What I will share today are the product operation strategies of 360, Xiaomi, WeChat, and Oasis, including some concepts and theories that need to be understood for product operation, the three major elements of operation from scratch, and operation strategies for each product life cycle. I believe this will be of some inspiration and help to those who are doing product operation or other operations.

The following is a summary of the article’s ideas. The picture shows the directory navigation of all the contents:

1. What do you need to know about product operations?

Before analyzing what we need to know about product operations, let’s first think about what operations are? What skills are needed for operations? How do we define operations?

Product operations need to understand three things:

1. You need to know what operations are and what the focus is.

Regarding the question of what operations are, it can be simply understood that product managers are responsible for giving birth to children, operations are responsible for raising children, and the mission of operations is to make the product bigger and stronger.

No matter which vertical field you are operating in, the focus of your daily work is on attracting new customers, promoting activation, and retaining customers. If the product you are responsible for is paid, you may also need to pay attention to conversion.

2. It is necessary to understand the nature of operations and eliminate misconceptions

The essence of operation is business activity, which usually requires you to achieve a certain goal, which may be revenue or other goals.

Many operations personnel are not clear about the essence of operations, do not understand the underlying logic of operations, do not have clear goals and directions in their operations work, are not clear about what they need to do, and always feel that they are just doing chores.

Therefore, we must eliminate previous misconceptions at the root and clarify the essence of operations. Even if your superiors do not set goals for you, you will have clear goals and directions in the subsequent operations process. It is you who should actively embrace the position of operations rather than passively execute it.

3. Some concepts of operation need to be clarified

1) Operation has certain costs. Free of charge does not mean zero cost. Free is the most expensive.

As we all know, promotion and activities all cost money, but many small and medium-sized enterprises still need to operate through some free methods of promotion. However, free operation does not mean zero cost.

Let’s first take a look at why not spending money does not mean zero cost.

For example, if you are responsible for channel operations, but there is no funding for you to do paid promotion, and you can only do some free ASO, you need to communicate with the app store operations, apply for their free activities, or use some connections around you to attract some customers to do channel joint activities or cross-industry activities together.

You should know that this process will cost you time, manpower, connections, and opportunity costs. Some may also require resource costs, including material resources, location resources, free coupon resources, etc. So, not spending money does not mean zero cost.

Next, everyone should be deeply aware of the truth that free things are the most expensive. Behind free things, you often need to download APP, form a team, and split, etc., which must cost you a certain amount.

For example, 360 VS Rising Antivirus Software:

Everyone knows that 360 is a relatively well-known free antivirus software, but some of you may have never heard of Rising, and may even think it is a rogue software.

But in fact, in 2005, the three major antivirus software giants were Rising Antivirus, Kingsoft Antivirus, and Jiangmin Antivirus. 360 had no presence at that time, and 360 Antivirus was only launched in 2006.

In 2005, the entire Rising Antivirus Software had a total of 80 million users. At that time, each software was sold for $198, which is nearly RMB 1,400 each. If calculated based on the total number of users, the total revenue would have been RMB 112 billion, and the commercial benefits were very optimistic.

In 2006, 360 adopted the judo strategy and launched free anti-virus software, instantly seizing the anti-virus software market with a market share of 36.5%.

The decision to make it free is fatal to Rising, because with such a large user base of 80 million, if Rising were to be free like 360, it would mean a loss of billions in revenue every year. However, if the software maintained its selling price, the market users would inevitably be drained away bit by bit by 360 and ultimately fail. This move forced Rising into a corner, and finally 360 defeated Rising in this way.

How does 360 make a profit?

360 has five main business revenue points:

• To earn agency fees, he provided agency services to Kaba and others, and collected agency fees from them, earning hundreds of millions of yuan every year;
• 360 navigation;
• Browser search;
• Advertising agency, cooperating with game developers;
• Game development, web development, etc.

These commercial profits are higher than directly charging users for software usage. Therefore, the free business model makes more money than directly selling software, which allows 360 to boldly make the free decision.

In fact, many apps now also use the free model to make profits, such as JD.com's free fruit planting. You open JD.com every day to water the fruits, and when the fruits are 100% irrigated, you can get the fruits for free.

However, you need to pay time, money, and manpower costs in the whole process, and contribute to the platform's open rate, retention rate, and activity rate every day, and finally get about 10 yuan worth of fruit in return. For the platform, this 10 yuan is well spent.

2) Operations must be profitable

We often talk about goal orientation and result orientation, which means that operations need to bear certain KPIs. It also means that operations must be profitable. The profits are reflected in multiple dimensions such as revenue and number of users. Of course, there may be some other dimensions of goal orientation, such as number of users and number of major customers.

3) Operations pursue input-output ratio

Usually, the operating expenses applied for will consider how to allocate them to each project and each channel each month, how to place the funds to reduce the CPA of the channel, how to conduct activities to maximize the ROI of the activities, and how to make the traffic cheaper. These are all manifestations of pursuing the input-output ratio.

Of course, in addition to spending money, fission activities are also a very good way of promotion. It has lower operating costs and is the most effective way of activity outside the AARRR model.

Combining the above three points, we can know that the essence of operation is a commercial activity. Therefore, we need to consider many levels, contents and dimensions in the process of operation, especially the timing and motivation of operation. If the timing of operation is a little bit wrong, it may cause relatively large losses. For example, large-scale events such as Double Eleven can bring a lot of revenue in one hour.

2. Three key elements to start operations from scratch

Next, I will share with you the three main elements for doing a good operation from scratch. Here I will explain it from the three aspects of operation skills, principles and momentum.

A while ago, I saw a picture on WeChat Moments with three sentences written on it: "See yourself, see all living beings, see the world." At that time, I didn't understand the meaning behind these three phrases. Later, I suddenly realized that the pattern and strategy behind these words are very high.

1. Technique, that is, technology and methodology, corresponds to the previous words, that is, see yourself

What we can do is to optimize our skills, discover ourselves, know what we can do and what we cannot do, and continuously optimize the tools and methodologies of operations to maximize efficiency.

2. Tao, that is, user-centric, that is, seeing all living things

There are also some corresponding professional terms for product managers, such as PMF (product market fit), which also places special emphasis on users and the market.

What we can do is to be clear-headed, focus on users and the market, know what users need, what they want, what their pain points are, what they avoid, etc. When we carry out operational activities, we need to pay attention to these points, try our best to match products with the market, use data as a channel and be goal-oriented, so that products and operating methods are more suitable for users.

3. Trend, that is, industry trend, corresponds to the previous words, that is, see the world

The opportunities, trends and winds are all under our control, just like everything in the world is under our control, and what we can do here is to seize the momentum. You must know that situation can only be sought but not created. It is always the situation that creates heroes, but heroes cannot create the situation. The same goes for what Lei Jun, president of Xiaomi, said: "As long as you stand in the right place, even a pig can take off."

Therefore, operations must go with the trend. For example, online education and collaborative office are new trends this year. Friends who are interested in these industries can give them a try.

3. Product life cycle operation strategies

Now that we understand the art, principles and trends of operations, we will share with you the operational strategies for each product life cycle.

Let’s first take a look at the life cycles that a product goes through. A product generally goes through four different life cycles: exploration, growth, maturity, and decline.

In the four different life cycles, the focus of operations is actually different. Especially for user operations, the user attributes, user characteristics, and user strategies they face are completely different.

During the product exploration phase, operations are mainly focused on finding seed users; during the growth phase, operations focus on developing the platform's growing users; during the mature phase, operations focus on maintaining the platform's active users; during the decline phase, operations are mainly focused on maintaining declining users, silent users, and lost users.

Next, I will talk to you in detail about the different stages, what points need to be paid attention to in operations, and what operational strategies are available in different stages. I will also give some actual cases to help you understand.

1. Product exploration phase

During the exploration period, operations must pay attention to three points:

1) The number of users is not important, user retention is important

The answer is obvious. During the product exploration phase, the more users the better. If you spend a lot of money to attract new users during the product exploration phase, you will definitely attract a wave of freeloaders, and only a few users will remain. Many companies spend a lot of money on operations, but once they run out of money, they are helpless.

In the end, all the invested money is wasted. Users come today and leave tomorrow. Isn’t it a waste of effort? Therefore, if you are also relying solely on spending money to operate your business, you need to start reflecting on yourself.

2) To verify whether the product model is feasible, do not provide welfare subsidies from the beginning

Many companies will choose to spend money and offer benefits for promotion in the early stages of opening a store. This is generally agreed to be the fastest way to attract user attention. If you can't even attract user attention in the early stages, how can users know whether your product is good or bad, and how can you verify it quickly?

However, you need to think about whether your product is good enough? Don’t just focus on promotion, products are also important and both need to be taken into account.

3) Eliminate abnormal users (such as illegal users and wool users)

Because most companies still spend a lot of money on activities in the early stages, we often attract a lot of abnormal users during the exploration period.

What is an abnormal user?

It refers to the users who take advantage of you and the black market users. These users come for your benefits. If you don’t have any benefits, they will leave immediately. Such users are of no value to you.

What should be the operational strategy during the product exploration phase?

First, we need to select good seed users:

Regarding seed users, I would like to share with you the stories of Xiaomi’s 100 dream sponsors.

At the beginning, there were only 100 users for the internal beta test of the first version of Xiaomi MIUI. These users were mobile phone enthusiasts recruited by Xiaomi from major mobile phone forums. These 100 seed users participated in the internal testing of the entire product and operations together with Xiaomi employees. There were no rewards in the early stages, and there would be a version iteration every Friday.

Finally, the product quickly crossed the chasm and gained recognition from most users. Xiaomi's target users have also changed from the original niche target group such as mobile phone enthusiasts to the mass user group, and its slogan has also changed from the original "Born for Enthusiasts" to the current "Let everyone enjoy the fun of technology." Xiaomi's user group has changed, and the entire product has crossed the gap and can be accepted by the public.

Lei Jun called these 100 seed users of the early products the 100 dream sponsors, and also built a sculpture in Xiaomi's new headquarters campus, on which were engraved the names of the 100 original MIUI forum users.

You can do some ground promotion activities:

During the product exploration stage, you can do some ground-based marketing activities. Generally, the users obtained through ground-based marketing activities are the target users we want, so you can try to do more ground-based marketing activities.

Stick to word-of-mouth communication, and it is best not to give users rewards, benefits, subsidies, etc. at the beginning:

This actually allows the users who really like the product to stay and eliminates the users who are just trying to get the freebies.

2. Product growth stage

The product has gone through the exploration period and has entered the growth period, which has actually proved that the product's previous business model is feasible. The next thing to do is to vigorously attract new customers and reduce customer acquisition costs.

The methods generally adopted in the growth stage of operational strategies are as follows:

1) Quickly seize the market with a beachhead strategy

For example, from East China to South China to North China, this is the beachhead strategy.

2) Pay attention to word-of-mouth communication to make users feel involved

Once users feel engaged, they will be more willing to spread the word for you, bringing spontaneous growth to your product.

3) Conduct viral marketing, fission activities, etc.

Fission activities are the most effective way to reduce customer acquisition costs.

Everyone is very familiar with the case of WeChat red envelopes. In 2014, WeChat updated the red envelope grabbing function during the Spring Festival. Combined with viral marketing promotion, the number of users immediately exceeded the efforts of Alipay in the past few years.

But in fact, WeChat Pay was first launched on August 5, 2013. On January 4, 2014, Didi was connected to WeChat Pay. On January 27 of the same month, WeChat launched WeChat Red Packets, which allowed the product to be promoted quickly and with low customer acquisition costs. These are all WeChat's operational strategies during the product's growth stage.

3. Product maturity

When the product reaches maturity, more attention will be paid to revenue and user activity.

Therefore, in the stage of product maturity, our operational strategy should be more inclined to develop some functions that are more friendly to user activity and user experience, such as refined user operations and user level system.

Next, let’s talk about the operational strategies of mature products:

1) Refined operations

These include some refined user content recommendations, push recommendations, user insights, user tags, etc., especially user insights, which can be studied as a key project of operation.

2) Establish a user rating system

Based on past experience, the cost of attracting a new user is 5.7 times the cost of maintaining an old user, and the value of a new user is not as high as that of an active user. Therefore, when the product enters the mature stage, many apps will have many means to promote activation, such as adding user level systems, point level systems, sign-in systems, etc.

3) Develop new functions and try new business models

At this stage, the product will also consider more revenue issues and will pay more attention to developing more new business models, such as adding membership services and value-added services.

4) Activity-driven

In addition to daily operations, platform activities will become more frequent, relying on a large number of activities to promote revenue growth.

Activities are needed to support the product during its maturity stage, and activities are one of the means of growth. Operations often carry out fission activities, interactive activities, and communication activities to drive growth.

JD.com’s activity schedule for 2020 includes 365 days in a year, and JD.com has activities on nearly 355 days. It is conceivable that activities have an immediate effect on boosting revenue.

4. Product decline

If a product reaches the decline stage, it proves that the product has lost its vitality and obvious competitiveness. The only thing the operator can do is to slow down the speed at which users leave the platform as much as possible, allowing users to continue to stay or leave more slowly, while also gaining time for user transfer.

There are two strategic actions that operations can take at this stage:

1) Adopt user recall strategy

For example, SMS recall, email recall, push recall, etc., all available channels should be used.

User recall can also be combined with activities. For example, if a user has been lost for half a year, you can give him a one-time reward of 200 yuan in red envelope. This is because for such heavily lost users, they will only return if the temptation is great enough, and users will not pay attention to small rewards.

2) Develop new products as soon as possible and divert users to new products to avoid user loss

In this way, by directing old users to new products, some of the cost of attracting new users can be saved.

Weibo and Oasis are the most typical cases. Although Weibo's overall scale is still quite large, its overall user base and user time will be severely eroded by apps such as Tik Tok, Kuaishou, and WeChat. Oasis can be regarded as Weibo's new product hope.

The Oasis product was launched in internal testing in September last year. At the end of the year, Weibo invited many celebrities to use Oasis and bring in traffic to the product.

At the same time, many changes have been made to the Weibo product to bring traffic to Oasis. Celebrities or users use Oasis to share updates on Weibo. If Weibo users want to click on them to view them, they have to download Oasis. These methods have brought a lot of downloads and traffic to Oasis.

The above are some operational strategies that are often used in the four life cycles of a product. Finally, I have compiled a table of operational goals, indicators, and methods for different operational cycles. You can refer to it according to the different development stages of your product:

IV. Interactive Q&A

Regarding user recall, how should the intensity of welfare recall be controlled? Is a welfare of a few dollars enough?

We need to offer different benefits to different users based on the length of their churn. User recall depends on the situation. For users who have been lost for more than half a year, it may cost a lot of money, and the activities or benefits must make them feel that the power is strong enough and attractive enough. However, if the users are lost within a month, a few dollars of benefits is OK.

Based on past experience, the conversion rate of user recall is usually not very high, generally between 1% and 3%. So if you want to recall users back to the platform as quickly as possible, try to complete it in the shortest possible time. Don't wait until users have been lost for half a year or more before taking recall action.

Educational products are in the exploratory stage of operation. How can we achieve good word-of-mouth promotion?

During the exploration phase, the education industry can focus on communities, attracting people who want to learn knowledge, or use channels such as our circle of acquaintances to do word-of-mouth promotion.

How can online education find its own business model during its exploration period?

If you want to know the business model of an industry, the first step is to find the commercial value-added points of your product, such as the 360 ​​business model mentioned earlier: zone agency fees, browser search, advertising agency and other models.

When it comes to online education, you must first determine what business model your company will adopt in the future? For example, if you are engaged in Internet education, your business model can be to sell courses for training to C-end users, or to provide internal training for B-end enterprises. These are all different business model positionings. You can formulate different business growth strategies based on the different positioning of the company.

Author: Kaka Teacher

Source: Kaka Teacher