The universal equation for product growth: number of users = user motivation / action cost

The article analyzes and explains the universal growth equation of the product: number of users = user motivation/action cost. The author summarizes the application of the growth equation in actual work with detailed cases, and gives a detailed introduction to the practice in the two scenarios of communication cost and time cost.

What to do if no one uses the product? Give red envelopes to users.

No one uses the product features? Strengthen the UI, make it popular, add red dots, provide mask prompts, and provide sufficient user guidance so that users will not be unaware.

These are common routines when product or feature data is not good.

We make products and meet requirements, but no one uses them. Not only is it a waste of resources, but the team will also feel frustrated. It's obviously a very good function, why doesn't anyone use it?

Before answering this question, let me first introduce a word that is slightly rarer than demand: motivation. Demand is the external manifestation of users' specific behaviors, while motivation is the users' internal purpose.

Eating is a need. Eating hotpot is eating, and eating bread is also eating. If you are greedy, just eat hotpot. If you are just hungry, just give yourself a piece of bread . The essence of paying attention to needs is to go beyond needs, focus on users' motivations, and understand what their purpose is. From what the user needs to what he wants: if the motivation is strong, he wants it very much; if the motivation is weak, he may or may not want it.

But only looking at the motivation and not the cost is just hooliganism.

Although the user wants to eat hot pot, he can only afford 10 yuan, so he can only eat bread. Even if the products and functions meet the needs of users very well, but the user has to pay a huge cost for it, or even if it exceeds the limit of what he can afford, he will just turn a blind eye.

Therefore, motivation and cost must be considered together. We always emphasize simple and easy-to-understand designs in order to reduce users' learning costs.

Motivation is the external manifestation of the user's internal desires and fears. It is related to people and cannot be created, but it can be enhanced. The strength of motivation is related to a person's characteristics and inner expectations. Women with good looks have a stronger motivation to maintain their beauty than ordinary women. Beautiful women are the breadwinners of the medical beauty industry. Monetary benefits have a greater impact on the motivation of low-income people than high-income people, and the more money they can earn, the more obvious their motivation will be.

Therefore, by understanding the product functions and clarifying the user's motivation for use, we can determine the core characteristics of the user base. Then further amplify the motivation based on the expectations of the target users.

But not all product features can effectively enhance user motivation, so we must also consider reducing behavioral costs as much as possible.

The core idea of ​​"number of users = user motivation/action cost" is to increase the number of product users by enhancing the user's motivation and then reducing his action cost as much as possible. This is a growth strategy formulated from the user's perspective, which does not conflict with the growth equation formulated through the North Star Metric. (Note: For a detailed introduction to the North Star Growth Equation, see "Product Core Working Method: How to Find Demand Points that Drive Product Growth") These are two thinking modes of product growth strategy, one is the emotional user perspective, and the other is rational data-driven. For the same problem, we can even cross-think through these two modes to get the most effective solution strategy.

Next, we will introduce the application of "user volume = user motivation/action cost" in actual work through detailed cases and analysis.

First, let’s look at the main motivations of users.

There are five main categories:

1. social contact. It’s mainly because I’m afraid of loneliness and need a sense of existence. Therefore, maintaining social relationships, expressing one's own personality and preferences, and showing off intentionally or unintentionally. These three types of content are the core of social networks such as WeChat and Weibo.
2. entertainment. Boredom is the main theme of ordinary people's lives, so videos and games have always been the mainstream of the industry.
3. Pursue profit. Seeking benefits and avoiding harm is human’s subconscious. There is no gain without pain, and this is why micro-business and social e-commerce have risen.
4. Pursue progress. If a person has no dreams, then what is the difference between him and a salted fish? Without the motivation to progress, human beings would still be living in the primitive jungle. Therefore, there are a wide variety of XX universities, XX reading clubs, and XX training courses.
5. Basic survival. The main things are food, clothing, housing, transportation, firewood, rice, oil and salt.

Secondly, what cost will users pay when using a product? There are mainly three categories.

1. time. In addition to the waiting time for downloading, it also takes time to learn and understand, so once users get used to a tool app, it is difficult for them to switch to the same type of app. However, the user overlap between different e-commerce platforms is very high, and there are many people who use Taobao, JD.com, Pinduoduo, and Vipshop at the same time. This is because the core motivation for shopping is cheapness, and the tiny learning cost is insignificant compared to the actual monetary benefits.
2. money. The monetary cost is easy to understand, and it involves pricing. For the same product or service, the lower the price, the more popular it is. Now video sites, games, and knowledge all require payment. Free access is just bait.
3. communication. The cost of communication is the need for help from WeChat friends, in short, it is favors. The WeChat ecosystem is a place where favors can be consumed.

Monetary costs mainly involve the pricing of products and services, which will not be introduced here. Interested students can view the relevant information about pricing.

Next, we will give a detailed introduction to the practices in the two scenarios of communication cost and time cost.

Scenario 1: Paying the cost of communication

These are mainly products that require users to interact socially and are strongly related to fission sharing.

There is a phenomenon that when ordinary product managers turn to designing fission sharing functions, the final results are often not very good. The thinking habits developed by ordinary product function design focus on the interactive design and implementation process of product functions. In addition to interaction and implementation, the key to fission sharing is the design of user participation motivation and action cost, so the thinking needs to be upgraded to do it well.

A product manager who can do a good job of fission sharing will have the advantage of dimensionality reduction when designing other product functions. The final content of this article will reflect the advantages of this way of thinking.

Next, we will focus on how to make users willing to pay the communication cost and share and forward our products.

Users' motivation to share and forward.

1. Social motivation. Show off and express your personality and preferences. This type of motivation prefers posting on WeChat Moments. Actively sharing a favorite product with friends is the preference sharing among social motivations.
2. Pursue profit. Sharing can earn you rewards, and is also the most common way. Rewards can be in the form of cash, user privileges, or even learning materials.

There are two types of communication costs that can be paid.

1. Just share it to a group or circle of friends, no help from friends is needed.
2. Need to find friends to help. The more people there are, the higher the cost.

Making products is actually doing business. User motivation is the product value we provide, and the cost of action is the price. The better the product, the more users will be willing to trade. On the contrary, it is a slow-selling product due to design errors.

For example: Share a friend's help and you can get 1 yuan in cash. Then maybe 10% of people are willing to participate. If you share it with 1 friend, you can get 10 yuan. As the rewards increase, motivation will also increase, and perhaps more than 50% of people will be willing to participate. On the contrary, if you increase the cost of the action, you need to invite 3 friends to help you in order to get 1 yuan. Maybe only 5% of people are willing to do so. The lower the user motivation/action cost, the fewer users will be willing to participate.

But this is just an example. In actual projects, enhancing user motivation and reducing action costs are not adjusted arbitrarily. If the rewards are too high or the cost of action is too low, even if the number of users increases, it will lead to serious losses. Loss-making businesses are all very popular, but whether they are valuable to the enterprise needs to be carefully weighed. For example, Ruixing Coffee has acquired a large number of customers in a similar way, but its future remains unclear.

However, in the fission sharing business, there are people who want a large number of users to participate but are unwilling to bear huge losses, so they start to engage in unscrupulous business, such as Pinduoduo.

Pinduoduo's activity of giving away 100 yuan in cash is designed to set up a strong enough motivation and then continuously virtualize the cost, creating the illusion that the cost of action is very low, in order to deceive you into participating . 100 yuan in cash is a strong enough motivation for most people. And once you get involved, you don’t know how much the action will cost. But it will continue to give you the illusion that the cost of action is very low.

This behavior is like when you want to buy something but they don't tell you the price, but make you feel the price is very low, and ask you to pay 2 yuan first. After you give it, they tell you that you are close to it, and then ask you to pay another 2 yuan. Because you have already given 2 yuan, you have to give more, and then you are trapped.

For example, if you receive more than 90 yuan at the beginning, you may think you are very close to your goal. The user's "empiricism" is utilized here. Because of life experience, progress and amount are related. 90 relative to 100 means the progress is 90%. In fact, this is just the beginning of Pinduoduo's routine. .

The second level of deception is also the most critical. The user invites the first five friends to help, and on average each person will be rewarded about 1 yuan . The user indeed reached 96 yuan without much effort. This is the key supplement to the first layer of deception. Based on this progress, users can calculate that they may be able to get 100 yuan by inviting less than 10 people.

However, the cruel claws that Pinduoduo has been hiding will be revealed after users have worked hard to invite more than 10 friends: the pain of inviting 1 person and getting 1 point begins here.

As for other analyses about users not wanting to give up because of loss aversion and continuing to invite for the 100 yuan, we will not elaborate on them here. Here, only the motivation/cost part is introduced. There is already a lot of summary information about this activity available online.

It is rumored that this cash event will open up some lucky places, allowing individual users to really get 100 yuan quickly. Then, the user's luck will spread in the circle, and people who were originally unwilling to participate will also think because of this lucky story that they may be the lucky one and eventually participate.

This is another strategy to enhance user motivation. The lottery industry is so developed because people have the illusion of confidence and always think they might be the lucky one. It’s the same illusion that 90% of people have, thinking their driving skills are above average.

The core strategy of the "100 yuan cash red envelope" is exactly the same as the previous "bargain and grab for 0 yuan", it's just that it's been repackaged and put online again, but users still can't resist the routine and are hurt again. From a product perspective, this design is excellent. But the result is rather cruel to most users.

However, just knowing these methods is not enough. The following three key points must be paid attention to during practice:

1. Trust is the basis of motivation. People have a stronger sense of trust in things that are visible and familiar.
2. Understanding is the prerequisite for user action, and complex rules will block most users.
3. The costs of action accumulate in the details that no one notices. Every additional point will block a group of people.

1. Trust is the basis of motivation

We once did a traffic-generating project called "0 Yuan Treasure Hunt".

Users can get one free lottery code every day. Invite 1 friend and you will get 3 extra lottery codes. The more lottery codes you receive, the higher your chances of winning. The rules are basically the same as NetEase’s one-yuan treasure hunt. The only difference is the way to obtain the lottery code. NetEase charges 1 yuan for one code, while we distribute it for free every day. The value of one lottery code is about 0.3 yuan.

The winning rules use a calculation formula related to the listed index. It is very fair and the winning code cannot be manipulated, but it is also very complicated and most people cannot understand it. But we hope to enhance users' sense of trust through fair, open and just rules.

After the project was launched, the data performance did not meet expectations.

Refer to “Product user volume = user motivation/action cost”. If the data is to be improved, the user’s motivation to share must be improved. We made several changes.

1. The value of the prizes has been increased from prizes worth more than 100 yuan to the most attractive top-of-the-line iPhones, Dyson hair dryers, etc.
2. The scope of winning has been expanded. If the friends you invite win, you can win too. The motivation to invite is stronger.
3. The cost of understanding is reduced, the interaction process is further simplified, and the display of various irrelevant information is reduced.

The most exciting thing about product work is that it’s like an exam, you don’t know what you’ll be tested on. I prepared hard, and when I finished the test and waited for the results, I felt nervous and excited. The above three changes mean that the test was a failure. After going online, the effect still did not improve. Failing an exam is a common occurrence in product development, and trying again and again after repeated failures is just basic practice. We made a lot of adjustments later, but the effect was still minimal.

Until we added a feature called "Post Your Winning Receipt". We compiled the photos and emotional expressions taken by the winning users into a review page. All users can intuitively feel the surprise of the winners through pictures and texts. Users can feel the beauty of luck through more concrete pictures and texts.

Once this feature was launched, the daily activity of the entire project increased 20 times.

We have always wanted to explain to users through rational rules that this is the most fair, open and just approach. Please believe us. But human instinct is to reject reading. Apart from work and study, no one would be willing to read those long passages of text and rules. We tried all rational and abstract rules, but to no avail. But once the emotional and concrete order posting system was put online, users bought into it. After gaining the trust of users, the rational rules designed previously, such as inviting 1 person to get 3 additional lottery codes; if your friend wins, you also win, etc., can truly take effect.

This is also the most common scene in product work. Many projects have been worked on for a long time and optimized a lot, but there is no improvement. Until an inadvertent change is made, the data skyrocketed. This is the process of quantitative change to qualitative change. We need to remind the project team frequently that as long as they stick to the optimization direction that everyone agrees on, even if they have failed before, success is likely to come next time. We have had such experiences several times, and each time it lasted for more than half a year. This is the experience gained through projects, setbacks and time.

Trust is the basis of user motivation. Without trust, all efforts will be in vain. However, with a foundation of trust, we must also reduce any unnecessary understanding costs and make it simple and easy to understand.

2. Understand that understanding is the prerequisite for user action, and avoid complex rules

In 2018, "koi" in the circle of friends was very popular. We also imitated it once. Just like the 0 Yuan Treasure Hunt, it emphasizes objective and fair lottery rules.

The process of participation is: after seeing the event information -> you need to follow the official account -> in the link that pops up on the official account -> get a lottery code -> then forward the article to your circle of friends to be considered successfully participated.

After reading this passage, you may need to go back and read it again to understand the entire activity process. Complex processes will greatly increase the user's understanding cost. Based on motivation/cost, increasing costs too much means saying goodbye to users. Therefore, the results of the activity did not meet expectations.

Let’s go back and study the koi fish that has been all over the screen of China Merchants Bank. The activity rules simply state that the winning rules are: randomly drawn from all participating users. This subverts our understanding. It also deepens our understanding of user motivations.

Seeing the attractive list of prizes, how to participate is the first motivation. Don't add content that she doesn't want or need to know. After all, understanding the complicated rules of the event in detail will not increase her chances of winning. The motivation of most users is not to win prizes, but to participate. When they see their friends posting on social media, they feel like they are participating in a fashionable social event and participating won’t cause any disturbance. Winning the prize is just a matter of chance. Because through subsequent data observations, it was found that less than 10% of people would come back to see the lottery results. Most of the time, people just post it on their Moments and forget about it.

So before the Spring Festival in 2019, we copied the practice of China Merchants Bank. The final result far exceeded our expectations. Less than half an hour after going online, it had already exceeded the expected target. Once the fission activity spreads, the data will rise straight up. In the end, the event also swept the screen. That night, I was quite excited. However, it was blocked on WeChat the next afternoon.

Therefore, simplicity and understanding are the prerequisites for action. Complex rules will only keep users out. But in fact, there are some details that we are not aware of that block users.

3. The cost of action will accumulate in the details that no one pays attention to. Every increase will block a group of people

A project we did called "Share Cashback" experienced two ups and downs in participation rate due to details.

The first time was when it rose by more than 50%. It is easy to understand that by streamlining the page and removing all information that is not relevant to sharing, the effect achieved exceeded expectations.

The second time, it dropped by nearly 20% because of the addition of 3 small circles. This is very unexpected.

At that time, three small circles were added under the "Invite Friends to Help" button to tell users that they have to invite friends to help in order to get rewards. Without making any changes and just adding three circles, the participation rate dropped by nearly 20%. After a quick rollback and removing the three small circles, the data is restored to its original state.

It was far beyond our expectations that three circles could have such a big impact. Why is this happening?

You may guess that these three circles will make users mistakenly believe that they need to invite three people to get rewards, and the cost is too high, so they give up. This is just speculation, we have not conducted any user interviews and have no evidence to prove it. But the final result tells us that the three circles on the page, which are as small as they can be, also have a direct and obvious impact on the data. Product managers should focus on key details like this, rather than getting hung up on insignificant details that, no matter how they are changed, actually have no impact on the results.

The above introduction is a practical summary of scenarios where users need to pay communication costs. Next, we will introduce how to apply “Product user volume = user motivation/action cost” in scenarios where users need to pay time costs.

Scenario 2: Users are willing to pay the time cost

For most users, the time cost is less than the communication cost. In other words, most people would rather trouble themselves than trouble others.

We once worked on a project where you could earn gold coins every day. Users can sign in every day to receive 50 gold coins, browse 30 products and stay on each product for more than 5 seconds to receive 200 gold coins, and invite 10 friends to help to receive 200 gold coins. After receiving enough gold coins, you can exchange them for corresponding gifts.

The final data shows that users who received 200 gold coins after browsing the products accounted for more than 50%. Only 20% of users are willing to invite friends, and less than 5% of users are able to invite 10 friends. In order to reduce the cost of users completing the action of inviting friends, we designed a tiered reward system: 20 gold coins for inviting 1 person, 60 gold coins for inviting 3 people, and 120 gold coins for inviting 6 people, but it didn't help. The main reason for this result is that there is an overabundance of support messages on WeChat, and few people are willing to actively click to support. Compared to asking for "favors" of help, users obviously prefer to spend some time browsing products to get rewards.

Although the user's personal time cost is lower than the communication cost, based on the motivation/cost, we cannot ignore the user's motivation.

1. How do we encourage users to write honest reviews for the products they purchased?

If a user wants to post a review, under what circumstances is the motivation strongest? Everyone should be able to think that when a review is bad, it means that they are seriously dissatisfied with the product or service.

The second is the unexpected praise. The unexpected joy will motivate you to share. But 90% of the shopping orders are as calm as water, leaving no trace of emotion in my heart. The motivation for evaluation is weak.

However, real user reviews of products are very important for other people's purchasing decisions. Positive reviews can promote transactions, while negative reviews can also influence users to give up. Therefore, more than 90% of the positive reviews we see on JD.com and Taobao are posted by the merchants themselves. Fake positive reviews lose their reference value for decision-making, which ultimately leads to a decrease in users' trust in reviews. Users no longer use reviews to influence purchasing decisions, but instead just look at the actual photos taken by netizens.

If we consider it from the perspective of motivation/cost, what are the motivations and costs for users to fill out reviews?

(1) Motivation for filling out the form

• Personal emotional expression. Strong, but few scenes.
• You can get rewards by giving reviews. For example, JD.com rewards customers with Jingdou. Motivation is related to the size of the reward. If it is a shopping community, similar to Xiaohongshu, when users have a strong motivation to obtain medal status, virtual honors such as medals, labels, and identities can be rewarded. The level medals of the online community mean voice and appeal. However, on supermarket-style B2C platforms such as JD.com and Vipshop, users have little motivation to obtain medals of honor. The complexity of user motivation is reflected in the fact that for the same reward and the same group of people, the strength of motivation may be different in different scenarios.
• Hope it helps others. It is human nature to be helpful.

(2) Cost

1. Copy organization and thinking. It is not easy to express what you want to say in words. Taking photos and videos is easier than writing.
2. Taking photos and uploading them takes time.

(3) So how can we increase users’ motivation to fill out truthful reviews and reduce the cost?

We can use the reference comparison method mentioned in "Product Core Working Method: How to Find the Demand Points that Drive Product Growth". Let’s first look at how the industry does it. For example, JD.com, how do they increase user motivation and reduce the cost of reviews?

You can be rewarded with 40 JD.com quality reviews by posting your orders and reviews on JD.com. You can also be upgraded to a reviewer and enjoy privileges such as doubling your JD.com reviews and displaying identity medals. Improve users' evaluation motivation. There are also many preset evaluation dimensions, which can be automatically filled in with one click to reduce the evaluation cost. It can be seen that JD.com's product managers have put a lot of thought into product reviews. There is nothing special about Taobao’s actions, so I won’t mention them here.

Based on JD.com, we can make some additional optimizations to enhance users' motivation to help others.

The strength of this motivation is related to the following five points:

1. The content sent out can be seen by users in need. There needs to be a weight of time, otherwise even if it is sent out, it will fall on deaf ears and the user’s motivation will be weakened.
2. If a review is liked or a follow-up message is left, users must be proactively informed. Otherwise it’s just empty likes and meaningless.
3. If enough goods are purchased and enough people are helped, the reviews sent will have unique badges and high weight, which are clearly distinguished from ordinary fake reviews. It's well written, but it won't be misunderstood as fake praise.
4. Even a simple review is worth recommending. Does a good review require enough text and a lot of well-taken pictures? At present, only businesses will carefully prepare so many texts and pictures. Evaluations from real users are often very casual. Just a simple sentence or two to express your feelings is the most valuable real feedback. However, this kind of untrue, casual and thin evaluation seems inconspicuous among the positive reviews with pictures and texts. This can affirm and recommend these simple and effective reviews, and indirectly reduce the time cost for users to write reviews.
5. Lead with empathy. Helping others is also helping yourself. If you want to have more real shopping reviews to refer to when shopping, please pick up your phone and write down your real reviews. Touch the user's empathy.

By grasping these five points, a product strategy that encourages more users to write real product reviews can be output. As for the effect, I will add the test results when I have a chance to practice it.

Final Thoughts

At this point, all the content surrounding “product user volume = user motivation/action cost” has been introduced. Keeping this formula in mind will allow us to always think from the user's perspective during the product design process, from what we think the user's needs are to what the user's true inner motivations are? What are the costs of stopping him from taking action? When we always consider these two aspects, even if no one uses the product at the beginning, we will quickly find ways to increase the product's users.

Another growth approach is to develop a growth equation through the North Star Metric, driving product user growth through rational data.