Analyze product operations based on the AARRR model

The pirate model is often used in product operations . This model can help us better analyze product operations and adopt targeted marketing. The author discusses this from three aspects. Let’s take a look.

I have recently read some books on product operations. When it comes to product operations, we cannot ignore the Pirate Model, namely the AARRR model . This model can help us better understand the user life cycle and adopt targeted marketing. Next, analyze it:

AARRR model operation path: Acqusition -> Activation -> Retention -> Revenue -> Referral I have compiled a common indicator and operation plan for the AARRR model, as shown below:

Why do product managers need to study product operations? Here we use the Golden Circle Rule (Why, How, What) to analyze:

1. Why do it?
2. How to do it?
3. do what?

1. Why do product operations?

The job of a product manager is to create a product that meets user needs based on user needs.

It is very common for a company to make its own products. If our products are launched but we have not yet started product operations or promotions, how would users know about this product? For mobile devices, do users rely on searching in the app market themselves? The natural traffic brought by this may be difficult to exceed 10,000 downloads in a year.

Product operations usually come ahead of the product. Once the product framework is finalized, product promotion will begin, and the operations department will go to various channels to find seed users for the product.

For example, if we want to make a product of trendy toys and figures, we need to go to Bilibili, Xiaohongshu, Douyin, Weibo, Tieba, Douban and other channels to find communities about trendy toys and figures, find accurate users, promote the product to users, and output product highlights based on users' existing pain points.

For example: users are troubled by the lack of an e-commerce platform that is vertically focused on the trendy toy and figure interest community.

Based on user needs, the first step we need to do is to plan the product based on user needs and make an MVP (minimum viable product). Through MVP, we can verify whether it meets the needs of seed users. Then, we can perform agile iterations on the product to meet user appeal needs and even excitement needs. Here is an example:

• Basic needs: It can satisfy the closed loop of users communicating in the community and purchasing goods;
• Expected demand: When users make purchases, the coupons they have can be used in the best way;
• Exciting demand: After purchasing the product, the logistics status will be updated and pushed to the user in real time.

The reason for designing MVP is to find seed users to verify the product. We analyze from the following dimensions:

Cost perspective: The product development process is long. If the product does not address the core needs of users, it is a failed product. If the full version is launched, more costs will be wasted.

Business perspective: In the Internet age, product updates are extremely fast, and products need to be launched quickly to capture the market. When competitors go to market before you, by the time you develop a complete version, user resources have almost been seized. At this time, user resources require more operating costs to tap.

When the product is launched, the first thing to do is to cold start it and input data into the product. At this time, you can look for a third-party organization to provide high-quality content for the product cold start. Then comes the first step of the product operation AARRR model: attracting new customers.

If the operation is at the forefront of the product, when the product is launched, it has been laid out for several months and has accumulated a certain number of seed users. It can successfully divert traffic by simply promoting it and offering certain discounts. The verification of the product by seed users is crucial to determine whether the product direction needs to be adjusted or whether the product is considered to be worthless and must be abandoned.

2. How to operate product?

Manage the user life cycle through the AARRR model: attract new users -> activate -> retain -> convert -> split;

The product itself has a product life cycle, which is divided into: startup phase, growth phase, maturity phase, and decline phase. Things to do in each phase are:

• Start-up period: looking for seed users to verify the product model;
• Growth stage: Conduct product marketing, i.e. attract new customers;
• Mature stage: design marketing activities and conduct commercialization;
• Decline stage: repatriate or transform products; design the second life cycle curve of the product, and by constantly finding new demand points and growing the second business curve, you can extend the product life cycle and generate greater commercial value.

At the same time, within the product life cycle, there is also an operational life cycle:

• Start-up period: Find seed users to test and optimize positioning, content, etc. (slow growth)
• Growth stage: focus on growth channels and efficiency (rapid growth)
• Mature stage: Accounts are basically established, with more focus on brand and monetization (slow growth)
• Decline stage: the account has no major actions for a long time, and user activity decreases

At present, different types of products have entered a state of inventory game, such as e-commerce platforms:

In the early days, Pinduoduo took the sinking market as its entry point and expanded rapidly. At that time, Taobao was building Tmall and competing with JD.com for the upstream market, and relaxed its attention on the sinking market. When attention was focused again, Pinduoduo had already reached a certain scale.

However, Taobao and JD.com subsequently implemented strategies to recover the business. Taobao launched Juhuasuan and JD launched the Jingxi APP to compete with Pinduoduo for the lower-tier markets. Why do they still have to compete in the lower-tier markets?

Due to the weakness of human nature, people like to take advantage of small bargains and like products with high cost performance. If Taobao and JD.com are left to their own devices, users in the sinking market will gradually be lost to Pinduoduo. However, it is currently difficult to increase the number of new users, so it is necessary to retain old users. Since then, we have entered the era of stock game, and various platforms have begun to retain users.

From the perspective of the operation map, the operation map is divided into the following stages: purpose, process, positioning, layout, content, promotion, and profitability.

How to do each stage respectively, expand it in the following dimensions:

• Purpose: Brand promotion, marketing capabilities, functional services
• Process: registration process, information preparation, account process
• Positioning: competitor analysis, who am I, who are the target users, user pain points, how do you solve them
• Typesetting: content presentation, content/marketing packaging, and excellent typesetting standards
• Content: The essence of content writing, topic selection/title/content planning, content interaction skills, analysis of excellent articles
• Promotion: How to expand exposure, multi-platform promotion, and integrated resource promotion
• Profitability: how to monetize, when to monetize, and how to monetize

3. What specific product operation strategy should be implemented?

The following examples are given for each stage of the AARRR model, and the various common operating conditions are analyzed:

(1) Attract new customers

• Free Strategy: Luckin Coffee
• Traffic purchase: Toutiao
• Viral sharing: Didi invites
• Manufacturer pre-installed: Xiaomi comes with a little information
• Content marketing: soft articles/audio/short videos
• Event Marketing: Hype/User Engagement
• Resource exchange: BD resource cooperation

(2) Activation

• Product function: product value activation
• Push strategy: APP content information push
• SMS push: promotion/marketing push
• Deeplink: between apps/share pages/direct access to apps
• Email marketing: marketing email push
• Email marketing: marketing email push

(3) Retention

• Red envelope strategy: Meituan APP red envelope coupons/SMS information push
• Points Mall: Sign in/get points to exchange for benefits
• Virtual Honor: Virtual Rank/Medal of Honor Design
• Content marketing: continuous output of soft articles/audio/short videos
• Event Marketing: Get rewards by participating in events and interactions
• Social marketing: output high-quality content/increase value and stickiness

(4) Conversion

Regular conversion:

• Free+paid model
• Advertising traffic: Baidu promotion/portal banner advertising/headline information flow
• Value-added services: QQ membership/JD PIUS membership/game equipment
• E-commerce monetization: Xiaohongshu/Taobao/Luoji Siwei
• Intermediary service: Guazi Used Cars/Tmall
• Unconventional transformations:
• Financial services: Online poker
• Data Supermarket: Data Selling
• Financing and listing: venture capital financing/stock appreciation

(5) Fission

• Invite friends to help
• Share with friends
• Share to increase your chances of winning
• Complete tasks to get rewards

Summary: I think the essence of business is: business model × development space × competitive barriers × corporate culture

The essence of Internet business is:

• Product (service) × traffic (users) × conversion
• Sales = Number of visitors × Conversion rate × Order price

Author: Koko is not Koko

Source: Koko is not Koko