AARRR model, analyzing Himalaya’s membership growth!

The AARRR funnel model is also known as the Pirate Model. It explains the five indicators for achieving user growth and also helps us better explain the principles of acquiring and maintaining customers. This article uses the AARRR model to comprehensively analyze Himalaya ’s membership growth and share it with everyone.

From August 16th to 12:00 am on August 19th, Himalaya launched a buy-one-get-13 membership campaign. By activating a Himalaya membership for one year, you can enjoy 13 major memberships, including Himalaya Annual Membership Card, Tencent Video VIP Annual Card, iQiyi Gold VIP Annual Card, JD PLUS Annual Membership Card, and NetEase Cloud Music Vinyl VIP Annual Card, etc. These are particularly attractive memberships. Himalaya has ignited consumer enthusiasm with real price discounts.

Official data shows that more than 100,000 "buy one get 13" memberships were sold within one hour of going on sale. However, looking beyond the bustling scene of users buying, from Himalaya's operations perspective, this round of super-value joint memberships reflects the sluggish user growth and the increasingly high cost of attracting new users in the current red ocean of the Internet.

So, how to achieve user growth? The following is an analysis of Himalaya’s membership growth using the AARRR model.

The AARRR funnel model is a customer life cycle model proposed by Dave McClure in 2007. It explains the five indicators for achieving user growth, namely: Acquisition, Activation, Retention, Revenue, and Referral. It is also called the Pirate Model due to its predatory growth method. It can help us better understand the principles of acquiring and maintaining customers.

01 User acquisition (Acquisition) and self-propagation (Referral)

Growth goal: Get the most registered users at the lowest customer acquisition cost

1.1 Target audience

Users who do not use the product

1.2 Customer Acquisition Channels

In the customer acquisition stage, we can choose growth plans. There are four common growth plans:

1.2.1 Resource-based growth

Resource-based growth relies on the product’s own industrial channels to achieve growth, by introducing traffic through cross-border cooperation to achieve the goal of adding new users.

a) Associate Members :

• Buy 1 get 13 joint memberships, the effect achieved is very significant. On the one hand, it cultivates users' payment habits and develops a core loyal user group. On the other hand, the app breaks the circle during dissemination and achieves the effect of enhancing brand power.
• This approach also has some drawbacks. Spending money to grab users cannot lead to sustainable development and it also hurts old users. Compared with other large video and shopping platforms, Himalaya, as an audio platform, is relatively niche. If joint members are attracted to other members, Himalaya is just a by-product. Even if users register and activate their membership, user stickiness is relatively low. Once the membership expires, the renewal rate is difficult to predict.
• This is a harm to users who purchase membership at the original price. The purchase volume of original price memberships will inevitably decrease, leading to the depreciation of the membership itself and a reduction in member loyalty.

b) Upstream and downstream cooperation

• We have reached a strategic cooperation with upstream publishing houses and cultural groups to jointly develop areas such as audio book adaptation, and launched the "Audio Library Plan". Publishing organizations can obtain more traffic through this plan and open up new revenue flows.
• Cooperate with downstream listening devices and smart hardware to exchange traffic, such as mobile phones, AI speakers, etc. The cooperation method is that Himalaya provides advertising display for downstream hardware, and downstream hardware manufacturers pre-install and build-in Himalaya's APP. It also establishes extensive content cooperation with first-tier automobile manufacturers, and deeply explores the two major life-oriented audio content distribution scenarios of "home" and "car".
• We have reached an in-depth strategic cooperation with Didi Designated Driver. All car owners who use Didi Designated Driver will have the opportunity to obtain an in-car smart hardware "Car Listening" and receive exclusive designated driver vouchers provided by Himalaya FM.

c) App store promotion

Cooperate with various application markets and APP stores to obtain homepage recommendations or collection recommendations.

After acquiring new users through resource-based growth, retention becomes crucial. Users are attracted, but they do not necessarily like the product. At this time, pay attention to the number of new users, the number of secondary retained users, etc.

1.2.2 Platform-based growth

Platform-based growth is to strengthen the product’s IP on some platforms with large traffic.

Himalaya has been operating Douyin accounts, Weibo accounts, Zhihu accounts, Toutiao accounts, and Baidu Tieba accounts, innovating in content promotion and distribution, increasing brand awareness and expanding the audience. By leveraging the larger traffic advantages of other platforms, it will attract some users who are interested in the content, allowing Himalaya's content to reach more users.

1.2.3 Fission Growth

Fission growth is a growth method that uses users as a channel and achieves low-cost traffic generation through social fission. Himalaya's fission methods include:

• Recommended gift: Get a 20 yuan coupon for successful recommendation
• Free 7-day membership for relatives and friends
• Gift a membership to a friend
• 423 Listening Book Festival encourages users to create book lists and share them with friends to receive subsidies
• Share and earn points. Earn points by sharing programs. The more friends click, the more you earn. Points can be exchanged for physical items.
• The "Audio Creative Challenge" encourages canvassing and ranking, and has set up a fan choice award.
• Himalaya Knowledge Ambassador, share Himalaya paid products, and get up to 50% cash back for every purchase made by your friends.

1.2.4 Investment-based Growth

Investment-based growth is scale growth, which means high investment, but the increase in users is also considerable. There are two types here: one is brand advertising, which expands brand awareness and increases natural traffic. The second is performance advertising, which can be either search advertising or display advertising.

1. Ordinary placement: Place APP ads in high-traffic locations, such as headlines feed, soft article promotion, entertainment programs such as "Immersive" and "The Temptation of Dinner", and subway ads
2. Targeted delivery: Himalaya and Geely Emgrand jointly created the "Upward Library" based on the fact that the brand audience of Geely Emgrand is an elite group. Himalaya accurately analyzes the characteristics of the brand audience to ensure that the brand image and marketing concept accurately reach the audience.
3. Regional distribution: Ximalaya city partners cooperate with agencies with local resources to provide advertising, content marketing and city services (audio cultural and creative products, reading booths, audio libraries), etc.

1.3 Platform’s own customer acquisition

1.3.1 Content Attraction

Good content is the foundation of growth. Himalaya's content covers many fields such as books and children. The quality of free content is not worse than that of paid content. It covers audio books, music, crosstalk, radio dramas, anchor radio stations, and open classes. Paid content includes master classes, fine novels, live micro-classes, Xima book lectures, etc.

Trendy, rich and diverse content meets the needs of different groups of people.

1.3.2 KOL attracts new customers

• By attracting big Vs and using the traffic brought by celebrities to drive traffic to the platform, for example, stars and KOLs such as Guo Degang, Cai Kangyong, Cui Yongyuan, Yi Zhongtian and Uncle Qiuye have settled in the Himalaya app, and transformed their experiences and knowledge into PGC audio albums for sale on the app. Through the recommendation mechanism, popular creators are given more traffic and better recommendation positions, which mobilizes the enthusiasm of KOLs, completes the exchange of traffic between KOLs' own channels and the platform, and expands the platform's promotion channels.
• Cultivate grassroots anchors who actively become content producers, build an anchor matrix, and establish a complete anchor training system

1.3.3 New User Attraction through Activities

Create exclusive Himalaya memory points, such as 66 Member Days, maintain them for a long time, form traditions, and strengthen user impressions.

• Large-scale online event: 423 Listening Festival

Ximalaya launched a topic activity on the Weibo platform: It is too difficult to guess the title of a book using emoticons. Many internet celebrities, actors and big Vs were invited to participate in the topic. It has been read 230 million times and discussed 69,000 times.

• Offline promotion: Himalaya 423 Book Listening Festival and emoji company jointly organized a subway joint event: Guess the title of the book. The posters were exhibited in more than 20 stations of Guangzhou Metro.

1.3.4 Peripheral supplies

The official mall is divided into several aspects, including life aesthetics, cultural and creative products, IP peripherals, good books, smart hardware, and cat peripherals.

1.3.5 Creation Center

Teach everyone how to become an excellent anchor and how to make money from Himalaya.

1.3.6 Himalaya Enterprise Edition

Customized for enterprises, workplace content is shared by all employees and pushed to thousands of companies in a personalized manner, reaching users more precisely.

02 User Activation

The definition of activation is to help users experience the core value of the product and allow them to achieve the AHA Moment. Target users acquired from various channels will, through this stage, some of them will be activated and become real users of the product.

2.1 Intelligent Personalized Recommendation

Himalaya established a big data team in 2014, dedicated to creating personalized radio stations with "one thousand faces for one thousand people".

After a new user enters the APP, there will be a tag selection page where the user can choose the area of ​​interest they want to pursue. Subsequently, the app will recommend content that the user may be interested in based on the user's behavior. The page that each person opens on Himalaya is different, ensuring that people who are interested in a program can find where the program is.

2.2 Broaden the path for creators to realize their value

• Ten Thousand People and One Billion Plan: In 2019, Himalaya platform anchors received 1.634 billion in cash dividends through knowledge payment and other means
• Joy Plan: A short video "Pure Music Master" competition, where the winner will receive a prize of 10,000 yuan + top-level production + 600 million exposures, and gain growth support for the platform from traffic to monetization.
• Live broadcast - Spring Plan: including profit-sharing reform, traffic upgrade, ecological empowerment, copyright support, union training, anchor delivery and other measures. The threshold for profit-sharing rewards has been significantly lowered, opening up an exclusive channel for "live broadcast + recorded broadcast".

2.3 Content Operation

In addition to the above methods for all users, there is also targeted content operation for member activation.

• Analyze existing programs in high-playing and high-conversion categories to introduce high-quality members in these categories, and focus on the conversion of new content after it goes online
• VIP content audition allows users to experience Himalaya’s core functions through membership, helping users find Himalaya’s core value and experience the difference between member services and non-member services.

03 User Retention

Nowadays, with the increase in Internet penetration, the cost of acquiring customers is increasing, and trying to reduce the loss of retained users is the top priority of current operations. From a product perspective, the most essential thing is to enhance the competitiveness of your own products, continuously meet user needs, and optimize user experience.

3.1 Optimize user experience

• Free data service
• Reduce recording and live broadcast costs and optimize editing functions
• Creation center, reducing anchor learning costs and increasing monetization speed
• Exclusive for users with disabilities
• Member privileges: free listening for members, member exclusive, first-hand listening to popular programs, special discounts on good books and courses, no audio ads, distinguished logo, exclusive customer service, sleep aid and stress relief, super high sound quality, colorful barrage, member welfare club, discounts in the good stuff mall, and Headspace membership.

While improving the core competitiveness of the product, other methods can also be adopted to increase user stickiness to the product.

3.2 Daily Active Functions

Daily active functions refer to cultivating user habits through some methods;

• Welfare center sign-in function, sign in for 7 days to get membership;
• Earn points through daily tasks, experience sleep-aiding and stress-relieving services, and listen to live broadcasts.

3.3 User Incentive System

The user incentive system refers to a method that uses appropriate feedback of user recognition to motivate users and form a positive cycle based on their behavior in the product.

• The points system allows users to exchange points for prizes and participate in a variety of interactive games. The prizes are also attractive things such as memberships, points, discounted goods, etc. The gift lottery makes users feel a sense of scarcity and the need to participate quickly to receive benefits.
• Points can be earned for listening levels, listening to programs and consuming points. After earning points, paid general coupons and VIP memberships can be rewarded, and human risk aversion can be used to increase user stickiness to the product.
• Membership level. Himalaya’s membership growth system is divided into 5 levels, providing differentiated privileges and benefits. Growth value can be obtained by listening to member albums and purchasing membership cards of different levels. This can screen out truly high-quality users and provide high-quality users with the most and most affordable privileges, thereby ensuring the super high stickiness of this part of users.
• VIP Benefit Calculator: Updated daily, including the number of VIP albums listened to, amount of money saved, number of times ads were removed, and duration of ad removal. It encourages users to stay in the app longer and visualizes the duration of stay, making users feel that membership is such a cheap thing when using the app, thereby increasing the time users spend using the app.

3.4 Strengthen user investment

• Time investment: Through phased tasks, users' time investment is strengthened, making it difficult to give up halfway. The maximum listening task duration is 60 minutes, and points are earned in three stages. After completing a 30-minute task, users will continue listening in order to earn more points. The growth value of the membership level will decrease as the membership is lost. Unless the user does not want to use the APP anymore in the future, the user will not easily lose the growth value.
• Monetary investment: Through annual membership/monthly membership, etc., the user's monetary investment is strengthened, and the user's loss when leaving the platform is increased. When purchasing a membership, a Xiaoya speaker is given away. The cost of discarding physical goods is high, which is more conducive to user retention.
• Content investment: Through the accumulation of UGC content, users’ content investment is strengthened. Users accumulate a large amount of content in the process of using the product, so it becomes difficult for them to leave rashly. Fun dubbing, short videos, and national reading, low output threshold, and connected reward function
• Emotional investment and social investment: By guiding users to invest their emotions, emotional investment of spiritual sustenance is generated; by forming stable circle relationships, users' social investment is strengthened. The stronger the social relationship, the stronger the user's dependence on the product. The My Listener Circle function allows users to set up their own circles and gather fans in the circles, or join other circles to find friends with common interests; the host and the fans establish a two-way relationship, further improving the stickiness of the My Listener Circle.

3.5 Multiple carriers and multiple scenarios

• Expand the usage boundaries of products and seize more of users' fragmented time, such as the Himalaya mini program.
• In terms of terminals, in addition to smartphones, vehicle-mounted systems, smart TVs, smart speakers, smart watches and other terminals can be connected to deeply meet users' listening needs while driving, traveling, exercising, etc. At present, Himalaya has relatively few smart hardware of its own and it is difficult to form an ecological closed loop. It needs to continue to develop or continue to deepen its core competitiveness, otherwise it will be at risk of being replaced.
• Recommended albums that are preferred and serialized by members who are about to expire, so that users are reluctant to leave

3.6 Recalling Lost Users

For lost users, trace their source channels, analyze their behaviors, find out the reasons for loss and avoid them.

Recall users through the following means:

• Data association: Cooperate with other platforms to obtain users’ preferred products in a timely manner and push corresponding information
• Changes in related content: When the content that the user has followed/listened to/subscribed to is updated or changed, the user will be notified in a timely manner.
• Specific time period: For example, if the user has not taken any action on the platform for a week, they can be awakened.
• Specific time points: push messages to users at some fixed time points (membership day, Double Eleven)
• User scenario changes: When the user's scenario changes, relevant content is pushed, such as city switching/season switching, etc.

Information push is the most commonly used recall method, which is mainly divided into two types: APP push and SMS.

• APP push is the most common and widely used push method in daily life. Its main advantages are high opening rate and no cost.
• SMS has a high time relevance, is not limited by scenarios, is applicable to a wide range of people, and has strong reminder capabilities.

04. Get Revenue

The ultimate goal of a product is to achieve commercial profit. Whether it can make a profit often determines whether the product can ultimately survive in the market. While maintaining user loyalty, what needs to be considered is how to find the right opportunities to make a profit.

In the current market environment, commercial profits can often be obtained in two ways: one is to monetize products and services, and the other is to monetize traffic.

Himalaya adopts multiple payment models to convert its users.

4.1 Product and Service Monetization

• Paid courses (master classes, boutique small classes, live micro classes)
• 1-year (monthly or annual) membership package with automatic renewal function.
• Mall Products
• Dubbing service

4.2 Traffic Monetization

4.2.1 Advertising Revenue

• Location advertising: APP opening screen, home page banner, etc.;
• Audio ads: insert voice ads in the middle of audio;
• Pop-up ads: insert pop-up ads in audio
• Brand Radio: Brand promotion radio station.
• Floating window advertising: Sound on body plan

4.2.2 Fan Economy

Big V, anchor; reward and fan circle mechanism.

Indicators to watch:

Through some indicators, we can quantitatively evaluate the monetization effect. From the indicator level, we can focus on the following indicators:

• Revenue = DAU*PUR* ARPPU,
• DAU (Daily Active User)
• PUR (Pay Users Rate) is the proportion of paying users to all active users, that is, payment penetration rate = number of paying users/number of active users*100%, the proportion of the paying user group in the active user group. Once a user makes a payment, he or she becomes a paying user. This indicator is often used to measure whether the payment module of the product can truly meet user needs.
• ARPPU (Average Revenue Per Paying User) = total payment amount/number of paying users.
• LTV: Customer lifetime value refers to the sum of all economic benefits a company obtains from all user interactions.

The above is my personal analysis based on the idea of ​​being familiar with the model. There are definitely many shortcomings. I hope you can put forward valuable opinions and suggestions~

Author: Niu Ying

Source: Niu Ying