5 aspects to understand private domain traffic!

Private domain traffic is a popular term in the Internet industry today. Every person and enterprise wants to enjoy the benefits of private domain. What should we do? This article will analyze from five aspects. Don’t miss it if you are interested in private domain traffic.

1. Private domain traffic operation capabilities are gradually becoming a rigid demand

Private domain traffic will become a mainstream topic in the next three to five years, and the demand for talent in operating private domain traffic products will also increase.

There are two arguments in support:

1. The era of traffic dividends has passed, traffic giants have emerged in various market fields, and new platforms have little chance of emerging. In the case of stagnant traffic, everyone is thinking about how to keep traffic from decreasing and increase conversion rates.
2. The bargaining power of traffic platforms is getting stronger and stronger, and the cost of public domain traffic is getting higher and higher. For enterprises, the ROI of private domain operation conversion is higher than that of public domain acquisition conversion.

Many companies are also illustrating this issue with practical actions. For example, a large number of Taobao merchants adding customers to WeChat, Perfect Diary's private domain grass-roots strategy, and financial giants building CRM systems all mean that companies are exploring transformation to private domain strategies.

Since enterprises are moving towards private domain operations, they will need product operation talents with private domain capabilities.

If the previous era was the era of classic product managers who built platforms, organized architectures, and created experiences. The next era will be the era of private domain product operations that understand growth, operations, and monetization.

2. What is private domain traffic operation capability?

To explain private domain traffic clearly, we must start with its essence: "traffic". If you explain the essence clearly, you have already explained half of it.

The simplest indicator to measure traffic is DAU. I saw that the DAU of WeChat Video Account exceeded 200 million a few days ago, so let’s start with this talk.

WeChat Video Account DAU exceeds 200 million, what does this mean? Unfortunately, very few conclusions can be drawn.

First, 200 million is only the DAU on the day of opening. It is still unknown how many will be retained on the next day and how many will be retained after seven days. All I can say is that there were 200 million users interested in the video account that day, and everyone just clicked in to take a look.

Second, what is the usage time of 200 million DAU? WeChat has not yet disclosed. Judging from the DAU of Moments, it is 750 million and the average usage time per person is 30 minutes. If we can see that 80% of users use the video account for less than 1 minute, it will be meaningless.

Third, the DAU of Douyin (excluding Tik Tok) was around 400 million in February this year, and it should be between 400 million and 500 million now. With the support of the WeChat platform with a DAU of over 1 billion, achieving 200 million DAU in a single day can only be said to be a milestone, and there is still a long way to go.

Based on these three points, we can only say that the WeChat account has successfully attracted everyone’s attention, the tickets have been issued, and the audience has entered, but the key is how the show is performed.

If you sing well you can make money, if you sing badly you will be scolded.

The amount of DAU depends on promotion and traffic, as well as the length and frequency of use, which will indicate whether users recognize the product and whether the product performs well.

To put it bluntly, traffic only means interest, while usage time means attention and stickiness, and the ultimate paid monetization is the real value. Although there is a funnel relationship between traffic and value, there are tens of millions of growth product managers and private domain operations between them.

The performance of Internet products is nothing more than traffic, advertising, and conversion.

But today, unlike the previous era of traffic dividends, traffic has become more like a basic concept and prosperity indicator. When people judge the value of a product, they often look at usage time and MAU/DAU. The fundamental reason behind this is that the ROI of pursuing DAU is getting lower and lower (there is no traffic dividend as mentioned before).

So how can we put aside vanity indicators like DAU and achieve high ROI?

We have to start from the key path from traffic to conversion. Here we need to use a set of classic methodologies, namely the AARRR model, let’s review it first.

AARRR is the abbreviation of Acquisition, Activation, Retention, Revenue, and Refer, which correspond to the five important links in the user life cycle.

Step one: user acquisition. Generally speaking, it refers to the process of attracting users from the public domain traffic pool. There are many means, such as through advertising, content diversion, activities, etc., which is the first step in growth (growth is not only about reaching and diverting traffic, but also about launching and activating).

Step 2: User activity. Mainly look at data such as number of uses, DAU, and usage duration. Therefore, the 200 million DAU of WeChat mentioned above can be considered to have passed the active stage only when the duration and frequency are combined.

Step 3: User retention. This is also a step that has not yet been verified and requires next-day retention and seven-day retention as evidence.

Step 4: Transformation. At this stage, what matters is ROI, that is, the user's LTV (lifetime value) must be able to cover CAC (user acquisition cost) and other server and operating costs.

To calculate LTV, the formula can be broken down into: average LTV per user = monthly ARPU * average monthly life cycle of the user. If you further stratify users (paying users and non-paying users), you can continue to break down the formula: ARPPU (average revenue per paying user) = ARPU/payment rate.

Therefore, when conducting user stratification operations and channel traffic optimization, how to increase LTV and reduce CAC is our core goal.

Step 5: Spread the recommendation. It can be divided into two indicators. For dissemination, look at the K value, and for recommendation, look at the NPS value.

K = (the number of invitations each user sends to his friends) * (the conversion rate of people who receive invitations to become new users);

Net Promoter Score (NPS) = (number of recommenders/total number of samples)*100%-(number of detractors/total number of samples)*100%. The range of Net Promoter Score is between -100% and 100%.

The AARRR model focuses on analyzing the entire process of a user from the public domain to reach, retention, and conversion. In this era, public domain traffic is very expensive. Take Taobao's direct train click charges as an example. For mass consumer goods worth dozens of yuan, if you don't focus on optimizing the delivery, the cost of a direct train conversion may be dozens or even hundreds of yuan, which is a huge loss-making business.

Therefore, when the cost of acquiring public domains is so high, it is necessary to increase the LTV of these users while reducing CAC. Private domain traffic operation is a solution that kills two birds with one stone. A large number of public domains have been exposed to users, and there is a demand or possibility of repurchase, which can increase LTC. At the same time, referrals and recommendations brought by private domain traffic can also greatly reduce CAC.

For enterprises, not building a private traffic pool is equivalent to wasting this part of the traffic and value.

There are many ways to build a Civic traffic pool and many ways to play with it. Traditional enterprises have their own way of playing, and Taobao players have their own way of thinking, which I will not elaborate on here. But in essence, it can be summarized by a mainstream idea, which is CRM. I define CRM as customer data accumulation and customer relationship management.

The concept of CRM originated from sales. A TO C salesperson, such as an insurance agent, may serve hundreds or thousands of customers. Behind these are hundreds of birthday and holiday greetings and tens of thousands of customer preference tags. If there is no methodology and tools to support it, operating costs will increase and it will be difficult to break through one's own production capacity bottleneck.

The CRM tool is such a product that reduces the marginal cost of customer service. With the support of tools and methodologies, sales can use the tools to manage 1,000 customers as if they were managing one customer.

CRM tools are easy to make, but methodology is the hardest thing to establish. Sales itself is an act of dealing with people. If I can understand the sales methodology clearly, I don’t need to be a product manager and can directly do sales or sell methodology. But beyond the core methodology, there are still many areas where products can be empowered, which requires product managers to have analytical skills and experience.

Take my official account as an example. It also has a retention pool of followers, and there are all kinds of people in it. There are die-hard fans, accounting for about 700 people; there are people who are very willing to pay, accounting for about 100 people; there are about 300 fellow authors who come to watch the fun; and there are about 50 people who come to laugh at the joke and wait to be scolded. This is just a grouping based on motivation. If we add conditions such as city, gender, age, etc., there will be more groups.

This example is given to illustrate that the same user may have hundreds of different mindsets. To operate these private domain traffic well, we cannot do things in a one-size-fits-all manner.

Every time I write an article with practical content, I have to weigh the depth of the article and whether it can be understood by my 700 loyal fans, and at the same time attract 300 people in the same industry to exchange ideas and convert into loyal fans? If you only consider that you enjoy writing, it is easy for readers to turn from fans to passers-by, resulting in a deterioration in the traffic structure. The deterioration of traffic structure is difficult to see in the reading volume.

Even if the number of readers is the same, 1,000, the traffic effect and value will be completely different if people click in because they think they can get value or if they click in because the title is interesting.

The essence of private domain traffic operation is to sort out these mixed traffic data, optimize each part, and improve the overall conversion rate.

3. What is the essence of private domain traffic operation?

Following the methodology, we will discuss in depth the essence of private domain traffic operations.

Before talking about the common point of essence, it is still necessary for us to understand the differences in private domain operations of different products, which will help us have a deeper understanding of the essence.

Take standard products, such as a certain style of toilet paper, for example. Users often think "buy it where it's cheaper".

The reason is that this product:

• What you see is what you get, very standardized, no variables, know everything;
• There are few counterfeits and low risks, and most merchants can provide standardized quality and services.

Therefore, the decision-making mechanism for this type of product is very simple, that is, price-oriented. Other attributes such as brand, logistics, and service are no longer differentiated. For private domain operators who want to monetize this type of product, the key is to use the group buying model to negotiate low prices and directly satisfy users' mentality of "buy where it's cheaper".

What about more complex products? Take critical illness insurance, where the annual premium is as high as 10,000 yuan. Its decision-making mechanism is extremely complex and the user's mentality is also very complex.

For example, there are at least three main purchase cases I have seen:

1. I will help: users buy insurance not because of the agent’s professionalism, but out of personal relationships and relationships with relatives and friends, to help him complete his sales performance. There are quite a few such orders.
2. I believe in big brands: When users buy insurance, the first thing they consider is the brand and company endorsement. This mentality is essentially because insurance is not what you see is what you get. Even after purchasing, many people do not have a paper receipt, and cannot describe what the insurance they bought is, because the terms are extremely complicated and there are cases where compensation is not paid. Therefore, many users will put all these uncertainties on the brand. For this type of user, KOC and KOL brand promotion is very effective.
3. I only buy the right one: This type of user has a deep understanding of insurance, knows how much to buy, and also knows what his or her needs are. For this type of user, agents need to impress customers with absolute professionalism, which includes the ability to analyze needs, plan insurance plans, and provide services in all aspects.

For agents, the above three types of customers are actually three types of layered private domain traffic. If agents want to maximize sales efficiency, they need to distinguish these customers and take targeted operational actions.

For orders from personal connections, make good use of your emotional intelligence; for orders from brands, operate KOCs well; for orders from professional professionals, work hard to improve your own hard power.

Through the two examples of paper towels and insurance, we can find that the standard conditions of goods, income types, prices, repurchase conditions, and customer mindsets will greatly affect the methods of private domain traffic operations. For product managers, this means tens of millions of cases and tens of millions of methods, which are basically impossible to understand and consolidate.

But back to our initial question, what we are looking for is the essence of private domain traffic operations. With the essence of private domain traffic operation, we can abstract the common points of these cases and methods and make more in-depth product designs. And I can give my current answer to this essence, which is: trust.

4. Use private domain operations to win user trust

He who gains trust gains everything.

Why is it that e-commerce, with such a powerful business model, still cannot completely crush certain areas? The reason is the trust issue. Alipay has solved more than 90% of credit problems through guarantees and credit points, but the remaining 10% are the most difficult to solve.

The reason is that there are systems and rules behind the credit score, and not all behaviors can be strictly defined. The digitization of these behaviors requires many years of sedimentation and experimentation.

For example, an insurance agent sells you a 10,000 yuan insurance policy, and his Sesame Credit score is 900, so you happily buy it.

But later when you asked him about insurance, he always replied after 2 days, and the tone of his reply was very bad, which made you feel that the experience was very bad, but there was nothing you could do, and you could not apply to reduce his credit score to 500 because of this behavior.

There are too many variables and difficult-to-define situations when people get along with each other, so various laws and constitutions are constantly revised to provide a rough bottom line guarantee, but the main battlefield for building trust between people is still when they get along with each other.

The bottom line is based on the law, the upper limit is based on people's hearts, and heartfelt communication is better than digital endorsement.

Therefore, the North Star metric for sales in the insurance industry is the number of interviews. If the Aha moment is the only metric, then the number of client meetings is the North Star Metric, and the two are strongly correlated.

The reason behind this is, as the saying goes: seeing is believing. The closer relationships and trust building brought about by face-to-face meetings are a higher dimension than online communication. What you see is what you get, and the tangible sense of achievement and reality are incomparable to other forms of connection.

Going further, trust comes from more understanding and control. How to build trust is a big issue, but there are five basic sources of trust:

1. Trust based on relationships, such as friends of friends, relatives’ introductions, etc., endorsements based on existing relationships, also called recommendations and referrals, are one of the main sources of seeding.
2. Trust based on common ground. People tend to understand each other's characteristics and attributes better because of the same experiences and hobbies, making it easier to build trust. The conversion rate of like-minded communities is extremely high.
3. Based on real trust, appropriately revealing one's personal information, experience, image photos, etc. can greatly increase trust. This is why the follower relationship of Kuaishou is stronger than that of Douyin, because the sense of distance brought by reality is reduced;
4. Based on the trust in the transaction, when the other party can get value from you first, you are more likely to proceed with the next transaction. Many Ponzi schemes are based on this.
5. Based on trust in position, friends who have fought together are the most trustworthy, commonly known as friendship for life. This is because the experience of fighting against enemies and difficulties together on the same side has formed a very deep foundation of trust, such as Li Yunlong and Chu Yunfei.

The five major sources of trust are just the most mainstream and common parts. There are many other ways and wild ways to be sorted out and summarized, but being able to make good use of these five points is enough to do a good job in private domain operations.

Having mastered the basic point of trust and the five major source channels, we need to convey this information to users, and this channel is our platform and content. Salespeople can meet with customers in person, but Internet users can only complete information exchange through product operations, so the essence of private domain traffic operations is the ability to build trust.

In order to build trust through relationships and bring about conversions, we designed a group-buying and bargaining function; in order to allow users to build trust through common points, we created more brand stories and KOC cases; in order to use authenticity to bring about trust and conversions, we encourage users to upload pictures when making purchase reviews, and constantly use communities to stimulate users to actively exchange information; in order to build trust through transactions, we first provide free services and materials to customers, and then step by step move on to sales conversions; in order to use our stance to bring about trust, we have created an open and inclusive community tone for Bilibili.

Therefore, AARRR, CRM, and service sales methodology are essentially the same thing. That is, through certain information interaction methods, operations can enhance customer trust and achieve sales conversion.

5. How to improve private domain operation capabilities

To sum up, the essence of private domain operation is to improve the utilization rate of public domain traffic, increase LTV and reduce CAC, and achieve conversion.

It requires strong data analysis capabilities, the ability to continuously optimize the scope through business analysis, and continuously analyze effective data that fits the business scenario.

There are many ways to improve conversions, but the core is user segmentation and refined operations. Start from the user's mind, constantly understand the user's mind in every local case, influence the user's mind through product operations, and achieve conversion improvement. This requires certain user research capabilities and methodological support, as well as one to three years of business accumulation.

The essence of improving conversions is to build trust.

Trust comes from but is not limited to five aspects: existing relationships, commonalities, authenticity, transactions, and positions. This requires extremely strong product design and operation capabilities to make users trust the platform or IP. It is not limited to basic comment area design and event operation, but more about gameplay variations based on business characteristics. It is the most difficult and most interesting part of operating a private domain product.

If you want to focus on practicing your private domain product operation capabilities, you might as well start with the business you are responsible for, look at the user's LTV and CAC, and the stratification and grouping, then try to look at some cases, and design some product functions and operation mechanisms based on these cases.

As long as you treat users as friends instead of taking advantage of them.

If you stick to it, you will always win their trust and gain a reasonable business model.

The public domain is like buying vegetables in the market, and the private domain is like having a closed-door conversation. Trusting and benefiting each other like friends, and giving each other a simple and direct experience may be the only answer to operating private domain traffic products.

Come on everyone, let’s encourage each other!

Author: Mr. Peanut Butter

Source: Product Art