Learn how to use the AARRR model to achieve user growth in one article

" User growth is essentially a precise, low-cost, and highly efficient marketing method. - Sean Ellis"

Article Directory:

01 What is user growth?

02 What is the AARRR user growth model?

03 Early Preparation

04 How to use the AARRR model to achieve user growth

at last

01 What is User Growth

In recent years, the topic of user growth has emerged one after another. Affected by the decline of the Internet dividend, more and more companies find it difficult to acquire customers, so user growth is an eternal topic to ensure the healthy development of the product.

However, we cannot simply view growth as “the accumulation of new users”, because this only means an increase in quantity but does not generate any benefits for the product, let alone profit for the company.

Therefore, "increase in users" can only be regarded as a link in the user growth system. If you want this system to run smoothly, you need to coordinate with other links to achieve overall results.

For large companies, growth will not be particularly difficult. After all, their brand reputation and market share are there. Just by organizing a large-scale event, such as Double Eleven, they can increase their users by hundreds of millions in minutes.

The most important thing is that there is strong financial support behind the product. A welfare subsidy can easily amount to hundreds of millions of yuan, which was an unimaginable subsidy level in the past.

However, as the cost of acquiring customers increases year by year, large companies are beginning to struggle.

However, small companies do not have so many unique conditions. They are struggling to make ends meet every day and are always worried about user growth.

Because products can only generate corresponding benefits when they are used by users, and the larger the number of users, the greater the chance of creating value for the company.

So for any business of any size, user growth is an urgent issue that needs to be addressed.

However, user growth cannot be achieved just by wanting it. It is a complex system that involves the coordination of multiple aspects such as products, operations, marketing, and technology.

Therefore, in order to grow, the company must first form a professional growth team to be responsible for user growth:

User growth is a huge project. Unlike other methodologies or research activities, it cannot be completed by one or a few people. It requires an entire enterprise or a professional team responsible for user growth.

The positions involved range from person in charge to product manager to data analyst, and finally to interaction, design, technical development, marketing and market, etc. It can be said to be a "one-stop" strategic growth team.

From a time perspective, user growth is a long-term system: it is not like a project-based system, where a team is temporarily formed for a project and disbanded when the project is completed.

It is a period of time spanning several years or even decades. In this respect, it is somewhat similar to "ethnography", but with different purposes:

• User growth focuses on the increase of users and benefits;
• Ethnography, on the other hand, focuses more on the study of populations, which is a long-term project.

With the popularization of the concept of user growth, more and more companies, teams and individuals have created a variety of growth methods and models, among which the " AARRR User Growth Model " is the most popular.

So what exactly is the “AARRR User Growth Model”?

The "AARRR User Growth Model" is composed of the acronyms of the five links of the model, namely Acquisition, Activation, Retention, Revenue and Referral.

The first A refers to acquiring users.

The first step in marketing a product is to acquire new users. This is the first factor to ensure the healthy development of the product and also the primary condition for user growth.

The second A stands for activation.

It is a link to convert users who passively enter the product into active users.

According to valid data, when the calculation of new users’ activeness on the next day after they enter the product begins, a considerable number of new users (more than 80%) will not be activated again.

To put it bluntly, the users acquired in the first stage can only generate 20% of the energy per day, and the rest is wasted. Therefore, the purpose of activation is to increase energy and reduce waste;

The first R is to improve retention.

The most intuitive data indicators to solve this problem are daily retention, weekly retention, etc.

These indicators can monitor the user retention and churn of the product, and then take corresponding measures to encourage these retained and churned users to continue using the product;

The second R is to gain profit.

This is the core part of the AARRR model and also the fundamental driving force for the sustainable development of the product.

To put it simply, users generate benefits for the product. This benefit can be money or some kind of value, depending on how the company defines the meaning of benefit.

The third R is referral communication.

From recommendations to acquiring new users again, product development and user growth form a perfect cycle, which is the "head-to-tail connection" link that ensures the sustainable development of the product.

Judging from the actual data, completing the five rings in a one-way manner is like a funnel. The number of the next ring will always be lower than the previous ring, and the value of the rings at the bottom will be greater.

Some readers may ask: "The fifth ring does not produce any value, so how can it be considered the greatest value?" This will be explained in the following text.

As the saying goes, “A little time before sharpening the knife makes the work of chopping wood easier.” Before starting user growth (MVG) work, you need to prepare the “four major systems” first.

MVG meaning:

Referring to MVP, the author temporarily defines user growth as Minimum Viable Growth, abbreviated as MVG. As for why it is called " minimum viable growth ", this will be explained in detail later.

Archimedes once said, "Give me a fulcrum, and I can move the whole earth." Below, I will use this sentence to explain the four major systems:

Four major systems diagram

The first system: good products are the fulcrum

It is necessary to ensure that the product can be accepted by users. Not only must it be accepted, but users must also be "amazed" by the product.

The "amazing" here is somewhat similar to the "Aha Moment" described in "Growth Hacker". The purpose is to make users remember and use the product for a long time.

To put it simply, the product should not only solve problems for users, but also solve those problems with extremely high quality .

For example, when you need something, you think that no one will sell it, and then you search on Taobao and realize, “Oh, I didn’t expect there is such a thing, and it’s not expensive!”

In this way, this Taobao product not only meets the purchasing needs of users, but also satisfies the idea of ​​"good products are not expensive" behind the user's purchase with high quality.

This is a product that can "amaze" users.

In addition, based on good products, a visual data monitoring system should be established (this is a derivative product in addition to the main product).

And everyone on the growth team should be able to see valuable data metrics on the monitoring platform (within their authority).

After all, the quality of MVG's results needs to be supported and verified by actual data. At the same time, this is also the fundamental data to ensure that MVG can take small steps and run fast and continuously iterate.

The second system: the clear indicator is leverage

To put it simply, just like the " HEART User Experience Model ", it is necessary to establish a unique, clear, measurable and targeted goal.

You can directly use the company's established North Star indicator as your goal, or you can redefine a related indicator based on the North Star indicator as a direction.

In short, growth indicators must be combined with strategic indicators to be effective.

For example, Facebook’s North Star Indicator is daily active users, and WeChat’s indicator is the number of messages sent by users. The more messages sent, the more dependent the user is on WeChat.

Since both are social networking platforms, why does WeChat measure the number of messages instead of daily active users?

Because WeChat may have a high daily active users, but a large number of users only send one message when they go online. This phenomenon is unacceptable to the WeChat team.

Therefore, for WeChat, the number of messages can better measure the degree of user dependence on the product than daily active users.

The data monitoring system established in the first system is actually to ensure that all data indicators of MVG can always grow around the target, so as to ensure consistency in direction.

It is no exaggeration to say that MVG is a model based on collecting a large amount of data and then analyzing the data , so it is very necessary to have clear indicators and a visual data monitoring system.

The third system: a strong and professional team, that is, people

In fact, before the concept of growth became popular, a large number of companies were already doing this, but at that time they were all organized according to the project system:

It means temporarily calling together the heads of various core departments to hold a meeting, then discuss solutions and then go back to implement them.

When we finally see that the result is growth, we are overjoyed, and then the project is disbanded and the team members go their separate ways.

And when it comes to growth, it is not a short-term goal, but a long-term task.

I have mentioned this point in the previous article. The rules and key points for team formation can be reviewed in the previous article, so I will not repeat them here.

The fourth system: small steps and fast iterations, this is the way to exert force

Although the name of MVG has changed, its connotation remains the same: the purpose is to ensure the effectiveness and practicality of user growth.

During the growth process, the growth team must try more and constantly explore the most feasible and efficient growth model, rather than just going down a single path like designing a rocket.

Especially for small companies, it is even more necessary to constantly verify the various characteristics of their products to ensure that they are not eliminated by the market.

After all, the speed of the Internet is too fast, and if you don’t achieve MVG, you will easily be left off the highway.

As the saying goes, "everything is ready except the east wind", the following will break down in detail what the five links of AARRR are, and the author will also provide corresponding cases to deepen readers' understanding of the growth model.

Although it is simple to understand, it is not easy at all to implement the new implementation.

The essence of customer acquisition is the result of a process of disseminating information to the target audience. In the process of acquiring customers, we first need to define three issues:

• Who is the audience, that is, what kind of people are the target users of the product? What characteristics do these target users have?
• Through what channels will these audiences learn about product-related information, that is, what are the channels for information dissemination?
• What kind of communication methods are needed to reach these audiences so that they will be interested in using or consuming the product?

In response to these three questions, the following will explain the specific process of "user acquisition" point by point.

According to the relevant content of "user research", we can analyze the target users and expected users. The audience of the product can be mainly divided into three categories: primary users, secondary users and tertiary users.

If the company has the conditions and resources, it is recommended that they first draw a user portrait and cooperate with corresponding user research activities, such as user interviews, questionnaires, focus groups and other activities to help the team accurately define the audience of the product.

There are many channels for marketing and promotion. Here are a few more useful channels for promotion and marketing for reference only:

Channel Enumeration

(1) Advertising : This is the most traditional and most commonly used promotion channel.

Placing advertisements on platforms with relatively large traffic pools, such as TikTok and Weibo, can attract a large number of users.

Combined with the platform's own big data analysis, it can achieve both large-scale and precise delivery, which is convenient and efficient. That is, you have to consider the cost issue when placing the advertisement.

The left picture shows Country Garden’s advertisement on Weibo, and the right picture shows KFC’s advertisement on TikTok

In addition to placing advertisements online, you can also place advertisements in offline channels, such as subways, airports and other public places.

(2) Cross-industry collaboration : For example, Land Rover and National Geographic, Uniqlo and KAWS, and especially the “Palace Museum collaboration” that has been very popular in recent years, all of these companies have acquired new users through cross-industry collaborations between different industries.

Forbidden City co-branded lipstick

Logically speaking, it is a bit difficult for products from different fields to exchange users through cooperation, after all, they are in different fields.

But from the user's psychological perspective, although the fields are different, users are still human beings. Users' needs are at different levels, but they can exist at the same time. Therefore, cross-border cooperation in different fields may bring unexpected surprises.

Just like Marvel and Coca-Cola, one is in the film and television entertainment industry, and the other is in the beverage manufacturing (retail) industry. These two industries that have nothing to do with each other can build a powerful channel promotion channel by establishing some subtle connections.

Marvel and Coca-Cola crossover collaboration

(3) Ground promotion : It is the abbreviation of ground promotion personnel, such as those handing out flyers on the roadside and those who do swimming and fitness. These are all forms of ground promotion.

This approach relies on casting a wide net, attempting to reach potential customers by sowing widely and reaping little, so the rejection rate (difficulty in acquiring customers) will be quite high. After all, users may not necessarily be interested, unless they are very capable salespeople.

If you want to achieve precise ground marketing, you have to learn from Ele.me and directly enter universities to conduct ground marketing in the early stage of entrepreneurship. This will not only achieve precise customer acquisition but also low cost.

In addition to promotion based on people, promotion can also be carried out in public places such as subways and elevators. This form is both a form of ground promotion and a form of advertising.

Ground (advertising) promotion in public places

( 4) Traffic diversion : This is to cooperate with certain large platforms or large traffic owners (such as WeChat’s private domain traffic and Bilibili’s up masters) to guide each other’s traffic.

Alipay, Tmall and Fliggy are all products of Alibaba, so you can promote Tmall and Fliggy products in Alipay, drive traffic to both and promote consumption.

To put it simply, it is to use the Alipay platform to advertise the corresponding products, and the customers acquired are Alipay's existing customers.

Of course, this traffic is definitely not one-way. Alipay can also acquire customers from Tmall or Fliggy in certain ways. For example, when making payments, Alipay is used. This is an invisible +1 in customer acquisition.

In addition to internal traffic generation within the company, online products can also be driven through offline activities.

For example, for an offline event, you can invite offline users to join the online club.

Online membership is a way to connect offline and online traffic, that is, to "direct traffic from the public pool (all offline users) to the private pool (online products)".

The most popular medium for private domain traffic is the official account - the behavior of "asking for attention and subscription" is the behavior of directing the large traffic pool of WeChat (public domain traffic) to one's own official account (private domain traffic).

5. Social Marketing : There is a case of “viral customer acquisition” – Pinduoduo’s price-bargaining.

In the early days, Pinduoduo took advantage of the social relationships between people. For example, Li Ming asked Wang Hao to help him cut a price by selling his trust.

This will spread like a virus from person to person until it reaches its goal.

Why is it called viral?

• The first is that it spreads quickly and can only be spread between people;
• The second reason, of course, is that the virus is so annoying that people on WeChat are now "terrified of Pinxixi."

After all, social fission affects the trust between people. I feel embarrassed if I don’t help you bargain, but it doesn’t do me much good to bargain for you (actually there is a benefit, but it’s not big, which will be discussed later).

Pinduoduo's various bargaining activities

This is also why WeChat banned such marketing and promotional content (Pinduoduo was banned in the early stage because it affected the original intention of WeChat social networking, but now it has been acquired by Tencent and is also a Tencent product, which is much better).

But TikTok is not immune. It belongs to Toutiao. WeChat cannot just watch the users in its public traffic pool being taken away by Toutiao and become Toutiao's traffic, so it was "banned".

Of course, in addition to "viral" marketing like Pinduoduo, there are also some relatively mild but also very powerful social marketing methods.

Sharing recommendations is a good way. More information about sharing recommendations will be explained in detail in the "Recommendation and Dissemination" section of this section, so I will not go into details here.

The above channels can be promoted through different combinations. In other words, if you want to achieve effective MVG, you can combine the characteristics of each channel to launch a combination of punches.

What needs attention is the cost and cost-effectiveness of the channels used.

As for how to conduct cost accounting, it is necessary to use data analysis, such as AB testing, which will be explained later.

Now that we know who the users are and have the channels, all that remains is the content.

Different platforms have different characteristics, so when promoting, you must use appropriate content to do marketing.

For example, you can use brand advertising on Weibo, and use storytelling and other methods to acquire customers on Douyin.

In general, by combining the content that channel-exclusive users care about and catering to their interests, you can achieve your customer acquisition goals more accurately.

Speaking of marketing, it is actually somewhat similar to experience design.

Generally speaking, there are three characteristics and purposes of marketing:

Products (or brands, services, etc.) must be unique; they must be highly recognizable; and they must meet user needs , that is, they must be fully functional.

Only in this way can users be encouraged to use products and even purchase services.

Comparing the designs, don’t they correspond exactly to the three aspects of difference, memorable points and meeting needs ?

Some commonalities between marketing and design

After the three major directions are clear, the next step is implementation.

The execution process is slightly complicated, so I won’t explain it in detail due to the limited space of this article. I will focus on the subsequent verification and supplementary content:

We can verify the quality of the channel and the results through data, which is why we need to prepare a data monitoring system in advance.

Through this system, we can use these data to reasonably analyze the strengths and weaknesses of different channels. At the same time, we can also explore the commonalities between each channel and the product itself, whether the acquired users match the product, and other information.

For example, through AB testing, we can test on a small scale which channel has a higher cost-effectiveness, which can save a lot of costs in the future.

After all, resources are limited, and while considering the cost of acquiring customers, we must also consider the cost-effectiveness of acquiring customers.

However, some values ​​are not immediate, such as the implicit value of brand, which is a subtle "brainwashing" and an implanted information.

It may not generate benefits immediately, but later when users trigger this information due to certain scenarios, they will think of the brand, and corresponding value will be generated.

So, rather than viewing this as an immediate gain, think of it as capturing potential customers.

For example, the products of cross-border cooperation are not the target user group we need, but this does not rule out the possibility that there are a large number of potential users suitable for our products among the existing users of the cooperative products.

Therefore, we cannot simply generalize based on data indicators, after all, this potential information is impossible to measure.

Moreover, when calculating customer acquisition costs and cost-effectiveness, we must also look at the effectiveness of marketing communications comprehensively, and not just look at each aspect independently.

Activated (user) activity can be simply understood as the concept of the "active user" data indicator. Of course, the definition of activated users will vary depending on the product goals.

For example, most e-commerce products have newbie discounts, which allow you to purchase high-quality products at low prices, which is often referred to as "getting a bargain."

The first purchase behavior of such users is not considered as an activated user, after all, it is not a voluntary purchase intention.

This behavior or phenomenon cannot be said to activate user activity, but can only be regarded as a marketing method in the "user acquisition" link - using the "bargain mentality" of low prices and discounts to acquire customers at low cost.

Meituan, as shown in the figure below, uses a low-price method to guide users to open membership:

Only when a user activates and consumes, the user is truly activated.

(Of course, in some scenarios, users can be considered activated as long as they have purchased a membership. This needs to be defined based on product needs.)

There is also Taobao’s 88 members, who use the method of accumulating Taobao points to stimulate users’ desire to consume. After all, using a membership system can better enhance user stickiness and loyalty to the product.

The left picture shows the Meituan membership activation page, and the right picture shows the Taobao 88VIP pop-up window

In general, most products determine whether a user is activated by judging whether the user has secondary consumption behavior.

The purchasing behavior of secondary consumption is completely spontaneous. People are attracted by the value of the product, rather than for the purpose of taking advantage of the platform.

How should other products, such as tourism products and travel products, be defined?

The operation path of this type of product is generally very long, and it is difficult to offer large amounts of benefits, so as long as the user completes a core process completely and successfully.

For example, booking an air ticket, booking a hotel, going on a trip, hailing a taxi successfully, etc. (generating consumption) can be defined as an activated user.

No further related examples are given. In short, different products have different definitions of active users, and the scope still needs to be defined based on the characteristics of the product itself.

Now that we have clear boundaries, how do we activate users?

The author uses the above examples of "薅羊毛" and "去旅游" to introduce two different activation schemes in detail:

For users who want to get the best deals, what attracts them is definitely not the product itself, but the preferential policies of the platform, such as subsidies, new user discounts, coupons, etc.

Most platforms use this method to acquire customers at low cost. This is for first-time consumers.

So for second-time consumers (i.e. repeat purchasers), why can they still initiate consumption on their own without any preferential policies?

Comparing the differences between the two, it is nothing more than whether the content of the product itself arouses the user's interest, such as usage value, display value, texture and so on.

Therefore, the value of the product itself becomes one of the directions to activate users .

Let’s dig deeper into this example:

If a user’s first purchase on the platform (in the form of a discount) is eggs, how do you activate the user’s attitude and behavior towards repurchase?

At this time, you can try to optimize the supplier channels and introduce high-quality suppliers to provide users with high-quality products that can be guaranteed by consumption.

If the eggs are fresh and delicious, and their price is lower than similar eggs on the market, users will continue to have a "bargain-hunger" mentality, thinking that the eggs sold in this store have the best value for money and their value far exceeds the price, and they will repurchase.

As shown in the figure below, JD.com No. 1 Member Store invites users to become members, and then regularly sends eggs produced through safe channels (quality guaranteed) for free (for cheapness) throughout the year, using the value of the product to acquire high-quality, valuable users.

Of course, in addition to controlling the supply channels, you can also try to approach the user experience and design features that will surprise users.

For example, optimizing the display content of reviews, allowing more high-quality reviews to be exposed, etc. These can all be counted as points where users discover the core value of the product.

These points can make users deeply remember the sense of surprise, that is, the memory point and the sense of surprise.

High-quality graphic reviews (buyer shows) can enhance users’ trust in products, thereby stimulating their consumption.

When it comes to tourism, users will use and consume products only when they have demand, so the question of "how to activate users" must be optimized during the "usage process".

(Perhaps some readers will ask at this point: " Why should users use your product to make reservations and not other products? " This is to go back to the "user acquisition" link: whether it is brand placement or marketing strategy, these must be solved in the acquisition link.)

How to optimize the usage process? That must be to optimize the path used by users.

Assuming that the product already has a large user base, how can the newly acquired users be effectively activated?

This requires the use of refined design, that is, the " divide and conquer " approach:

Step one: attract first.

First, use big data to group users. It is recommended to use "labeled user portraits" to segment users' product usage: are they new white-collar workers or urban seniors?

Re-use these tags to push different content to users.

The more accurate the label is, the more likely it is to arouse the user's interest, leading to subsequent viewing of details and consumption behavior.

Step 2: Reactivate.

Predict user behavior and use user operation expectations to define corresponding operation steps.

For example, simplifying the path and reducing leakage:

By observing the funnel or other data, you can discover the numerical changes during the user's operation and optimize the path in a targeted manner.

This can reduce the resistance of users to using the product, effectively improve user satisfaction, and increase the success rate of users completing tasks on the core path.

To put it bluntly, the "activation and activity" link mainly depends on the quality of the product itself. The higher the quality, the lower the difficulty of activation, and vice versa.

Moreover, the process of stimulating activity is neither long nor short, and requires relevant personnel to constantly change and optimize the content.

This brings us back to the premise of "small steps, fast iteration" and "focusing on data indicators" mentioned at the beginning of this article. Only by discovering data changes in a timely manner during the process can we give the most reasonable solution at the most appropriate time.

Retention

Please note that we are talking about value here! Value can be in any form, not just consumption value .

If a user opens the software and only looks up information, he or she can only be considered an active user and cannot be counted as retained.

For example, Li Ming browsed on Tmall but did not place an order or pay (generate any consumption behavior) for a month. At this time, he can only be considered an active user.

At this time, the product should consider using appropriate forms to stimulate Li Ming and make him want to consume, so that the retention rate can be +1.

However, value cannot be simply measured by money. For example, for news products, the amount of user activity is a reflection of the value of the product. The number of messages on WeChat is also a reflection of the value.

Therefore, retention value should be viewed and defined dialectically in combination with product characteristics.

There are many ways to improve retention, and each product has different characteristics and problems, so the solutions adopted are endless.

The author briefly introduces several practical methods here to help improve product retention, for reference only:

(1) Sunk costs

Every year on Double Eleven, major platforms will organize a pre-holiday warm-up operation event in advance.

For example, the building event (game) in 2020 used the "energy investment" of users (players) before the event started as time cost, and finally converted it into consumption money to increase sales on the day of the big promotion.

Since players have already invested so much time and energy in participating in the event, they can only continue to pay the corresponding money to let the time "sink" in order to realize the value of the time they have invested.

(Consumption money is similar to points, and these points can only be consumed in a certain way, such as deductions for purchasing products, so that the fourth link of "increasing income" can be successfully achieved)

Isn’t this a good way to encourage users to create value? Although it’s a bit tricky, it’s also a good way to improve user retention.

(2) Loss aversion

Let’s take the Double Eleven example again. Every year, we launch discount activities, such as 40 yuan off for purchases over 300 yuan.

Sometimes we may meet this amount just to complete the order.

For example, if we buy something worth 880 yuan, and we are 20 yuan short of another 40 yuan off, we will finally look for useful things but perhaps not needed now to complete the order, and we may accidentally end up with 50 yuan.

Although we meet the "900-120" policy, if you think about it carefully, haven't we invisibly paid 10 yuan more?

Then why are there still so many users who just want to get together? Are you willing to pay even if it means paying a little more?

This is because the purchased item is valuable to the user himself, and this value exceeds the extra 10 yuan.

(The discount is actually a coupon, which is an indirect way to stimulate "increased income")

Marketing methods similar to loss aversion, as well as hunger marketing and limited-time flash sales, are all aimed at creating an atmosphere of missed opportunities, thereby leading users to have the illusion of "seizing the time."

(3) Herd mentality

For example, when a new product is first launched on the market, it will cause a sensation in the market, and then users will flock to it.

If the product is valuable, users will continue to stay with the product. Otherwise, if the product is worthless, they will leave. The more basic the demand level, the stronger the persistence).

In the long run, this is only a temporary solution, but it can stimulate user retention in the short term.

There are many methods, such as refined design, emotional design, membership system, holiday activities, etc., which are all good ways to improve retention.

Speaking of retention in essence, no matter how you play marketing or improve user experience, in the final analysis, users will reuse the product and contribute value repeatedly. This is nothing more than the product being able to generate or even create additional value for users, and users will be willing to use it.

Therefore, the question of improving retention comes back to square one:

• What should the product provide to users?
• What user needs need to be met?
• How to realize expected and attractive needs on the basis of meeting basic needs?

Only when a product satisfies users’ needs and creates value for them first, can users give back to the product and create corresponding value for it.

I wonder if you readers have ever thought about this question:

Why do people who have eaten at Haidilao go back again? Isn’t it enough to eat the same brand of hotpot once?

We can get a glimpse of this from some similar cases in the past:

In the past, people liked to go to coffee shops because coffee shops could provide an environment and this environment could create a corresponding atmosphere for users, just like when you play games at home and don’t feel anything, you go to an Internet cafe and the feeling comes up immediately.

Haidilao is a company that can provide a hot pot atmosphere:

There is no hotpot atmosphere when eating hotpot at home, but there is when you go to Haidilao (environmental value), and you don’t need to choose the dishes and eat them yourself, the waiter will help you do it all (service value).

In addition to the above values, there are various other values, such as various cleaning products coming out of the bathroom, small snacks provided while waiting, etc. These are constantly creating value for users.

When users experience this kind of value baptism many times, they will feel satisfied and begin to develop a sense of loyalty. They will slowly bring more friends to Haidilao for dinner, and provide more value to Haidilao as a company (this is actually the "communication recommendation" to be discussed in the fifth link).

Imagine if an old customer brings 5 ​​friends to dine together, and then these 5 friends, after sensing the value, will also bring 25 new friends to dine together, the compound interest effect will gradually take effect.

According to a research data from Harvard Business School, for every 5% increase in retention rate (that is, more old users stay), the profit margin can be increased by 25~95%!

Therefore, compared with the aspects of "acquiring new users" and "stimulating activity", retention is a link with greater maintenance value than the first two links, and it is also the most cost-effective link.

Just like the membership system, the value that one paying member (old user) can contribute is far greater than the total value that 10 new users can contribute.

Of course, the success of Haidilao cannot be explained clearly by the author with just one case.

This article is just to cooperate with the "improving retention" link, and only provides an in-depth description of certain single points. Readers are welcome to read on their own for more detailed content.

In addition to finding ways to improve retention, we might try a different perspective: reducing churn by reducing churn.

Doesn’t this indirectly improve retention?

Due to limited space, I suggest that you optimize yourself based on your actual work experience as to the specific methods to reduce the attrition rate. I will not describe them in detail here.

Revenue

Monetization is about obtaining revenue, which is a manifestation of the value that a company or product obtains from valuable users. The most direct monetization indicator is profit.

After all, when a company spends so much resources to develop and operate a product and provide services, the ultimate goal is almost always to make money, either from the users themselves.

For example, e-commerce, live streaming, payment for services, etc.

Either make profits through advertising revenue, which is similar to the main source of income for Douyin in the early stage, but it needs huge traffic to attract advertisers to invest money;

Another more special form is traffic monetization. Public welfare platforms, for example, rely on traffic to monetize, but what is monetized may not be money, but some value.

The left picture shows QQ Music Deluxe Green Diamond (membership system), and the right picture shows Weibo advertisement

The "acquisition of income" link cannot exist alone, it must rely heavily on the two links of "active" and "retention", so all the cases mentioned in these two links can be used as cases in this link for reference.

For example, the consumption money for building buildings is actually a point system, which is used to motivate users to use it, thereby promoting consumption conversion and obtaining profits;

Full discount is similar to coupons, which stimulates users to collect orders and spend money through discounts and obtain profits;

There is also Toutiao user segmentation, which uses big data to manage users, accurately serve content that users are interested in, and stimulate users to watch the same type of advertisements to increase the exposure of advertisers' brands.

Looking at the cases mentioned earlier, we can summarize: if you want to increase your income, it is either a "win-win-win-mode" or a "win-loss-mode":

The "win-win model" is actually a value exchange.

For example, e-commerce platforms establish a bridge of communication and trust between merchants and users, and then all three parties can obtain corresponding benefits from it - users harvest products, merchants harvest money, and platforms charge related fees;

The "win-loss model" is a way to increase revenue by sacrificing the value of certain users .

For example, advertising is a way to reduce user experience, but it can increase the platform's advertising revenue and the exposure of advertisers' products.

When encountering this pattern of increase and decrease, user experience designers need to take action to balance the critical point of winning or losing. After all, different advertisements have different losses to user experience.

For example, inserting advertisements through storytelling on Douyin is a good balance method, and of course there are more clever methods. For example, TopView is a good way.

There are many methods about "How to monetize? How to increase revenue?", which is directly linked to business and market, and interested readers can expand their reading of relevant materials.

Referral (recommended)

Before we begin to describe the "recommended communication" section, let's try to recall:

What elements guide us to make the decision to "go out" in the "mind journey" from the idea of ​​traveling to the decision to decide on traveling?

I believe it is a social recommendation.

At this time, readers will start to refute:

" What I found out on the Internet is like a social recommendation? There are related strategies on Mafengwo and Ctrip. After I found the strategies I was interested in, I made a decision! This has nothing to do with socializing."

So, who wrote these strategies? Isn’t it also a guide written by strangers?

If a stranger shares some of his travel summary on the platform, is that a kind of information exchange? Isn't this social? Isn’t socializing a stranger?

The picture on the left is Mafengwo’s “Fengshou Travel Note”, the picture on the middle is Ctrip recruiting future travelers, and the picture on the right is hot topic on Ctrip

Looking at the essence through the phenomenon, you will find that travel can be big or small, but what can guide us to make decisions is probably that "social recommendation" plays a decisive role.

Maybe it was recommended by strangers on the Internet, or friends and colleagues around you, but it would never be decided after searching for the encyclopedia of this attraction by yourself (unless it is for some purpose, such as business trips, which is rigid).

After all, we always rely on sharing other people's experiences to help ourselves suffer less losses, especially in the unscrupulous industry of tourism, where there are too many "ways" and you will be cheated if you are not careful.

From the perspective of Maslow's demand level, social needs are the longest and instinctive needs of human beings from the beginning to the present. After all, humans are social creatures. It is precisely because of the demand for social interaction that we have made up our minds.

With the previous social preparation, now we will return to the "recommended communication" link itself.

For a product, brand promotion in marketing is actually a way to implant a certain concept into the minds of users, which is what is called "nails" in brand positioning.

When can this nail be pried up, we need to use the power of recommendation and sharing: social media is the most powerful and direct force.

Like the usual Amway, it is a kind of recommendation. We often try something based on Amway content.

Because we believe that with the help of our friends' experience, we can avoid many detours and get more reliable, more accurate, and extremely cost-effective feedback.

You might as well dig deeper into what specific forms of social recommendations are there? The author summarizes three types:

The best way to understand the first is Pinduoduo, through social fission, the product can be spread among users like a virus:

Li Ming recommended a link and needed Wang Hao's help to cut it. The final result was that Li Ming could buy bargaining products at a low price, and Wang Hao could get the corresponding coupon;

If the first type is passive, then the second type is active.

For example, Li Ming asked you: "May Day is coming soon, are there any fun places to recommend?" Then you will start to recommend various amendments;

This is an active social recommendation;

The third type is more special. Although it is an active behavior, there is a certain exchange of interests.

For example, today, stocks made money, and then Li Ming would take a screenshot to post on his Moments, gaining a circle of likes and envious opinions, and then his friends also entered the market.

So what is the essence of these three forms and what is the logic behind it? How did these social recommendations come about?

This is actually an external stimulus. Merchants will use various subsidies, concessions and discounts to attract new users, similar to the "user acquisition" and "stimulating activity" links mentioned in this section.

To put it bluntly, it is a new round of customer acquisition, activation and retention;

As for the second type, it is the user's sincere recommendation.

It does not have some utilitarianism like Pinduoduo, nor does it have some purpose like the third one. Instead, it simply hopes to gain the respect and recognition of friends by sharing experience and try to establish emotional connections with others.

This is psychologically a sense of satisfaction that is needed. Of course, this recommendation is an act that only occurs when the value of the product itself can be shared.

If the early marketing is done well and the brand concept is successfully nailed into Li Ming's mind in advance, then once he is recommended by his friend Amway, Li Ming will immediately pry up the nail that has been nailed into, which will greatly contribute to the value of the brand;

The third type looks like a social need at first glance, but in fact, it has risen to the demand for respect.

In the view of Maslow's demand level, this is "taking behavior of respecting needs through the shell of social needs."

In summary, if the product user base becomes larger and fresh blood is maintained, the "transmission recommendation" link is essential.

Because it is a powerful channel that can be recognized by old users and then recommended to new users, that is, "human transmission", it can be understood as the mainstay of product marketing.

(This is also an important reason why "good products" should be ranked first among the four major systems in the preparation work in the previous article)

At the same time, "communication recommendation" is also a key link in allowing the user growth model to form a cycle, and can form a (closed) loop that connects the head and tail with the "acquisition of users" of the first ring.

By " If the old users leave more than 5%, the profit margin can be increased by 25~95% . This data can simply and roughly explain why the "dissemination recommendation" link on the funnel is the most valuable:

Although it is not a vested interest, its hidden value is limitless. It can not only create high profit returns for the product, but also bring more new users to the acquisition ring, which can be said to kill two birds with one stone.

All five links have been introduced so far. Finally, I would like to emphasize that the final result of MVG must be verified through data to verify whether the solution is feasible. After all, data is the most intuitive and effective way to monitor growth.

Especially when formulating corresponding plans for each link, it is necessary to be like the "HEART User Experience Analysis Model":

Define a clear and measurable data indicator, and in this process, we must continue to "run quickly and iterate quickly" and try to optimize the solution. Finally, we find the most suitable and effective solution to better promote and serve users, and thus allow the AARRR user growth model to form a benign, spiral upward closed loop and cycle.

at last

The growth model completely transforms invisible user growth into a data problem, which allows growth users to indirectly connect to growth data.

As long as all data are raised, the growth of users will naturally not be a problem.

However, the biggest difficulty lies in how the data grows, which requires the use of various complex and targeted methods to divide and conquer it.

With the development of the times, the user growth model of "violent customer acquisition" like AARRR has also begun to have an incompetent and unacceptable side:

It cannot achieve accurate customer acquisition, and it is now more and more users who are difficult to obtain.

According to valid data, the average customer acquisition cost of a large platform is 400 yuan per registered user, and this cost is still rising over time.

The cost of online customer acquisition continues to rise (unit: yuan/person), and the cost of customer acquisition has increased by 13 times in 9 years.

Think about it, 1,000 new users will cost 400,000 yuan, and no one can stand the money.

Therefore, in order to survive in the current environment where traffic dividends are in decline, we have to think about more novel ways to acquire customers.

The "precision customer acquisition" proposed by 6R user growth models - Recruitment, Reproduction, Retargeting, Retention, Revenue and Reservation are a good choice:

As long as users can be attracted, the cost will be greatly reduced.

• There is also social fission like Pinduoduo, which uses social power and interpersonal relationships to reduce costs;
• Toutiao uses big data to achieve accurate promotion;
• Alibaba opens up data middle platform, launches label user portraits, etc.

These are all reinnovation and recreation based on traditional growth models, and at the same time saves a lot of resources for the company.

6R user growth model

Finally, it should be noted that user growth is team work, not a battle alone.

It is best to know the core work of some other positions when it comes to each individual in the user growth team.

The clearer a person's definition of his or her position is, the easier it is to retreat into the comfort zone of his or her field.

The result is that cross-functional and cross-field communication will become less and less, which will breed a mentality of "being self-protection" and create suspicion and accusation of problems and mistakes in other functional departments. This is a mentality that is not conducive to oneself and the development of the team.

And as the pace of the Internet era accelerates, the team-collaborative working model is becoming more and more urgent, which also means that the practice of "protecting yourself" will no longer be applicable to the team organization, let alone the user growth team with extremely high responsibilities.

Therefore, no matter which position you are in, you must always understand one thing: only by being more capable than the position can you gain greater room for growth and progress.

-END-

Author: Great Sage

Source: Taotao's design footprints (dao875540493)