How to use the points system to stimulate user retention (Part 1): Classification and definition of points

The so-called points system is based on points. Before understanding the points system, let us first think about what points are?

With the popularization of 4G networks, mobile Internet has thrived and developed rapidly. As a result, the cost of acquiring users is getting higher and higher, and improving user retention is becoming more and more difficult. Faced with this dilemma, more and more products choose to use a points system to stimulate user activity and retention .

However, we have seen many point systems, such as e-commerce apps, Taobao and Tmall have their own point systems; the three major operators of China Mobile, China Unicom and China Telecom also have their own point systems; even the chain supermarket downstairs will have some activities to redeem points for gifts. The points system seems to be within reach of our lives, but how does the points system work? If you want to establish a points system for your own products, what directions should you consider?

When you think back to your experience of using apps like Taobao and Tmall, or using points from the three major operators to redeem gifts, have you noticed that they all have one thing in common: that is, after we complete a certain officially prescribed task, we can get certain points as rewards, and later, these points can be accumulated and redeemed for some gifts or benefits. No matter what these points are called, such as gold coins or points, the principles of their use are basically the same.

Definition of points and points system

Based on my observations of the above products, my definition of points is this: points are a means of official incentive for users to complete certain tasks and obtain corresponding virtual currency rewards.

These points, which are the virtual currency within the product, are redeemable. When the points accumulate to a certain level, users can obtain certain benefits and advantages, both spiritual and material. These specific tasks are generally the actions that the official particularly wants users to experience, and these actions are generally related to the most important evaluation indicators of the product. For example, daily sign-in and login, payment and purchase, and phone recharge. These behaviors can stimulate user activity, retention, and even conversion.

By observing these point systems, we can find that all point systems are divided into two parts: points obtained by completing tasks and points exchanged for benefits. So I think the definition of the points system is: the points system is a system in which users receive virtual rewards for completing officially designated tasks, and these virtual rewards are accumulated and can be gradually exchanged for actual benefits.

Classification and function of integral

Different scoring systems have different functions. According to their different purposes, there are three common scoring systems.

01. Stimulate activity and retention points system

The main purpose of the points system to stimulate activity and retention is to promote user activity through the points system. This is common in the points mall within various mobile apps. For example, you can get rewards for logging into gaming apps every day, or for signing in continuously; for example, you can get points from Didi Chuxing’s points mall, where you can redeem gifts by accumulating points from taxi rides.

02. Cultivate a user loyalty points system

Cultivating a user loyalty points system, as the name suggests, has the main purpose of cultivating user loyalty and stimulating users to repeatedly use the services provided in the product. Accumulated air miles, which are common among various airlines, can be exchanged for air tickets. This strategy will encourage users to tend to book flights with the same airline. For example, many milk tea shops use a promotional strategy of giving one free cup for every ten cups purchased, which is essentially a points system to cultivate user loyalty.

03. User relationship identification points system

The main purpose of the user relationship identification points system is to divide users into different levels according to the number of points, so as to treat them differently and conduct targeted user management. This is common in various products that are directly linked to money, such as credit card points systems, which are used to judge users' spending power and repayment ability. Another example is the previously very popular Sesame Credit score, which also evaluates the user's comprehensive credit and divides users into different levels, so that users can join different circles and have different permissions.

After understanding these, we have a preliminary understanding of the points system. So the most important thing is, how is the points system built? What should we pay attention to when building a reasonable points system? Nobita will discuss this with everyone in the next issue.

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