Event Operation｜Pinduoduo’s red envelope customer acquisition strategy!

Previously, we analyzed Pinduoduo ’s user portrait from the perspective of third-party data. In-depth review | What exactly supports Pinduoduo’s market value of 43.2 billion - Part 1. In this issue, we will begin to analyze Pinduoduo’s many growth points at the product level.

To facilitate the analysis, we rely on the 2A3R life cycle model to analyze functions and operations in different stages.

Due to the dual role of some functions or operational strategies, they will not be repeated in this article. Therefore, we break down the user life cycle into customer activation-retention-conversion-sharing acquisition, and define the key actions (Key actions) and indicators for each link.

1. Customer Acquisition and Activation

1. What should we focus on?

Since the development of the Internet, all major companies have gone through the stage of spending money to capture market share. During the customer acquisition stage, we invested a lot of resources in purchasing traffic and screening the best channels. However, as users develop usage habits, it is easy to attract traffic but increasingly difficult to activate users.

Pinduoduo, which has grown the fastest in the past two years, suffered a greater-than-expected loss due to huge customer acquisition costs when it released its first financial report after its IPO, and its stock price plummeted. To this day, Pinduoduo still uses the "throwing money" method to quickly acquire users.

So, how does Pinduoduo spend every penny of its customer acquisition money to acquire and activate customers?

In the customer acquisition and activation stage, we hope that users can quickly feel the core value of the product, complete designated actions and increase sunk costs .

Therefore, we focus on the following core indicators during the activation phase:

• Time spent on user activation – Evaluating activation efficiency
• User activation rate - evaluates activation success rate
• DAU/MAU—Evaluate the cumulative activation effect

Combining the above indicators, Pinduoduo optimizes the new user experience by optimizing the landing page, simplifying the registration process, creating browsing flows and rewards , reducing friction between products and users, and thus completing activation.

2. Detailed interpretation of Pinduoduo’s customer acquisition and activation

2.1 Optimize landing page

Usually when optimizing a landing page, we focus on three core elements:

1. Deliver relevance (tell users who I am and what I can do for them);
2. Demonstrate the core value of the product (what benefits it provides to users);
3. Provide a clear CTA (what users need to do immediately to get the benefit).

Let’s take the “Get Cash Every Day” activity as an example, where you can get cash by inviting friends to help you:

As the first official contact with users, Pinduoduo provided such a simple and crude solution based on the three factors mentioned above:

The landing page design directly appears in the form of a red envelope, which concisely demonstrates the value of the activity - giving away red envelopes and money - users do not need to read the guiding text of the sharing link in WeChat, nor do they need to look at any text on the page to directly understand the activity carried on the landing page; the CTA directly guides users to click through the bold word "open", and after clicking, they will directly jump to the corresponding download link in the app store.

Although the entire landing page has nothing to do with the core value of the product, or even does not reflect it at all, the large rewards of real money make it impossible for every participating user to escape the "law of true fragrance."

At the same time, the link uses the w.url.cn short domain name and uses Deeplink: when users who have installed and logged in open the App, the activity page will be directly called up; while users who have not logged in or have not installed the App will first complete the download-registration process and then jump directly to the activity page - minimizing the possibility of user loss after completing the download-registration.

2.2 Simplify the registration process

1) Single Sign-On

As a social networking product for acquaintances that originated from the WeChat ecosystem, Pinduoduo designed its login page to use WeChat as the only option for users (Tencent seems to particularly like this strategy) - eliminating a variety of third-party login methods, and even QQ and mobile phone numbers are included in the "other login methods."

While forming a traffic moat to prevent user outflow, users are only given one option and can complete the login in one step, effectively shortening the time users spend choosing a login method.

2) Only redirect, no need to log in and authorize operation

(I had doubts and asked my friends, and found that they all had authorization, pending confirmation) When choosing to log in through WeChat, according to the normal process, Pinduoduo will call up WeChat and ask the user to authorize. After completing the authorization, return to the Pinduoduo application. However, in the actual process, the authorization page that should have appeared was replaced by a short blank page, and Pinduoduo completed the authorization.

Since many Pinduoduo users will hesitate when encountering the authorization page and words such as "authorization" after the jump due to issues such as age and education, and this may cause users to quit midway, so the method of only jumping to the authorization operation without logging in can minimize the actions that users need to complete, help users make decisions and shorten the login time . After a successful login, one-click synchronization of WeChat information can help improve the completion rate.

3) No mobile phone number verification required

When we register and use new APPs in our daily lives, we often encounter this situation: after logging in with a WeChat account, the APP will also require you to enter your mobile phone number to receive a text message for verification. The APP operator monitors whether the user is a real user through mobile phone verification.

However, in order to quickly acquire users, Pinduoduo omitted the mobile phone number verification process, further shortening the registration process. There are three reasons:

• The user has completed WeChat registration. Pinduoduo can obtain the relevant ID through authorization and directly create a UserID.
• If it is a virtual number for free users or a 16x number of a virtual operator, the risk control department may not be able to verify the authenticity of the user through text messages because there is no real-person identification or relevant document verification. (But it also leaves a small hole for the wool party, and we don’t know whether it is intentional or negligence)
• If you design a mobile phone number verification process, you must consider many issues such as the registered number detection and prompt before the verification code is sent, the human-machine detection design before the verification code is sent, as well as ease of use, and the time it takes for SMS operators to send the verification code. Pinduoduo has always stimulated users' impulse purchases through low prices and subsidies. If it continues to use such verification methods, it may directly discourage users over a long period of time.

4) Subsequent improvement of personal information

Apart from not requiring mobile phone verification, we found that Pinduoduo did not have any pop-up windows or instructions that directly required users to complete their information. Even if we do not make any information completion, we can still use Pinduoduo normally.

It can be seen that Pinduoduo strives to allow users to experience the core value of the product at the first time, and spends their very limited time and energy on exploring the product.

5) Uninstall and reinstall without logging in

It is well known that if an APP causes too much disturbance to users or users think that the APP is of no value, they will uninstall it. These users may come back at some point in the future. In response to this, Pinduoduo has designed a system whereby users can automatically log into their original account after uninstalling the app and reinstalling it. Taking iOS as an example, even if you choose to delete the APP and all related data.

After re-downloading, you can still log in directly, and users can enter the usage state directly and quickly - avoiding many problems such as forgetting account or password during the second registration or second login process.

2.3 Create browsing flow and rewards

Before guiding users to start exploring the product on their own, we will prepare some basic guidance for users so that they can quickly understand what value the main core functions of the product can bring to them when they first come into contact with it.

For example, Dropbox will play some product videos for users, and mobile games will set various novice tasks for players. These tasks may be rewards or bring immediate satisfaction to users. Rewards include user ratings, user service rights, material rewards (red envelopes, physical objects), etc.

Due to concerns about sunk costs, once users decide to take an action, no matter how simple the initial action is or how troublesome the subsequent actions are, they will be more inclined to continue taking action in the future.

Therefore, in the early stages of a product, users experience the product through rewards or tasks that start with some simple behaviors. The more time, energy, and financial resources users spend on the product, the higher their trust/loyalty to the product.

To this end, Pinduoduo provides a lot of novice tasks and rich rewards:

• Enable message notifications: Mark relevant interest points in red to induce users to seek profit;
• Enable Pinxiaoquan: prompt xx common friends to use it, and arouse user empathy through action clusters;
• Coupons of various categories: stimulate users' consumption desire through reward incentives, and indicate the coupon expiration date on the coupon. Encourage users to take advantage of short-term discounts to purchase products.

Through various In-App-Push, Pinduoduo always reminds users that there is an opportunity or reward that is obviously valuable to them, thereby guiding users with different motivations and spending abilities to take action.

Based on my one-week usage, after launching the APP, I received three pop-up notifications through In-App-Push on the same day, recommending various coupons of different categories to me, thus stimulating users to make purchase conversions.

2. Retention

1. Why we care about retention

Sean Ellis's "Hacking Growth" quoted a Bain research report:

For every 5 percentage point increase in user retention rate, profits will increase by 25 to 95 percentage points. On the contrary, user loss will bring huge losses, which is not only a waste of initial customer acquisition costs and operating costs, but also a loss of expected profits. Therefore, the longer a product or service retains users, the greater the opportunity to gain more revenue. These benefits not only come from acquiring customers for products or services, but can also be the commercialization of traffic.

At the same time, the product team verifies whether the product has reached the PMF stage through retention; and evaluates whether the product functions solve user points through retention, thereby evaluating the health of the product.

In the retention phase, we hope that users will stay in the product as long as possible and recall lost/dormant users as much as possible.

Therefore, we focus on the following core indicators in the retention phase:

• Overall next-day/seven-day/monthly retention rate of the product—assessment of the overall health of the product
• Next-day/seven-day retention of new users—Evaluation of customer acquisition and activation effects
• (Active users/new users/core users and other specific groups) Next day/seven day/month retention rate - Operational effect evaluation
• Feature Retention Rate - Evaluating Feature Value

Combining the above indicators, Pinduoduo extends user usage time by providing services that meet user needs and make users happy and satisfied + social sedimentation + recalling lost users .

2. Interpretation of Pinduoduo’s retention details

2.1 Social Precipitation

We mentioned earlier that in order to encourage users to use the product for a longer period of time, we usually choose to increase the user's sunk costs so that users are reluctant to leave the product. For example, on financial products and video websites, users are reluctant to leave because they purchase high-value financial products or renew their memberships.

Just as what we fear most when changing mobile phones is moving the phone’s address book or message records, social sedimentation itself increases the sunk cost and makes the product stickiness gradually increase as the user uses it for a longer time.

Then, Pinduoduo, which started out as a social networking platform, adopted a social bottoming approach :

Comparing horizontally with Xiaohongshu or Taobao, we found that the community UGC+PGC format can effectively achieve social sedimentation. Pinduoduo has developed a large number of functional modules, which we will explain one by one.

1) Small circle

As a new function between the main banner and the function list, Pin Xiaoquan carries the tasks of Pinduoduo Moments.

We found some very interesting contents in the pop-up window in the privacy protection description: automatic synchronization of purchase records, visible only to friends, and automatic blocking of sensitive products.

Based on this, we can see that the significance of spelling small circles includes the following points:

• Show users’ buyer shows to stimulate other users to buy;
• Use friendships to enhance users’ trust in products and guide them to make purchases;
• Satisfy users' curiosity and check what products others have purchased recently.

2) Live broadcast

As the short-term retention effect of users caused by various reward stimuli gradually fades, and with the deepening of product use, user needs (from purchasing needs to social needs) gradually diversify. If you want to retain users, you need to encourage them to produce more content or explore more content.

If Pinxiaoquan is a form of UGC, then live streaming is the display of PGC. Whether it is a store or an individual, they can quickly start live streaming with almost zero threshold. Then, no matter whether the live broadcast content is a product review experience or other content, it can be presented quickly, giving users more fresh content.

2.2 Satisfy user needs and make users happy and satisfied

1) Duoduo Orchard, Duoduo Earn Big Money, Duoduo Love Elimination, Duoduo Ranch

Perhaps because of the endless fun of stealing vegetables and Alipay's Ant Forest, Pinduoduo has also developed four mini-games: (Duoduo Orchard) planting trees, (Duoduo Make Big Money) saving money, (Duoduo Love Elimination) elimination games, and (Duoduo Ranch) raising animals, which are permanently included in the product function list.

Everyone is familiar with the prototypes of these mini-games, which were once popular small-scale games.

If we combine the Hook model, we will find that these mini-games have similar routines:

• Occupies a very high-quality resource position within the product
• The interactive design is cute but not childish, making it acceptable to people of different ages;
• The gameplay threshold is low: watering, saving money, playing elimination games, raising animals;
• The core path is simple and clear enough: get props, water, save money, play elimination games, raise animals, invite friends to get props again, and repeat the cycle;
• Through tasks, users are forced to browse products multiple times, thereby increasing the order rate to a certain extent;
• The core rewards are simple, crude and varied: various rewards that help advance the game progress and various unexpected coupons;
• You don't need to spend any money, just play the game every day and complete routine tasks.

On the one hand, these small games provide high-frequency gamification functions for a relatively low-frequency e-commerce product, cultivating users' periodic usage habits and improving product stickiness, while guiding users' consumption habits through gaming.

Through a seemingly simple and achievable game goal combined with rewards, users are encouraged to continue consuming - this is similar to the product logic of Ant Forest to encourage green consumption. It’s just that Ant Forest starts from the perspective of public welfare, while Pinduoduo starts from the perspective of personal profit.

While obtaining material rewards, the continuous advancement of the game process also makes users feel happy. On the other hand, although it is a single-player game, there is also competition. Pinduoduo helps users establish social relationships within the product by attracting new users through old ones . It copies the social relationships among acquaintances in WeChat to Pinduoduo, quickly creates a large amount of interaction and user activity, and realizes social sedimentation.

2.3 Recalling dormant/churned users

According to statistics, the cost of acquiring new users in the Internet industry is currently 5-6 times higher than the cost of retaining existing users.

Compared with the acquisition and cultivation of a new user, the cost of awakening a lapsed/dormant user is relatively lower, because the lapsed/dormant user already has a certain understanding of the product and has had a certain favorable impression. The company can effectively save the time and financial costs of channel promotion and user usage habit cultivation - perhaps only a coupon/gift, a push/text message, and a piece of copywriting that hits the pain point can save a once active lapsed/dormant user.

As traffic costs have doubled today, spending more energy on improving user retention is a more efficient and economical business orientation.

As a savvy operator, the answer to this simple multiple-choice question of "how much does it cost" is obvious.

However, after I repeatedly uninstalled or did not use it for a period of time, I found that Pinduoduo did not have any recall measures. Perhaps for Pinduoduo, it may believe that we cannot escape the law of truth in the end, so it does not waste energy on recall operations.

Author: It's a small pot

Source: Market Dog