Customer acquisition skills for financial products!

Compared with ordinary high-frequency Internet products, financial services are a low-frequency demand for users. So, how to achieve growth in low-frequency scenarios? This article will discuss the author's exploration of the growth of financial products from the perspective of products.

Compared with high-frequency usage scenarios such as e-commerce shopping and short videos, financial services are a low-frequency demand for users.

For non-typical users, the number of times they need money in a year may not exceed three times - of course, if they are multiple users, they may have to rob Peter to pay Paul, which is a different matter.

So, how to achieve growth in low-frequency scenarios? This is what has always bothered me. Next, I will share with you my journey of achieving growth in financial products.

Developing Internet products and achieving growth all revolve around the following steps: customer acquisition, activation, retention, monetization, and recommendations. As for how to achieve the best combination of the above steps, it is necessary to constantly make assumptions, verify, and iterate to come up with a better solution.

The growth of financial products also remains essentially the same. In my opinion, the main steps of growth can be simply explained as: how to attract users to the product and have them use it for the first time, which will then lead to the second, third or even more uses of the product, generate revenue during the use of the product, and make them willing to share and recommend the product to people around them.

The following are some of the practices and directions I have tried when working on the growth of financial products:

1. How to attract customers for financial products

Compared with ordinary Internet products, financial products have much lower self-propagation rate. In contrast, financial products will cost more to acquire customers.

1. Organic traffic

The extensiveness of Internet communication makes the cost of obtaining information for the public extremely low. When an Internet product is launched on the market, even without any promotion, there will be some natural inflow of traffic. Of course, this is closely related to factors such as the product name, search keywords, and rankings. In addition, the size of the brand influence is also a very large factor affecting the inflow of natural traffic. The higher the maturity of the product and the greater the brand awareness, the proportion of natural traffic in the total traffic will also be very large.

For example, when you want to shop online, the first apps that come to your mind will be Taobao and JD. When watching short videos, you will think of xyin and xshou. Therefore, when users think of "borrowing money", if you want users to subconsciously think of your product, brand promotion and publicity are essential.

In addition, financial products are different from other Internet products in that users and even the market have very high compliance requirements for financial products. After several regulatory tests, the products that have the last laugh are those that closely follow the pace of compliance.

2. Advertising

Due to the particularity of financial products, their main source of customers is advertising, including traffic purchases from app stores, search engine optimization, and placement in traffic alliances.

However, although the traffic obtained through the above channels is large in volume, most of it is from non-target customers, with low conversion rates, uneven user quality, and the possibility of false traffic. Therefore, the budget investment in some channels here needs to be strictly controlled.

3. Loan Excess

Based on the fact that when advertising is carried out, most of the customers attracted are non-target customers, with low conversion rate and poor user quality.

In order to acquire target customers and conduct targeted marketing, placements are often made in loan supermarkets. The delivery forms include guided download, H5 full process or API docking.

Although the borrowing purpose of these users is clear, the risk is relatively high and there are multiple borrowing situations. At this time, it is more dependent on risk control to effectively identify users and judge risks.

4. Channel exchange

We all know that after Internet products reach a certain stage, they need to consider commercialization. Most Internet products will monetize traffic. Financial products lack traffic, but some corresponding products have traffic. Therefore, the two cooperate and achieve common success.

Generally, when connecting with channels, non-financial products will be chosen for connection, because the probability of their users being professional borrowers and long positions is lower. However, this is not absolute. It is necessary to treat it dialectically in combination with the tone of the product. The main customer base of some products is blue-collar workers in fourth- and fifth-tier cities. Therefore, the risk performance of users coming from this channel will be correspondingly worse.

Therefore, it is very necessary to adopt different risk control strategies for different channels and carry out differentiated risk control.

In addition to the several customer acquisition methods mentioned above, it is of course closely related to the product itself and the marketing actions taken. Product types should be as diverse as possible, meeting the needs of different user groups and combining them with operational promotional methods to attract user attention and enable further conversion.

2. How to activate the app after the user enters it?

For financial products, the true definition of activation is not just registration, but requires users to borrow money.

In reality, a large number of users only browse the App as visitors after entering the APP, or no substantial operations are performed after the users complete the registration process. For the product, this is a user with no value. So how to transform users from worthless to users who are valuable to the product and the company? In the activation stage, operations students play a very important role.

There are many financial products on the market at present. Users who are relatively sensitive to interest rates will compare the "price-performance ratio" of different products. At this time, giving new users benefits, such as interest-free coupons and discount coupons, can effectively convert new users. When users feel that it is "profitable", they will spontaneously proceed to the next step.

Financial products have a characteristic: since it is necessary to collect as much user information as possible to grant credit to the user, the user will have to fill in more information items. However, the more information items users are required to fill out, the lower the conversion rate will be.

So, how to transform the product process? Or to put it further: the transformation of risk control and data sources, while satisfying risk control requirements and simplifying the application process, is a very challenging task for risk control and products.

In addition, some users fail to convert because the credit limit given after credit approval is low and cannot meet the users' financial needs. Therefore, under the condition that risks are controllable, effectively identifying this part of the demand customer group and appropriately increasing the credit limit will have a very good conversion effect.

In general, the most important thing to activate silent users is to grasp their needs, that is, to recommend the right product to the right person at the right time.

Of course, this idea applies to all products, not just financial products.

Each financial company has many types of financial products. What we need to do is to choose a product that best suits the user and can meet their needs.

For example:

Your users' current funding needs are:

To relieve cash flow pressure in a short period of time, the capital cycle is not long. If you recommend a loan product with a term of 12 at this time, I think it will be difficult to convert this user.

The turnover cycle required by this user may also be 30 days. Although the 12-term loan product can solve the user's cash pressure, it makes the user pay the interest of the remaining 11 periods in vain. Any user with a little bit of common sense cannot accept this transaction; however, if a product that can be borrowed and repaid at any time and with interest calculated on a daily basis is recommended to the user, it can not only solve the user's cash pressure, but also maximize the utilization rate of funds.

Of course, the above needs to be based on sufficient understanding of the users.

3. Retention in Financial Products

If activation in financial products means getting users to borrow money for the first time, then retention is defined as repeat borrowing. The best effect is to make sure that when users have financial needs, the first financial platform that comes to their mind is your product.

So, how can we increase users’ loyalty to this product? At this time, the product itself and the marketing methods must complement each other.

In order to allow users to continue to use a product, in addition to meeting the basic standard of "being usable", you must also continue to work hard to make the product "easy to use".

Competition in the existing market is very fierce, and users have a wide range of choices. Therefore, only by continuously improving the competitiveness of products can we gain a place in the market. In addition to constantly conducting A/B experiments and improving product experience, operations for old customers should be as simple as possible - because compared to new customers, with the collection of user repayment behavior data and its data source, we will have a deeper understanding of old customers. Therefore, we can work with our strategy colleagues to provide differentiated product process processing for users of different risk levels. For old customers with good quality, we can simplify their loan procedures.

Another important factor that keeps users coming back is that the cost of leaving the product becomes higher. When users leave a platform, whether it is data or time, the cost will increase when they leave.

Around this core, we can extend outward with financial products as the center and use human nature to make some marketing strategies. For example, we can use human vanity and comparison psychology to build a membership system, credit points, etc., and use greedy human nature to establish a points system.

Let users continuously cycle through the product's small ecosystem to fully tap the user's life cycle value.

As mentioned above, we will use recommendation strategies in the activation phase: recommending suitable financial services to users. In the retention phase, we can also make full use of recommendation strategies, promote suitable financial products to users based on comprehensive assessments of their characteristics, needs and risk levels, and conduct cross-marketing. This can not only increase user usage of the products, but also improve user satisfaction and loyalty.

Remember, the cost of maintaining an old user is much lower than the cost of acquiring a new user. Instead of trying every means to "please" an unknown new user, it is better to spend some time thinking about how to retain an old user.

4. How to create more profits?

In the lending behavior, after the user borrows money, assuming that the user does not have bad debts, the interest generated by the loan is the profit created by the user for the financial platform.

In the glorious era of p2p, the bulk of p2p companies' profits came mainly from service fees, with interest accounting for only a small part of it, which is what we usually call the head interest. However, under strong supervision, service fees have now been cancelled, and the annual interest rate charged to customers must be below 36% (although there is currently no standard answer whether it is irr36 or apr36).

As regulatory conditions become increasingly stringent and profit margins are severely compressed, how to create as much profit as possible for the company is a topic that is often discussed at meetings and is one of the daily KPIs.

Today, let’s talk about how to make users create profits for the company from the perspective of increasing revenue and reducing costs:

1. Open Source

Under the premise of doing a good job of risk control, obtain more traffic and maximize the conversion of the obtained traffic to encourage users to borrow money. As we all know, risk control review is required after users borrow money. So what should users who fail the review do? How can we make full use of these users who are risky for the company and cannot be controlled?

At this time, the platform will usually direct these users who do not provide financial services to other platforms, and then settle with other platforms. This is because each platform has different risk control review standards. Some platforms have looser risk control. If the review fails on this platform, they can go to another platform or the review will pass.

In addition, many financial companies will develop some non-core businesses, such as building a shopping mall system within the app. While creating profit space for the company, they can obtain more user behavior data, allowing the platform to understand a user better in multiple dimensions. In addition, some platforms will also implant some advertising spaces in their own resource positions and use traffic to earn part of the revenue.

2. Throttling

Cost saving is mainly about controlling cost expenditure. The main costs of financial products include marketing costs, capital costs, bad debt costs, data costs and other costs. Therefore, it is crucial to control expenditures at each link and to achieve the greatest effect with the least resources possible.

Marketing costs mainly include customer acquisition costs, activity costs and promotion costs. Generally, before implementing a marketing plan, operators will draw up a budget plan and strictly implement it.

Capital cost: As a financial service platform, the capital providers behind it may be banks, consumer finance, trusts, small loan companies, p2p, etc. Different capital providers have different corresponding capital costs. For example, banks have low capital costs, but the threshold for cooperation with them is high, and there are high requirements for the company's strength and strict requirements for qualification review.

Bad debt cost: The bad debt rate is an important indicator in risk control. If we want to reduce the bad debt rate, we must do a good job in early risk control, which requires our risk control personnel to be able to effectively identify good and bad users. However, user quality is a dynamically changing process, and user risks will change over time. Therefore, tracking and maintaining users throughout their life cycle is particularly important. Once user quality changes, timely response measures must be taken.

5. Recommendations

Financial products are different from other ordinary Internet products. Due to their particularity, it is very difficult for users to actively recommend them to people around them. Therefore, we need to explore users' motivations for sharing and recommending, or the essence of human nature, and take different measures based on the corresponding motivations. From the perspective of recommendation, it can be divided into active recommendation and passive recommendation. Active recommendation means that the product is beneficial to the invitee and is shared voluntarily; passive recommendation means that the product is beneficial to oneself and can benefit from the recommendation.

Good for yourself (the inviter): If users can get certain rewards by successfully recommending others to use the product, then the user's enthusiasm for active recommendation will be greatly improved, such as getting cash for inviting friends. We have done many activities to invite friends to get rewards, such as coupons, prizes, phone bills, etc., but in the end, after comprehensively comparing all forms of rewards, giving cash rewards directly to the inviter, users' willingness to share is the highest.

Benefits to others (invitees): Another motivation for users to actively share is that it is beneficial to the invitees, such as product compliance, low interest, simple application process and fast payment, new member benefits, etc. When there are friends around who need funds, they can recommend the product to their friends at the first time. Of course, this is also closely related to the product's reputation and influence.

The growth ideas used in Internet products can actually be applied to financial products. However, in the process of practice, we must consider them comprehensively in combination with the particularities of financial products. We cannot blindly copy and paste and explore a growth path with financial characteristics.

To achieve growth for a product, it is not possible to rely solely on product managers or operations to achieve the goal. Instead, it requires collaboration and close cooperation among multiple departments, and working together towards a common goal to develop in a good direction.

The above content discusses growth from the perspective of the product. It only represents personal opinions. My skills are still limited, so please be gentle with any criticism from professional growth experts.

Author: Little Mushroom

Source: Little Mushroom