Summary of 2 aspects: The right way to open user growth

The essence of user growth is to conduct precise operations under the data analysis framework, which is a new practical science. It is necessary to prescribe the right medicine based on a full understanding of the business and not to be superstitious about specific operating methods . The author of this article summarizes from two aspects: What is the correct way to start user growth?

The author has been involved in the product industry for 5 years and has been working in user growth and data products for a long time. He has led difficult projects at startups and fought for their survival, and also fought for toilet freedom at a large company like Meituan . He is currently working on data product-related work at Tencent.

I have shared some thoughts on user growth with my friends before, and the response was good. I would like to take this opportunity to summarize and share some of my thoughts and accumulation on the direction of user growth in the past five years, hoping that everyone can gain something from it.

First of all, regarding user growth, based on the analysis ideas of WHY, WHAT, and HOW, three questions about user growth are raised:

1. WHY-Why do users need to increase?
2. WHAT-What is user growth?
3. HOW-How to increase user growth?

1. Why do we need user growth?

I understand that figuring out the relationship between user growth and the market in which the business operates is the key to understanding why users need to grow.

1. What is the relationship between user growth itself and the market in which the business operates?

The user growth scale itself is negatively correlated with market penetration. From the perspective of the macro-national population, when the user penetration rate of the existing market approaches 100%, the user growth scale approaches 0.

In other words, the user growth space depends on the current user penetration rate of its own business in the overall market.

2. From the perspective of time trends, what is the appropriate user growth rate at different stages?

I understand that to understand this issue, we need to understand the relationship between: user growth within the business, growth of the business itself, and growth of the market in which the business is located. The growth of the market in which the business operates determines the growth of the business itself, and the growth of the business itself determines the growth of users within the business.

For example, if we want to answer the question of what is the appropriate growth rate of food delivery business users (acquiring new customers) in 2017, the specific logic is as follows:

• First, let’s predict how big the takeout market will be in 2017, for example: nearly 300 billion (virtual data, no relevant sensitive information involved).
• Secondly, set a target market share for Meituan in the food delivery market in 2017, for example: 60%.
• Again, based on the market share target, calculate how big Meituan’s share of the food delivery market will be in 2017, for example: nearly 160 billion.
• Finally, based on the following breakdown of transaction volume, we can work out the magnitude of user growth for the food delivery business, as well as the goals that need to be achieved in terms of traffic volume, visit-to-purchase rate, number of new customers, transaction retention rate , etc., in order to meet this user growth target.

This is the first question I need to understand why users need to grow and how much they need to grow. Understanding the market is a prerequisite for user growth.

2. What is user growth?

From the perspective of user dimension and purchase funnel loss dimension, user growth can be divided into four scenarios, and the means of user growth are different in each scenario.

First, the meaning of dividing dimensions is explained.

Secondly, divide the user growth matrix as follows.

Finally, based on the matrix, user growth is divided into four scenarios. In each scenario, the means of user growth are significantly different.

In addition, the above prerequisite is: you must understand clearly what the market is like for the business and what the development of the business itself is like?

Because the development stage of the business itself determines the focus of user growth.

How to increase user growth?

I understand that user growth is a closed loop, as follows:

First, build a data observation dashboard based on the user growth model. Understand the data performance under different user growth scenarios, and conduct in-depth data analysis based on the data performance to discover user growth points.

There are two key points here:

1. At the data consumption level, can the selected metrics effectively and significantly express user growth? This is a question of whether the measurement is correct.
2. At the data production level, does the basic data of the user growth model meet the requirements of stability, completeness, and accuracy? This is a question of whether the data is accurate.

Secondly, formulate phased goals based on the rolling financial budget targets and current data analysis results.

The two key points here are:

1. Does the goal fit the current reality?
2. Is the target disassembled completely?

Secondly, implement the plan through product strategies or marketing tools to achieve phased goals.

Finally, evaluate the growth effect of this cycle and formulate the next stage goals to achieve a closed growth loop.

Specific examples are as follows:

think:

Why not follow the laws of nature and allow users to grow naturally? Because the rate of natural growth does not meet the requirements of business growth.

If we want to artificially intervene in natural growth, do we have to start with the user's motivations, and from the perspective of human nature, explore what kind of motivations a user has that turns him or her from "not buying" to "buying, buying, buying"?

Next, let’s talk about re-understanding user growth from the perspective of user motivation, for example: from the perspective of greed, anger, and ignorance.

Thinking more deeply, for the food delivery business, can we start from the dimension of motivation and explore new ways to increase users?

The following is a summary of what has been done:

Summarize

The essence of user growth is to conduct precise operations under the data analysis framework, which is a new practical science. It is necessary to prescribe the right medicine based on a full understanding of the business and not to be superstitious about specific operating methods.

The above are some thoughts and opinions about user growth. Welcome to communicate~

The author of this article @罗大大 is compiled and published by (Qinggua Media). Please indicate the author information and source when reprinting!

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