Pinduoduo-style promotion through old customers bringing in new customers! (two)

1. What is the activity of bringing new customers with old customers?

2. Business logic of the activity of bringing in new customers: 1+2+3

3. Example analysis: KPI of the activity of bringing in new customers

4. Other matters needing attention in the activity of mentoring new employees

V. Conclusion

Before reading this article, it is recommended to read the first part:

Pinduoduo-style promotion through old customers bringing in new customers! (one)

3. Example analysis: KPI of the activity of bringing in new customers

Setting reasonable KPIs as goals is the first step in product design for activities that bring old customers in and new customers out (in fact, it is also the first step in all product designs). In this chapter, I will introduce the key data indicators in the old-to-new activities with some examples, and share the common methods to improve these data indicators.

The KPIs for measuring the effectiveness of old customers bringing in new customers are usually the following two:

• ROI
• Number of customers acquired

1. ROI (Return on Investment)

ROI (return on investment) is the key indicator that is considered first in the activity of bringing in new customers. The calculation formula is:

ROI = revenue from new users / cost of acquiring new users

In the initial stage, the revenue brought by new users should be estimated based on the user LTV (lifetime value) in historical data. LTV refers to the total revenue contributed by users to the platform during the period of using the product. Based on user LTV, the revenue from new users in the old-for-new activity can be qualitatively defined as the revenue brought to the platform by downstream users within a certain period. For example, the revenue brought to the platform within 7 days after the downstream users start using the product can be counted as the revenue brought by new users in the old-for-new activity to calculate the activity ROI.

The cost of acquiring new users is usually the amount spent by the platform to acquire downstream users during an event. It is usually expressed as the total amount of rewards we issue to upstream and downstream users during the event.

During the activity phase, it is necessary to timely compile statistics on ROI data on daily, weekly, monthly and other time dimensions, and adjust the value of equity and product strategies based on actual conditions.

ROI has a directional significance for equity setting. Generally speaking, when conducting activities to bring in new customers, the principle that must be followed is that the cost of new users must be less than or equal to the revenue brought by new users. That is to say, it is necessary to ensure that the value that users bring to the product within a certain period is greater than or equal to the customer acquisition cost. Otherwise, the more users acquired, the greater the loss.

Improving ROI data performance can obviously be divided into two steps: increasing the revenue brought by new users and reducing customer acquisition costs.

In the activity of bringing in new users, the means to increase the revenue brought by new users is usually to design a set of product links within the product based on the characteristics of downstream users to stimulate them to use the product as soon as possible and experience the aha moment. In addition, as mentioned in the above section, we can add activation tasks and corresponding rewards to the upstream users' tasks, giving upstream users who have experienced the value of the product sufficient motivation to encourage downstream users to use the product.

For example, in the activity of bringing in new customers as shown in the figure, the upstream user can only be given the corresponding reward after the downstream user places an order.

The means to reduce customer acquisition costs is also relatively intuitive, which is to reduce the value of the rights and interests allocated to each new user. However, it is usually not recommended to directly reduce the value of rights and interests at the publicity level, because the reduction in the value of rights and interests will greatly affect the willingness to participate in upstream and downstream activities. You can consider changing the form of rights and interests distribution, such as packaging a lottery event, and using the user's "small risk for big win" mentality to stimulate their participation.

2. Number of customers acquired

Obviously, counting the number of customers acquired within a certain period is a direct indicator to measure the effectiveness of the activity of bringing in old customers to new users. Here, taking the product structure of the common activities of bringing in old customers to new users on the market as an example, by disassembling the funnel on the main process, we can decompose the indicator of the average daily number of customers acquired.

Typically, a standard onboarding campaign includes the following pages or elements:

• Entrance
• Event Venue
• Share Components
• Landing Page

Based on the above page settings, the indicator of "average number of customers acquired per day" is broken down as follows:

Average daily customer acquisition = DAU * event venue exposure rate (UV) * upstream sharing rate (UV) * upstream sharing success rate (UV) * average number of shares per person * sharing payload * invitation conversion rate

Obviously, the goal of increasing the average daily number of customers can be achieved by improving the performance of each factor in the formula. Next, we will analyze the factors in the formula one by one.

1) Event venue exposure rate (UV)

Event venue exposure rate (UV) = event venue exposure UV/DAU

Generally speaking, the exposure rate of an event venue is determined by the timing of the event entrance, the location of the event entrance, and the style of the event entrance . Obviously, if the display frequency is frequent enough, the display location is eye-catching enough, and the style design is eye-catching enough, the exposure rate of the event venue can be greatly increased in a short period of time.

Taking the Wanlimu APP as an example, it has set up an entrance for the old-customer-new activity in the lower right corner of all first-level pages except the shopping bag; the entrance style is the red envelope that the people love to see, and the activity copy "Invite to get a gift" is displayed on it; at the same time, when users visit the "10 billion subsidies" page, a pop-up window will be displayed to invite users to participate in the old-customer-new activity.

Although the overwhelming accumulation of entrances and pop-up reminders can increase the exposure of the event venue, from a global perspective, these methods may also distract users excessively and lead to a decrease in the conversion rate of the main process.

Therefore, a restrained entrance to the exhibition activity is also something that needs to be considered. I suggest that the activity participation experience of upstream users can be seamlessly connected to their experience of the product, making participation in activities to bring new users on board a natural part of the product usage process.

A common practice is to invite upstream users to participate in activities where old customers bring in new customers after they have been activated. At this point, upstream users have already experienced the product’s aha moment and felt the product’s value. Obviously, inviting them to participate in activities where old customers bring in new customers at this point is a natural thing to do and is also a guarantee for the conversion rate in subsequent links.

Take Chunyu Doctor as an example. As a medical information service APP that provides online consultation services, Chunyu Doctor's core function is that users can communicate with professional doctors online without leaving home. When users use this function to experience the aha moment, Chunyu Doctor will display the activity entrance of the old-to-new activity in the chat interface as shown in the figure below. Moreover, the value of the rights and interests is conveyed to users in the entrance information, and users are informed that they will have the opportunity to refund the consulting fee if they participate in the event.

The entry point for this type of activity is to set the timing of inviting upstream users to participate in the old-to-new activity to after the upstream users are activated.

2) Upstream initiated sharing rate (UV)

Upstream initiated sharing rate (UV) = Upstream initiated sharing UV / event venue exposure UV

The "sharing UV" defined here is the number of people who click the sharing button or entrance in the event venue

The upstream initiated sharing rate depends largely on the upstream users' willingness to participate in activities. The equity value and its expression are the key factors that determine the user's willingness to participate. At the business level, obviously, the higher the equity value, the greater the incentive to users. Therefore, increasing the equity value within the range allowed by ROI is the most effective means to increase the upstream initiated sharing rate; at the product level, considering that the upstream initiated sharing scene is located in the event venue, the information structure design and content display planning of the event venue are the key to increasing the upstream initiated sharing rate.

Before introducing how to design an event venue, I would like to introduce to you the six persuasion principles summarized in the classic book "Influence" by psychology master Robert Cialdini.

Because whether it is the event venue that we are currently preparing to introduce or the landing page that will be discussed next, it can be understood as a trigger that attempts to influence users and guide them to take action. On these pages, we try to influence users by delivering event information to them and expect them to take action. Here are the six principles in full:

Reciprocity - People are more likely to do something out of reciprocity, regardless of what favor someone has given you before and you now need to give someone else some kind of favor.

Commitment and consistency – People who have already taken an action are more likely to take it again, regardless of the size or content of the action.

Social proof – When feeling uncertain, people look to see what others are doing before making their own decisions.

Authority - People look to authority figures to decide what actions to take.

Favorability - People are more willing to do business with companies or people they like than with companies or people they dislike or have no feelings about.

Scarcity – People take action when they fear they will miss out.

Based on the six persuasion principles and combined with the content and business objectives of the event, I believe that there are six key points to designing an efficient event venue:

① Simple and direct transfer of equity value (reciprocity)

Delivering the value of rights and interests is one of the important tasks of an event venue. We must first solve the problem that users face when they visit the event venue for the first time: "What can I get at this event venue?" Therefore, the page needs to convey the value of rights and interests in a simple and direct way to stimulate users' willingness to participate in activities and increase sharing rates. Usually, displaying a promotional copy of the event that reveals the benefits at the top of the page is a simple and effective solution.

② Clearly describe the task and provide a clear entry point for sharing

Educating upstream users about the content of the tasks is another key message that needs to be conveyed at the event venue. We need to solve the user’s next question: “What do I need to do to get the reward?” Therefore, the page needs to clearly state the task content and tell the user how he can get the reward.

At the same time, in order to allow users to notify friends more conveniently, there needs to be an easy-to-find entry for initiating sharing on the page. The bottom-sucking button is a common entry display solution. Its position is fixed at the bottom of the screen. No matter where the user browses to on the page, as long as he wants to participate, he can initiate sharing by clicking the bottom-sucking button. The breathing-like shaking button is suitable for displaying sharing entrances that are fixed at a certain position on the page, because it is difficult for users to ignore the dynamic elements that appear on the page.

③ Display other users’ rights acquisition records (social recognition)

Obviously, when people are hesitant about whether to participate in an event, showing information about other users who have successfully won rewards in history will allay their concerns, provided that these winning records appear to be real.

Next, let’s take a look at an example, a venue for an event where old employees bring in new employees, which embodies the three key points mentioned above.

④ Create the perception of limited-time, limited-quantity benefits through product means (scarcity)

Sometimes people don't realize how good something is until they are about to lose it. Creating limited-time, limited-quantity benefits through product means can get people to take action immediately. After all, no one wants to lose the opportunity that they have already gotten.

Displaying a countdown on a page is a common method of creating a sense of urgency. Coupled with packaged limited-edition content, it can be very helpful in promoting user sharing.

⑤ Introduce authority or celebrities to endorse the event (authority + goodwill)

Seeing familiar positive celebrities on the page can quickly dispel users' concerns and distrust, and to a certain extent, it can also enhance users' willingness to share. Well, this applies to companies with deep pockets.

⑥ Display the downstream activity participation status

The above five points are all aimed at stimulating upstream sharing, and the sixth point is to facilitate the upstream to remind the downstream to complete subsequent tasks at the appropriate time. As we mentioned above, for activities that involve multiple tasks or where the downstream must complete a specified task (such as placing an order) before the upstream can be rewarded, it is very necessary to show the upstream the current status of the downstream's participation in the activity.

Here we take MissFresh's "Invite and Get Gifts" activity as an example. In this activity, the downstream needs to place an order before the upstream will receive rewards. The venue provides the information of "Friends to be Invited". Upstream users can easily see the downstream information that has not yet placed an order, and can click "Invite to Order" to push the downstream to complete the task. In this scenario, the upstream is motivated to accelerate the acquisition of rights and interests and actively pushes the downstream to complete the task.

Next, let’s look at a typical example – the venue of Pinduoduo’s “Get Cash Every Day” event. (Note: Although "Get Cash Every Day" is not a strictly limited event venue for bringing in new customers, its page design and product strategy have many advantages.)

① Based on the user's "loss aversion" psychology, efficiently deliver equity value (reciprocity): Before seeing the venue page, users will receive a "cash red envelope" distributed by Pinduoduo, with an amount of up to 97 yuan, but they can only withdraw cash when it reaches 100 yuan

② Incorporate scarcity, social recognition and other factors into the design of the venue, and provide a striking entry point for sharing

③ Use a famous CCTV host with a positive image and strong affinity as a spokesperson to endorse the event (authority + goodwill): Add a "Zhou Tao Gives Cash" module in the event venue, and users can get "cash rewards" after watching the promotional video, and invite users to share it again.

3) Upstream sharing success rate (UV)

Upstream sharing success rate (UV) = upstream sharing success UV / upstream initiated sharing UV

The successful sharing UV here refers to the number of users who successfully pass the shared content to downstream through the sharing channels provided by the venue. It is worth mentioning that the statistics of this data rely on the sharing success callback returned by the sharing channel, but not all sharing channels can return the sharing success callback.

With this as the background, the "upstream sharing success rate (UV)" discussed here is not the sharing success rate in the strict sense of the data level, but the sharing success rate in the business sense. This part of the data may not be accurately counted on the front end, but it does exist objectively.

For example, in the “Copy Link” channel, users can copy the link and send it to friends through some channels, but it is impossible to accurately count whether the user has shared successfully, that is, whether the user has spread the shared content to the downstream. It can only be counted whether the user clicked the “Copy Link” button.

The key factor that determines the success rate of upstream sharing at the business level is still equity value . At the product level, there are two key points:

① Provide common sharing channels based on user habits to ensure that users can quickly and easily spread activity information to downstream users. For example, in the country, WeChat is an indispensable sharing channel, and face-to-face QR code scanning is also a channel worth considering.

② Design legal sharing content based on the policy requirements of each sharing channel. As mentioned above, the sharing channel determines the form and content of the shared content. When users disseminate content through the SNS platform, the SNS platform will review the content. If the shared content does not comply with the policy of the SNS platform, the content shared by the upstream user will be blocked and cannot be viewed normally by downstream users. Therefore, when designing sharing content, you must pay attention to studying the SNS platform policies to avoid inadvertently crossing the red line, so as to avoid the upstream shared content being blocked by the channel, and ultimately failing and doing a lot of useless work.

4) Average number of shares per person

Average number of shares per person = PV of successful sharing / UV of successful sharing

Similar to the upstream initiation sharing rate and upstream sharing success rate, the average number of shares per capita at the business level also depends to a large extent on the equity value . The increase in equity value increases the willingness to share, and the average number of shares per capita will also increase accordingly. At the same time, we can use some product means to stimulate it. A common practice is to package various on-site activities to give users more reasons to initiate sharing again and again.

Let’s take Pinduoduo’s “Get Cash Every Day” as an example. It uses the following methods to stimulate users to continuously share:

① Zhou Tao gives cash: After clicking to view the promotional video, a small amount of rights will be issued and a sharing pop-up window will be displayed

② Hourly benefits

③ Red Envelope Rain Game: Get red envelopes after sharing

④ Finding a lucky star

From the above gameplay, we can see that thanks to the setting in the "Get Cash Every Day" activity that cash can only be withdrawn after the "cash" reaches a certain threshold, Pinduoduo first distributes part of the equity value that cannot be immediately realized to users, and then requires users to initiate sharing in order to obtain this equity value . With this as the core concept, it packages some on-site activities to stimulate users to continue sharing.

Let’s look at another example of MissFresh. When an upstream user successfully shares once at an event venue, when returning to the APP, it will display promotional words related to rights and interests on the sharing component pop-up layer, repeatedly emphasizing the value of rights and interests, in order to stimulate users to continue sharing. This is also an effective means of stimulation.

5) Share Payload

Sharing payload is a concept from the book Growth Hacker, which refers to how many people each user sends campaign promotion information to each time.

The means to increase the sharing payload are related to the sharing channels. Users are usually advised to send to as many people as possible each time they share. For example, when the sharing channel is an SNS platform, guiding users to send promotional information to group chats is an effective way to increase sharing load, which can gain more landing page exposure opportunities.

6) Invitation conversion rate

The invitation conversion rate refers to the proportion of all users who receive event promotion information from upstream and are converted to downstream users .

The invitation conversion rate is similar to the upstream sharing rate to a certain extent. It reflects the downstream participation willingness. The key factor that determines the value of this number is still the equity value and its expression . Focusing on the product level, here we take the most common and effective landing page as an example to discuss how to improve the invitation conversion rate.

The first product module that should be considered should be the preview of the landing page. As mentioned earlier, most SNS platforms will display the key information of the landing page, such as title, subtitle, pictures, etc. in the landing page preview.

The landing page preview is the first formal communication form between the old-for-new activity and the user. Therefore, designing an attractive landing page preview that makes the reached users want to click is the first step to improve the invitation conversion rate. In other words, getting more landing page exposure is the first step to improve the invitation conversion rate.

The information displayed in the landing page preview usually consists of a short sentence and a small picture. Therefore, the promotional copy needs to directly expose the downstream available equity value, and the picture should also echo the copy as much as possible, showing images related to the equity value, in order to attract the user's attention in the shortest time.

Next is the design of the landing page. Similar to the event venue, the landing page is also "a trigger that attempts to influence users and guide them to take action." The information set on the landing page is to guide users to participate in the event. Therefore, the design points of the landing page should also combine the event content with the six principles of influence mentioned above:

① Simple and direct transfer of equity value (reciprocity)

② Clearly express the task and provide a convenient way for downstream to participate in the activity

③ Display other users’ rights acquisition records (social recognition)

④ Create the perception of limited-time, limited-quantity benefits through product means (scarcity)

⑤ Display authoritative information about the product and build trust (authority)

⑥ Display upstream information on the page (favorability)

The definitions and improvement strategies of the indicators of each funnel link for the average number of daily customer acquisitions have been introduced here. Let’s review the formula for the average number of daily customer acquisitions:

Average daily customer acquisition = DAU * event venue exposure rate (UV) * upstream sharing rate (UV) * upstream sharing success rate (UV) * average number of shares per person * sharing payload * invitation conversion rate

Regarding the KPI of the old-to-new activity, there is another indicator that is often mentioned. It is an indicator to measure the virality of the fission activity - the K factor (also known as the viral coefficient). Its formula is the number of successful shares per user * invitation conversion rate, that is, the number of downstreams that each upstream can bring. I believe that readers have also discovered that the K factor is the second half of the formula for the average daily number of customers: "average number of shares per person * sharing payload * invitation conversion rate". I will not go into details here.

4. Other matters needing attention in the activity of bringing new employees together

1. Use A/B testing to continuously optimize your product

The vast majority of excellent Internet products are based on a large number of experiments, and the activity of bringing in new customers by old customers is no exception. The product design points and design strategies mentioned above are definitely not created out of thin air or taken for granted. They are the result of extensive testing and optimization. Therefore, do not take the pros and cons of a product or operation plan for granted. If conditions permit, it is necessary to use A/B testing for objective verification. This is especially true for subjective information such as marketing copy and promotional pictures. Designing this information is not an exact science. We need to start from the actual results and select the most touching promotional information by comparing the conversion rate differences between different groups.

2. An effective risk control system is the basis for the operation of the old-to-new activities

As we mentioned earlier, the value of the rights and interests distributed to upstream and downstream companies in the old-to-new activities is bound to attract the attention of the wool-collecting party. How to prevent the wool-collecting party from defrauding the rights and interests is also an important proposition. Against this background, it is particularly necessary to establish an effective risk control system to safeguard the activities of bringing in new customers. Generally speaking, the behavioral information of these users who want to take advantage will have certain patterns, such as similar device information, IP addresses, delivery addresses, etc. We can make rule restrictions for specific information. Any user who exceeds the rule restrictions will be marked as a blacklist user who cannot obtain benefits normally. The establishment of a risk control system is also a relatively complex project and is not the focus of this article. Interested readers can refer to relevant materials for further information.

5. Conclusion

At the end of the article, I would like to quote Sean Ellis’s point of view in the book "Growth Hacker" to remind you of the right time to use old-to-new customer acquisition activities as a means of customer acquisition, that is, "good products are the prerequisite for growth." The activity of bringing old customers to new customers is indeed one of the commonly used strategies to achieve growth, but like other customer acquisition methods, it must be adopted after determining the "indispensability" of the product.

No matter how much we invest in marketing and advertising, no matter how clever the marketing methods are, we cannot make users fall in love with an unqualified product. If we fail to create or determine the core value of the product before pushing hard for growth, then you may be able to indulge in the illusion of growth for a while, but you may also be immediately rejected by the market.

Remember, viral word of mouth is a double-edged sword. It can help you soar, or it can destroy you.

This concludes the introduction to the design strategy for the old customers bring in new customers activity. I hope this article will inspire readers’ product design ideas.

Author: Bruce Ma

Source: Bruce's Product Methodology