After 3 years, I have a new perspective on user operations

What is user operation and how to do it? I believe that you can search for a lot of pictures and texts on WeChat and Baidu, but there are very few user retention cases suitable for your own stage and field. As a user operator with more than three years of experience in Internet finance, I would like to talk to you about how to carry out user operations and incentives in Internet finance ?

1. What are the common user incentive systems currently?

① Membership: Users are stratified by membership level, and different rights and interests are granted. For example, QQ members have exclusive avatars, accelerated login and other rights and interests. The set rights and interests must be combined with user attributes. For example, QQ is a social product that young people are more enthusiastic about, so its rights and interests are more about honor and exquisite way of display and use.

②Virtual currency: It is mostly displayed in the form of points, circulated within a single product or between multiple products. The points within a single product need to be separated from other interactive rewards, otherwise there will be loopholes. Virtual currency needs to pay attention to issuance, consumption and currency pool to maintain a relative balance. At the same time, the currency must be set with a relevant validity period, otherwise it will easily lead to inflation, which will hurt user enthusiasm on the one hand and increase platform operating costs on the other.

③ Growth value/experience value: generally used to calculate levels, not consumable, and with a validity period. Generally, users can obtain it through online time, consumption, interaction (comments, posts), etc.

④ Rewards, more people pay attention: there are many live broadcast platforms , reading and writing, etc., which are a means to strengthen the relationship between users and KOLs . It can also be said to be a platform, focusing on providing resources and traffic to KOLs, forming a virtuous circle.

⑤Virtual props: If in e-commerce , they will evolve into welfare coupons and the like. Currently, virtual props are mostly on live broadcast platforms, forums, games , etc., usually purchased with cash or points. Fish balls and rockets in Douyu are more representative, transforming the concept of sending money into sending gifts, making sending money a natural thing.

⑥Ranking list: Users who rank high can receive generous rewards, which is generally used to encourage a small number of high-net-worth users to compete with each other and thus have more output. This type of situation usually occurs more frequently in gaming products.

⑦ Achievements and medals: Package a single simple task into a large task that includes multiple repetitions of a certain action. This is usually done as a surprise and as a reflection of the relationship between the platform and the user. However, this is different from the task. Generally, achievements and medals are not done together with tasks. Like the badges in keep, create badges for completing the same action different times.

⑧Tasks: These tasks should be set based on the user’s usage path and the changes in each stage of the user’s life cycle , such as tasks for beginners who have just learned about the product, advanced tasks for those who start using the product, and daily tasks for those who are used to the product.

2. How to set relevant incentive measures during the user life cycle?

First we need to understand what the user life cycle is like:

Step 1: Identify the indicators that need to be paid attention to at each stage of the user life cycle, set the goals you want to achieve through clear indicators, and if it is specific to the user, it is what behaviors you want the user to perform.

• Introduction period: CAC (cost per user acquisition), download conversion rate , number of registered users, and registration conversion rate;
• Growth stage: personal information completion rate, payment conversion rate;
• Mature stage, dormant stage, and churn stage: number of paying users , average payment amount per user, average number of purchases per user, AR PU (average revenue per user), recall rate, and churn rate;

Step 2: Identify the reward resources you can use at present, including spiritual, material, and other human incentives (voyeurism, laziness, vanity, greed);

Step 3: Use reward resources to match user behaviors that need to be incentivized;

Step 4: Prioritize related reward settings;

User life cycle data

①Life cycle value

• Customer Lifetime Value (LTV) = (a customer's monthly purchase frequency * average order value * gross profit margin) / monthly churn rate = number of purchases during a customer's lifetime * average order value * gross profit margin
• Gross profit margin = customer lifetime value (LTV) - [customer acquisition cost (CAC) + customer operating cost (COC)]
• CPCC (cost to acquire a paying customer) = LTV / 3

1/3 of the customer lifetime value is the upper limit of your cost to acquire a paying customer

Based on the above formula, find out the key indicators:

1. Increase the frequency of user purchases;
2. Increase the average order value of users;
3. Reduce churn rate;
4. Increase gross profit margin.

• Increase the frequency of user purchases: You can stimulate purchases through a variety of operational means, such as discount coupons, flash sales, buy one get one free, etc.
• User average order value: can be stimulated through some discount coupons, discounts, cash back, etc.
• Reduce churn rate: This can be done based on the user churn status, which can be divided into novice users, growth users, and mature users. Targeted measures can be developed based on different churn reasons.
• Improve gross profit margin: On the basis of certain user lifetime value, customer acquisition quantity, quality, and activity retention rate , find high-quality user acquisition channels and reduce the cost of acquiring a single user (CAC). At the same time, avoid stimulating only through interests. There should be a variety of incentives so that operating costs can be used reasonably and efficiently.

②Value judgment

• LTC ≥ CAC + COC, there is a basis for continuation;
• The appropriate LTC/CAC is around 3. A value less than this indicates low conversion rate, while a value greater than this indicates conservative market expansion.
• LTC/CAC＞1 means that the liquidity is directly proportional, otherwise the income is not enough to cover the expenditure, which is a dangerous situation.

3. ROI

To calculate the ROI of conversions at each stage, e.g.

• Download conversion rate from channel display to download
• Registration conversion rate from download to registration
• Conversion rate from registration to personal information completion
• From personal information completion rate to purchase conversion rate

Break it down according to the process of key user operations, and focus on improving the conversion rate of the link with the low conversion rate.

At the same time, the user life cycle can also be divided into three parts: ① customer acquisition; ② appreciation; ③ retention .

Customer acquisition is mainly about attracting new customers

Through various channels, including SEO , SEM , ASO , BD cooperation, etc., or advertising, H5 promotion, etc.

All channels can be divided into four types: high-quality channels, potential channels, junk channels, and other channels.

High-quality channels need to continue to be deployed, while potential loss channels need to be constantly tested. While expanding, they need to be constantly screened and eliminated. Junk channels should be abandoned directly. Other channels are relatively mixed during the deployment process and can be abandoned or increased based on the data. Some channels have the opportunity to become high-quality channels.

Appreciation is mainly about activation (I won’t go into details here, there are many means, and most of them are done in combination, the following can be used as a reference).

Reward inducement: task guidance, welfare coupons, membership, mall points, cross- marketing (hot products, traffic products, profit products. You can refer to JD.com ’s 618 event recently. The event page first displays hot products, traffic products and coupons to attract users, and then combines other products and profit products to guide users to pay attention and convert purchases), encourage dissemination (driven by interests or the spread of product experience word-of-mouth, both of which can bring a certain amount of natural user growth).

Retention is mainly about retention

At the same time, you also need to have a relevant early warning mechanism to determine in advance that users are about to churn in the data, so as to formulate corresponding recovery strategies;

See the following figure (for reference only) to judge the user's status based on the behavior triggered by the user:

Early warning methods generally include interest incentives or some caring reminders. Interest incentives, such as a 50-yuan cash voucher from Tmall Supermarket, can directly stimulate you to consume. As for caring emotions, Tmall Supermarket will send text message reminders: I haven’t seen you for many days, Tmall Supermarket misses you, come and see me, and the supermarket promotion is in full swing!

To wake up lost users, different methods can be used for users in different situations. Lost users need to be split into three categories:

Novice users (users who download and register), growing users (users who browse products, complete personal information, and make first-time purchases), and mature users (users who are familiar with the product and have made multiple purchases).

There are several ways to recall lost users: interest stimulation, event recall, scene evocation, emotional appeal, and honor recall.

• Benefit stimulation: Use push notifications/text messages to remind users that there are benefit coupons, or combine new products, major operational events, birthday benefit coupons, etc. to wake up users
• Event recall: inform users of the platform’s large-scale promotional activities through push/SMS
• Scenario reminder: such as Father’s Day and Mother’s Day, reminding users to buy gifts for their parents
• Emotional appeal: Holiday greetings, greetings after a certain number of registration days, etc. to awaken users
• Honor recall: inform the user that he or she enjoys distinguished rights and interests that only he or she has, such as you have obtained a welfare coupon that only 1% of people can get , etc.

Among them, interest incentives are the most effective, and other methods are equally important in different scenarios. Two or three methods can also be used together, such as event recall combined with interest incentives, and then informing users of major platform events and related welfare gifts. However, when using recall methods, it is necessary to understand whether the user is a novice user, a growing user, or a mature user, and use recall methods in a targeted manner based on the reasons for their leaving.

3. In summary, what should we pay attention to when setting up user incentives?

① First, you need to clarify the purpose of your incentive measures.

② Breakdown of key user data, such as single customer acquisition cost, gross profit margin and other data. There is another key data that needs attention: when a new user uses a certain function within a certain period of time and at a certain frequency, the user's retention probability on the platform will be maximized, and he or she will become a loyal user. This can be a starting point to achieve great success by using fewer resources. This is mentioned in Fan Bing’s Growth Hacker . I suggest you take a look at it.

③ Consider the continuity of each stage and set up incentives at key nodes to help users advance to mature users smoothly and quickly, so that users can achieve a balance between the platform's income and expenditure in a short period of time. Generally, when a user uses a product, the value he brings to the product has a certain cycle, and different users have different return cycles. Some quickly reach a balance point and bring profits to the platform, while others may take a long time to reach a balance, or even fail to reach a balance point. Setting up incentives at each stage can enable users to generate profits for the platform more quickly and sustainably.

④ Pay more attention to the early warning and recall of lost users. Generally speaking, the cost of acquiring a new user can be 5 times that of recalling an old user.

Conclusion

Under various uncertainties, users will evolve into many forms. It is difficult to say that you fully understand the users. However, based on some common sense of human nature, we can make some efforts to guide users to do things that are beneficial to the platform. We should also study users with awe.