How to trigger user growth?

My topic today is "Exploding User Growth ". I will tell you in detail some of my experiences in user growth in several first-tier Internet companies during my eight years in the industry. It’s not about how we acquire traffic and how we attract users, but about how we make products and what drives user growth from the perspective of the internal and external environment of the company.

For Internet products, just like traditional products, the key to user growth is to have a good enough product.

I have distilled several elements here: brand , traffic, products, activities, users, data and supply . I will break down each element in detail and share them with you.

1. Supply and user-driven

Now let’s look at O2O , almost none are left, why?

When O2O was developing, it acquired users by spending money, and the products did not really solve the core needs of users; but in the end, they were all false needs, so users could only be acquired through subsidies.

When I was in charge of operations at Nuomi, we did a lot of user growth. We combine the resources of the headquarters with local ones, use a city as a carrier, and think about how to increase the city's transaction volume and how to increase the city's user base.

The growth of a city’s cash flow comes from the growth in the number of users and merchants, just like two wheels: supply (merchants) and consumption (users). When user retention and repurchase reach a certain proportion, the city's cash flow will be healthy. If you rely on subsidies to increase the number of users, once the subsidies stop, the cash flow will drop.

There is a problem here: the number of merchants covering this city is not good enough, and users leave when they find there is nothing to buy.

So you should not only look at user growth, but also user retention and whether it continues to grow in this area.

User growth is just the beginning, not the end. Many people think that user growth is the end, but in our team, user growth has just begun.

If a company's users are like a pool, then you can only maintain sustained growth when the water inlet is greater than the water outlet - many people must have been familiar with this point of view a long time ago.

But there is a very core key point here, let me explain it:

User churn does not mean real churn, but rather that when a user grows to a certain stage, he or she changes from an old user to a churned user - this is the user churn we talked about before. However, real user churn does not mean that users can be recalled after churn, but that they should be handled well in the new user stage.

The opposite of user churn and recall is user growth. Because there is no growth, users are lost - at this time, recall is just a remedial measure.

Why do we say that user growth should “begin with the end in mind”? A large number of users end up leaving the company right after they come in (corresponding to the small water drops in the picture) and do not grow; however, only when users grow can they contribute value to the company.

Let's look at two lines:

The first line is the user life cycle curve, which guides users to continue to grow.

The second line is the user monetization curve, which is about how to better monetize users after they grow and maximize their value. Cross-category backflow, increasing average order value, etc. are all things that the user operation team needs to do.

When we were doing finance, we discovered through data analysis that after a user has conducted five transactions with a platform, the user will become a loyal user of the platform . This is my own experience. There are many such magic numbers in life: for example, waiving annual fees for five credit card swipes, getting a free bill with a certain amount of top-up at a restaurant, etc.

Although the number 5 is small, the idea it expresses is: they are working on your user growth and studying the turning points of the user life cycle.

Next is the spread of the users - only when the users become loyal users will they invite more users.

We are in the financial management business , and the rich people invite in the rich people, but that doesn’t mean the money will be placed with you. Only when the user grows up and has enough trust and loyalty to your platform, can he contribute a lot of value to your platform, and at the same time your marginal cost is decreasing; at this time, his recommendation value is extremely high - so why do we need to retain users? When your product is good enough and your recommendation mechanism is good enough, one user can become 5 users. This is the exponential growth that the Internet should have, and it is the biggest difference from traditional industries.

This chart is analyzed from a financial perspective:

There are three lines for user growth: operation (life cycle curve), value (user value curve) and finance (user cost curve). From a financial and operational perspective, these two curves do not completely match, but we need to find the best node in them - the leverage space - from a financial and operational perspective.

For example:

Inviting a friend will give you 10 yuan, then 30 yuan, and then 100 yuan; it’s not that we are throwing money away. If you spend 30 yuan or 50 yuan, 20 yuan will not stimulate users much, but if you raise it to 100 yuan, it may bring you exponential growth - at this time, your cost of acquiring a single user is actually decreasing, because for the same traffic, the cost has increased threefold, but the effect has increased tenfold, and the efficiency of acquiring users has been greatly improved.

2. Activity-driven growth

Next, let’s talk about activity-driven growth:

During Halloween , which categories sell best on group buying websites or local life service websites?

Local life services are a typical festival economy - only on the settlement day does everyone's demand explode. User growth must be based on potential energy. When you do it at this time, the efficiency and conversion will be the highest. This means you have found potential energy.

But when I tried to manage my finances, I found that it didn’t work. Why?

Consumption and investment are two opposite things: consumption is the holiday economy, but investment is the weekday economy. The things are opposite, but the ideas are the same.

On Double Eleven in 2012, we did not hold any event - we were a local service company, not an e-commerce festival. But then we found that traffic to all websites had increased by more than 50%. We began to realize that Double Eleven is not only a festival for e-commerce, but a festival for the entire industry. Users will think that there are discounts everywhere on this day.

When we were reviewing user growth, we found that the curve was surprisingly consistent with Nuomi's growth curve: through your interaction, user growth continues, and when you are doing activities, various data are also continuing to grow.

3. Data-driven growth

When we first started recalling lost users, we did the data analysis ourselves. We found that it takes more than 20 days from user registration to investment, and all our recall of lost users is concentrated in about 20 days.

Later I found out: this data should not be viewed in this way. It is wrong to calculate its average value. Instead, you should look at the concentrated distribution, that is, see at what point in time 80% of users converted. We later discovered that most users converted within the first seven days of registration, and those who did not convert were lost - our strategy was adjusted to the first seven days.

We further analyzed and found that 65% of users converted their investments on the same day, so we adjusted our strategy. Later I found out: it’s not the same day, but within a few minutes of using the product, if the user has not converted, then he will be lost.

Based on this analysis, we moved all our strategies forward, and the overall conversion rate increased many times. This is about discovering problems through data and then formulating strategies to achieve user growth.

I went back to work in finance, and I did nothing in the first month except sorting out all our data indicators: the indicators that would be reviewed in the morning meetings and the indicators that the company wanted to look at. Then we spent another three months working with R&D to clearly define all the data indicators and data reports.

Now when we arrive at the company every morning, the first thing we do is to look at the data. Half of my time every day is spent looking at the data. There are three tables: user table, capital report and cost report. These are what I must look at every day.

How to formulate data indicators?

First, we need to identify the top-level business processes.

I have always said that there are three books on user growth. The first book is "Lean Data Analysis", the second book is "Exploding User Growth", and the third book is " Social Dividends".

What are your top-level business processes? First of all, what do you do - this is very important. What you need to look at are the user growth indicators of your product: for P2P , look at how many borrowers and investors there are; for intermediary platforms, look at the conversion rate; for e-commerce, look at the number of SKUs, etc.; otherwise, there are too many indicators and it is easy to get lost.

Then, start from the top-level business process and break it down to the secondary business process.

For example, if I’m a vegetable seller, how many dishes do I have, where is the store, how many people come to eat there – these are all basic business operations. On this basis, we can further break down the process into: which departments are involved, what indicators each department looks at, etc.

Looking at the data does not mean that we just need to look at marketing and funnels. First, you need to determine what your business process is, and then you will know which links may have problems. For example, visitor conversion rate may be related to the platform but not the channel ; but if it is conversion rate or investment, it may be related to the channel - you need to be able to reversely infer through indicators which link may be the bottleneck of user growth, so as to guide you to effectively solve the problem and achieve user growth.

For a while, our data in a certain channel was declining (the decline in data is actually normal, due to cyclical fluctuations, market reasons, etc., but if there is a continuous and regional decline, then there is a problem), so I went to find out the reason; R&D said that we had released a new version, and it seemed that a module in the registration process was broken, so we quickly responded and the data returned to normal.

Another example: A colleague added an extra process to a very small channel. I thought it was unnecessary, but after talking to him for a long time, I was reluctant to remove it. Later we found an inconspicuous channel and removed it. As a result, the user growth tripled after this page process was removed. Later, we removed all the processes in our bar.

There are many communication problems within the company, including communication between operations and products, and communication between products and technology, but there is no common language to solve these problems. I used to work in a company where everyone’s native language was data, and they used data to communicate. This ensures that everyone looks at things from the same dimension, and you can abandon your position and identity and use objective data to illustrate the problem.

4. Product-driven growth

Product innovation must lower the threshold for users, not only the usage and experience threshold, but even the name.

Around 2010, group buying first existed in the form of packages, and the initial benefit was cheapness. If it is not cheap at the beginning, the basic users will not be covered. Later, with the introduction of vouchers, general users were covered again. Then mobile payment solved the problem of convenience and expanded the user base.

When Yu'e Bao first came out, it had more than 400 billion yuan. Now it manages trillions of yuan in funds and is also the world's largest money management fund.

Why did it break out? In addition to many innovations in convenience, mobility and security, the name is also important.

What is the essence of social security? Money fund. But why is Yu'ebao not called a money fund? But it is called current financial management? Everyone knows what current account management is, but if it is called a money fund - how many people will be in the first level of the funnel? No more than 100 million people. It is called current account financial management, grafted onto Alipay 's user base of hundreds of millions, and coupled with returns several times higher than bank current accounts, it exploded overnight.

For many products, users will be lost if you don’t know what the product does after hearing about it - even a name can cause cognitive barriers for users, and users may be lost.

5. Traffic drives growth

The transition from the PC era to the Internet, the changes in the entire device, and the traffic migration caused by the changes in consumer groups are the traffic dividends. When we increase user growth, we must look for traffic pools in line with the development of the industry and the Internet, and we must pay attention to changes in channels.

We must explore newer channels and newer things.

Why is the Internet always the latest thing? Because trendy things will definitely bring traffic bonuses. There is a very core keyword involved here: incremental market and existing market. Taxi-hailing and group buying are essentially serving the existing market, that is, this business already existed offline, and we just moved the business online.

Before shared bikes came out, many places already had government-owned bikes, but why did shared bikes explode instead of Amplitude bikes? There are two very core premises:

1. Mobile payment makes payment more convenient.
2. Shared bikes used to be bike rentals with fixed areas and restrictions. But shared bikes have made the threshold very low: just ride and go, park and pick up whenever you want.

Ofo initially focused on the campus market . There are approximately 26 million college students in China, which means that even if it could achieve 100% coverage, the user base would only be 20 million. Later, OfO moved out of the campus because the campus market is relatively closed and small in scope, so it is possible without GPS. At that time, I wrote an article titled "ofo goes out of the campus, market positioning leads to product misalignment."

When Mobike was first launched, I wrote an article titled " Mobike's biggest enemy is not OfO, but human nature." Mobike is facing an open market, and putting one bike out there is like throwing it into the ocean, so it has to solve the problem of Internet connection.

When the demand for this product exists, but the usage threshold is too high, the market cannot explode; when you have a good solution, the product will explode.

Let me tell you again: Why is the channel sinking so rapidly?

We have worked in many cities before and discovered one fact: if you are the first to enter a city, 80 to 90 percent of the market share will be yours. If someone else wants to attack this city, the cost will be three to five times the cost you incurred to enter the city, and they may not even be able to succeed. And as long as you gain a firm foothold in the market and your market share grows, you will have strong gross profit margins and will be able to control pricing power.

Why do people say that the Internet will eventually become a monopoly industry? Because monopoly can control pricing power, after controlling pricing power there will be a lot of gross profit and a lot of indicators; then profits can be generated through a large number of channels, and then the attack can be reversed.

In fact, user growth is not just about simply acquiring users, but about grasping trends in the entire market and inside and outside the company, grasping users and market links, and doing the right things to achieve user growth.

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

Product promotion services: APP promotion services, information flow advertising, advertising platform