How can online education retain non-paying users and encourage referrals?

Under the high pressure of policies this year, online education companies have begun to reduce their budgets for online customer acquisition. For example, it was revealed some time ago that Gaotu stopped delivering online information flows, and Zuoyebang has also significantly reduced its delivery volume in recent times. In the face of great policy uncertainty, companies have begun to cut their advertising budgets. However, despite the reduction in advertising spending, the pressure to increase users has not decreased at all.

Therefore, each company's subsequent focus will be on increasing referrals from old customers to new customers and offline customer acquisition projects, using the original traffic pool and offline traffic to bring more new registered users to the company.

However, I have studied the growth strategies of referrals of various companies. Most of the products still focus on referral strategies for old paying users . The principle involved mainly includes the consideration of two factors:

1. ---

   The accuracy of the crowd

2. Crowd quality issues

Birds of a feather flock together. If a parent A buys the company's products, then there must be many potential users in her circle of friends, such as her child's classmates, playmates of children in the community, etc. These parents are users with huge potential. Once parent A recommends properly, they will be easily converted in the future with the endorsement of their friends and the unwillingness of their children to fall behind.

However, after using the referral strategy for a long time, you will find a problem: the original paying users have no motivation to refer others or their referral potential has decreased, the number of new paying users is small and they are not very enthusiastic about participating in activities, but the pressure of user growth is only increasing . In this case, stimulating the vitality of old users or broadening the referral population has become a strategy that can further bring about user growth.

Today, let’s talk about how to retain non-paying users to make referrals by broadening the scope of referral targets.

If we can get users to refer other users before they convert, and establish an invitation relationship between friends, then it will be more convenient to use the referral invitation relationship to recall users in the future.

1. Is it necessary for non-paying users to make referrals?

Is it necessary for non-paying users to make referrals? After all, users don’t pay, so what motivation do they have to share? Can the quality of referred users and the cost be covered?

This is also the reason why many companies limit referral activities to paying users. On the one hand, it can ensure user retention and participation, and on the other hand, it can ensure the quality of referred users and maximize the conversion of potential target users.

So, is it necessary for non-paying users to make referrals? I have summarized 3 factors:

1. Current referral life cycle status
2. Look at the number of non-paying users
3. Look at the behavior of non-paying users

Next, I will analyze these three aspects one by one to see what stage is suitable to start referrals for non-paying users.

1. Look at the referral life cycle and CAC

This should be easy to understand. If a product has not yet started a referral strategy for paying users, then there is actually no need to have a referral strategy for non-paying users.

Use paying users to implement a referral strategy. Only when paying users are willing to recommend your courses to their friends can it be proven that your product is truly liked and praised by parents .

In addition to the incentives behind referrals, what is more important is the users' recognition and spread of word-of-mouth. Each one is a spokesperson for the product. While it seems like parents are being asked to share, in fact it is a recommendation when their children’s learning has been effective and they can feel their children’s growth. Otherwise, the parents’ recommendations will be greatly discounted.

In the early stage, we established contact with paying users through various touch points, and promoted parents' recommendation behavior through a series of means such as user behavior, experience and effect externalization in each life cycle, thus forming a referral strategy for paying users. Only by establishing a referral strategy for this group of users will it be possible to expand the target group in the future.

But if the company got started by relying on referrals, even many of its current users are actually brought by referrals. More than 50% of users are paying users who have completed referral tasks and brought in new registered users. This actually shows that the referral strategy has reached the mature stage of its life cycle and needs to start a second growth curve or find ways to fully activate old users.

The old paying users, both in terms of participation rate and the number of users who can actually be referred, are beginning to decline. At this time, you can actually consider the strategy of referral of non-paying users.

Of course, there is another key factor that cannot be ignored, which is how many non-paying users there are in all product systems. The scale of non-paying users determines the operating space and is also the key to whether it is necessary to immediately launch a non-paying user referral strategy.

2. Look at the number of non-paying users

The scale of non-paying users here refers to the non-paying users that exist in all product systems. The product system here includes mini programs, official accounts, apps and corporate private domains. For example, after inventory, we found that the current number of non-paying users is over 500,000, and the monthly active users among these users are about 100,000. In fact, we can start referral activities for these users.

Let's do some calculations. If the monthly active users are 100,000 and the user referral participation rate is 10%, and each person can refer an average of 0.5 users, then 5,000 new users can be brought in per month. As these non-paying users accumulate in the future, the potential for future growth will be greater.

For example, I can see that VIPKIDS currently has many activities that specifically invite non-paying users to participate: group purchase to get courses, inviting friends to register to get energy stones, bargaining to get physical items, etc. These are all activities for non-paying users to participate.

3. Look at the behavior of non-paying users

If non-paying users have little interaction with the product, it is actually difficult to make referrals. The lack of interaction with the product means that parents have little knowledge about the product. Many people may hesitate to recommend something they are not familiar with.

When planting grass, you must have seeds yourself before you can plant grass for others, otherwise it will be difficult for you to convince others.

In addition, less interaction with the product also means that social products that are exposed and suitable for dissemination are difficult for users to discover, so the referral effect of non-paying users will be greatly reduced.

Therefore, improving the retention of non-paying users has become the top priority when releasing the referral population, that is, how to retain non-paying users. In the era of wild growth, we only need to consider paying users of service accounts, but as the cost of acquiring customers increases, it becomes very important to serve non-paying users well and improve their retention.

2. How to improve the retention of non-paying users?

In fact, many companies also want to engage in non-paying user referrals. After all, there are a large number of users in this area, and there is more room for operation. However, there are two biggest challenges in referrals for non-paying users:

How to improve the retention of non-paying users and how to activate previously accumulated non-paying users.

Paid users can stay active on the platform for a long time because they have courses to take and there is valuable content on the platform, so they basically open it once or twice a week to study courses with their children.

However, the active cycle of non-paying users is very short, basically only one week. After the trial, if they do not purchase the course, it is basically difficult for them to be active in the product system in the future. Therefore, how to complete product referrals and improve the retention of non-paying users within a limited and short period of time has become a very critical issue.

1. Why do non-paying users stay?

If we want to improve the retention of non-paying users, we need to know why users are willing to stay.

When we use a product, it is most likely because the product has some value to us and meets some of our needs. We use Graphite because it provides online document storage; we use Get or Fan Deng Reading because they provide good content for us to learn; we use Jike and Douban because their community atmosphere allows us to meet many like-minded people.

We may stay because of a certain feature/tool, content or community service , which actually represents 3 typical retention methods. Online education products may also start from these three aspects to improve user retention.

Xiaoyuan searches for questions, Zuoyebang provides tools for searching questions, Banyu picture books and Xiaoji Jiaojiao provide good content, Babytree and Mayu provide a good community atmosphere. Of course, it is also possible that courses are offered first and then traffic products are developed to retain users. For example, VIPKIDS has opened a knowledge library. Users who purchase an annual membership can read all the content in the library, and can get cash back by completing check-ins every day. Zebra also has picture books and membership products, which are actually a means to improve user retention.

If you can’t convert the users you have worked so hard to acquire, then just keep them well. Who knows, they may be converted one day in the future. Even if these users cannot be converted, it would be great if they could refer their friends to try out and sign up for courses.

Now, companies with few SKUs and a single type of product have begun to feel a certain sense of crisis. Their SKUs are becoming more and more diversified, and they are also starting to create low-value traffic products to better handle traffic.

2. How to use products to improve the retention of non-paying users?

More and more educational companies are beginning to realize the role of building their own traffic pools, using them as traffic tools on the one hand and monetizing educational courses on the other. Banyu Picture Book is the best example. It first uses high-quality content to accumulate traffic pools and improve user retention, and then flows back into AI courses and live courses respectively.

So if you don’t have low prices, how can you improve retention with more SKUs? This piece of content is essential for user retention and necessary for expanding the traffic pool. VIPKIDS has also established its own library, which improves long-term user retention through free check-in activities and continues to generate leads for live classes.

Use content and tools to improve the retention of non-paying users , set up a referral product system in the content provision process, and stimulate users to share and forward.

3. How to activate old non-paying users?

If the company has already had a referral system in place for a long time, then it can leverage the social relationships established between friends to reactivate users and have friends recall them.

The core of recall is reach + traffic acceptance. Reach users in appropriate scenarios, and then make preparations for traffic acceptance so that users can see the content they want to see as soon as they come in, and you can hook users with sufficiently attractive content.

3. How do non-paying users make referrals?

Ultimately, our goal is to retain non-paying users, and the core is to use these non-paying users to bring more new users to the product. There are hundreds of thousands of examples every month, but the paid conversion rate is only about 1%-5%. Most of the traffic is hard to waste. Although there may be CC follow-ups in the future, it is difficult to increase the conversion rate.

But if we can leverage this group of users to further bring new users to the product, the longer the retention time, the greater the potential to bring valuable paying users.

Of course, non-paying users also need to consider these two key factors when making referrals:

1. Classification of non-paying users
2. How do non-paying users make referrals?

Next, let’s talk about these three key factors one by one.

1. Non-paying users stratification

Because non-paying users have not yet become users of our products, they may have certain questions about the products. Therefore, when we use non-paying users for referrals, we need to at least ensure that the non-paying users who can make referrals are potential target users of our products. The reasons for such restrictions are, firstly, to prevent users from taking advantage of the service, and secondly, to control the CAC cost of users.

Therefore, it is recommended that when conducting a pilot activity, users who have attended trial classes should be used as pilot users first. These users have a certain understanding of the product and are also potential target users. In addition, you can also use the target user's city as a pilot. For example, if your target user group is basically first- and second-tier users, then you can start with first- and second-tier non-paying users, use free content to attract users, and then use some product form suitable for users to engage in social communication as a carrier to stimulate users to share.

Sharing behavior can, to a certain extent, further expand the product's dissemination and promote user growth.

2. How do non-paying users make referrals?

There are actually two core goals for non-users: one is to improve user retention, and the other is to convert as many users as possible. On this basis, our possibility of making referrals is greatest. Retention is the basis of conversion and referral. Without retention, these two things will basically be difficult to carry out.

Conversion is actually an ongoing behavior. During this process, CC will continue to follow up and convert users based on user behavior. Retention is the basis of referral behavior. Only when users stay can stories happen. If the user is just a passerby, then it may be too late for all stories.

In this regard, 51 talk has an activity that is actually very well done. It uses content to retain users and sets up referral incentives in the process: users can learn along with the check-in recording theme set by the system. In this process, the baby needs to read and record along with the content. After the recording is completed, click to share it to Moments. If at least 2 friends listen to it, it means that the check-in for the theme is successful. Each day’s album contains 7-14 days of follow-up content, and only one can be unlocked each day. The shared content includes baby recordings and registration for foreign teacher classes, which can further bring new users to the product.

In this way, the user's 7-day and 14-day retention is guaranteed. During this retention period, the check-in activities are used to continuously refer the product and bring in new users.

In addition, VIPKIDS's free learning activity is also an activity to increase non-paying users and use non-paying users to make referrals: open an annual library membership card for 365 yuan, and check in 299 days in total within a year, and the annual card fee will be fully refunded. One check-in is counted as completing at least one book reading or dubbing of a book and sharing it on WeChat Moments on the same day.

However, the act of sharing to Moments counts as checking in, which can easily lead to suspicion of cheating. It is also possible that the message is deleted directly after being shared to Moments, or it may be set to be visible only to oneself. Compared to 51 Talk's sharing to Moments for two people to audition, sharing to Moments has a greater potential for cheating.

In the future, as the cost of online advertising increases, online education products may increasingly adopt two methods of acquiring customers: online and referral. For enterprises, if they can use referrals to leverage user growth and bring more new users to the product, then they have undoubtedly mastered the secret of growth and can acquire users at the lowest cost and highest efficiency. In this era where users are capital, how to quickly achieve high-speed growth becomes very important.

I hope the above content can inspire you. You are welcome to leave a message in your circle of friends to share your ideas about referrals from non-paying users.

Author: Operation Wang Diary

Source: Operation Wang's Growth Diary