut out

For example, for some cash loan products, the personal information page of the main process requires filling in a lot of information. Are commonly used email addresses and company names required to be filled in the main process? Can’t it exist as an advanced certification for a personal center or a credit center? In the main process, if it is not absolutely necessary, cut it if possible.

For example, before obtaining the verification code, many products add graphic verification codes to prevent SMS bombardment. Can't we make some strategy so that when an abnormal call to the SMS verification code interface is detected, the graphic verification code will appear again? Is it necessary to make all users suffer just because of the possibility of being swiped?

2) If it cannot be removed, see how to simplify the existing operations to make the user operation path as short as possible.

For example, when adding a bank card, do you have to select the bank first before you can move on? Can't the bank be automatically identified after entering the bank card number?

The registered mobile phone number of more than 95% of users is the same as the mobile phone number reserved by the bank. Can't the bank's reserved mobile phone number be used as the registered mobile phone number by default and can it be modified?

There are many such points, such as operator authorization. In order to prevent crawlers, operators need to fill in a graphic verification code. In this case, can't the graphic code be directly recognized to identify the Chinese characters and fill them into the input box?

For example, when a user enters a page that requires data input, the input keyboard is automatically called up; if it is pure numeric input, the numeric keyboard is called up to reduce user operations.

Whenever possible, reduce user input and simplify the user operation process, do not bother the user and let the user perform the simplest operation.

At the same time, it is not advisable to disturb 90% of users just to make things convenient for 10% of users.

3) Make it simple for users, with low cost of understanding and unified cognition

In some cases, even if the operation is not simplified, if the interaction planning is unified, users can anticipate how the next operation will be presented, the copy is concise and powerful, and the cost of understanding is low, users can also feel that your product is simple and not complicated.

2. Benefits, interests, and profit-driven

Rewards for users can be simply divided into three categories:

One is a real preferential reward

One is the virtual reward of status enhancement to satisfy vanity

One is that not doing so will cause you losses

We can provide targeted incentives for these three types of rewards to improve conversions.

1) Preferential rewards

Common methods, such as novice gift packs. After completing registration, users can obtain various types of coupons to stimulate user usage and complete designated tasks.

Preferential rewards are generally related to activities. However, if the product process and operational activities can be combined, the conversion rate can be greatly improved.

For example, what rewards will be obtained for completing registration, what rewards will be obtained for completing authorization, what rewards will be obtained for completing card binding, what rewards will be obtained for completing the first loan, etc., which can effectively stimulate users to complete the specified operations.

2) Virtual identity or status privileges

There are many ways to play, and you can combine it with the characteristics of cash loans.

• For example, regarding user classification, users of different levels have different membership levels and privileges.
• For example, users of different levels have different credit limits, interest rates and fees.
• For example, by completing designated operations, you can get a certain avatar or medal. After collecting a certain number of medals, you can get a big discount.

3) Tell users what they will lose if they don’t do this

Compared to "telling users what benefits will come from doing this", "telling users what disadvantages will come from not doing this" will bring better promotion effects. 360 Safe Browser achieves very good promotion effect by telling users that if they do not install 360 Safe Browser, they may enter unsafe websites or phishing websites and suffer losses when visiting websites or shopping, and gives statistics on "how many people suffer how much loss in a day".

Similar strategies can also be used appropriately to provide guidance during the user operation process. For example, when filling in contact information, personal information, etc., informing users that "false xxx information will result in review rejection" can effectively motivate users to fill in correct and valid information.

3. Emotion, emotional experience

There are three most painful emotional experiences for users regarding cash loan products: the pain of having their review rejected, the pain of review speed, and the pain of loan arrival speed.

The rejection of review is the most harmful to users, but this is determined by the risk control strategy, which means that the platform cannot provide loan services to users. The most appropriate approach at this time is to guide users to apply for loans on other cash loan platforms, which can not only provide services to users, but also bring in traffic income to your own platform.

Timeliness greatly affects user conversion and retention . Most users who borrow money from cash loan platforms are in urgent need of cash. If the review and loan issuance are slow, users will simply leave and stop playing with you. Therefore, improving the review speed and loan approval speed is a very core task for cash loan platforms.

Many platforms now launch the "compensation for rejection, compensation for delay" campaign, which aims to dispel users' concerns about being rejected or borrowing money slowly, so that users can stay and play.

At the same time, cash loan platforms can also add security, brand, and platform credibility elements to their products to reflect the platform's professionalism and credibility, reduce users' concerns about information security and violent debt collection, and promote user use of products.

The interaction, UI, and copywriting need to be carefully polished so that users can feel the warmth and care of the product. Sometimes the color of a button or a thoughtful copy can increase the conversion rate by several tens of percent.

4. Reach users

Reaching users and telling them their current status and next steps is a very important part of promoting user conversions in certain links.

Common ways to reach users are SMS, push , WeChat public account template messages, in-site messages, red dot reminders, pop-up messages, etc.

These methods are divided into reaching when not in use and reaching when in use.

1) Reaching when not in use

It means that users can be reached even when they are not using the product, including SMS, push, and WeChat public account template messages.

It is mainly used in scenarios with strong reminders, especially when the user leaves and needs to be told or called back to take the next step.

For example, after a user obtains a credit limit, if he or she does not apply for a loan for a few days, multiple strong touches will be used to remind the user to apply for a loan.

For example, if a user has not visited a product for a long time and is in a lost state, operational activities can be combined to remind the user, reach the user, and recall the user.

2) Reaching during use

It means that users can only be reached when they are using the product, including in-site messages, red dot reminders, and pop-up messages.

Mainly used in weak reminder scenarios.

For example, users can be reminded after receiving coupons, after earning points, or when new features or activities are launched.

It is very effective to make full use of reminders to reach users and stimulate user conversion without disturbing them frequently. Combining these methods of contact will be more effective.

2. Quick Verification

After finding the conversion link that needs to be improved and determining the conversion improvement plan, it needs to be quickly implemented and verified.

Without on-the-ground verification, everything is just empty talk. We must have the spirit of " growth hacking " and frequently make assumptions and verify.

For Internet products, the only thing that can’t be defeated is “speed”. “A first-rate conversion plan is launched online in half a month” and “a second-rate conversion plan is launched online in three days”. I have iterated the second-rate plan four or five times in half a month, and quickly launched it online to look at the data to evaluate whether the optimization direction is correct.

3. Track the results and summarize and reflect

After going online, it is necessary to follow up on the results as soon as possible to understand whether the optimization plan has stimulated conversions.

For many product managers, the project ends when the product features are launched. This way of thinking is very harmful.

After going online, you need to observe the data as soon as possible. If the effect is not good, you need to roll back to reduce losses and re-hypothesize and verify.

If the effect is good, we need to draw inferences from it and quickly expand this type of optimization to other links.

For example, after adjusting "graphic verification code appears for all users" to "graphic verification code appears only under specific circumstances", the conversion rate of this link is significantly improved. This strategy should be promoted in all links with graphic verification codes.

For example, after the page that collects user information adds encryption protection for user information, users' willingness to fill in information will increase. Then all pages that collect user information can be treated similarly.

summary

We use the "3W1H model" to describe the following four parts. In a market environment where traffic is becoming more and more expensive, we mainly provide everyone with a way of thinking to improve product conversion rates, to promote conversions, reduce costs and increase profits. This way of thinking is not limited to "cash loan products" but is applicable to all "Internet products".