User Growth Tips

The background for writing this article is due to the recent work adjustment. I started to get involved in user growth , so I plan to systematically catch up on the knowledge of user growth. The content mainly comes from the teachings of senior colleagues and some books. It is mainly theory, supplemented by insights. There is not much practical experience, but it is comprehensive in content, so I would like to call it "The User Growth Beginner's Guide that Everyone Will Collect After Reading It."

Ever since the term “growth hacker” became popular a few years ago, “user growth” has been very hot, very hot, very hot. On the surface, growth seems to be a very interesting thing that can easily generate data feedback to show achievements. However, once you enter the industry, you’ll find that growth is either stepping into a pit or on the road to the next pit.

How does user growth come about? Think about it, the Internet used to be divided only into products and operations. Later, the division of labor became more refined, and the naming also changed from transaction-oriented to goal-oriented, such as commercialization and user growth. Especially when it comes to user growth, in an era when user growth is easy, there is no need to deliberately break out the division of labor for growth. The emergence of new jobs means that this task will become increasingly difficult, and at the same time the responsibilities will become increasingly greater.

How to view growth

1. What is the value of user growth?

It is more accurate to say that it is an increase in total product value rather than user growth. Total value = number of users * payment rate * average order value * repeat purchase. "User growth" is to increase "number of users * payment rate", that is, the number of paying users, "commercialization" is to increase the average order value, and repeat purchases require both growth and commercialization to drive

2. What are you doing to increase user growth?

I think user growth is doing three things:

Let users come: Previous operations were centered on products rather than users, and it was difficult to achieve the ultimate experience. User growth emphasizes the efficient connection between users and products, allowing users to experience the core value of the product and feel good. Therefore, it is necessary to attract accurate users, make precise connections, and optimize user paths. In simple terms, if high-end hotels want to attract users, they first place an advertisement in the first-class reception room at the airport, then send a special car to pick them up at the airport and take them directly to the hotel, and then beautiful waitresses will receive and guide them throughout the check-in process.

Keep users: Conduct vertical life cycle management for individual users. For details, refer to the AARRR model. In simple terms, it means first making users feel comfortable staying so that they are willing to come again, and then they can become members, earn points and discounts, come frequently, and bring their colleagues and friends along.

Let different users have different feelings: User tiered management provides differentiated personalized experiences and efficiently meets needs. In simple terms, it means preparing presidential suites, ordinary rooms and economy rooms, so that users with different paying abilities can stay in different rooms.

Many times, growth means moving offline methods of attracting and retaining customers online. The difference lies in the use of algorithms and technologies to achieve wider coverage, greater refinement, and lower marginal costs.

3. Growth means spending money? Isn’t it great?

Growth is mainly achieved by attracting new customers and continuing the business. Attracting new customers is indeed a costly thing, but it is not easy because it is essentially a business. The money invested in acquiring users needs to be earned back from the users to calculate the ROI. You need to prove that you are spending your money wisely, that is:

(1) In absolute terms, the money earned in the end is more than the money spent (LTV > CAC)

(2) Relatively speaking, you should choose the most efficient way to spend money (give money to the media, channels or users), the target of spending money (specifically which media/channels/user groups), and the amount of spending (how much money to spend on each media/channel/user group, depending on the marginal benefit).

Note: Giving money to the media is branding, giving money to channels is buying traffic/advertising, and giving money to users is fission. Channels and fission will be explained later.

4. What qualities are needed to achieve growth?

Understand users very well: Growth is closely related to users and requires deep insight into user psychology. We have a comprehensive understanding and control over the user's portrait, needs, scenarios, the fit between the product and the user, etc.

Have data sense: Growth often involves experiments, which require rapid verification of conclusions and agile iteration, thus requiring data-related hard and soft skills, especially sense.

Ability to collaborate across departments: Collaborate frequently with business parties, sometimes even across departments, which requires strong communication, collaboration, and the ability to secure resources.

Strong judgment: Not all practices can produce deterministic results using data. In many cases, logic, experience, intuition, etc. are needed as references to make judgments.

Other requirements for product planning also apply to user growth, including owner mentality, product sense, logical thinking, empathy, sense of business, technology, and aesthetics, etc.

5. Why does growth emphasize finding users’ key behaviors?

According to statistics, on a certain e-commerce platform, after one repeat purchase, the user retention rate increases by 30%; after five purchases, the user becomes loyal and the retention rate increases to over 60%. Regardless of whether purchasing behavior and retention are correlated or causally related, we only need to try our best to guide users to complete the purchasing behavior to improve their retention.

It may be possible that guiding users to complete other behaviors can also help improve retention, such as searching, browsing, and viewing reviews, but we need to find the most relevant ones.

Generally, we believe that when users complete key behaviors, they can experience the core value of the product and achieve the "Aha" feeling, which will greatly benefit their subsequent activity and payment.

6. What is the growth rhythm of the product?

Rhythm and focus:

Seed stage: work with product colleagues to complete demand exploration and MVP creation;

In the embryonic stage: PMF (product-market fit), product-channel fit, and the core is retention;

Growth stage: focus on user conversion, with the core being payment;

Mature stage: The core focus is on old users, as well as the activation of declining and silent users, the recall of lost users, and the core focus is on activity;

Note: (1) In the early stages of a product, the emphasis is on speed and agile iteration. Within a limited window period, quickly occupy territory, establish brand awareness, expand first-mover advantage, and then use economies of scale to bring in subsequent steady stream of natural volume, thereby reducing customer acquisition costs.

(2) The key to incremental market is speed, while the key to stock market is the degree of operational refinement.

7. What is the relationship between growth, market and operations?

Growth focuses on both product branding and actual product conversions. For some products that need to scale and have brand influence, growth and marketing students need to work closely together. For example, both parties jointly plan the overall brand tone and publicity and promotion strategy, and then the growth students are responsible for brand advertising, and the marketing students are responsible for event planning, etc.

The difference between growth and operations lies mainly in the work goals rather than the work content. Growth involves all operational work that helps growth (including product capability building)

8. What is the channel doing?

The core of channel delivery is to find the most effective multiple delivery channels and decide the scale of delivery for each channel through single-channel ROI and cross-channel comparison. As a side note:

(1) Generally speaking, app stores and mainstream information flow advertising platforms (such as Tencent AMS and ByteDance Pangolin) are the main delivery channels.

(2) Performance advertising mostly uses CPA (games generally use CPS), while brand advertising mostly uses CPM. The "A" in CPA generally refers to registered

(3) App store traffic (especially targeted users) is limited. As the volume of ads increases, the marginal cost will increase. Information flow ads generally have a large traffic pool, so this problem is unlikely to occur.

(4) If you have the support of a big company like Tencent or ByteDance, you can try to divert traffic and exchange volume through internal channel cooperation

9. What is fission doing?

Fission means "people pulling people", which is essentially to establish an interest incentive system. The benefits need to be given to both the communicators and the disseminated, supplemented by appropriate scenarios, reasonable names of diffusion, etc. A few key points are as follows:

(1) The carrier of fission is social relationship chain and trust;

(2) The quantity can be one-to-one or one-to-many;

(3) Forms include fighting, helping, chopping, sending, comparing, and exchanging;

(4) The incentives can be money/materials/information/group membership, or discounts related to the main business;

(5) Pay attention to security risks and prevent illegal activities and profiteers;

(6) “Drawing Koi” is a variant of fission gameplay that takes advantage of everyone’s mentality of taking chances. Some users are willing to contribute low-cost sharing operations to “work” for the platform, and they expect that there is a high probability that they will get nothing in the end. For the platform, the average forwarding cost of "Drawing Koi" will be lower and it will be easier to attract market attention. However, the operations required of users should not be too complicated;

(7) The concept of “social currency” is mentioned in “Contagious”, which emphasizes that in order to make a product a “social currency” that everyone is willing to promote, the product needs to have “unique design”, “high recognition in public places”, and “deliver valuable information rather than pure advertising”. If it is supplemented with reasonable incentives (such as authority, scarcity, differentiation or certain emotions), it will be easier to spread;

(8) Fission needs to pay attention to the alignment with product tone and core values. It would be best if it could help users establish a certain mindset or experience the value of the product. For high-end brands, they are not inclined to do a lot of promotions and group buying, which will damage the brand reputation. They can do this through sub-brands or second brands, such as Juhuasuan and Jingxi.

Today, when the traffic dividend has peaked, in order to attract new users, people often try all kinds of "devious ways", such as unexpected native advertisements in variety shows, suddenly finding that relatives and friends have pulled them into a welfare group when opening their phones, and having to follow countless public accounts to order songs at KTV... which makes people feel heartbroken. Therefore, growth people need to carefully balance efficiency and experience.

Some fragmentary insights

1. Retention is the key to user growth.

2. I agree with a perception repeatedly mentioned in “I’m Doing User Growth on the Front Line”: the means of growth is to transform subjective cognition into objective cognition through data-driven iterative testing, and to exchange the redundancy of testing for the certainty of growth.

3. User attribute labels have limited reference value. It is better to have behavioral labels because different individuals in the same portrait often have significant differences, and there are also significant differences between people’s thoughts and behaviors.

4. Fogg Behavior Model (FBM).

In order to get users to complete a certain behavior, three factors need to be considered: motivation, ability, and trigger. This is of reference value for our understanding of user acceptance and activation. Thinking from the user's perspective, motivation solves the question of "why do it", ability solves the question of "how to do it" and "can it be done", and triggers solve the question of "where to start".

5. The value of the brand to the product.

The core reason why a brand can attract consumers is trust. In the long run, it can help users reduce decision-making costs among multiple brands, thereby helping the platform to acquire customers steadily. At the same time, brands can also increase ARPU value by increasing product premium.

Maintaining brand awareness in the public's mind is like pan-social networking. For people working in investment/BD/sales and other types of jobs, it is necessary to maintain a large number of weak-connected social resources, which is much better than building relationships from scratch at critical moments.

6. "Addicted" - Addiction model.

4 steps: trigger the user's desire to act, get the user to act, reward the user, and finally get the user to invest time and energy.

(1) The desire to act is to explore needs and find the essential motivation that motivates users, which is something that must be done in advance.

(2) Giving rewards to users is an auxiliary incentive and should be done later.

(3) After users complete a behavior, they are encouraged to complete it multiple times, investing more time and energy. The more sunk costs they incur, the more difficult it will be for them to leave.

7. Scale Effect and Network Effect

The definition is as follows (from Zhihu answerer Char):

Scale effect: As scale increases, unit costs decrease, thus giving companies a competitive advantage;

Network effect: As the number of users increases, the value per user increases (demand-side scale effect);

My understanding:

(1) The difference between network effect and scale effect lies in whether the individuals within the scale are connected. Such connections can increase the value of individuals and attract more individuals to enter. Therefore, network effects are more likely to give rise to leading platforms. WeChat is a typical network effect. Two-sided markets such as Taobao, Didi, and Meituan have cross-side network effects, and the B and C sides enhance each other’s scale gains (there is a competitive relationship between the B and C sides).

(2) Network effects will bring about scale effects, but scale effects will not necessarily bring about network effects.

(3) Both network effects and scale effects may bring negative effects after the platform reaches a certain scale: the negative effects of scale effects are reflected in increased marginal costs and reduced marginal benefits, which is the "diseconomies of scale" in economics. In network effect platforms, in addition to the above reasons, negative effects may also come from realistic factors such as the decline in individual quality, such as Weibo and Zhihu. In a bilateral market, both parties are interdependent. Once the supply and demand are unbalanced, the value of some individuals will be reduced, causing them to leave the platform.

Author: Seven Days

Source: Seven Days