A must-have user growth map for new product developers

User growth is an eternal topic in the Internet circle. Whether it is a business or a product, growth is necessary to ensure survival, create more value, and serve more users. The author has recently read some books and articles related to user growth, so I would like to share with you my understanding of growth logic based on the books and articles and my personal experience. This can help those who are new to growth to establish an understanding of the user growth framework. Due to the limited length of the article, I will not give an in-depth introduction. The following is the framework of this article. If there are any shortcomings, we welcome your criticism and correction.

*Part of the content of the article is referenced from "Growth Thinking" by Li Yunlong and Wang Qian, "Exploding User Growth" by Huang Tianwen and articles by some authors on the Internet.

What is user growth?

When it comes to user growth, what’s the first thing that comes to your mind?

Attract new customers and let more and more people use your products!

No, no, in addition to attracting new users, you also need to retain users and reduce user churn rate, so as to achieve user growth.

It seems to make sense.

But in fact, the above two statements are only limited to the "growth in the number of users", but the simple growth in the number of users cannot necessarily complete the business loop and bring about revenue growth. The essence of user growth should be the "growth in user behavior."

For different platforms, the user behaviors we focus on are different:

• For e-commerce platforms, the focus is on transaction behavior;
• For content platforms, the focus is on content production and consumption behaviors;
• For live streaming platforms, the focus is on viewing behavior and payment behavior...

Use a formula to explain the relationship between the number of users and the number of user behaviors:

Number of user behaviors = number of users * proportion of the behavior * frequency of the behavior for a single user

From this point of view, increasing the number of users is only one way to increase user behavior. We can also increase user behavior by increasing the user penetration rate of the behavior and increasing the frequency of individual user behavior.

So what should we do specifically?

Before doing user growth

First, don’t rush into growth.

Before we start to increase user growth, we need to make one thing clear: a good product is the basis for achieving user growth.

Why?

First, only products that have verified PMF (Product-Marketing Fit) can grow effectively. The so-called PMF means that the product meets market demand.

We know that products are used to solve user needs. So before we grow we need to consider:

Do user needs really exist?
Can the product find its market?
Are users willing to pay for the product?
Is the business model viable?
…..

How to verify these points? Usually we will adopt low-cost MVP (Minimal Viable Product) to test market reaction and verify users' real needs.

For example: If you want to start a small program startup project for breakfast delivery in school, how do you verify the PMF of the product? The simplest way is to create a WeChat group and encourage students to place orders for breakfast directly in the group. Team members will take the orders and complete the delivery service. At this time, you can see how many classmates are willing to join the group? How many students are willing to place an order? What is the frequency of order placement? How much delivery fee are students who place an order willing to pay? This can help us evaluate whether the demand for breakfast delivery is real and whether the product has commercial value? At this point, the MVP is the WeChat group for placing breakfast orders.

By verifying PMF through MVP, we can achieve the goal of rapid trial and error and rapid iteration. If the product's PMF is not established, it is destined to be a failed product. The more you invest in blind growth, the greater the loss.

Second, a good product can bring self-growth. High-quality products can become a driving force for growth. Through word-of-mouth among users, they can form effective self-propagation and drive the growth of user scale.

Third, products determine the ceiling of growth. The essence of a product is to meet user needs and market demands. The more target audiences there are and the greater the target market potential, the greater the room for growth.

How to increase user growth

Now that we have discussed the premise of user growth, let’s talk about how to achieve user growth.

User growth should be throughout the entire user life cycle, so we can first list each link of the entire user life cycle, as follows:

As shown in the figure, I divide it into two parts according to the user's operation stage:

• User acquisition
• User Retention

I think there are two very important aspects in user retention: user growth and user recall.

Let’s talk about them one by one.

1. The first step is user acquisition.

The goal of this step is to acquire as many users as possible. In this link, users go through three stages: external users who have no knowledge of the product - cognitive users who are exposed to the product in some way - new users who are trying the product for the first time.

These three links can be seen as a funnel. Therefore, in order to acquire more users, we usually want to reach as many external users as possible, let them know about the product and maximize their conversion into new users.

How to reach and convert users? It can be roughly summarized into the following three ways to obtain traffic:

I won’t go into detail about the above methods, but here I want to mention two principles to pay attention to when obtaining traffic:

① Regardless of the method used to acquire customers, LTV should be greater than CAC, that is, the user lifetime value should be greater than the user acquisition cost. Otherwise, we will lose money every time we acquire a user, and the ultimate goal of user growth is to generate profits.

② Aim at target users and don’t cast a wide net blindly. As the saying goes, live by attracting new customers and die by retaining them. In addition to quantity, quality is also an indicator for measuring the effectiveness of attracting new customers. Blindly pursuing quantity without paying attention to quality growth is ineffective growth and cannot complete subsequent conversions and achieve product goals.

For example, we have seen some Internet products that attract new users by offering cash subsidies for new user registration. However, if the rules are not set properly or the subsidies are excessive, it will easily lead to a large influx of non-target users. The number of users will increase significantly during the event, but the retention rate will be extremely low. Users will leave after taking advantage of the situation, which is ineffective growth.

However, when the user scale develops to a certain stage, after all the users in the plate circled by our target user portrait have been reached, in order to achieve continuous growth, we have to continue to acquire some less precise users around the plate. The size of the target user base is the ceiling determined by the product itself. If you want to break the original ceiling and grow further, you can expand the width and depth of the product to meet the needs of more people, thereby expanding the size of the target user base.

2. The second step is user retention.

Acquiring users is only the first step. Retaining users can further achieve product goals.

From the user life cycle diagram we can see two paths:

• One is the main path for new users to continuously grow into core users.
• The other is that users are lost at different stages and aggregated into a lost user pool. After these lost users are touched by recall measures, some of them return to the original path.

The two paths correspond to user growth and user recall in user retention respectively.

But no matter which method is used, the core of user retention is to provide users with product value - short-term value may only bring short-term benefits, but if you want to retain users for a long time, you must consider long-term value.

Method 1: User Growth

The user growth mentioned here refers to the process in which users gradually increase their connection with the product as they use the product, starting from light connection, and grow from new users to primary users, active users, and core users. For different products, different user growth stages should be divided according to their own business goals, and different means should be used to help users grow at each stage.

How can we help users grow?

(1) From the product perspective: Find the Aha Moment

We call the moment when users feel the value of our product the "Aha Moment". This moment is what impresses users and is also the moment when users grow. Only when users feel the value of the product will they be likely to stay and upgrade to more advanced users. Therefore, we need to lower the threshold for users to use, optimize the user experience, and help users continuously discover Aha moments during use.

How to help find the user's "Aha Moment"?

For example, we want to help a reading app’s new users grow. Through analyzing user behavior, we found that the user retention rate of the audiobook function is the highest, so the audiobook function may be the point that can impress most users. After further analyzing the data, we found that the retention rate of users who have listened to 5 books or more is much higher than that of users who have listened to less than 5 books. We call the number "5" the magic number. Listening to 5 books is the "Aha Moment" for most users.

After reaching this conclusion, we can guide user behavior through various means, motivating users to listen to all 5 books, achieve Aha Moment, perceive product value, and further achieve user growth.

It is worth mentioning that the Aha Moment may be different for different users, so refined operations can be carried out for different users. In this process, fast-paced experiments are an effective way to verify growth points. Design multiple growth experiments for AB Testing, quickly verify and repeat continuously, and optimize and iterate.

(2) From an operational perspective: short-term value leverages long-term value

We can also use user incentives, such as providing some short-term product value to leverage users and guide user growth step by step. As users grow, we can bring longer-term user value.

For example, the user growth path of an Internet insurance product may be as follows:

The user growth path of an e-commerce platform may be as follows:

The above two examples both use operational means to guide user growth. Being good at using some "leverage points" to create some short-term, timely and stimulating user value, thereby leveraging users' willingness to participate, is one of the effective ways to help users grow.

Method 2: User recall

In the process of user growth, it is impossible for us to meet the needs of every user, and some users will definitely be lost at different stages. Therefore, what we need to do is: on the one hand, prevent user loss in advance, and on the other hand, attract back users who have already lost. It's like raising a flock of sheep. In addition to letting them eat grass and grow, we also have to pen the sheep to prevent them from getting lost. If the sheep accidentally get lost, we have to find them back.

First, prevent user churn

Rather than trying to win back users after they’ve churned, it’s probably more effective to prevent them from churn in advance. Here are three ways to prevent them from churn:

1. Set up a churn warning. To prevent user churn, we must first define user churn, then set up churn warnings, and activate users before they churn.

2. Increase user migration costs. In the process of users using the product, they will always leave some traces of themselves in the product. Increasing the user's investment in the product can increase the user's migration cost to a certain extent, thereby reducing the possibility of user churn.

For example, if we use a music app for a long time, we collect a lot of our favorite songs in it and create our own playlists, so it is not easy for us to switch to other platforms because we don’t want to lose our original playlists.

3. Take advantage of loss aversion. A psychology study shows that the negative utility brought by the same amount of loss is 2.5 times the positive utility of the same amount of gain. Taking advantage of this and increasing the user's sense of loss when they leave is also a way to prevent user churn.

For example, if we subscribe to a membership for a music app, we would not be willing to give up the app before the membership period ends, because we would be at a loss if we spent money but did not enjoy the corresponding rights and interests. By the same token, if you want to retain a user, you can give him a one-month membership and he probably won’t be willing to leave.

Second, recall lost users

If the user does churn, we can recall the user from the following two perspectives:

(1) Product perspective: Return to the Aha Moment

If the reason for user churn is that the product is no longer Aha for the user, then returning to the Aha moment can be an effective way to recall the user.

To give a simple example, suppose I am a fan of Jay Chou and have been listening to his songs on a certain music platform. My Aha Moment is that I can listen to many songs of my idol on this platform. If one day, this platform removes all of Jay Chou’s songs due to copyright issues, then this product will no longer be Aha to me, and I will look for other platforms where I can listen to Jay Chou’s songs. If the platform repurchases the copyright of Jay Chou's songs, it will bring back the Aha Moment for fans and they will come back.

(2) Operational perspective: Recall through contact channels

There are many reasons for user churn. Recalling users through contact channels is a more common way to recall them, but it also depends on what other ways you can reach users? Common ones include: Push, SMS, official accounts, mini-programs, WeChat groups, friend relationships, etc.

How to recall users effectively? Here are some ideas:

1. Use loss aversion to provide value and attract users back
2. Recall users using social relationship chains
3. Grasp user needs and remind users of the value of the product

It is also worth noting that when users return to the product, it does not mean that the task is completed. Helping users to find the Aha Moment again and stay is the real purpose of recall. For example, friends who play games may have had this experience: after not playing the game for a while, they can receive a "return gift pack" when they log in again. With the help of the props in the "return gift pack", they can find the fun of the game again.

Summarize

1. First, we introduced the definition of user growth as the growth of user behavior, and proposed the growth formula:

Number of user behaviors = number of users * proportion of the behavior * frequency of the behavior occurring for a single user.

2. Secondly, we have made clear a premise before achieving growth: good products are the basis for achieving user growth.

3. Next, we introduced how to increase user growth from the two perspectives of user acquisition and user retention. The two main methods to improve retention are user growth and churn recall.

So how are these methods reflected in the growth formula mentioned above?

1. We can increase the number of users by attracting new users in the user acquisition phase and recalling users in the retention phase;

2. Through user growth, we can increase the proportion of user behaviors and the frequency of behaviors.

Finally, user growth is actually a very broad concept, and there are still many treasures waiting to be discovered. That’s all for today’s sharing. Everyone is welcome to leave a message to communicate.

Author: Lemon two

Source: Lemon Two