Under the epidemic, the market investment cost of online education has continued to rise. For online education, which already has low gross margins, how to acquire customers at a lower cost becomes an important issue. Among them, Renren Education’s distribution platform, which acquires customers from WeChat social media, is the preferred operating channel for most merchants. The author of this article analyzes and explains the concept, form, and pros and cons of education sharing and shares it with everyone.

As we enter 2020, more and more companies are joining the online education gold rush, and it is becoming increasingly difficult to acquire traffic. For online education institutions, how to obtain traffic quickly and efficiently has become a major problem for the market and operators.

Generally speaking, the common customer acquisition channels for an online education company are the following: information flow delivery, WeChat ecosystem customer acquisition, and other channels (online and offline). As the largest part of social traffic at present, WeChat ecosystem has exploded with huge potential since 2019. As a WeChat social customer acquisition platform, Renren Education's distribution platform has become a battleground for various online education institutions.

For an online education company, what exactly is Education Everyone Distribution? What are the current mainstream forms of distribution among people? What are the pros and cons of Renren Distribution?

1. What is Education Renren Distribution?

The origin of the Education Renren distribution platform is social e-commerce, which is a model of making money by distributing products. There are three important roles in the core relationship chain:

1. Platform: responsible for convening distributors and connecting with product parties.
2. Distributor: Participate in the product sales on the platform and gain profits
3. Product side: the person who provides the product

Social e-commerce is a more advanced form of early WeChat business. It is based on the WeChat business model and is compliant, instrumentalized, and corporatized. Its core is to use the social relationship chains of general users to help product makers sell products and bring benefits to ordinary users. It is a typical case of organizational relationship transformation, such as Yunji and Beidian.

The distribution of education to everyone is still the same, that is, a company launches a social distribution education brand for education recommendation under a certain name. The education distribution platform is responsible for recruiting education brands and distributors. Distributors recruit more high-quality course distributors for the distribution platform. Education companies obtain more low-priced experience users on the distribution platform. Because the transaction chain is directly opened up, distributors directly benefit, and education companies obtain lower-cost experience customers.

• Platform: responsible for convening distributors and connecting with educational product providers.
• Distributor: Participate in the product sales on the platform and gain profits
• Educational enterprises: those who provide educational products

As a form of customer acquisition for education enterprises, and a labor-intensive industry, there are both advantages in acquisition costs and, of course, risks in customer quality. Let's take a look at the product forms and risks of customer acquisition on the Renren Distribution Platform.

2. What are the current forms of customer acquisition on Renren Distribution Platform?

Online education products have always been in the form of free learning since the earliest VIPKID one-on-one products. With the changes in the online education customer acquisition market and the transformation of sales methods to community training camps, free, low-unit-price, and low-medium-unit-price products have gradually emerged. Various products have different customer acquisition paths, costs and results.

During its research, Yifan discovered that some AI enlightenment products, priced at 199 yuan, were sold on more than 50 distribution platforms and had very stable sales every month. According to the distribution platforms, after some products were put on the shelves, more than 20,000 orders were sold a day, with revenue exceeding 6 million yuan. So what are the product models of education distribution platforms? Let’s take a look at each one separately.

1. Product model with low conversion and high customer acquisition

The low-to-high customer acquisition product model, as the name suggests, means that customers directly switch to courses from participating education brands for high-priced products. It is a direct customer acquisition product. Currently on the education distribution platform, there are mainly the following customer acquisition products: free learning products for 0 yuan, physical products for 9.9 yuan, and physical products for 49.9 yuan. Different customer acquisition products have different operating methods, and each customer acquisition product also has different problems and possible opportunities.

(1) Learn products for free at 0 yuan

The mainstream product is 0 yuan free credits, which means directly learning for 0 yuan without any rewards, and learning for 0 yuan by checking in and getting rewards for two weeks. On the distribution platform, these two products generally exist in the form of CPA+CPS, that is, the distribution platform will get customer rewards for inviting customers to experience the product. The reward for A is generally between 10-50 yuan. The distribution platform will get a commission for the transaction when inviting customers to experience the product and the brand makes a transaction. The CPS is generally between 5%-30%.

In the early days of distribution platforms, this type of product was relatively easy to promote. However, with the popularization of education distribution, no matter how hard brands try to promote free learning products on distribution platforms, there will be more problems with inflated volumes. Because many small and medium-sized brands are currently at a disadvantage in terms of distribution channels and it is difficult to control them, if they try to expand distribution channels by selling products for free in the early stages, there will be greater risks.

However, if the brand is a relatively large brand and limits the quality and ROI requirements of the free learning, it is a very important customer acquisition product for the brand.

(2) 9.9 Free physical products

The customer acquisition products that are given away in kind on 9.9 are generally two types of products, one is the live class for large classes, and the other is the AI ​​class for early childhood students. This type of customer acquisition product had particularly high customer acquisition efficiency and quality in the early days of online education. This type of product enters the education distribution platform, and like the free learning products, it generally cooperates in the form of CPA+CPS. The reward for A is generally between 30-90 yuan, and the CPS is generally between 5%-40%.

In the early days, giving away physical products for 9.9 was also a very important means of acquiring high-quality users. However, in the middle and late stages, it also gave rise to problems similar to free learning products for 0 yuan. That is, after users of the education social distribution platform become familiar with the customer acquisition methods of the education brands, they will conduct various fake orders on the front end.

Because of the physical gifts included, this product became very popular in the circle of friends. Small brands also have the problem of small organization, which makes it difficult for them to have bargaining chips and face the problem of conversion. Large education brands will have absolute advantages in comprehensive effects because of their high volume and investment.

(3) Free physical products for 49.9

Customer acquisition products that offer free gifts at 49.9 yuan are generally half-month packages of AI early childhood courses. Because the user base is small and the effects are difficult to see among children, a relatively long product experience cycle is needed to build consumer trust. Similar programming courses also use customer acquisition products at this price. The means of giving away physical items for 49.9 are also different. Some are to activate the item after placing an order and then give away the physical item. Some brands even give away physical items after activation and after completing the course. This kind of product enters the education distribution platform, generally in the form of CPA+CPS cooperation. A's reward is generally between 100-300 yuan, and CPS is generally between 5%-30%.

Products that cost 49.9 yuan plus the physical product are becoming increasingly difficult to sell on distribution platforms, because distribution platforms only offer products that cost 9.9 yuan plus the physical product, unless they are particularly large brands or differentiated courses. Small brands also have the problem of small organization, which makes it difficult for them to have bargaining chips and face the problem of conversion. Large education brands will have absolute advantages in comprehensive effects because of their high volume and investment.

Low-to-high-turnover products are a quick way to acquire customers for education brands on distribution platforms. However, because the purchase threshold of such products is low and the distributors are natural persons, if the product is added to the distribution platform in the middle or late stage, and the distributors on the distribution platform have tried and purchased other courses, the new brand will inevitably face the situation of having an experience but not paying the full price. When small brands expand their distribution platforms, it is difficult to negotiate with the distribution platforms on settlement rules, and the end result is that they lose money but not users.

2. Low-price large-class package light-class customer acquisition product model

The product model of acquiring customers with low unit price and light customers, as the name suggests, means that customers participate in the long-term light course products of the education brand and do not directly participate in sales training camps. The education brand chooses the right time during the long-term operation and maintenance to introduce low-to-high products.

Limited by the current situation that users of the distribution platform are distributors, there are many risks in the customer acquisition model of directly experiencing large courses. Education brands imitate the model of selling VIPs by video platforms such as iQiyi, and develop short-term, medium-term, and long-term zero-service recorded courses to acquire real customers. Because the unit price of the product is relatively high and the proportion of user distribution rewards is controllable, it is currently a more preferred distribution course product direction for various brands.

When cooperating on this kind of recorded course package product, two profit-sharing models are adopted: one is direct CPS, and the other is CPS+CPS from small to large. Because this product is a large virtual course package, it is a relatively easy product to promote in the early stages for distribution platforms. Educational brands generally offer more than 60% of their CPS commissions to the platform, and the platform only keeps about 40% as operating and maintenance fees. In this way, the platform does not have to spend extra money to acquire a customer, and the cost of acquiring a customer is the initial R&D investment in making the product.

The benefit of cooperating on low-unit-price lesson packages is that it increases the authenticity of purchasing customers and makes it more difficult to fake orders, while the company's short-term fixed cost expenditures are not that large. However, although the initial cost expenditure seems small, the silent cost will become apparent in the later stages.

Because of the free check-in mechanism adopted by enterprises, there will be a situation where the customer check-in rate on many distribution platforms is extremely high. Since the platform has remitted more than 60% of its investment in the early stage, once the customer remittance exceeds 40%, the education brand will face reverse subsidies. Once the path design and conversion rate of small to large cannot be improved, in the end there will be a situation where users are served but market costs are increased.

This design of long-course packages with free learning requires advance calculation of operational risks in actual operations to avoid the existence of long-term risks for the enterprise.

3. What are the advantages and disadvantages of acquiring customers on Renren Distribution Education Platform?

In a survey of 100 distribution platforms, Yifan found that the current education distribution platform has entered a fierce competition, and the products of the distribution platforms have begun to show a large degree of homogeneous competition. It is not easy to acquire customers at low prices on the Renren distribution education platform at this stage.

Based on his own experience in cooperating with distribution platforms and communicating with some partners who acquire customers on distribution platforms on a large scale, Yifan has summarized 8 points to note when acquiring customers on education distribution platforms, hoping to help small and medium-sized education companies avoid the detour of acquiring customers through distribution platform channels:

1. For low-conversion, high-customer acquisition products, when cooperating with brands, the CPA settlement must use restrictions on user quality to avoid being fleeced by distribution platforms, because distribution platforms have no shortage of users who place orders for fake experiences;
2. If the education brand has limited sales and reception capabilities, try to use relatively high-paid trial course products on the distribution platform, which can improve the quality of users to a certain extent;
3. When cooperating with distribution platforms, you must pay attention to researching the reputation of the distribution platforms, especially some small and medium-sized distribution platforms, and finally join some distribution platform channel cooperation groups to conduct research;
4. It is generally best not to exceed 30% of the pre-deposit for customer acquisition cooperation on the distribution platform, because once the platform faces exchange pressure for customer acquisition, the pre-deposit will be difficult to recall, increasing the capital risk;
5. Distribution platform cooperation is a long-term channel cooperation. It is necessary to establish a deduplication problem between free channel volume and distribution platform volume to avoid a user wasting costs in multiple channels;
6. The CPS split for regular courses must be as low as possible to avoid giving a higher commission in the early stage, which will affect other commission forms of the project;
7. There must be a refund restriction period for channel users. The channel fees can only be settled after the restriction period has passed.
8. We should pay attention to the continuous learning rate and long-term renewal rate of users in different channels, and establish a long-term monitoring mechanism for the quality of channel users;

The distribution platform, which seemed to be very profitable, also had some not-so-good negative news after its model became seriously homogenized.

Not long ago, an education distribution platform announced that it would cease operations indefinitely due to business problems. Previously, a certain 0-yuan punch-in learning picture book product maliciously changed the exchange conditions of the 0-yuan punch-in free learning due to its continued operation, causing users of the distribution platform to complain to multiple education distribution platforms on a large scale...

Every type of entrepreneurship involves risks. Whether it is an education distribution platform or an education brand, both parties must always keep a tight control on costs and delivery to establish a good foundation for long-term operations.

Author: Yifan

Source: Operation Hunter