The common concern of hundreds of thousands of Internet practitioners!
Author: Zhao Zhengyu, the author authorized reprint morning reading class
Source: GrowingIO (ID: GrowingIO)
Editor: Verna
Hi, everyone. I am Zhao Zhengyu, vice president of Consumer financial products of Dianrong. I am mainly responsible for the business growth of the loan side and the construction of relevant support platforms in Dianrong. For nearly a year, I systematically combed through the growth story. Today I would like to share with you how we practice minimization and some of the thinking behind it at Dianrong.
The definition and mission of Growth in dianrong
What is Growth?
Growth has been around for a long time, and it used to be more about user growth. But for us now, growth is not just about user growth, but growth in metrics that are critical to the overall scale of the business.
Take Internet finance as an example, it is certainly closely related to money, so the growth we think includes user growth, revenue growth, profit growth, retention growth and so on, and the growth of these indicators can drive the growth of the overall business scale.
(II) What is the mission of growth?
Specifically, the mission of dianrong growth team consists of three aspects: improve decision-making efficiency, improve success rate, and bring real value growth.
1. Improve decision-making efficiency
As we all know, the organizational structure of large and medium-sized enterprises is very structured, and different departments have their own assessment indicators and report them to different management levels. It is actually very difficult to do seemingly simple things across departments. At Dianrong, the mission of the growth team is to resolve the barriers of cross-functional collaboration, so that everyone in each department can grow at the same level towards the same goal.
2. Increase your success rate
There is an interesting phenomenon that the Internet industry changes rapidly. I have been working in the industry for more than ten years, and I am learning new knowledge and accumulating new experience every year. The young fresh meat who graduated from school in these two years can absorb a lot of previous knowledge and experience in a very short time. If you interview any recent graduate, he or she will probably explain to you exactly what the AARRR model is and what A/B testing is.
So what’s the difference between us and them? I think the success rate is due to experience. For a practitioner with many years of experience, he may have a 50% success rate on one attempt, while for a novice, he may have a close call. Therefore, the second mission of dianrong growth team is to improve the success rate and minimize the cost of trial and error.
3. Add real value
The third mission of the growth team is to deliver real value for growth. For example, for registrations, do you want pure quantity growth or quality growth? How do you find the most valuable one among multiple metrics? The bigger you are, the more likely you are to face this problem.
I think it’s easy to grow on a big platform, but does that growth make sense? That’s something to think about. I’m going to tell you more about how we define, measure, and maximize growth metrics.
Dot finance growth methodology
To sum up, the growth methodology of Dianrong consists of four steps: define growth, minimize, measure and maximize. The first three steps are mostly thinking level content, only the last step is the implementation level.
(1) Defining growth
Before you can grow, you need to understand what the goal is. In many traditional large companies, this goal setting is usually top-down, with executives setting the revenue target for the year and then breaking it down into the various divisions. However, for the growth team, I think this approach is not very scientific. Because the revenue target defined from top to bottom is actually the internal Profit and Loss index of an enterprise, we call it PNL (Profit and Loss), which does not follow users and the market.
PMF (Product/Market Fit), as we all know, was a concept put forward ten years ago: Product / Market Fit means being in a good market with a product that can satisfy that market. The concept is very abstract, without any concrete metrics. But for the growth team, the key to defining growth is to find the relationship between product PMF and PNL.
Because there is no direct relationship between PMF and PNL, it does not mean that if the product and market match, there will be revenue, nor does it mean that the company that has been losing money does not match the product and market. So how do you find the relationship between the two? What we do is we make a bunch of assumptions, and we use a bunch of assumptions to come up with a core formula between user data and revenue.
For example, if we want to make a loan product, we will assume the following formula:
In this formula, all elements are unknown variables that need to be broken down and assumed in greater detail. For example, after we get this formula, we can further split the input cost, namely the customer acquisition cost, according to our own experience of Internet products. The customer acquisition cost can be divided into the cost of reborrowing customers and the cost of first borrowing customers, and the cost of reborrowing customers can be further divided into the product of the number of reborrowing users and the unit cost of reborrowing users. Then continue to break down the other elements using the same idea.
For a large-scale project, such a formula is not enough. Within dianrong, we split the assumptions of three or four core growth metrics, such as profit, based on the project’s PNL. Once these core growth metrics assumptions are made, we basically think of them as defining a digital target for business growth.
(2) minimize
After the definition of core growth index is completed, for example, we assume that the profit target of a project is 20 million yuan, which is actually unenforceable. There are hundreds of people on the team, and they don’t know how much their work can support that 20 million metric. So once we define growth, what we need to do is minimize growth.
What does it mean to minimize growth? In point finance, Minimum Viable Growth (MVG) is an important criterion for measuring the Minimum Viable Growth. It helps everyone on the team define their work, which is one of the most important ways to reduce mistakes. As a team Leader, you cannot guarantee that everyone is elite, nor can you guarantee that everyone has the same idea with you. By breaking down each of the core metrics into the smallest executable units, even the most elementary people can know exactly what they need to do when they receive the metrics, and the goal of minimizing viable growth is achieved.
Take a specific example, a public number monthly profit to reach 10 million, then split to each core indicators, and then to the minimum executable indicators, everyone’s work in the team, and need to pay attention to the data every day, it is very clear. For example, how many customers wechat and community promotion need to get every day, how much conversion rate of each part needs to achieve and so on.
(3) Measurement
Before we launch a page or feature, it would be terrible if we didn’t have a data tracking system in place and a data kanban in beta. Chances are that all the data you come back with is wrong and of no guiding value.
In the past, we used a lot of statistical tools, but the problem was that it took a long time to go online. However, the core of Growth Hacking is to iterate in small steps and go online quickly. In this situation, it is difficult to achieve real-time and perfect data tracking.
GrowingIO solves this problem very well. One of the things that appeals to me about GrowingIO is the rounder feature, which supports our data collection and analysis on the client side very well.
Why should Growth Hacking build dashboards in the first place? For example, in the graph above, this is the overview data of one of our small projects. On the default overview page of GrowingIO, I can see at a glance the progress of the project, which has a very clear turning point.
At the beginning of the project, when we just started to promote, the overall traffic increased greatly. After this stage, the overall traffic began to show a relatively stable trend, but the bounce rate began to drop sharply, while the number of page views increased exponentially. This shows that the transformation that our operations team is doing to the users within the product is starting to pay off. Without such a kanban, it’s hard to see the changes at a glance. So good measurement tools are essential for growth teams.
On the user side, we rely entirely on GrowingIO and rely on our own statistical platform for internal data access. But starting this year, GrowingIO will allow you to combine internal data with external user behavior data; That means we can do a lot more data analysis on it, and we’re looking forward to that internally.
In addition to kanban, the most common measure we use internally is quadrants. For any MVG (Minimum Viable Growth), we can measure it in a quadrant; It is versatile and easy to understand. Most importantly, a quadrant can represent three indicators. For any MVG, it provides a visual representation of the three core growth metrics and can be used for everyone’s reporting.
For example, the above chart is the performance measurement of customer channel promotion. The horizontal axis represents the ROI of the channel, the vertical axis represents the cost per customer acquired, and the size of the circle represents the income scale. With this diagram, you can see the effect of each channel very quickly.
Obviously, the lower right corner of the channel is the better, because the cost of acquiring customers is low and the ROI is high. Of course we want all the circles to be in the lower right corner, but this was not possible at the time of initial placement. What we’re going to do is, by optimizing, move all the circles to the bottom right, which is what every MVG actually does.
(4) maximization
In fact, the above three points are more methodological. In terms of implementation, what do we do? For Dianrong, this is a process of growth maximization. As each of our smallest units got bigger, so did our entire company.
Ideally, all the circles are moving in the lower right corner of the quadrant, but reality is often skewed and not all small teams are moving in the right direction.
In the three steps mentioned above, the disassembly of indicators may involve the top management of the company, while in the execution level, how to smoothly pass on their own ideas and indicators to achieve the desired effect, and optimize the success rate and efficiency is the key point in the process of maximizing.
Build and operate growth team
My mission in Dianrong is to build a growth system, including organizational structure, technology, product design and so on. To test some ideas, I also get involved in some real businesses, such as consumer finance. Building the growth team is an important part of my work, because the skill structure of the growth team will directly affect the growth efficiency.
(I) Growth team structure
The chart below shows the structure of dianrong’s growth team, which is similar to Facebook’s. My role is Growth Leader. The Growth Strategy under me is mainly responsible for index dismantling. They will play an overall coordinating role in the Growth team and provide support and guidance to each department with data.
The Growth Service team on the far left is basically made up of technical people who build and build all the products for Growth, such as user portrait systems, data tracking systems, SMS trigger platforms, and so on. These product solutions are universal and not specific to one business, so they don’t touch and solve front-line business problems.
Core Growth is the Core of our Growth team, which is a maximized execution team. The members of this department are all internet-born and have rich operational experience. They put all their testing results, growth ideas, and so on into the product, rather than doing it the other way. They are dispersed across business units and advise on product growth through the minimum feasible growth unit test.
Operations is our daily operation department. They maintain and grow through some daily operation and promotion methods, but on the whole, we still prefer natural growth within the product.
Taskforce is a kind of secret Service team. In some innovative or promising areas, but not currently important or risky, we will select a small team, usually consisting of two technologies and one product, to do a tentative exploration. I think a company needs to spend at least 10% of its resources on this area to make sure that the company is constantly improving.
What is very different about Dianrong is that the colleagues in the independent Marketing Department and the operation department are scattered among different departments in the Growth Team. Although they also report to the head of Marketing Department, they directly report to the Growth Team about 80% of the time. If your company has that kind of vision and drive, I think it’s really helpful for growth.
(II) How does the growth team operate
So how does dianrong’s growth team work? Let me give you a few simple examples.
1. Organizational structure of the Core Growth Team
In the case of the Core Growth Team, we divided the organizational structure according to the MVG mentioned earlier. Because you will find that in the team, each person is good at different parts, some people are good at optimizing the product to achieve natural growth, some people are good at insight into people and do a good job of community operation. Then how to maximize their capabilities is a problem that Growth leaders need to think about seriously.
What I do is to divide them according to MVGS. Each small MVG is associated with each other. Through the association of MVGS, people in the team are associated together. The advantage of this is that MVGS are assigned to the most appropriate team. For example, teams working on product conversion are often very good at dimensionally identifying problems through tools. They are experts in this area. I don’t usually have very integrated teams, because I want each team to focus on the smallest execution unit.
2. Understand growth fatigue and always maximize resource efficiency
We believe that every product has a growth bottleneck, and when the manpower is fixed, once THE MVG reaches a growth bottleneck, the team’s contribution will plummet.
As a Growth Leader, it is necessary to efficiently identify the Growth bottleneck of each MVG on a weekly basis, and then quickly adjust resources to maximize efficiency. We help the growth team adjust the MVG every two or three weeks to keep them on top of their growth.
3. Destructive test can greatly save the test efficiency
Why does destructive testing greatly save test efficiency? To take a simple example, many Internet financial products will plan the operation activities of old customers and new customers, and usually need to find the balance between the lowest commission return benefits and the highest conversion rate. To find this balance, operations often run multiple sets of tests and then look back to find the best solution.
But before we test it, what we really need to know is whether “old customers bring new customers” is feasible. In the growth team of Dianrong, we tend to advocate destructive experiments in the early stage. In the example above, our first step is to test the maximum benefit we can give, because that will be the best number for the whole activity. If the numbers are still not good enough, then we would assume that the activity itself is not generating growth. We don’t need to measure the rest of the data.
The biggest benefit of disruptive experimentation is that it saves a lot of useless tests and quickly determines whether something is right, which is the core of growth.
Conclusion: Growth is a process of exploring human nature
What I said above is a very data-driven growth system, but at the end of the day, we need to get back to the essence of business, to the essence of products. What do your users really want? Only by figuring out what your users really want can you find growth.
So I think, in addition to very data-driven growth ideas, we need to talk to users face to face on a regular basis to understand what users really want. Because ultimately, growth is a process of exploring human nature.
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See here, small early to send welfare again! Leave a comment below to share your thoughts or stories about user growth. Two copies of Chief Growth Officer will be given away for the morning Reading class. The rule is to choose the two most thoughtful commenters in the comments. The deadline is 24:00 on November 21st, so check out the comments.
