Huang Shaolin talks about "The Tao and Techniques of Paid Member Management": Seizing members' perception and improving user retention rate
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Recalling that at noon on May 8, 2019, I went to the [AeSA Asia-Pacific Brand Business Accelerator] (https://tesa.today/) in the Huashan Cultural and Creative Park and listened to [Huang Shaolin] (Max), the head of the membership business research center of [iQiyi] (https://tw.iqiyi.com/), talk about “The Tao and Art of Paid Membership Management”.
Recently, the trend of Subscription Service is gaining momentum, and not only publishing houses have introduced “[Subscription Economy: How to Use the strongest business model to open up new service opportunities](https://www.books.com.tw/exep/assp.php/vista/products/0010819588?utm_source=vista&utm_medium=ap-books&ut m_content=recommend&utm_campaign=ap-201906)》This is a good book that specifically talks about the subscription economy. We have also seen in the media industry that leading brands such as Tianxia, Shangzhou and Apple Daily have adopted it… In fact, almost all industries including clothing, dating software, meditation apps, and razors have factories. The provider provides subscription service.
Previously, I learned from Max’s Facebook that he [had lectured on the same topic in early May] (https://www.facebook.com/digitalwall/posts/10158449294093266). At that time, I was looking forward to the opportunity to hear my classmates explain this topic in person. Now my dream has finally come true. Having said that, I would also like to express my special thanks to my friend [Ye Jianhan] (https://www.facebook.com/twJohnYeh) for his great assistance. Of course, the reason why I came to listen to Max’s speech today is not only to learn how to operate a paid membership, but also to meet this old classmate whom I have known since college!
Max mentioned at the beginning that there are two types of membership systems. But no matter which one, it is actually not new.
The first type of membership system is the membership loyalty program (https://buy.line.me/s/%E8%A8%88%E7%95%AB) (Loyalty Program), which is mainly derived from the airline’s mileage program. Customers’ flight miles can be converted into air tickets or gifts, which can form a centripetal force. For example, American Airlines has 650,000 members, and American Airlines’ AAdvantage rewards program is one of the largest loyalty programs in the world. Promoting this plan will naturally be a great incentive for travelers who make good use of miles and are familiar with point applications. It can also be said to be a great tool to increase customer activity and loyalty.
The second type of membership is subscription-based, which mainly comes from the mobile phone services of telecommunications companies. You can obtain a series of services and benefits by paying a monthly fee. Nowadays, subscription services have been extended to many industries, such as magazines, cable TV or Amazon Prime, etc. It is a business model that drives customers to pay subscription fees to obtain services.
Max pointed out that the focus of subscription services is to obtain a stable customer base to obtain good cash flow. Today’s sharing mainly focuses on the business model of such services.
Max, who has worked for well-known enterprises on both sides of the Taiwan Strait such as Sina.com, Taiwan Mobile, Weiba Telecom, 51.com, Alipay, Hunan TV Happy Shopping e-commerce and iQiyi, also runs the well-known website “[Digital Wall] (http://digitalwall.com/)”, so he can be said to be a senior Internet person!
He used [S-shaped curve](https://wiki.mbalib.com/zh-tw/%E6%B1%89%E8%BF%AA%E7%9A%84S%E5%9E%8B%E6%9B%B2 %E7%BA%BF) to explain the growth [trend] of retained members (https://buy.line.me/s/%E8%B6%A8%E5%8B%A2). I accidentally discovered that this classic curve is actually very knowledgeable.
Charles Handy divides the development process of the enterprise into three parts, and Forming a curve from the beginning, to development and growth, and then to decline, this curve is the inevitable fate of an enterprise, but not every enterprise must develop, glory, and fall exactly according to this curve. The fundamental factor of whether it can operate sustainably lies in whether the enterprise can make appropriate changes at the right time during the development process.
If the S-shaped curve is the main one, Combined with the concept of “Crossing the Chasm”, users can be divided into: early adopters, early majority, late majority and late niche when operating paid memberships.
“Crossing the Chasm” talks about the early stage of the high-tech industry life cycle, that is, the emerging high-tech Technology products marketing strategy. Only by crossing the chasm stage can we continue to move towards the mainstream market, and even enter the tornado stage.
Max mentioned that early adopters tend to be male, younger, and like to try new things. They are not price sensitive, but they are heavy users, and they are concentrated in economically developed areas. When he talked about these characteristics, my mind immediately flashed to the grand scene of people queuing up to buy iPhones… Sure enough, these 3C groups are representatives of early adopters.
On the other hand, the majority of the people in the later period were mainly women and slightly older. These groups are easily affected by the environment and are extremely price-sensitive. They are relatively light users and are mostly located in economically backward areas.
To be honest, I am not unfamiliar with this S-shaped curve. However, after listening to Max’s explanation today, my interest in research was aroused. In addition, I just suddenly remembered what Charles Handy once said: “The secret of a company’s continuous growth is to start a new S-shaped curve before the first curve gradually disappears.”
When you feel very comfortable now, it is the beginning of the curve that is about to fall.
Listening to Max’s sharing today, I am also very impressed by this. It is dangerous to stick to the rules. If you see that your business is stagnant, you must quickly consider developing The Second Curve!
Looking back in June 2015, iQiyi’s VIP membership had just exceeded the five million mark, but they had already begun to wonder whether they had passed the 50% midpoint of the market? Max pointed out that there is actually a lot of knowledge involved in the management of paid memberships. He himself believes that this is a process of continuous self-proofing in confusion. Based on his past development experience in iQiyi, Max shared with you three innovative content charging models, namely: “library” in 2012, “chasing” in 2015 and “fans” in 2018. To be honest, everyone is familiar with the “library” model. It is said that iQiyi’s film library has about 8,000 [movies] (https://buy.line.me/s/%E9%9B%BB%E5%BD%B1), which is quite impressive. What is more interesting is the subsequent two modes of “chasing” and “fan”, which fully grasp the subtleties of human nature.
How to lower the entry barrier, attract new members, and try to retain old members has become the homework of the team led by Max. In order to effectively operate paying members, Max pays special attention to changes in members’ monthly viewing time. He found that the average viewing time per person will shrink as the market expands from early adopters to late majority. Therefore, we must find ways to increase members’ time occupancy.
When I heard this paragraph, I suddenly remembered what Luo Zhenyu said, “Time is the real battlefield” (https://zhuanlan.zhihu.com/p/23039730). In the future, there will be two types of business value that will become bigger and bigger: one is to help users save time; the other is to help users waste time on good things. At the same time, around the concept of using time as the new currency, businesses have two ways to acquire users: one is to make them addicted and delay their time; the other is to provide services and optimize their time.
The future battlefield, a very important area in consumption upgrade, is the transition from consuming tangible products to consuming intangible products. For example, various services, entertainment, tourism, etc. In this field, space no longer plays a role and time becomes the only rigid resource.
If you want to improve the quality of paying members, you naturally need to rely on refined operations. In addition, you must build powerful system capabilities, including: channel distribution management system, marketing activity management system, message channel management system, cashier and order management system, user member portrait system, content distribution recommendation system, statistics system, and copyright management content production system, etc.
Among them, the commercialization of user member tags interests me the most, and it can complement and study the book “[Super Tags: Communication Methods to Reshape User Minds] (https://book.douban.com/subject/33417655/)” that I am reading recently.
For paying members, membership rights are naturally very important, but in addition, the perception of membership is also critical. Max pointed out that they improve member perception through three methods: exclusive content promotion, on-site perception optimization, and spokesperson or brand activities, and improve [usage experience] by tracking member satisfaction (https://www.contenthacker.today/2018/01/improving-legibility-readability.html).
For the management of paying members, it is naturally necessary to understand and track the competitive situation. But Max reminds everyone not to just focus on the share and current status of competitors, but also to understand the ecology of the entire market. In addition to having confidence in the services you launch, you must also try to steal each other’s users.
You have to spend a lot of money, and you have to work hard, but you have to leave some breath. You cannot have a chance to breathe after you have finished fighting. Once you fail or suffer a big setback, you may not have a chance to turn around. This is not acceptable.
If you are interested in “Growth Hacker” or “[Fission Marketing](https://www.contenth acker.today/2018/12/fission-marketing.html)” and other concepts, you may have heard of “Attraction, retention, promotion and revenue”. These are also related to the indicators that Max shared with you today that you need to pay attention to at each stage of the member life cycle.
Today I heard Max share a lot of cases about iQiyi and Tencent Video, which were enough to make us dumbfounded! However, when you hear the case of Netflix, the giant in the streaming media field, you may be surprised by the high payment retention rate of this American company. How is this up to retention rate of more than 90% achieved?
Netflix’s opponent is no longer a TV station or movie company, nor is it even Disney or Time Warner Group. But sleep. In other words, Netflix is competing for “all time outside of work.” Netflix’s goal is to become the first global pay-on-demand audio and video platform, which replaces television itself.
NETFLIX Ted Sharondos Sarandos) explains their strategy precisely: “More content, more viewing; more viewing, more subscriptions; more subscriptions, more revenue; more revenue, more content.”
For paid membership operations, the ideal state is for user growth and content investment growth to be consistent. Ted Sharon Doss tells everyone that content consumption, usage time, and user retention rate or change are all closely related. The above three points just echo Max’s wonderful sharing this afternoon.
From today’s lecture, I once again felt the importance of membership operations and pricing strategies. In addition, I also feel that although information technology is developing rapidly, traditional industries such as the telecommunications industry or the department store industry still have something to learn from. After all, the pricing strategies of these large companies have been used for hundreds of years, and they are quite mature from a Taoist or technical perspective!
As the saying goes, “A stone from another mountain can be used to attack jade.” Whether it is iQiyi or Netflix, there is a lot worth learning. Well, I really appreciate Max’s wonderful sharing without any secrets!
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