Profitable customer acquisition methods for K12 online education!

In 2019, the author participated in the cold start phase of an internally incubated educational product for primary school students, which mainly featured fun video animation classes by famous teachers.

1. Let’s talk about users and needs first

Typical users are mothers of primary school students, aged between 30 and 50, Android users, and 75% of them access primary school courses through the app for the first time.

The child's math ability is poor, ranked below 60% in the class. He has a fear of math and is therefore averse to learning it, which leads to him being very passive in his studies and under a lot of pressure.

After investigation and discussion, we sorted out the main problems currently faced by users:

1. Most parents are unable to recognize and analyze the specific problems their children encounter in their studies.
2. The quality of after-school tutoring provided by parents is relatively low, and the input-output ratio is unbalanced (moms spend a lot of time and energy, but the tutoring results are not ideal).
3. Most parents do not have the ability to select suitable tutoring classes for their children and mainly follow the trend (recommendations from teachers, relatives and friends).
4. It is difficult for parents to judge the actual effect of tutoring classes, as the basis for judgment is subjective (verbal feedback from children) and delayed (it is often after the major exams that they discover that the tutoring effect is not good, which has already delayed the golden learning period).
5. Some parents still mainly use punishment-based education as the main method, which makes it difficult for children to build up confidence in learning.
6. When it comes to weak subjects, children become bored with studying, creating a vicious cycle.

The user's goal is to go to school. After the child is in the second grade, the pressure to go to school gradually increases. This type of user has three needs :

1. Help children improve their performance in weak subjects, overcome their aversion to learning, and establish a positive learning cycle.
2. After-school tutoring (homework), analyzing the problems children encounter in their studies and giving suggestions for improvement.
3. Screen tutoring classes and get the basis for judging the effectiveness of tutoring classes.

2. Let’s talk about direction and goals

1. Look outside first

See what types of players are on the market.

1) In terms of format: live classes

The advantage of live streaming is that the user education cost is lower , and there is real-person teaching interaction, which is close to the experience of offline cram schools.

The disadvantage is the contradiction between scale and parents' personalized learning needs . The more customers a famous teacher covers and the more standardized the solutions are, the lower the marginal customer acquisition cost; however, parents expect their children to have the opportunity to have personalized interactions with famous teachers, but the opportunities for interaction decrease as the number of customers covered by a single course increases, making it difficult to meet parents' expectations.

The second disadvantage is the rigidity of the live broadcast time , which conflicts with parents' schedules. Although live broadcast replay is provided, it will seriously affect users' attendance rate.

2) Content: Classes taught by famous teachers

• The advantage is that it gives full play to the head effect of famous teachers . In the context of uneven distribution of educational resources in time and space, it focuses on parents in provinces with weak educational resources, so that as many children as possible can enjoy high-quality educational resources.
• The disadvantage is that it brings up new problems on the supply side (the stock of famous teachers) . Famous teachers have a head effect in the industry (similar to KOLs on live streaming platforms), and teaching staff cannot be replicated, so it is a solution with certain risks.

2. Look inside

With reference to the existing middle school user data, we first launched teaching materials and courses for a large user base in the APP.

By analyzing the stock activity data of each province, we found that :

1. Parents who have not received higher education (the final education is below college) prefer our products.
2. Overall, provinces with a larger number of children aged 0-14 use more of our products.

We conducted a survey (questionnaires, offline activities) and came to the conclusion:

1. Parents whose children's academic performance in certain subjects is above average are not our target users. Such users prefer advanced products, such as Xs Math.
2. For pure video courses, the price users are willing to pay is relatively low (regular courses are about 99 yuan per semester), so we need to find more profitable and replicable solutions.

At the same time, the company has put forward new revenue requirements for business lines, which is also a prerequisite for providing more resources.

3. Determine your goals

1) Focus on repurchase rate

The average cost of acquiring a new customer is higher than that of repeat customers.

Assume the goal is to add 1 million new customers and 500,000 existing customers. When the repurchase rate is 60%, 700,000 new customers are needed. If the small-to-big conversion rate is 30%, then 2.33 million new experience class customers are needed. If the repurchase rate is 10% higher, that is, 70%, 650,000 new customers are needed. If the small-to-big conversion rate remains unchanged, then only 2.16 million new experience class customers are needed.

In summary, every 1% increase in repurchase rate will save a lot of upfront customer acquisition costs, and repurchase rate is an important indicator at this stage.

2) New customer acquisition

Online + offline. Online, we try to split low-priced courses and distribute high-priced courses; offline, we cooperate with the school team.

3) Plan the path to achieve the goal

① Repurchase rate and secondary indicators: Addition rate > Attendance rate > Check-in rate > Completion rate

The learning effect is measured through a series of indicators, and the learning effect determines the repurchase rate of parents.

② New customer acquisition = offline customer acquisition (campus team) + online customer acquisition (traffic > trial class > regular class)

We go to schools offline to generate revenue, conduct growth experiments online, convert trial classes into full-priced classes, and distribute full-priced classes.

4. Provide a solution

① Introducing the “Tutor” community service

Intervene in the "after-class tutoring" scenario and, through supplementary teaching services, let parents feel that their children are [taking classes] rather than [watching teaching videos], thereby improving parents' value perception and achieving product repricing.

While providing tutoring for parents, we also set up feedback channels for parents and guide them in making payment decisions.

② The course format is determined to be "Video Animation Course"

The content is aimed at primary school students in the second grade and above who have poor math performance (below 60% academic ability). The purpose is to dispel children's aversion to learning through interesting content, gradually consolidate their knowledge through the AI ​​question bank, and ultimately enable children to build confidence in learning math and learn independently.

The primary reason for using video courses is to provide time flexibility, guarantee attendance rate, and ensure that parents and children have a relatively complete learning experience no matter when and where.

Secondly, compared with live classes, the standardized learning experience provided by video classes can be replicated infinitely and is almost not limited by teaching resources. Although the average order value is not as high as that of live broadcasts by famous teachers, it is more likely to have scale advantages and is a solution worth trying.

③ Determine the profit model (online: traffic > trial class > regular class three-level model; offline school sales)

Online, based on the "tutor + class" model, we try to provide a one-week trial class, hoping to give users a complete learning experience within a week. By perceiving the fun of animation classes and the value of supplementary teaching services, users are guided to convert into full-price class customers.

Offline, we have opened up the primary school business in the sinking market. The school-entry team has mastered the key role of "school teachers" by tackling the school management, and finally converted parent customers on a "class" basis through the influence of teachers.

After a period of trial operation, we provided supplementary teaching services to users who had already purchased full-priced courses. Before the end of the semester, the operations staff raised the price of full-priced courses and converted them to repeat purchases. The repurchase rate was stronger than we expected, which proved that the decision to intervene in the "after-class tutoring" scenario was correct. The supplementary teaching services did solve the problems of parents, and increasing the repurchase rate is our long-term goal.

In addition, about 32% of customers in the first trial class were converted to customers of full-priced classes , which proves that the "small to big" model is valid, but it also has certain risks. The labor cost of tutors is pre-placed in the "experience class". The product positioning of the "experience class" is a "trust" and "entry" product. This places high demands on the tutors of the experience class, who need to provide the best quality service to new users in a short period of time while stabilizing the conversion rate from "small to big".

The content tone has also been verified. Looking at it in terms of the school year, many parents have reported that their children used to be afraid of learning math, but now they will take the initiative to watch our animation classes, and their grades have gradually improved. However, parents of students with better grades are not very willing to purchase courses. Even if these parents purchase courses, their main purpose is to facilitate their children's preparation and provide supplementary teaching services. The activity level of this type of users is not high, which is consistent with the results of our previous active user analysis.

3. New problems arise unexpectedly

The introduction of tutoring services is a double-edged sword, the most significant problem it brings is the increase in marginal costs.

The marginal cost of a class = marginal labor cost + marginal management cost, which means that every product sold is accompanied by labor costs, and a large amount of labor costs are incurred in the experience class.

The most destructive of these is the marginal management cost brought about by the accumulation of manpower. Management has an inverse scale effect. When the number of tutors expands by more than double digits, the young team with an average age of 25 obviously encounters obstacles. When the number of teaching assistants reaches three digits, the team reaches the critical point of being out of control.

The most obvious phenomenon is the decline in key indicators . The reduced quality of team recruitment has led to unstable service levels, distorted SOPs, and increased customer complaints. What’s even worse is that local office politics have emerged among the senior management of the business team, which has reduced the efficiency of resource utilization and exacerbated information asymmetry.

Author: Dabei

Source: Dabei