How to let consumers pay

According to the report, only 15% of users in China download apps are willing to pay. How do developers attract users to agree to pay? In my opinion, the determinants are not consumption and consumption, but good product and market environment, which is essential. This requires developers to be disciplined and able to offer better products to users, and I'm sure consumers will be happy to pay for them.

First, let the user truly become your user: Aarrr model

AARRR is acquisition, activation, Retention, Revenue, refer, written in this five-word, which corresponds to the 5 important aspects of the mobile application lifecycle. Let's briefly explain the meaning of each item in the AARRR model.

Get User (Acquisition)

The first step in operating a mobile application is undoubtedly to get the user, which is what we usually call the promotion. If there is no user, there is no operation.

Increased activity (activation)

Many users may be through the terminal preset (brush machine), advertising and other channels into the application, these users are passively into the application. How to turn them into active users is the first problem the operator faces.

Of course, this is an important factor in the promotion of the quality of the channel. Poor promotion channels bring a large number of one-time users, that is, the kind of startup, but no longer use the kind of users. Strictly speaking, this is not really a user. Good promotion channels are often targeted to target groups of people, they bring users and the application design of the target audience has a great degree of coincidence, such users are often more likely to become active users. In addition, the selection of promotional channels must first analyze the characteristics of their application (for example, whether small audience applications) and the target population. It is a good promotion channel for others, but not necessarily suitable for you.

Another important factor is whether the product itself can capture users within the first 10 seconds of use. Again have the connotation of the application, if give a person's first impression is not good, will also "Blind Date" failure, become "marry not go out of the difficult."

In addition, some applications will attract new users by experiencing good novice tutorials, especially in the gaming industry.

Increase retention rate (Retention)

Some applications have solved the problem of active degree, and discovered another problem: "The user comes fast, walks quickly". Sometimes we say this app has no user stickiness.

As we all know, the cost of keeping an old customer is usually much lower than the cost of acquiring a new customer. So bear break corn (take one, lose one) is the application of the operation of the taboo. But many applications do not know what time the user is lost, so on the one hand they constantly open up new users, on the other hand, and constantly have a large number of users lost.

To solve this problem, we first need to monitor the user's loss by daily retention rate, weekly retention rate and monthly retention rate, and take corresponding means to motivate these users to continue using the application before the user is lost.

The retention rate is also related to the type of application. Generally, the first-month retention rate for utility applications may be generally higher than the first month of the game class.

Earn Revenue (Revenue)

Access to income is actually the core of the application operation. Very few people develop an application just out of interest, most developers are most concerned about income. Even for free applications, there should be a profit model.

There are a number of sources of income, mainly three: paid applications, application fees, and advertising. The acceptance of paid applications at home is low, including the Google Play Store in China, which only pushes free apps. At home, advertising is the source of revenue for most developers, and application fees are currently used in the gaming industry more.

Either way, revenue comes directly or indirectly from the user. As a result, the increased activity and retention rates mentioned above are essential to income generation. The user base is big, the income is possible on the quantity.

Self-propagation (refer)

The previous operations model ended at the fourth level, but the rise of the social network has added one aspect to the operation, the viral spread based on social networks, which has become a new way to get users. The cost of this approach is very low, and the effect is likely to be very good; the only prerequisite is that the product itself should be good enough to have a good reputation.

From self-propagating to acquiring new users again, the application operation forms a spiral trajectory. And those excellent applications make good use of this track, and constantly expand their own user groups.

With this aarrr model, we see that getting users is just the first step in the entire application operation, and the fun is still behind us. If only to see the promotion, do not attach importance to the other levels in the pipeline, allowing users to fend for themselves, then the application of the future must be bleak.

Ii. How to use the AARRR model

Usually in the application, the headache is the background statistics of the activation volume than the channel to provide a lot of downloads. But a few days ago, a friend of mine consulted me about a sudden surge in the activation of one of their apps from one channel. But he checked the amount of downloads on that channel (the home Application market), and there was no noticeable change. So he was very confused and asked me if there was any way to help him find out why.

A lot less can make a person headache--because the data is abnormal, it usually indicates that there is a problem. But just looking at an activation volume and a download amount does not reveal the root cause of the problem. Especially when we have learned about the mobile application operations model, we need to understand what kind of data we should focus on in every aspect of aarrr, what kind of data performance is normal--simply, only know that aarrr is not enough, but also use it.

Get User (Acquisition)

At this stage, the most concerned data is the amount of downloads. Today, some media reports often use downloads to measure the size and success of an application. However, the download of the application does not necessarily mean that the installation, installation of the application does not mean that the application must be used. So very soon the activation volume becomes the most concerned data of this level, even is the data that some promotion personnel only concern. The usual amount of activation, that is, the number of new users, is the new number of standalone devices that started the application. The activation volume seems to be more of a second layer of activation, but because of the amount of downloads and the amount of installation, the data are relatively virtual, and it does not really reflect whether the user has been acquired. So everyone has to look at activation, which is really getting the new user.

Another very important data is the amount of activation that is divided into channel statistics. Because in the channel promotion, many application developers chose to pay the promotion. When settling, it is natural to understand how many users are actually active in a channel. Even without a paid relationship, developers need to know which channel is the most effective.

But at a higher altitude, CAC (customer acquisition cost) is the most needed to focus on the data. There is a rough line in the industry that the cost per Android user is about 4 yuan, and iOS users are about 8 yuan. Of course, the application of market downloads, mobile phone presets, advertising and other different channels of access costs are completely different. There is a cost-effective problem, some channels to obtain a higher cost, but the user quality is also relatively high (what kind of call high quality, the following will be explained).

Increased activity (activation)

See the activity, you first think of the indicators are DAU (day active users), MAU (monthly active users). These two data basically illustrate the application of the current user base scale, in the online gaming industry This is two operators must see indicators. Usually active users are users who have started in a specified period of time. But is startup really equal to active? If only once in a specified cycle, and for a short period of time, such user activity is not very high (of course, for some special applications may be high, for example, used to record the female physiological cycle of the application, January start once is enough). So it's going to look at another two metrics: Average time to start each time and average daily boot times per user. When these two indicators are in the upward trend, it is certain that the application of user activity is increasing.

It is also important to channel statistics on the use of time and startup times. We call them the quality data of the channel, if a user on a channel, the two indicators are poor, then there is no point in this channel to invest too much. The most typical is the user of parallel machine brush, many preset applications are activated when the brush is finished. For this passive-active user, one can look at another metric, called the number of user-initiated users, that is, the number of users who have only started up to date.

In addition to the channel, another and active degree-related analysis dimension is the version. There are also differences in the length of use and number of startup times for each version. For product managers, analyzing different versions of the difference in activity can help keep the application improving.

In addition, related to the activity, there are daily active rate, weekly active rate, monthly active rate of these indicators. Of course, the active rate and the application of the category is very related, such as desktop, the use of electricity-saving applications of the active rate than the dictionary application.

Increase retention rate (Retention)

Download and install-use-uninstall or forget, this is the user's lifecycle in each application. Successful applications are those that extend the life cycle of the user as much as possible, maximizing the value of the user's life cycle (the topic of the next session on life cycle value).

For most applications, care should be 1-day Retention and 7-day Retention. Here I use English, because its Chinese translation is not uniform, easy to cause ambiguity. 1-day retention is usually translated as the first-day retention rate, in fact, this "debut" does not mean that the application is installed on the initial days (assuming the date is D), but effected day, that is, the installation of the second day of use. Because the concept of a retention rate is not available on the first day of installation (only 100%). By the second day, the number of users who were installed on the previous days was still starting to use the app, which is 1-day Retention. Because it is the next day, some articles are also called "the next day retention rate". Similarly, 7-day retention is the percentage of the total number of users who started using this application in the first installation of D-Day on the d+7 day. Typically, the first few days after a new installation is used is the period of greatest wastage (for details on the retention of the user, please refer to our colleague's other blog, "read your user retention"). So these two indicators are most important in the retention rate analysis. There used to be a game industry experts pointed out that if you want to become a successful game, 1-day retention to reach the costs, 7-day retention to reach 20%.

Some applications do not need to start daily, so you can see the weekly retention rate, the monthly retention rate and other indicators, will be more meaningful. Retention rate is also an important indicator of the quality of the users of the channel, if the same application of a channel's first day retention rate is much lower than other channels, then the quality of this channel is relatively poor.

Earn Revenue (Revenue)

The most familiar indicator of income is the ARPU (average per user income) value. The corresponding relatively little mention also has an indicator called ARPPU (average per paid user income). A few days ago, @ Wu gang in micro-blog map compared to the World War II ARPU value when it is noted that the weekly pay user ARPU (so actually is Arppu). But many people mistakenly read the 60-dollar week ARPU value, which makes them overly optimistic about the Android game.

Is Arppu high, ARPU will certainly be high? The answer is not necessarily. Because there is also an indicator of the proportion of paid users, that is, the proportion of the total users of paid users. If the proportion of paid users is low, then the average income is lower for all users. In general, if a game increases the price of a virtual prop in order to improve Arppu, the proportion of paid users will be reduced accordingly. Find a balance between Arppu and paid users to maximize revenue.

But income is not the most important, profit is. How to maximize profits? The most simplified formula for profit is: Profit = income-cost. First we look at the cost, we mentioned in the last article CAC (user access costs). In addition, the development costs of the application itself, server hardware and bandwidth costs, and operating costs, and so on. However, in the case of a large number of users, CAC will become the most important cost, and other costs are not in order of magnitude, so we only consider CAC in subsequent discussions.

So how is income calculated? ARPU is a time period-related indicator (usually the maximum monthly ARPU value) and cannot be fully matched to the CAC because the CAC and time periods are not directly related. So we have to look at one more indicator: LTV (life cycle value). A user's lifecycle is the cycle between a user starting the application for the first time, and the last time the application is started. LTV is the sum of revenue that a user creates for the application during the lifecycle, and can be viewed as a long-term cumulative ARPU value. Average LTV per user = monthly ARPU * User average lifecycle per month.

LTV–CAC, it can be considered the profit that the application obtains from each user. So maximizing the profit becomes how to reduce the CAC while increasing the LTV, so that the difference between the two is maximized. Further, the different channel source users do the analysis, according to their different CAC and LTV, can deduce different channel source profit margin difference.

Self-propagation (refer)

Self-propagation, or viral marketing, is a marketing approach that has been widely studied in the last 10 years. Although we have all heard of some classic viral marketing cases, but to say how to quantify the effectiveness of the results, few people know the K factor (k-factor) this measure. In fact, the term K-factor does not originate in the market or software industry, but in the science of infectious diseases--yes, that is, the scientific study of real viral transmission. The K-factor quantifies the probability of infection, that is, how many hosts in all the hosts that an infected host is exposed to can be infected by the virus.

The formula for K-factor is not complicated, k= (the number of invitations each user sends to his friends) * (The conversion rate of the person receiving the invitation into the new user). Suppose the average user sends an invitation to 20 friends, and the average conversion rate is 10%, K =20*10%=2. The result is pretty good--when k>1, the user base grows like a snowball. If the k<1, then the user group to a certain size will stop the growth through self propagation.

The AARRR model is ideal for user operations, where you can find core elements that increase the overall user retention rate and eventually turn it into revenue.

Third, the app mainstream charging mode

App charging mode is not only free and charge two kinds of forms, through the combination of basic elements of charges, it can be divided into many kinds, the following about the payment mode diagram of the expression, is a reference from the Japanese edutainmentlab of Mr Banqiao Wu's book "Hot merchandise is so created."

Next, we'll introduce you to a variety of business models that can be developed in the app economy. In the diagram below, the green Enterprise refers to the app developer

Mode one: Paid application (Pure sale mode)

Illustration: Users pay money to buy apps, developers thus profit, one of the current mainstream pay models

This should be the simplest model-developers make apps that sell to users through the App store or harsh. In this mode, the point is to make the sales of unit x sales a lot, it seems like nonsense, but it is worth thinking that if an app is useful for a particular group, but it may not be attractive to the general public, then it will not be $0.99 but won't sell a few more, Whether the price should be set higher, and then through the right publicity to let people in need to know this information, although sales are limited, but because the unit price is high enough, overall sales may be more favorable. And because the price is high, then there are discount promotional space, further attract price-sensitive consumers rob cheap.

Case: "Angry Birds" and "Keynote" belong to different paid app, one is the game, the fast consumable, one is the tool class application, belongs to the productivity, the two price is 6 yuan and 128 yuan respectively, why so price? Because "Angry Birds" belong to the game, is impulsive consumption, the audience face wide , the price of 6 yuan (0.99 U.S. dollars) can maximize their earnings, and "Keynote" positioning in productivity, using mobile phones, ipads to achieve production of the user itself is less, if the price of 6 yuan is not conducive to maximizing their own earnings. If the use of "Keynote" can really improve the efficiency of users, 128 yuan for this group of users is nothing. Pricing strategy in the pay model is very important, generally based on experience, and analysis of the price of similar products, you can estimate the WTP of consumers, in the center of the range to determine the price of their own app, so as to close to the real p. Different app, different region market situation is not the same, you need enough to understand the region market and the type of app in order to accurately estimate p, and through the fluctuation of sales and consumer feedback to adjust the price of the timely. If you do not understand these, personal advice to price a little higher, and then based on feedback information down prices, and even do some restrictions on activities, is also a choice.

Mode two: Advertising mode

Illustration: Users do not have to pay, advertisers pay advertising fees to developers, developers thus profit

This is also a relatively simple model, this diagram is simplified in the model, the actual operation between advertisers and developers should also have Apple or Google, the two major advertising agencies to launch the platform. And this mode of profit is mainly rely on advertising, so to be as big as possible app download, so if you can combine users have the need for services such as information or intelligence, one demand already exists, and the effect of advertising media will be more obvious.

Case: April 2012, "Fishing Tatsu people" in the iOS platform one line will sweep the big download list. There are numbers to illustrate its popularity: Apple has been in the App Store on the home page recommended six weeks, the total download has exceeded 33 million, active users up to 2.6 million, has been in more than 30 countries in the App Store download ranked first.

At present, "fishing Tatsu people" in iOS download up to more than 18 million, on Android more than 15 million, 70% revenue from the built-in ads, the rest is the platform with the split. For a long time in the future, advertising revenue is the main source of income for people who catch up. Touch-control technology has itself set up an advertising system, its operating mode similar to Google's "AdWords" for advertising, the main precision marketing. "Catch people," the advertisers, many are from the traditional or mobile Internet game developers, such as Moore Manor, through the channel to do the promotion, and now gradually have the brand to advertise, there is a well-known brand of luxury car advertising.

"Fishing Tatsu People" app is a typical advertising model, through the user clicks Ads banner form to obtain income, but the ads always affect the user experience, if your app is not irreplaceable, or as little as possible to use this model to obtain income, it is easy to cause the loss of users.

Mode three: Income combination mode ("Guide chicken" mode)

This is an extension of the pure sale model, the idea is to attract consumers by using one or two of the products that are particularly inexpensive, and then to sell them to other products, just as the real-life malls usually have so-called special offers to attract consumers to the stores, while having the opportunity to buy other things to increase turnover is the same. And in app's field, "lead the way chicken" even price can be $ (with "advertising mode" to use together)

Case: Currently can not find this type of income of the app, but the typical is the same company's app between the cross promotion, through the form of Exchange to guide the user, so as to achieve mutual win, but also reduce the entire company's access to the user's cost.

Mode IV: Purchase IAP within the program (continued introduction of the updated Affiliate function mode)

Illustration: Users will download the app main program, and then download the Affiliate function

This means that, in addition to the main program, the continued introduction of additional pay to download the ancillary features such as the game of the new scene or photo software new filter effect, so that revenue can continue to grow. The same can also make the main program cost is $ (with advertising mode), or the use of income combination mode of psychological effect.

Case: The famous photo-assisted application camera+ developer Tap TapTap recently published in the official blog of the March 28 application of the updated sales data and the program to buy ("I? Analog "Special effects package" income statistics. Its new version is built with a $0.99 purchase item inside the program: "I?" Analog "special effects package. 5% of users have purchased the special effects package, and the developer's income from IAP has been 68267 dollars. This is the pattern of camera+ 's attempts.

Mode five: Monthly fee model

Illustration: Users regularly pay money to developers when using apps consistently, typically using Evernote

As the name suggests, as long as the user continues to use, as time goes on to pay regular fees. This pattern of deformation may not necessarily be tied to time, but the amount of use. Subscriptions can also be a way to use this pattern.

Case: Evernote use is the monthly fee model, users need to renew each month to ensure their senior membership, thus enjoying more membership privileges. Evernote Official statistics show that in the first month after the user registered Evernote, only 0.5% chose to pay for the service, 6 months later the figure became 1%, and 2 years later the payment rate rose to 5.5%. In addition, 42% of the user registration and discard the Evernote will choose to return to use. And 25% of those who have been using it for 4 years have become paid users-and obviously, as Phil Libin at first expected, as more notes are stored on Evernote, users are increasingly dependent on the service, and demand for their pay is growing. Evernote CEO Phil Libin said: "For us, the easiest way to get 1 million paid users is to get 1 billion free users first!"

Mode VI: Platform Media-mode (O2O)

Illustration: The developer's app provides the media users and platforms, and in addition to the app's function, it can pull the user to the merchant, and the huge flow of the app itself.

Case: Public comment Network is a more typical example, after 8 years of development, the public comment network has become a local business to provide a one-stop precision marketing platform for integrated services. The emergence of group buying, in the public comments on the network, is to solve the local merchants at a certain stage of the marketing needs of a new way of marketing. Local businesses in different marketing stages can include electronic coupons, keyword promotion, such as different marketing mix mode. Through 020 of the form, the public comments network will be their huge online traffic into the business consumers, in order to achieve revenue, this is the platform of media-mode, but also the most mature mode, the most important thing is that this model does not affect the user experience, because the model itself and the app has a certain degree of relevance, can effectively pull users, Not as tough as advertising.

Iv. key points to allow users to pay willingly

Product Word-of-mouth is the key to pay

Product Word-of-mouth is a comprehensive experience of the application, whether the product is easy to use, can solve the user problems are embodied in the product Word-of-mouth, a product without a good reputation without talking about what charges, can survive has been very good. So the basis for users to pay willingly is: the product itself.

Relevance is the core of paying

Let users pay willingly, the core is relevance. Mobile game value-added charges are props, checkpoints or even songs (music), no game is not designed like this. Similarly, mobile advertising is the same, a help users check the application of the weather is to show a game tips, conversion rate can be high where to go? Further to pull users to use the new product is the same, the first application to do information products, the second application has done lbs products, two of products have no correlation between, how to pull it Typical examples such as Sogou's triple and 360 's level three jumps. Similar to the business model, but from the security defender user conversion to the browser user's conversion rate is significantly more than from Sogou user to become Sogou browser users, the difference lies in relevance. The same program purchase, more than the user wants a step, through this step to pull users to complete the design of the task, in order to let users willing to pay.

In addition to relevance, importance is also important. In terms of Evernote, its core, in addition to the record is the cloud synchronization, so that data can be summed up in each terminal, the core charge is the flow of cloud synchronization. Can not strangle the free users, do not let them sync, but also through the flow of this factor to isolate the user base, so that the need for large flow synchronization users willing to pay, this is the degree of consideration. Again, such as the previous period of music charge topic, QQ Music is the way to isolate the user group by sq quality, so that users willing to pay. We need to design a few features to differentiate users from these functions, thereby achieving the purpose of paying.

Payment method is the last step for users to pay

Often, payment facilities are a key factor in paying users. When the user has a pay impulse, the more convenient means of payment can increase the user's pay ratio. Because the application is like doing consumer goods, this consumer goods in addition to the user pro-Lai, but also need to pay convenience.

Sina Weibo client Weico CEO Xu Shiyan shared Weico Pro's sales changes before and after the APP Store supports the renminbi:

The original user must have a dual-currency credit card, and the need to manually open the overseas payment function to be able to shop in the app Store. After supporting the renminbi, users can pay by using any debit or credit card that supports net silver. As a result, the data really reflects the fact that with more convenient payment methods, users don't mind paying small bucks to get the product they want. According to speculation, some users have been relying on Taobao to buy black cards to pay for applications, the move to the apple caused a lot of bad debts, and even led to "and the language" and other popular applications in China fell out of the popular list. But the App Store, which supports the renminbi, has greatly encouraged these users to make small payments. The game of cheap games such as plants vs. Zombies and fruit cuts has also boosted sales. This shows that the convenient payment method can effectively improve the free users to pay users conversion rate, reduce the user because of the frustration caused by the payment.

This part of the information from the following articles, thank you for your share of cattle:

1. "Uncovering the code behind the application promotion operation"

2. Diagram of nine app business models