When talking about growth, people always tend to bring up the AARRR model. But where did AARRR come from? What is its underlying logic? What are the shortcomings at this stage? But few people discuss it. In fact, the growth model has undergone three major iterations. Only by understanding this process can we avoid copying the classic model and better understand how to build a growth model that adapts to the characteristics of the times.

01Three iterations of the user growth model

Over the past 20 years, economic development has undergone three changes: traditional offline model, PC Internet, and mobile Internet. The logic of growth has also undergone three major iterations (as shown below).

Traditional growth model: location-based people-goods-place. In traditional offline operations, occupying an advantageous sales location is equivalent to monopolizing the source of users. Therefore, the choice of region and location is the first factor, followed by how to allocate sales staff to the store (people), how to introduce goods (goods), and how to optimize the layout (store).

First iteration: PRAPA is created. The rise of the Internet has broken the monopoly of traditional channels on location (venue) and also provided consumers with a richer experience. Users can watch videos, play games, and read articles for free, greatly enhancing the experience process. From the traditional "consumption upon arrival in store" to gradually transforming to "experience first, pay later" or even "free experience, paid value-added". This transformation requires the growth model to focus on the entire experience process and the entire path of "promotion → registration → payment → conversion → high average order value" in order to improve conversion efficiency and achieve operating results.

Second iteration: from PRAPA to AARRR. When mobile Internet replaced PC Internet, the logic of growth also changed:

1. Users are more dependent on mobile phones and mobile applications. The total time invested in mobile Internet is increasing, but the loyalty to each APP is decreasing. Therefore, user retention has become very important.
2. New media (WeChat, Weibo, Douyin, Kuaishou, Bilibili...) make user touchpoints more diverse. The means of acquiring users are no longer limited to advertising promotion and have become more diverse, so the concept of Acquisition has replaced Promotion.
3. Users interact more frequently. In addition to traditional KOLs, a large number of KOCs have emerged, and viral communication has become popular. This makes referrals between users an important growth force (Refer).

It can be seen from this that the growth model is never static, but changes with technological conditions, business models, and economic development trends. The third transformation has quietly taken place in recent years with the advancement of AI technology and the increase in data resources, and has become increasingly obvious in the post-epidemic era, from the AARRR to the 6R model. The intuitive reason for the change is that the AARRR model is encountering more and more growth problems.

02 New challenges for AARRR in the post-epidemic era

Although AARRR is regarded as a classic in many books and articles. But as it was born in the era of the great leap forward in mobile Internet, it has been marked with a distinct mark of the times.

Question 1: The starting point of the entire growth is still customer acquisition, but the cost of acquiring new customers is getting higher and higher . Acquiring new users is the engine of growth. This view is understandable during the period of rapid growth, but with the formation of a situation where leading players in e-commerce, social networking, media, O2O, games and other fields have dominated the market, the space left for acquiring new users is getting smaller and smaller. Correspondingly, the cost of acquiring customers continues to soar. It is not easy to snatch players from your opponents.

Question 2: The entire growth model is a linear funnel, and user referrals come too late. The traditional AARRR model regards refer as the last step in the conversion funnel, and assumes that referrals are something that only a few core users or KOC/KOLs can do. This does not fully unleash the power of user referrals, but instead incurs additional costs to promote user referrals. As for purchasing public accounts, Weibo, and live broadcast promotional space from KOCs and KOLs, it turns referrals that should have been generated spontaneously into a business, which becomes another form of advertising, thereby increasing the cost of investment.

Question 3: User activity is high and the number of freeloaders is increasing. Traditional methods of stimulating user activity, in addition to distributing coupons, include signing in, clocking in, spinning the big wheel, drawing red envelopes, smashing golden eggs, shaking beans, and planting fruit trees. Although the forms vary, everyone is involved in the push targets, which can easily lead to a group of active participants who specialize in taking advantage of the situation, driving up costs. Truly silent users, on the contrary, find the repeated message harassment annoying and eventually become increasingly silent.

Question 4: One-size-fits-all user retention segmentation. The habit algorithm for user retention is to artificially set an indicator such as "no login for 3 months" as the loss standard, and count those who do not meet the standard as retained users. But in reality, before users reach the churn standard, their behaviors already have obvious differences. Some are particularly loyal, while others are erratic. A one-size-fits-all division is too simple and crude. The result of a unified awakening is that the power is used evenly, making it difficult to regain loyal users, while erratic users take advantage in vain, with high costs and poor results.

Question 5: Conversions are achieved simply by issuing coupons and throwing money at them. Since 2013, we have experienced red envelope wars in industries such as group buying, online payment, Internet finance, O2O, food delivery platforms, online taxi-hailing, shared bicycles, and short videos. To the extent that the idea that "working on the Internet means giving out red envelopes" has become deeply rooted in people's minds. Under the bombardment of red envelopes, users' appetites are becoming more and more discerning; the costs of attracting new users and promoting activation are increasing.

Looking at the five major issues, the eight words "rising costs/simple means " appear most frequently. Today, when the industry's bonus period has peaked, the inevitable trend is to shift from land grabbing to intensive cultivation, which has triggered the third major change.

03 The 6R model adapting to the new era

All changes come from solving specific problems. The five major problems currently facing AARRR are essentially due to the lack of refined means. To achieve refinement, we need to deepen our understanding of users and provide more personalized products and services. This is inseparable from the accumulation of data and the advancement of AI algorithms.

Think about the major innovations in the industry in recent years: Pinduoduo, which is based on social gameplay; the rise of Toutiao, which is based on personalized recommendations; Alibaba began to connect the data middle platform and launched a recommendation system based on user tags; all of which are transforming traditional means of growth. The specific successful experiences include the following six points:

1. Accurate customer acquisition based on understanding of users.

Traditional advertising is analyzed based on channel attributes. For example, if you find that channel A is effective, you will make additional investment; if channel B is ineffective, you will reduce investment. Try each step one by one. If we can screen out a group of highly active and highly retained "seed users" from new users, combine the basic attributes + preference characteristics of the seed users, establish an analysis model, and lock in similar groups of people across all channels, we can acquire highly accurate new users on a large scale without having to try step by step, which can greatly reduce costs.

At this time, it is no longer a forced acquisition, but a recruitment. It is like HR recruitment, screening resumes and understanding the characteristics of the interviewees before making an appointment, which greatly improves the efficiency of the delivery.

2. Social media promotion in advance to stimulate new users’ enthusiasm for promotion

In the customer acquisition stage, we fully utilize the strong connectivity of social communication and word-of-mouth recommendations, and effectively reduce the cost per customer through flexible coordination and interaction of "push" and "pull". Compared with referral, the creation of push emphasizes reproduction, that is, a user can spread the word of mouth to people around him.

Therefore, it is necessary to give users simple and replicable tasks to quickly achieve fission-like forwarding, without the need for personal creation by users, thus avoiding the long-standing problem of referrals becoming a way for KOC/KOL to earn advertising fees.

3. Define users by level and formulate refined activation strategies

To promote user activity and avoid blindly and indiscriminately disturbing users, user segmentation is necessary. In addition to stratifying the degree of user silence, a rich tag library needs to be established for user behavioral preferences, reachable methods, and responsive content. Therefore, the best method can be selected from many methods such as in-site push, pop-up windows, text messages, EDM, etc., to truly make silent users log in and use the app again. To a certain extent, it can prevent active old users from taking advantage of the platform.

In short, we don’t want simple activation, what we need is detailed retargeting.

4. Personalized content customization to stimulate internal motivation

If you want to reduce the cost of promotion, you have to get rid of the one-legged approach of relying solely on coupons. Therefore, it is necessary to provide users with useful and interesting services and content, leaving a good impression on users, so that silent or lost users can actively remember and revitalize in the right scenarios. This requires relying on big data and recommendation algorithms to create a personalized and humane experience. Whether it is Taobao’s “Thousands of Faces for Thousands of People” or Toutiao’s “Personalized Recommendations”, they are both successful practices of carrying out refined operations based on a huge tag library.

The changes in steps 3 and 4 actually refine the Acquisition and Retention in the AARRR model. With the help of personalized recommendation algorithms, Retargeting (layered activation) and Retention (content awakening) based on user stratification are used to avoid large-scale activation activities, thereby reducing costs and increasing efficiency.

5. Accurately target and optimize the conversion process

In order to avoid the indiscriminate distribution of coupons, companies must conduct a multi-dimensional comparison of the characteristics of target users and the portraits of their own users, so as to lock in the right group of people for the campaign and avoid the use of coupons to force people to buy in from the source. Before launching large-scale advertising, the target group can be further subdivided, and A/B testing of different advertising ideas can be conducted to guide the campaign. This will gradually adjust the process, improve conversion efficiency, and avoid over-reliance on subsidies for revenue (as shown in the figure below).

(Image optimization suggestions: You can emphasize in the copy that different copy tests are conducted on the same sample set .)

6. Focus on stock management and improve retention quality

The shift from incremental management to stock management is an irreversible trend. Therefore, when considering income conversion, you cannot just “cut the leeks and leave.” It is necessary to review regularly, make churn predictions, and identify high-value users with a tendency to churn so as to prepare for advance response and reduce the risk of user churn. Managing the reservations of existing users is just as important as the revenue that directly leads to conversions.

It is precisely because of the observation of these six changes in thinking towards refined growth that Daily Interactive (Getui) proposed a new 6R growth model. Years of practical experience in the mobile Internet field and technical accumulation in the data intelligence industry have enabled Getui to create a more detailed growth model.

Compared with AARRR, the 6R model:

1. Use recruitment to refine acquisition and improve delivery efficiency
2. Pre-position refer to improve social fission efficiency
3. Retargeting was used to refine activation and improve activation efficiency
4. Added Reservation to strengthen the management of existing users

The overall logic is as follows:

In addition to more detailed divisions and operations, the growth logic based on the 6R model is no longer a simple funnel screening. During the operation process, users will continue to be driven by personalized content, and active users will remain active; for users who are about to churn, personalized content will be used to evoke their good memories of the App and keep them active on the terminal; for users who have already churned, it is necessary to "pull" and "push" them again to get them to "come back", thereby restarting a new user life cycle and forming a sustainable growth closed loop.

04 Successful Experience of 6R Model

The 6R model is a refined improvement on AARRR. Therefore, in the implementation process, it is often necessary to first optimize the areas where AARRR is insufficient: strengthen customer acquisition pull, strengthen personalized push based on user segmentation, strengthen user retention and other weak links in traditional operations, and finally enrich the one-way funnel into a closed-loop operation, thereby improving operational capabilities.

1. Application of 6R in the digital upgrade of traditional enterprises

In digital operations, the biggest difficulties for traditional enterprises lie in the two aspects of recall and remembrance. In the post-epidemic era, user travel is restricted, and traditional enterprises are rapidly shifting from offline to online in terms of both business and users. How to leverage digital work, maintain relationships with users, discover more usage scenarios, and promptly stimulate and meet user needs has become the key to breaking the deadlock. The role of the 6R model in the digital upgrade of traditional enterprises is more reflected in: providing personalized outreach based on user stratification, enhancing user stickiness, and providing users with high-quality services in a timely manner.

For example, the number of mobile banking apps is huge, and user demand is also "rigid need", but how to make the use of mobile banking apps "high frequency" requires the help of the digital 6R model. In terms of operational activity planning, mobile banking apps can integrate their own embedded data and business data with third-party data such as Getui, divide inactive user groups according to users' occupations, interests, hobbies, online behavior preferences and other dimensions, formulate corresponding operational activities, cross-product recommendations and cross-industry cooperation to trigger activity, such as setting up taxi service discounts for urban commuters, and providing Fengchao Express detention fee discounts for online shoppers. In terms of user awakening strategy, mobile banking apps can perform customized data modeling to discover people among the long-tail users who are similar to highly active users, thereby improving overall user activity.

2. Application of 6R in new Internet players

The biggest pain point for new Internet players is that traffic is expensive and promotion is difficult. It is easy to fall into the trap of spending money to buy prosperity and then spending money to end the business. If you want to avoid falling into the trap of spending money to buy growth, you must reduce blind subsidy investment, truly understand users, and stimulate user demand. The application of the 6R model among new Internet players is more reflected in exploring user characteristics, finding content that matches users, stimulating users' self-propagation methods, and promoting to similar groups of people. Strengthened pulling and pushing forces.

For example, a house rental app displays houses to its users in a personalized manner through a user portrait system. For example, after learning that a new user group is composed of working women born after 1995, who live in Shanghai, are pet lovers, have a lower-to-medium consumption level, and like shopping, we can accurately recommend to them fully-decorated apartments with high cost-effectiveness, convenient geographical location, and the possibility of shared renting and allowing pets.

For working men who live at home, we recommend houses in suburban areas with more favorable prices and direct access to the subway. Through personalized push, the attractiveness to new users is increased, thereby improving the retention quality and conversion difficulty of new users and reducing customer acquisition costs.

3. Application of 6R among veteran Internet players

In the post-epidemic era, a large number of companies have transformed online, making the competition for existing users more intense. For veteran Internet players, retaining a large number of existing users is as important as attracting new ones. In the face of operating cost pressure, the key is to conduct refined stratification, retain old users, and reduce conversion costs.

It is imperative to change the past situation of flooding the market with money and issuing coupons everywhere. The application of the 6R model among veteran Internet players is more reflected in optimizing conversion costs through an automated ABtest system, reducing activation costs based on user stratification, and simultaneously improving the efficiency of converting active users and retaining lost users.

For example, a novel reading app cooperated with a personal app to create a user churn warning model. The analysis found that, while 67% of the users appear to be inactive, only 19% of them are judged to be high churn warning users. The remaining 48% of users are actually in a state waiting to be activated and have a high possibility of being awakened. After clarifying the target group, launch powerful activities to attract users with high churn warning, and activate them through activities such as content updates and sign-ins to awaken users. It not only reduces retention costs, but also attracts users on a large scale.

There are many similar cases. More and more companies are beginning to transform traditional AARRR and upgrade to 6R based on the principles of refinement, personalization and intelligence. In short, refined operations, cost reduction and efficiency improvement are the general trend of the entire mobile Internet industry in the post-epidemic era.

Ahead of all complaints:

The cost of acquiring new customers is high!

User interaction, poor stickiness!

There is no way to retain old customers!

Conversion depends on coupons, which costs a lot of money!

There are 6R model application scenarios in every industry.

Author: Down-to-earth Teacher Chen

Source: Down-to-earth Teacher Chen