User growth: creating a closed loop for attracting new users

The endless stream of products on the market has indeed brought about more intense competition. Statistics show that less than 1% of each new product can successfully cross the "growth stage". The Internet’s demographic dividend is gradually disappearing, and most industries are moving from incremental markets to stock markets. At this time, it is difficult to attract users simply by relying on product innovation and functional usability. Product homogeneity is so serious now that everyone can quickly copy a product with good functions.

Therefore, the requirements for product managers are getting higher and higher. No matter how good a product is, it is useless if it cannot attract users. So I personally think that growth product manager is also a very important transformation path for product managers in the next few years.

So I want to talk about how Internet products achieve growth .

How to acquire customers is the most troublesome thing for every product, and it is also the basis for a series of subsequent growth actions. Without users, there is no growth. There is actually a logic to customer acquisition, which is mainly divided into four steps.

The first step is to create a closed-loop strategy

This closed loop means that after successfully attracting a new user to the product, it is not actually over yet. The key is to give these new users the ability and channels to attract new users.

There are three main strategies we commonly use to attract new customers:

Inbound marketing : acquiring users through one’s own capabilities (high-quality content output or services) rather than traditional advertising.

A typical closed loop for attracting new users in inbound marketing is to use UGC+SEO to guide one group of users to another group of new users.

Common products include Zhihu, Douban, Jianshu, etc.

Push marketing: using mass media to directly carry out large-scale publicity, such as television media advertising, elevator advertising, transportation advertising, etc.

A typical closed loop for attracting new customers in push marketing is: paid marketing + advertising

Common products include BOSS Direct Hire, Yuanfudao, Zuoyebang, etc.

Fission marketing : The most commonly used customer acquisition method in the Internet industry in recent years. The typical closed loop is that old users continue to bring new users to form a snowball effect

Common products such as Pinduoduo, Luckin Coffee, etc.

The second step is to measure the customer acquisition effect

Here is a commonly mentioned customer acquisition formula: LTV>CAC

LTV, or customer lifetime value, refers to the value that a customer can bring to a product over its entire life cycle.

CAC stands for the cost of acquiring new users.

If we further refine this, we can get a similar customer acquisition funnel, where we should pay attention to both the number and quality of new customers.

However, it is important to note that the definitions of some indicators

For example, when considering the number of downloads and registrations of a product, we pay more attention to the latter. For example, do we consider user registration as a success? Not necessarily. Many Internet products consider new users to be successful only when the user completes a certain activation action.

The third step is to optimize the strategy of attracting new customers. Which areas can be further optimized?

We have just mentioned the common strategies and methods for attracting new customers. Here are two examples.

When Uber was first launched, analysis of App Store data revealed that user churn on the App Store search page was very serious, reaching a 50% churn rate.

So they decided to do ASO search optimization. After the optimization, Uber’s download data on the AppStore increased significantly.

Another product, Instagram, also lost more than 80% of its visitors on its initial landing page.

How do they reduce churn and increase conversions? They put the new landing page user registration and login on the same page, so users can log in and register for the product very conveniently and quickly. Although this method seems very conventional now, it brought a lot of data improvement to Instagram back then.

Step 4: Apply closed-loop techniques to attract new customers

There are actually many key points to closing the loop of attracting new users. Here we take a short video app as an example

1. Have a clear strategic focus

As a content platform, Kuaishou has always focused on UGC. The short videos are rich in content, using a large number of daily "original" funny jokes from rural areas and small cities to differentiate themselves

2. Have clear goals

Pay attention to these indicators of newly registered users: number of likes, number of comments, number of reposts, and completion rate

3. There are different closed loops for attracting new customers at different stages of the product

Early stage: mainly to accumulate content and establish the content ecology of the platform

Later stage: Use invitation friend subsidy rebate to expand user referrals

By building a closed loop of attracting new customers through the above 4 steps, we can achieve rapid and effective customer growth and make attracting new customers a sustainable closed loop.

Author: Hutong No. 6

Source: Hutong No. 6