App promotion｜Any product is a business

1. What is the product?

At the end of the day, the product is a business. No matter how complex a product is, it can be broken down into businesses.

For example, let’s take a look at Zhihu.

Many people think that Zhihu and Baidu Knows are very similar. In fact, Baidu Knows is designed to solve the questions asked by the questioner and to improve the richness and satisfaction of Baidu search . It is in the search business. Zhihu is in the content business.

On Zhihu, it doesn’t matter whether the questioner is satisfied or not. Once a question is raised, others can modify it at will. Which answer is better does not depend on personal likes and dislikes. Anyone can click Like, Thanks or Not Helpful to change the display weight.

Zhihu has designed two modes: big V recommendation and official recommendation. When you open Zhihu, you will see the timeline of the big Vs you follow, who He Caitou liked, and Wang Zhuo’s answer to furniture again. This is recommended based on your (your favorite big V's) interests, and Zhihu officials will also make recommendations. This ensures that you can see things that interest you and some new and interesting things.

We have designed favorites, and you can also follow favorites; we have designed the hottest topics so that you can see the hottest topics at the moment.

All of the above allows high-quality content to surface as soon as possible, allowing content creators to receive rewards that are much higher than Baidu Knows' points. All of this ensures the production of content on Zhihu.

Zhihu, which has gathered a large amount of high-quality content, can monetize in two directions: one is the content creator, who can obtain high-quality content through paid means; the other is the content consumer, who is itself high-quality traffic and can monetize through advertising. At present, Zhihu’s advertising is still very restrained, but there should be big moves in this area in the future. It is estimated that it will be real-time bidding advertising based on interests.

▼ Illustrated Zhihu

2. The relationship between products and operations

So what roles do products and operations play in doing this business? Products are responsible for building this business; operations are responsible for verifying whether this business is feasible. Note that verification can precede production.

An example was mentioned in "The Lean Startup ". A company wanted to develop an office software, but didn't know whether it hit the user's pain points. So the operation department made a fake video to introduce such an application and its functions. After it was put online, it attracted a lot of clicks, and many netizens left messages asking where they could download it. So the company worked overtime to speed up the development and finally achieved great success.

From the direction of a company to a certain function of a product, operations can use low-cost means to help explore the way for the product in the form of activities or communications. After the product is formed, operations need to introduce suitable users at the right stage and with the right methods.

For example, an online education company where I used to work reached a cooperation with the Ministry of Education. The Ministry of Education needs to carry out publicity and education on fire warnings, and the method is for users to register on the App and then do questions on it.

However, this education only targets young students (children from kindergarten to first and second grades), resulting in a large influx of very young children and parents into the App in a short period of time. The main function of the App is to answer questions online with real people, and it is actually mainly aimed at junior and senior high school students (parents can usually handle elementary school questions). Therefore, this group of users is not of great value to the App at present, and has seriously affected the atmosphere of community communication.

Furthermore, this group of users is likely to affect the operations and product judgment of their own business model and lead the product in the wrong direction.

3. How to understand a business?

1. LTV and CAC

Let’s first popularize these two concepts: the total profit (note that it is profit, not income) that a user brings to you during his or her entire life cycle, from registration to uninstallation, is LTV (Life Time Value); and the cost of acquiring a user is CAC (Customer Acquisition Cost). It can be said that LTV and CAC are the yardsticks for measuring a business.

There are two types of business:

(1) LTV > CAC

This type of product generally has a very clear way of monetization. At this time, the operator only needs to continuously bring in users, the more the better.

(2) LTV

They are unable to make profits in the short term and generally lack a clear way to monetize. But due to the characteristics of mobile Internet (everyone is a self-media ), as long as the product really solves a problem. Then once the user base reaches a certain scale, such as hundreds of thousands or millions of real registered users or even active users, self-growth can definitely be achieved. Therefore, the promotion at this time has only one purpose, which is to reach this point faster. At this time, the best criterion for judging promotion is whether it helps you reach this point faster. The case of online education mentioned just now is of no help in this regard.

2. Product model, market environment and user characteristics

For a business, we can grasp it from three aspects: product model, market environment and user characteristics. Let’s take a case where LTV>CAC and a relatively simple product: Points Wall .

(1) Product model:

The business of the offer wall is simple. Advertisers (CP) need downloads; there are many people in life who have spare time and want to make some money. However, if advertisers directly contact people, for example, by posting on a forum: "I will give 2 yuan to anyone who downloads my game ", the operating cost is too high and it is not sustainable.

So there came into being a vertical points wall, connecting advertisers and users. As the executor, the points wall undertakes the needs of CP. It is then presented to the user in the form of a task list. Users receive tasks from it, complete tasks such as downloading, registering, and trying out the game, and then get points. Points can be redeemed to Alipay or WeChat .

At the same time, the main significance of large-scale downloading behavior for Android is to generate data (people who download your app for money will have very poor subsequent retention ), and it has a deeper meaning for iOS. Because of the closed-loop ecosystem of the App Store, there is not much that CP can do. Large-scale downloads can change the ranking of an app in the free list , paid list, or keyword list. The ranking can be influenced through a points wall, allowing the app to gain natural downloads.

(2) Market environment:

Points walls were very popular in 2014 and 2015, mainly for the following two reasons:

1) The mobile Internet is developing rapidly and there is a lot of hot money;

Those who have not raised funds need to create data to raise money; those who have raised funds need to create data to show the market and competitors. The points wall is the cheapest platform for increasing volume.

2) Users are curious.

At that time, users would go to the App Store’s overall rankings to see if there are any apps they have not used, and download them to see if they are fun. In this case, the resources available to users, namely tasks, are divided into large applications (under BAT) and small applications. Large applications have a constant demand for volume. Small applications are sporadic.

In this way, when a user logs in, he can complete the tasks of several or dozens of large applications in a very short time. After that, you can occasionally get small tasks.

(3) User characteristics:

It takes users about 5 minutes to complete a task, and they will generally receive a reward of 1-2 yuan. In this way, a new user may get a reward of 10-30 yuan within 1-2 hours. After that, you may get a 1 yuan reward every 1 or 2 days.

The value of the platform to users is simple: make money by completing tasks. So what kind of users are the target users of the vertical points wall?

Lack of money. Only those who are short of money will take 1 dollar as money;

boring. Only people with a lot of free time will spend an hour downloading an app to earn 10 yuan.

The two dimensions intertwined together are our target user group:

1) They should be users from third-tier cities, or poor young people in first- and second-tier cities

Reasons: Prices in third-tier cities are low, and 1 yuan means a lot of money; work in third-tier cities is generally less busy, but there is a lack of entertainment, so there is more bored time.

2) Vertical user groups include:

Pregnant women (women, more keen on saving money; limited mobility, mothers have to take care of children, and their time is fragmented and boring)

Factory workers (low income; extremely boring work and lack of entertainment in the evening)

Students from third-tier cities (lack of money; bored, no other entertainment except playing games)

The matching degree of the above three user groups decreases successively.

Subsequent user research and promotion experience proved that our user positioning was relatively accurate.

Okay, after clarifying the above three points, let’s deduce this business.

Assume that the cost of acquiring a points wall user is 8 yuan. As mentioned earlier, the tasks of a vertical offer wall are generally composed of several stable large applications and irregular small applications. On the first day of user registration, users can complete tasks for about ten large applications.

Assuming that each task contributes 1 yuan of profit to the platform, the LTV is already greater than the CAC. After that, you may occasionally complete a task and contribute 1 yuan. When the number of tasks became too few to tolerate, he left.

Obviously, the points wall meets the first type of business, and the monetization path is extremely clear and concise. So we can see that in the second half of 2015, vertical point walls experienced a growth spurt, and many more players entered the market. However, starting from Q2 2016, the points wall began to shrink. This business is not doing well.

Because the market environment is changing.

First of all, there is less hot money, and those who have tried to switch to entrepreneurship have almost all tried it, even the O2O model with heavy weight has almost all been tried. Venture capitalists won’t even look at products without a clear monetization plan. So you see, live streaming has become popular this year.

In addition, users' usage habits have changed a lot. Look at the people around you now, it’s good enough if they can update two apps a month. Including the App Store’s keyword list, everyone feels that it is not as effective as last year and is not attracting much traffic! In the past, I might search for travel apps to see if there were any good ones, and then I would say, “Hey, there’s an app called Tuniu that looks good, let me download it and try it out.” Now, I know I want to download Tuniu, and then I go to the App Store. Even if the first search result is Qunar , the second is Ctrip , and the third is Tuniu, would I go to Qunar and Ctrip?

The change of Baidu index of 3w Coffee Shop, a synonym of entrepreneurship

Market changes have resulted in a decrease in the number of large applications with large budgets, while also cutting budgets in this area. There are fewer new apps, and budgets are used more cautiously. What did this result in? When users of the points wall come up, they find that there are only 5 applications they can work on. After completing them, they have to wait for three or four days before getting another task; then they have to wait for a few more days before getting another one. Would anyone keep your app just to make 1 yuan in three days? It's boring.

This resulted in two phenomena:

New users’ contribution to the platform has been greatly reduced;

The user's life cycle is greatly shortened, and the ultimate result is a decline in LTV.

But the traffic in the market itself is becoming expensive. Because it has experienced explosive growth, there are many competitors but only a few channels , and users are shuffled back and forth, which causes CAC to increase instead of decrease.

This ultimately leads to CAC>LTV, which naturally makes this business difficult to do.

Therefore, when we operate and promote a product, we must have a very clear understanding of the product's operating model, market environment and user characteristics. These three are interdependent and influence each other, and jointly determine the changes in the two scales CAC and LTV.

The above is the prerequisite for promotion.

Mobile application product promotion service: APP promotion service Qinggua Media advertising

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