Analysis of three stages of user growth and development and "five growth models"

Write at the beginning:

When you encounter a problem, I give you a solution. If it doesn't work, I don't know what to do. This means that I'm not professional. When you continue to challenge, try to test, and find out all kinds of possibilities, the next time you encounter it, you will have at least 3.4 solutions, which is new growth.

The process of tracing back to the source to expand the knowledge line and learn more is a basic way to accumulate expertise.

I want to talk about this content Marketing History of growth.

Not completely original, quoted a lot of foreign language content, translated one by one, sorted out the timeline, and sorted out some case It is easy to understand, but there will still be a lot of content that cannot be explained in one article, and can only be supplemented later.

The citations have been placed at the end of the article, and most of them need ladders.

It's a bit wordy. OK, let's start

Growth marketing has been developed for more than ten years, and many methodologies and models have been born, such as the well-known AARRR model and a large number of A/B test iterations.

After it was introduced into China a few years ago, it was very popular. There were a lot of content about growth techniques and methodologies on the Internet, all of which were hot searches.

Have you ever thought about it, User growth What is the essence of? What is the difference between the core of so many methodologies and traditional marketing?

So in the process of sorting out the development stages of marketing growth, a conclusion was drawn: user growth is a methodology to shorten marketing time.

To put it simply: I can't jump directly to the future to see the results, because it takes a lot of time, but this time can be shortened by certain methods.

In the past, it took two or three months, or even half a year, to know how much advertising helped the turnover; I only need three days to know now.

In the past, only with the increase of marketing budget can the marketing results be gradually amplified; Now I want to guide users to help me promote together. Even if the resources are the same, the marketing results can expand with the increase of users.

In the past, many practices had to be tried, and it took several years to know which one might be effective; Now we should use the most efficient method to quickly find effective marketing means.

The first stage: the origin of growth marketing

Growth marketing or Growth hacker (To be honest, no one in Silicon Valley really likes this word.) It is generally recognized that Facebook originated first.

But the birth of an academic is not water without a source. It is reasonable to say that growth is born of marketing. When it comes to marketing, we have to mention the earliest practice and marketing model - AIDA rule.

Where there is commerce, there is marketing, hawking, long-distance transportation, and gold lettered signboards. These are the original states of advertising, promotion, logistics, and brands. There is marketing but no "learning".

So in 1898, Elmer Lewis, the first president of the American Advertising Association, proposed the purchase behavior rule, namely the AIDA rule: A attention, I interest, D desire, and A action. The rule was quickly applied to salesmen and advertisers. It is the first marketing methodology with theoretical nature refined in history. It has been 120 years since then, and it has been more than two years since the birth of two sons.

AIDA rules focus on "broad" customer acquisition, which is also closely related to the current background. In the 19th century, the Internet did not appear, let alone digital marketing. To achieve such fine tracking, analysis and operate It's impossible!

After that, marketing gradually developed, and we returned to Facebook.

Imagine Facebook, a group of house engineers in black hats and blue jeans, suddenly asked by Zuckerberg to promote Facebook to more people. What do you think they should do?

As a group of science and engineering houses, they obviously can't accept the thinking of the traditional advertising industry: "I know half of the advertising expenses are wasted, but I don't know which half."

Science and engineering students are very concerned about using scientific methods. Science stresses the importance of repetition. I need to know what will happen if I do something, so that I can continue to copy this result.

Although it is obvious to look back now, they did what no one did at that time: subdivide every element and monitor every result.

When doing scientific experiments, we should control each variable and try to reduce it to only one variable, all other conditions are the same. On this premise, record the results of different variables, and then further analyze the data.

What are the variables? At the beginning, we were ignorant and listed everything. For example, the famous AARRR is one of the frameworks.

Extended reading:

Has AARRR been proposed for more than 10 years?

The first AARRR should be the most frequently mentioned and used framework in user growth. It was proposed by Dave McClure in 2007 and is still widely used as a thinking framework for user growth. AARRR stands for A (Acquisition), A (Activation), R (Retention), R (Referral), R (Revenue).

How do you use AARRR as a thinking framework?

In the form of "funnel", AARRR boils down the user's behavior path from start to success into several key core steps. When formulating indicators, we can follow each key core step in the AARRR framework and then disassemble it to determine the KPI/KR, so as to optimize each key core step as the goal, improve each step of transformation between the funnels, and achieve the goal of overall growth. With this framework, users' life processes are divided into different stages, and then different data are observed for each stage.

Data is the most important element of growth marketing.

Different from traditional advertising, with the vigorous development of the Internet, data has been generated. Only then can we have a standard to judge, know whether we are doing right or not, and continue to improve and progress.

At this point, the first phase of the user growth methodology in its true sense has been completed.

We cut the user's life cycle into different stages, and also have appropriate indicators to monitor the performance of each stage. So we can quickly know what we are doing and what impact it will have on the company's future revenue.

I can make a copy adjustment for the landing page of the website to see if the registration conversion rate will increase. Design customized content for registered SMS push, and see if the user retention rate has improved. Because we only look at this stage, we can know the results faster.

Stage II: Retain as king

After using this framework for several years, we found two problems:

If you look at every indicator, it's like not looking at it. You can't allocate resources most effectively

Some stages of the user's life cycle are obviously more important than others

So someone began to put forward other concepts, such as the Polaris indicator, which means that you only need to pay attention to one of the most important indicators.

Which indicator? Each company is different, and you need to decide this by yourself. Anyway, don't say that every indicator is important.

Almost in 2015, Andrew Chen, a well-known venture capital in Silicon Valley, pointed out the importance of retention from the data, so we reached a new consensus: Retention is king

Students who pay attention to the growth of hackers in Silicon Valley will find that since this year, people have almost stopped talking about frameworks, especially the top group. Everyone is talking about retention rates. (The AARRR model of the previous stage was developed in China in 2017, but it was soon retained in the second half of 2018.)

At this point, the second phase of user growth is over.

What's the difference between it and the first stage??

The answer is: precision

The first phase is to segment the user's life cycle, monitor the most representative indicators in each cycle, and then continue to experiment and optimize. In this way, we can know the impact of these changes on the product in advance.

However, the main purpose of a company is revenue growth, so in the second stage, they found that the retention rate is the key stage that has the greatest impact on revenue.

Therefore, the second stage is not only to know in advance, but also to be able to suit the remedy to the case and optimize the most critical links.

Extended Reading

Focus on the retained RARRA model

RARRA is a concept proposed by Thomas Petit and Gabor Papp in 2017. Gabor Papp, while proposing RARRA, also summed up the background of the current "mature mobile Internet" as follows: "The mobile app market is becoming saturated, the bonus era is over, and customer acquisition is not as easy and cheap as before." That is, the mobile Internet has moved from an era of "increment" to an era of "stock", so the "user retention" after obtaining traffic It is even more important. This concept has been used in China for some time, and it was mentioned above that it was proposed in the second half of 2018.

Difference from AARRR framework

The composition of the steps of RARRA is the same as that of AARRR. The main difference is that the steps are reordered according to different priorities, emphasizing the importance of R (Retention) retention. The framework logic of RARRA comes from: in order to achieve retention (R, Retention), efforts should be made to let users understand the core value of the product/service (A, activate Activation); At the same time, it can also enable users to share independently (Referral) and invite friends around to use the service/product together; Finally, we can make a profit naturally (R, Revenue) and acquire new users (A, Pull New Acquisition)!

Why does retention become more important in the era of "mature mobile Internet"?

When it becomes expensive to obtain traffic, but cannot effectively convert traffic into product user groups, enterprises will bear and waste the high cost of "seemingly owned traffic". In 2017 – 2018, China talked about "growth hackers". In 2019, it began to emphasize "private domain traffic". The emergence of this word is positively related to the industry's emphasis on retention. "private domain traffic" is focused on retaining "public domain traffic" as its own user group. Therefore, the core spirit of this framework is to respond to the arrival of the "stock age", take retention as the highest priority goal, and adjust the framework steps to RARRA, which is to emphasize that the value of products to users can naturally bring more growth momentum to users.

What do "public domain traffic" and "private domain traffic" mean respectively?

Public domain traffic refers to traffic that does not belong to you, such as traffic on search engines, social media, and other platforms. You need to obtain "public domain traffic" through paid advertising, business cooperation and other ways. After you acquire it, you rely on strategies and means to keep users on your platform. In the future, if you reach it again or if the user returns on his own initiative, there will be no additional payment. This kind of traffic is what you really own, which is called "private domain traffic". If you don't reserve traffic as your user group, you need to pay for public domain traffic every day and "rent" users; When users settle into their own user groups, you can say that these traffic is what you have. Of course, ownership does not mean ownership forever. It is still necessary to rely on strategies and means to promote and maintain, otherwise the retained users may still be lost.

Current stage: fast cycle growth, AHA moment

Growth Loops

It is not enough just to increase the priority of retention!

In 2017, a new voice came out: Loop. Then in 2018, executives/venture capitalists from four well-known Silicon Valley Internet companies proposed a new growth framework, Growth Loops.

After entering China, there are several common growth loops: viral fission, subsidy growth, and UGC content cycle.

This concept is to re-examine your business model and replace the original funnel framework with a circular framework. Although there are also concepts such as conversion rate and retention rate, the focus is to make the cycle as fast as possible. Different goals will lead to different optimization directions.

If the key word of the second stage is "accurate", it is "fast" in this stage.

The growth cycle is to allow users to participate in your growth model. Your growth is no longer limited by your company's resources, but you can use the value generated by users to maximize the benefits of existing users.

This concept is also mentioned in the "Flow Pool", but not much. Most of the content is still talking about customers.

The growth cycle should not only know the marketing results in advance, but also show the marketing results in advance. I said at the beginning that user growth is a methodology to know the marketing results in advance. In fact, this is not just about monitoring data, doing experiments, and expanding results. Analysis is also a key point.

Difference from AARRR/RARRA framework

The AARRR/RARRA mentioned above, in more abstract terms, is actually an input (pull/activate), action/step Action/Step, and output (transform/benefit). However, the funnel frame has the following two characteristics:

Each link is still broken.

From the entry of traffic to the end of profit.

Therefore, although the funnel frame (AARRR/RARRA) and the Growth Loops have inputs and outputs, the biggest difference is whether the output can return to the input. Once the output results can flow back into the input, this growth will be "sustainable and compound interest growth".

For example, some UGC content platforms, such as petal and stand cool for finding pictures.

Their core growth momentum comes from the UGC content on the website. Seed users upload content, and other users have more interactions on the platform because of the content. Then, because these UGC content continues to bring more new and old users to the platform from the outside, a circular loop is formed.

The well-known Amazon growth flywheel theory is also the concept of growth cycle loop.

Extended Reading

The actual case of Xiaohongshu's increasing product sharing

How does Little Red Book find out growth momentum and implement it through the framework of circular growth Growth Loop.

1. User Data Discovery

When I was the Growth PM of Little Red Book, I found from user data that a large proportion of users would share the content of Little Red Book on other social platforms to their friends. However, the amount of return brought by such sharing was very low. I think it is a pity. So I thought that if every user who shares independently only brought back one more user every day (no matter new or old users), the DAU would be doubled directly!

2. Growth Loops Framework Application

(Input) The first group of users saw the content they were interested in on the platform and shared the Action to external users. External users were exposed to the platform because of the sharing behavior of the first group of users. After many contacts, external users perceive the value of the platform, download the APP, and officially join the platform (Output/Input). The preference data obtained during the training period helps the algorithm generate personalized content, thus improving the retention of new users (Input). At the same time, when new users can find interesting content on the platform more easily, it can also encourage them to join the sharing ranks, Share your favorite content to other external users (Actions).

3. Specific implementation items

Based on such thinking, my team and I started to implement a series of projects. For example, from the path of "sharing", go out of the "every" carried User experience Nodes (such as sharing UIUX design, link title and thumbnail optimization after sharing, landing experience after being opened by other users, data collection in behavior path, etc.) are the scope of our optimization. At the same time, we also take this opportunity to "nurture users" and collect the user preferences brought in at the same time. Later, when this group of users officially download the APP and become our "real users", we recommend the initial data required for cold start of the algorithm (more accurate than our guesses in other ways). In this way, The process of onboarding can also provide a better user experience (and thus enhance retention). After this series of projects are launched, we can achieve "sustainable and compound interest growth" through this Growth Loop!

* Why is it important to support users?

Xiaohongshu is an app that combines community and e-commerce. It is very difficult for a user to download an app immediately because of a piece of content or a product. It is also a pity if he does not try to "support users". If you can provide his lightweight service first, he will be more willing to download the app and become your more valuable user when he feels the greater platform value later (for example, he wants to view the page after collecting it)!

What factors have the greatest impact on the retention rate?

In addition, up to now, I still believe that the retention rate is the king, but just as the retention rate is important because it has the greatest impact on profits, can you find out what factors have the greatest impact on the retention rate?

Yes, and I have found it. This is the moment of AHA. This concept has been around all the time. We have known it since the earliest time when Facebook grew up and the team became popular.

But why did people still look at the retention rate?

The reason is simple:

1. Although I can use interviews or the experience of product developers to determine Aha's moment, I don't know whether he is really completely related to the retention rate.

2. I can't find our company's AHA moment.

In other words, the importance of the retention rate can be easily deduced from the model, so we will say that it is very important. However, there is no other data to support our own AHA moment, which is the most important indicator.

I think this problem will gradually change. With the lowering and popularization of machine learning threshold, every company can find its own AHA moment through algorithms.

Once the AHA moment is found, the key data will move forward from the retention rate to the utilization rate at the AHA moment.

In fact, many products have found their own AHA moment.

Because the retention rate itself is a time consuming indicator, if you want to see the weekly retention of users, you need at least two weeks to get this data (after the experiment goes online, you will not know how many users joined in the first week return visit in the second week until the second week is over).

At this point, by observing the utilization rate of AHA at the moment, we may know after three days or the first week at the earliest, and our future results will be a little more advanced. This is also the core concept of "fast" at this stage.

Growth evaluation model from UX

The other one is also closely related to product development Growth model ：HEART。

HEART was proposed by Google's Quantitative UX Researchers team and was initially used for data informed design. They proposed HEART as a framework for measuring UX indicators. HEART stands for H (Happiness) E (Participation Engagement ）A (Adoption) R (Retention) T (Success).

HEART originated from the product development process as the framework of UX data measurement, so it focuses more on the "relationship" between users and products. It is not just to see how many people have used the product, but to further understand users' satisfaction, engagement, adoption, retention, and task success with the product. The closer the "relationship" between them, of course, the better the growth effect will be!

Of course, HEART can not only be used for product development, but also for daily business - replace the product with the service provided, and see the "relationship" between users and core services provided by the company.

There are many miscellaneous things to be done for growth, which covers a wide range, because everything can "grow". To make a change, you don't have to wait several months to know the result; Do not rely solely on the company's own ability to do marketing; You don't have to touch and try like a headless fly to find a method that may be useful. The significance behind these phenomena is to bring the future closer and let you see the results faster (whether it is successful revenue growth or failed experience learning).

Finally, let's quickly review some growth models mentioned above:

AIDA | The earliest growth framework pays more attention to attracting new customers.

AARRR | A user growth framework in the form of a funnel.

RARRA | Reorder AARRRs by priority, emphasizing the importance of retention.

Growth Loops | Replace funnel with cycle. Sustainability and reusability are the core of this framework.

HEART | Originating from UX, it pays more attention to the relationship between products/services and users.

Thanks for reading. See you next time.