Analysis of AARRR models of Starbucks, luckin coffee, Pinduoduo, etc.!

In the user operation system, there is a classic framework called AARRR, which stands for Acquisition, Activation, Retention, Revenue, and Referral. This model can help us better understand the user life cycle and adopt targeted marketing.

If "user operation" is regarded as a love affair between business owners and users, then acquisition is like getting to know each other, and you need to find ways to make the other party know you; activation is like establishing a romantic relationship with the other party; retention is to maintain the passion of the relationship, increase user expectations and maintain the relationship chain; revenue is like how to make the other party spend money on you, and make the other party feel that it is worth the money; and referral is the other party's willingness to introduce you to relatives and friends.

01 Acquisition

How to make the other person know you as much as possible? The two most direct ways that come to mind are: one is to participate in more social activities and get to know more people; the other is to be introduced by acquaintances. These are the two most commonly used models for attracting new customers for current Internet products: increasing exposure and conducting “fission marketing” through social relationship chains .

1. Increase exposure

Increasing exposure is not limited to investing a large amount of advertising money in media placement. With the help of capital, business owners can leverage more resources and quickly occupy the market. TikTok, Xiaohongshu and other apps have attracted a large number of fans and traffic by inviting celebrities to join.

Luckincoffee brings 1 billion capital to the education market, provides free coffee with large subsidies, and invites Zhang Zhen and Tang Wei as spokespeople. Through precise WeChat LBS business circle fixed investment and elevator targeted advertising, it achieves targeted and high-intensity exposure.

Credit card apps of banks such as CMB and GDB are actively seizing the entrance to offline merchants, attracting users through promotional activities such as “5 yuan off for purchases over 100 yuan”, “50% off food day on Wednesdays” and “half-price on Fridays”, thereby bringing in new users and traffic to the app.

2. Use social relationship chains to conduct “fission marketing”

The most typical examples are new Internet companies such as Luckin Coffee and Pinduoduo. Luckin Coffee gave away cups for attracting new customers. On the day the activity was launched, the number of new user registrations doubled month-on-month, and orders increased by 40% month-on-month, greatly reducing customer acquisition costs. Pinduoduo, which was created for group buying, has come up with many new ways to do it: one-cent lottery groups, one-yuan new member acquisition groups, bargaining assistance, and red envelope sharing... It has gained 300 million users since its establishment three years ago.

In the past, the most important part of attracting new users was exposure. All H5s, posters, social games, and Weibo forwarding draws were essentially providing a creative material for exposure. However, current platforms with strong transaction attributes such as e-commerce and community O2O have extended the simple function of attracting traffic to converting users, taking a step closer to encouraging users to trade.

02 Activation

Now that you have let the other person know you, how do you establish a "romantic relationship" with each other?

1. Give some privileges

Give a little more easily obtainable privilege. Just like from ordinary friends to lovers, maybe saying "I love you" to each other and holding hands with each other will be the beginning of our love.

Guiding user conversions through membership privileges is a common method used by e-commerce companies: JD.com members can enjoy free shipping and double their JD Beans; Xiaohongshu members can enjoy free shipping and receive exclusive prices; NetEase Kaola members can receive shipping coupons, tax-free coupons, and discount coupons. Content-based e-commerce platforms such as Xiaohongshu encourage users to produce high-quality content by designing a user growth path, from Diaper Potato to Crown Potato.

2. The threshold for obtaining membership privileges should not be too high

Starbucks will promote membership when users need special benefits the most. When you buy two cups of coffee, the Starbucks clerk will say to you, "You can actually enjoy the buy one get one free privilege when you buy two cups of coffee, but the prerequisite is to apply for a membership card. After applying for the card, you only need to pay the price of one cup of coffee when you buy two cups of coffee, and there are three such opportunities in total." In this way, Starbucks membership allows users to shop happily.

03 Retention

Next, after starting a "relationship", you should think about how to maintain the freshness of the relationship and how to increase the other person's stickiness.

If you want to retain users and keep freshness, product iteration and innovation are important ways

Just like Nayuki’s Tea, new products are launched every month, the ingredients are upgraded and the methods are optimized every six months, and every store in every city is designed to be different. Constantly generate new content to allow users to continue to experience and always maintain user expectations.

When users tend to churn, remind them of the efforts they have made.

Xiaohongshu will remind you through PUSH that "you have received x likes in the past x days." Through the public welfare game "Ant Forest", Alipay has consolidated social relationship chains and improved retention rates.

Facebook discovered early on that user churn was very serious, so it added a new page after the logout process. When a user is about to leave, the system will read out the five people with whom they interact most closely in the friend list and ask, "Are you sure you want to leave?" Many users who were about to log out stayed because they were worried that they would never see the status of these friends again. After this page went online, it reduced Facebook's losses by 2% within a year without spending a penny and retained 3 million users.

04 Revenue

Now that the relationship is stable, how can you make the other person willing to spend money on you?

Tell him that he can get a great value experience by paying a little more.

Starbucks’ membership system always has many tricks that make you feel it’s “great value”. For example, when you have used up the three buy-one-get-one-free coupons of your Starbucks junior membership and are preparing to buy your fourth cup, the clerk will say to you: "If you buy one more cup, you can upgrade to a Jade Star Card member, and you can get a free coffee redemption coupon." At this time, many customers will be eager to buy one more cup, upgrade their membership, and get more benefits.

In the Starbucks App, the "little stars" in the cup are also implementing this routine. Little Stars is a way to earn points. Starbucks uses stars to replace the amount of consumption. For every 50 yuan spent, one star will be generated (similar to virtual points). When you open the app, you can see how many stars you have. The visual upgrade progress will encourage you to go to Starbucks more frequently.

Similarly, Starbucks also uses free breakfast coupons to make cross-category product recommendations, hoping that we will buy some breakfast pastries when we buy coffee.

05 Refer self-propagation

Only when you like or hate someone will you want to mention him in front of others.

Similarly, what kind of products make people want to share positively? In addition to the reposts caused by low prices, the biggest reason is that people like it.

Three Squirrels has put a lot of effort into triggering self-propagation among users. When the user signs for the goods, there will be a lot of surprises. You will receive a cutely designed packaging box with an opener attached to it, which saves you the trouble of looking for scissors everywhere. When you open the box, not only will you find the cutely designed food packaging, you will also find thoughtful little items like sealing clips, wet wipes, and garbage bags. Your experience will be beyond your expectations and full of joy. Many users posted on their Moments, leading to word-of-mouth communication.

Marketing is like designing a "dragnet" that requires guiding user behavior step by step. Looking at the relationship between people and products from the perspective of the relationship between people can help us better focus on users and discover the pros and cons of product experience. At a time when traffic costs are high, optimizing every step of user conversion from awareness to purchase to self-propagation has become an important means of reducing marketing costs and increasing efficiency.

Author: Vinky

Source: Ding'er Little Bell