What to do if the product doesn’t sell quickly? From traffic operation to user operation

In both speeches, solutions to three pain points were mentioned:

1. What to do if the product doesn’t sell? From heavy decisions to light decisions.
2. What to do if the product doesn’t sell quickly? From traffic operation to user operation .
3. What to do if the product is not expensive? From positive marketing to reverse marketing.

We will introduce them in three parts.

Xiaomi was founded on April 6, 2010. In just one year, Xiaomi grew from 0 to 1 and became a unicorn valued at US$1 billion.

In the following three years, Xiaomi grew rapidly to become the best-selling smartphone brand in China, creating a commercial miracle for China's Internet phones.

Next, let’s analyze the underlying logic behind Xiaomi’s fast sales:

From 2010 to 2019, Xiaomi's growth can be divided into three stages, from 0 to 1, from 1 to 10, and from 10 to 100.

1. Selling fast is Xiaomi’s lifeline

Different industries have different worlds. Lei Jun entered the hardware industry from the Internet software industry. Lei Jun has a deep understanding of why it is important to sell quickly.

1. Hardware R&D and sales cycle

Hardware products have a long R&D cycle and a short sales window. Cash flow security is the enemy of business.

It usually takes 6 to 12 months from research and development to market launch, while the best golden sales window is generally about 3 months. Therefore, when selling mobile phones, you have to distribute the products comprehensively and put them on sale right from the start.

2. The cost of a mobile phone depends on the time and scale of sales

Due to Moore's Law, component prices are falling almost every month, and similarly, mobile phone prices are also falling.

In addition, the cost of selling 1 million units and 100,000 units is completely different, so selling mobile phones must be done on a large scale.

3. The historical opportunity period for smartphones is extremely short, only 3 years

In 2010, domestic smartphones accounted for 16% of the Chinese market and 0% of the international market.

By 2013, domestic smartphones accounted for 72% of the domestic market share and nearly one-third of the international market share.

The window period for the smartphone industry is very short, and the basic structure of the industry stabilizes in just three years.

The above three points determine that Xiaomi must sell quickly, otherwise it will be difficult to survive.

2. Xiaomi from 0 to 1: Two major strategies for recreating customer value

Xiaomi's brand is not big and competition is fierce. How can it compress the large number of potential consumers scattered across the country who need to change their phones within a year into purchasing within three months?

An idea that can be learned from is: the real estate industry's sale of pre-sale properties can be replaced by the language of cognitive marketing, which is called mental pre-sale.

Obviously, the customer value of products that can be mentally pre-sold and products that can only be made and sold immediately are completely different in user perception.

Therefore, Xiaomi successfully used two major strategies to recreate customer value in mental pre-sales: one is customer decision guidance, and the other is customer path guidance.

1. Customer decision guidance

Before Xiaomi, there were roughly two types of decisions in the Chinese mobile phone market:

The first category is brand decision making , which is mostly high-priced foreign brands;

The second category is low-price decisions , most of which are domestic copycat phones.

To put it in plain words, the driving forces behind customers' decision to purchase mobile phones can be divided into two categories: the former is high configuration and high price, and the latter is low configuration and low price.

Xiaomi has creatively provided consumers with a third decision-making criterion: high configuration and low price.

How do users perceive high configuration and low price?

It is mainly reflected in two value points: high cost performance and born for fever.

1) High cost performance

Xiaomi’s core keyword is high cost-effectiveness. High cost-effectiveness actually means selling product functions, with functional marketing as the main focus.

Xiaomi's high cost performance = benchmarking against Apple + quality commitment + Internet direct sales + user operation

Xiaomi's core advantage is making Internet mobile phones and subsidizing marketing costs directly to users through direct sales over the Internet.

High cost-effectiveness and good quality for every penny, this is actually the strongest reason for consumption, attracting consumers with high desires (at the same time, the disadvantage is that it also attracts price-sensitive users).

From a branding perspective, what kind of understanding does functional marketing give to consumers?

——Quality commitment.

I know this thing with my eyes closed, and it will definitely not rip me off if I buy its product. Do I know what I am buying before I buy it? What behavior is likely to occur after purchasing? This is called the power of brand.

Brand is a powerful driving force for achieving mental pre-sales and large-scale sales.

At the same time, it should also be pointed out that there must be a reason for high cost performance. High cost performance without a reason is very troublesome. Customers don’t want cheapness, they want a bargain, or a bargain with a reason.

2) Born for fever

"Born for fever" is value marketing.

In the early days, Xiaomi used engineering culture and engineering marketing as its entry point and growth lever.

In fact, the early MIUI was not a user forum, but an engineer forum (Xiaomi's seed users). In the early days, Xiaomi spread its business through word of mouth among engineers. Therefore, "Born for Enthusiasts" establishes a sense of product value endorsed by engineers, and at the same time builds MIUI into a word-of-mouth communication platform that carries quality.

What does value marketing correspond to in user perception?

In users’ perception, why do they buy a Mercedes-Benz? Why buy an LV bag?

——Conspicuous consumption.

The core of conspicuous consumption is consumer-centered personality identity . What consumers identify with is not your product, but their own personality.

Consumers want to use Mercedes-Benz cars to receive customers, which represents his status. The Mercedes-Benz car is just a product representative that happens to be used as a label.

The underlying logic of conspicuous consumption is the customer's willingness to pay, which must be generated from personal identity .

The high-altitude bombing above says “born for fever”, and the following tells consumers “high cost performance”, what is this?

This is at the level of customer value re-creation, guiding customer decisions to Xiaomi's brand: on the one hand it is functional marketing, on the other hand it is value marketing.

Through these two types of marketing, customer decisions are guided to the two major customer value points of traditional brands: one is quality commitment, and the other is personal identification.

For ordinary brands, it is impossible to achieve these two value points when going from 0 to 1. It can only promise low-end quality, but cannot promote personal identity because the brand is too small and has no influence.

Because Xiaomi is a heavyweight entrepreneur, the period from 0 to 1 was greatly compressed, and from 1 to 10 a two-pronged approach was adopted. Therefore, during these two stages, consumers' brand awareness and sales conversion rate of Xiaomi were relatively high.

2. Customer Path Guidance

The so-called customer path refers to the scenario in which a merchant can meet a customer? When customers have consumption needs, in which scenario do they think of merchants?

1) Product Trichotomy

Here we first introduce a growth tool: the product trichotomy.

Separation of products and commodities: first use products to bring in traffic, then use commodities to realize value.

Product and commodity stratification: users experience products, and customers purchase commodities.

Product and commodity profit sharing: Traffic-based products are cost centers, focusing on CAC customer acquisition costs; value-based commodities are profit centers, focusing on LTV customer lifetime value.

The product trichotomy is essentially a behavioral induction.

Xiaomi's products are mobile phones. In order to promote sales of products, Xiaomi separated products from goods and established a traffic-generating product called MIUI (mobile phone operating system) .

Therefore, the product positioning is: "Highly cost-effective mobile phone for enthusiasts"; the product positioning is: "Advanced user (seed engineer) guided innovation".

Before Xiaomi released its first mobile phone on August 16, 2011, this traffic-generating product had accumulated 100,000 potential consumers and hundreds of millions of social media exposures for Xiaomi.

These two indicators transform mental pre-sales from an empty marketing concept into real sales execution.

2) The underlying logic of the product trichotomy

Why is the Product Trichotomy Effective?

——Because the underlying logic is behavior induction.

What is behavioral induction?

We'll take some time to explain this in detail:

Why is GMV e-commerce difficult now?

Because GMV e-commerce is traffic interception. Who to intercept? High desire customers. They have already developed consumption demand for a certain product and need a final trigger or direct matching of demand.

However, what if current consumer desire is not strong, or the consumption frequency is low like mobile phones?

Then use advertisements (including: targeted advertising, creative advertising, public service advertisements, etc.) to bombard the target. The result of the bombardment will be a significant increase in mental memory.

When consumers’ needs are clear, they can immediately think of the brand promoted in the advertisement. This is the commercial value of “one word represents the mind” or “creativity inspires emotions”. This approach is aimed at consumers with moderate desires.

How to deal with those consumers who have no desire at all at the moment?

That requires using the common means of the Internet - behavioral induction.

For example: Luckin Coffee’s subsidies, free use of WeChat, Pinduoduo’s overwhelming presence in WeChat groups, and checking mass consumption trends on Dianping.com. . .

To summarize:

• High desire consumption, connected with demand;
• Consume in desire, awaken with memory;
• Low desire consumption, using behavioral induction.

Most of us merchants only focus on demand matching and ignore the latter two. It can be said that the potential of marketing has not been fully tapped.

Before Xiaomi, traditional mobile phone marketing = traffic interception + demand matching + function persuasion, so it was inefficient.

Xiaomi has overturned the traditional mobile phone marketing model and created a new Xiaomi marketing model: Xiaomi marketing = user operation + customer decision guidance + customer behavior induction

3. Xiaomi from 1 to 10: 5 systems of user operation

Xiaomi’s sales volume from 0 to 1 is still a relatively easy task (on the order of 1 million units). From 1 to 10, the three-part product division with MIUI as the core can no longer support the large volume (tens of millions of units).

what to do? Xiaomi needs to establish a user operation system with user mobilization capability as its core. It is specifically reflected in the following dimensions:

1. MIUI Forum - Engineer Customer Service

1. When it was first launched, we found 100 seed users through the forum;
2. Update and iterate every week to establish a very close relationship with engineering users;
3. The engineering culture has supported Xiaomi's customer value and organizational capabilities from 0 to 1 and from 1 to 10.

A large number of engineers gather in the forum, and only they can put forward professional opinions (including product bugs and product iteration suggestions), forming an engineering culture.

This engineering culture is highly consistent with the overall customer value of "quality commitment" and "born for audiophiles".

2. Mobile Forum-Product Customer Service

Mobile phone forums are an important user pool for Xiaomi from traffic operations to user operations, and potential mobile phone users eventually accumulate here. This is more of a product-oriented customer service.

In mobile phone forums, users’ first reaction is what problems are there with their current phones, and the second is what direction they hope mobile phones will develop in in the future. This is an ideological position for product iteration and trial and error.

In the early days of Xiaomi, the entire company did not have any sales KPI indicators. But what is more interesting is that Xiaomi set KPI indicators for engineers in the mobile phone forum. On average, each engineer had to answer more than 100 questions every day, which turned into a product-oriented customer service, except that this customer service was mostly performed by engineers.

In the entire mobile phone industry, only Xiaomi has formed this very unique engineer customer service culture, which is unique.

3. Weibo-marketing customer service

Xiaomi caught up with the rapid development of Weibo in 2010 and accidentally discovered that Weibo had a particularly large voice and strong influence. So they built Weibo into an event operation base and turned it into a traffic pool with the ability to mobilize and amplify.

For example: "Sina Weibo starts selling Xiaomi Mi 2" was forwarded 2.65 million times on Weibo, and gained 370,000 followers, setting a record for the highest number of forwardings on Weibo in 2012.

Here it is marketing-oriented customer service. The main task of customer service here is not to actually solve the problem, but to establish user relationships and manage user cognition from a marketing perspective.

Xiaomi has also set a very interesting KPI here: when a user complains or makes a suggestion, a quick response must be made within 15 minutes.

There are more customer service staff here who understand marketing. They may not know all the details about the products, but they have the emotional intelligence and skills to interact with customers in a friendly manner.

4. WeChat-Service-oriented Customer Service

After many trials and errors and adjustments, Xiaomi finally turned WeChat into a service base and service portal. This is a truly service-oriented customer service that requires both understanding the business and truly solving customer problems.

For example: A customer left a message saying, why can’t my phone be charged?

It is useless to just answer this kind of question. You must help the customer solve the problem.

5. City Meeting - Offline Customer Service

Xiaomi also set up local meetings and held offline activities. The customer service here is mainly focused on fan gatherings and fan interactions. In principle there are no direct sales KPIs.

After continuous investment in the above five user operation systems, by the end of 2014, Xiaomi had sold 61.12 million mobile phones throughout the year. In just three years, it achieved sales ranking third in the world and first in China, creating a commercial miracle for China's Internet mobile phones.

4. What is the solution to sell quickly?

Okay, let's summarize here:

Why has Xiaomi achieved such great business results in the two stages from 0 to 1 and from 1 to 10?

The main reason is that Xiaomi has found a solution to sell quickly, namely: from traffic operation to user operation.

What is the significance of shifting from traffic operation to user operation?

It means changing from catching fish in the river to raising fish in the pond. In order to seize the short-term, high-intensity and large-scale sales window, it is an impossible task to accomplish through traffic operations. It is necessary to achieve mental pre-sales through user operations.

In the stage from 0 to 1, what are the key success factors for selling quickly?

Xiaomi has adopted customer value reconstruction, including two major reconstructions: customer decision guidance and customer path guidance.

Customer decision guidance mainly creates a third type of customer value of "high configuration and low price" in addition to the traditional mobile phone marketing means of "high configuration and high price, low configuration and low price", which is specifically reflected in:

• Achieve quality commitment through "cost-effective" functional marketing;
• Achieve personal identification through the value marketing of "Born for Fever".

Customer path guidance mainly established the "three-part product method". Through the free MIUI forum, it gained 100,000 users and over 100 million exposures, laying a massive user base for the successful sales of the first mobile phone, Xiaomi 1.

From stage 1 to 10, what are the key success factors for Xiaomi’s fast sales?

Xiaomi has established five user operation systems with user mobilization capabilities as the core. It is the first mobile phone company in China to realize true fan operation. This also lays the groundwork for economies of scale in the large-scale sales of Xiaomi's smart home appliances.

Related reading:

1. User operation: new funnel model for conversion analysis!

2. User operation: How to use B-side operation thinking to increase user growth?

3. Product operation: How to use data analysis to drive product user growth?

4. APP user growth: One model solves 90% of growth problems!

5.How to increase users? Take Pinduoduo and Xiaohongshu as examples

6. Triggering user growth: Is user operation just about attracting new users?

7. User operation: What else can you do to attract new users without fission users?

8. User operation: how can financial products awaken dormant users?

9. User operation: How to make use of private domain traffic?

Author: Cao Sheng

Source: Grayscale Cognition Society (ID: HDrenzhishe)