A 10,000-word analysis of brand growth

The past two years have seen an explosive growth period for new brands. These new species that have grown up from various segments have either unique insights into the scenarios, a deep understanding of the products, or the ability to accurately grasp specific groups of people.

In the context of a major restructuring of the entire industry, as long as you achieve one thing to the extreme, you will have a chance to break through.

From the perspective of the entire consumption cycle, there is still a lot of room for future development, but as the pattern evolves further, the war has also escalated from local to global. How to achieve global brand growth across cycles has become the final battle for all TO C businesses.

In a recent online member event for the New Wave Brand Club, Shi Mingliang, founder of the Global Growth Academy and former partner of XiRan, analyzed in depth the five core driving forces and six growth paths for the rise of new brands based on the underlying logic of consumption evolution.

I have been working in the consumer retail industry and have experienced several cycles. I first worked in the sinking market at P&G and worked on many brands, among which the more representative ones were Always. Correspondingly, I also did a lot of marketing cases with high ROI output.

After leaving P&G in 2015, he started a New Zealand homemade yogurt brand. In the first year, he achieved sales of 40 million through private domain and community operations, and also ranked first in the sub-category on Tmall.

I joined Yili in 2017 and was responsible for the development of emerging categories such as healthy food. For example, we defined a track called "milk mineral beverage" from 0 to 1. The ox horn bottle product we launched at that time achieved sales of 300 million yuan in the second year.

Later, I worked as the general manager of the private label division of a leading pet TP company, where I created three pet brands covering food, clothing, housing and transportation. At the same time, I also incubated our own IP Douyin account into a large account with millions of followers.

Then in 2019, he joined Xiaohongshu, responsible for the platform operation of the FMCG industry, and also built the live broadcast system of the entire Xiaohongshu platform. In the second year, Xiaohongshu’s live streaming also became the growth engine of the entire platform, generating more than 3 billion GMV.

After that, I started a business with my colleagues from Xiaohongshu and opened a chain of beauty and cosmetics stores (Xiran). So after all this trouble, I also want to share the pitfalls and experiences with you. There are three main parts:

The first part is an analysis of the growth of emerging brands in the past two to three years, hoping to help everyone find their own brand development path; the second part is about the underlying logic of the entire evolution of consumption; the third part is aimed at everyone's long-term development, how to cross the cycle and build a sustainable brand. I have also summarized a practical system for brand's global growth.

1. Growth analysis of Santonban, Perfect Diary and Helens

New consumption is indeed very popular now, but from a cyclical perspective it is still in its early stages and there is still a lot of room for growth in the future. First, let me analyze the growth paths of some emerging brands.

Please think about two questions:

1. What are some of the emerging brands that impressed you and that you are eager to learn more about?

2. Why has there been a new explosion and innovative revolution in consumer retail in the past five years?

I have listed some brands, such as Santonban, which is a representative of new brands with upgraded quality. Traditional instant coffee is convenient but tastes bad, while freshly ground coffee is of high quality but inconvenient. Santonban has achieved the combination of quality and convenience in the instant coffee category.

Moreover, the price range is very high. Although 6-10 yuan is much more expensive than traditional instant coffee, consumers tend to anchor it as a cup of freshly ground coffee. This anchoring makes its pricing cost-effective in the eyes of consumers.

Perfect Diary is a core representative of high-quality traffic. It acquires traffic quickly and in large quantities, has accurate offline traffic, high conversion efficiency, and also has a very high subsequent LTV pulling efficiency. Therefore, it is a very strong price-killer strategy, occupying the user's mind through online saturated traffic and offline store settings.

Half Acre Flower Field is a top growth brand in the protective product category, and the core point is to follow the path of product segmentation. The scrub product cleanses the skin cleaner and whitens it better than traditional shower gel, and is very suitable for visual promotion on Xiaohongshu and Douyin, but large companies don’t focus on it.

Therefore, after it has established a mind-share in a small category, it can then expand to the traditional large categories of washing and care products and some care categories to increase user acceptance.

Ramen Says is a pre-packaged strategy in the catering retail field. It restores the products in restaurant ramen shops into pre-packaged products, which is actually a strategy to improve quality and convenience.

Including the Airbus brand, its pasta sells for 60-80 yuan in restaurants. It allows you to make pasta products at home in 15 minutes that taste almost the same as in the restaurant, and the price anchor makes you feel that this product is very cost-effective.

Brands like Lofree and Morphy are focused on small home appliances, and one thing they do very well is that they fit the user scenarios.

For example, Lofree’s lipstick keyboard, with its attractive design, addresses the user’s needs for fun and personalization in the office environment.

In fact, Morphy has seized the opportunity of the appearance economy, the single economy and the lazy economy. Focusing on the user's family dining scenes, it has transformed kitchen appliances from simple hard-core functionalities into high-quality, high-appearance and high-interest home soft furnishings.

The last one is Helen’s, which is now the largest tavern in China and also a price killer.

It is a bar where any young person or even blue-collar worker can dine without any pressure. Young people today are under too much pressure and they all need a stress-free space.

2. Five core driving forces for the rise of new brands

Why have these emerging brands risen rapidly in recent years? I think there are five main driving forces, and these five core driving forces are interrelated and indispensable.

First of all, it is the supply chain. The supply chain is not just the supply chain of products, but more of a supply chain of high-quality talents.

The second is consumer mind, national confidence and domestic products and trends.

Nowadays, consumers' confidence and preference for domestic products are constantly increasing. In the minds of consumers, the quality of domestic products and foreign brands is not much different. Domestic products and foreign brands can even become a plus point and a possibility for premium.

The third is external empowerment, with capital providing funds and resources.

The fourth is starting the business. When I was at P&G, the money spent in a quarter was basically no less than 30 million. If the budget at the time was only a few million or even a few hundred thousand, it would have been unimaginable 10 years ago that I could build a brand quickly because there was no such path.

At that time, whether it was outdoor advertising, sponsorship of television entertainment programs, or celebrity endorsements, the threshold was very high. Now we have diversified traffic and relatively low thresholds, so whether you are planting content traffic or creating your own content matrix, you can achieve tens of millions in sales at almost no cost.

Although everyone is now saying that traffic is drying up, incremental traffic is decreasing, and the cost of single traffic is becoming more and more expensive, there are still many traffic pools and traffic strategies worth exploring.

The fifth is the business model, DTC directly to consumers.

There are several benefits to reaching consumers directly: first, it can help you obtain user insights in the first place; second, you can use all sales data to reversely reshape your supply chain; third, you can retain user digital assets.

In fact, digital transformation does not only mean spending a lot of money to build a middle platform, but also consciously getting rid of middlemen through the DTC business model, obtaining user value, and then driving the three major values ​​of users in multiple ways: purchase value, social recommendation value, and media communication value.

3. Six growth paths for new brands

So if you want to create a new brand, how should you form a clear growth path? Based on my past experience in operating different brands, I have summarized six paths:

The first is the path of “price killer + saturated mind occupation”.

The main approach of this path is to use cost-effective and high-quality products to quickly acquire users, then form economies of scale, and then through saturated minds online and offline, occupy users' perception of you in this category and quickly form a mental advantage.

The strategy for all consumer products is first-mover advantage. If your product has a high cost-performance ratio, you can gain scale advantages. After gaining the advantage of scale, we can then use the advantage of scale to occupy the saturated minds of the subdivided categories and gradually build the brand.

The most representative ones here are Perfect Diary, Mixue Ice City and Helen's.

Price killing is the most effective strategy in any industry and category. Of course, the premise of this strategy is to not lose quality, while at the same time achieving fast and efficient media, traffic, and channel reach to occupy a saturated mind.

The second strategy is to “upgrade quality”.

What we discussed earlier is how to optimize the price without sacrificing quality, while upgrading the quality means that the user product experience is significantly upgraded without a big increase in price, or with a slight increase.

For example, Xiaoxiandun can deliver freshly stewed food to your home through cold chain on the same day. The quality is extremely high, and the product density is also very high, making it very filling to eat.

Therefore, in order to achieve the ultimate improvement in user experience, the price should remain unchanged or slightly increased, so that people will still feel that it is cost-effective.

In addition to Xiaoxiandun, Sandunban, Neiwai and Bai Xiao T are also very representative.

The third strategy is "category segmentation", which is to explore the niche tracks that large companies have not yet paid attention to.

For example, the scrub from Half Acre Flower Field and Daily Dark Chocolate mentioned earlier. The entire chocolate track is declining, but dark chocolate is growing, and no giant can do it well.

The logic behind segmentation is that it allows you to compete head-on with the giants. Large companies have a natural disadvantage, which is that they can only operate in large categories and it is difficult and unwilling for them to occupy small categories.

For example, if a company already has tens of billions in revenue and needs to grow by 10% a year, it is impossible for it to go into a product category with a total volume of only tens of billions, because even if it occupies 30% of the market share in the industry, it will not be enough for it to share.

Just like Daily Dark Chocolate, big chocolate companies know that dark chocolate is good, but it is impossible for them to give up their large base chocolate business to make dark chocolate, so Daily Dark Chocolate has made such progress.

There is also Shangming Optoelectronics. It cannot compete with Philips in lighting, but it has made many levels of segmentation. It explores aquaculture lighting from users' personal lighting, and then explores succulent plant lighting within aquaculture lighting.

Why? Because it discovered a trend that young people like to grow succulents. Succulents need light to grow, and spectral radiation creates different colors and sizes of succulents.

Therefore, it became the number one in the sub-category of succulent plant lighting, and then expanded into other lighting products, forming a good strategy of single-point breakthrough and then extension of categories.

The fourth strategy is “retailization of offline business formats”.

As mentioned earlier, offline catering pre-packaging, such as Ramen Says, Airbus Pasta, and Zihaiguo, all follow a similar logic. Including ampoule essence, it is an extension of the traditional medical beauty industry.

The fifth strategy is to "occupy specific scenes and time."

Morphy and Hellens, which I mentioned earlier, have both occupied users' homes, kitchens, and nighttime social scenes, just as Hellens is now known as the nighttime Starbucks for young people.

Occupying the scene breaks the category restrictions, thus generating long-term repurchases from users.

Gongyan is a restaurant in Beijing. Although it is not a chain, it represents a dining scene that celebrates the Chinese culture of young people.

Every customer who goes to the palace banquet can wear the costumes of ancient royal nobles, and the waiters inside will dress up as palace maids to serve you. The sense of ceremony is also very strong, so tickets are hard to come by, and everyone basically has to make a reservation several months in advance.

The sixth strategy is “branding and concentration of traditionally scattered large categories,” such as Jiang Xiaobai’s Meijian.

Plum wine actually has a history of thousands of years, but except for Japan's Qiaoya plum wine, it has never been truly branded. Umejian has achieved intensive branding of the plum wine category.

Longmi is a brand of rice.

Longmi is a relatively interesting brand. It sells rice, but not by the traditional method of selling it in kilograms. Instead, it puts the rice in cans. A can of rice is suitable for a small family of 2-3 people, solving the problem of people wanting to eat rice occasionally but not wanting to buy dozens of kilograms at a time.

In addition, young people now have a pain point when cooking, which is that they don’t know how much water to add to the rice. There is a ruler on the can of Longmi, which solves the pain point of young people in cooking.

1. From channel and category positioning to user long life cycle positioning

In the evolution of China's consumer market over the past 30 years, a core trend has been the arrival of the fourth consumer era.

I call the earliest consumer era the channel era, the second era the brand era, the third era the product era, and now the user era.

In the channel era, as long as there are goods, they can be sold, so all we have to do is to expand distribution, and building a distribution system is extremely important. In the 1.0 channel era, the core business indicator of consumer brands is distribution rate.

The second type of indicators are occupancy indicators within channels or retail terminals, such as shelf share, surface share, stack share and promotional position share.

These four major proportions are what we look at every month, which means we have direct opportunities to increase sales share within the channel.

In the channel era, the core user behavior is people looking for goods. Since there is no search and product recommendation in all traditional retail channels, various retail positions within the channel are extremely important.

Later, we gradually entered the brand era. A very core point was that everyone took product brands as the core and created an organizational structure of brand managers.

The core theory at that time was positioning, focusing on a category and building the brand into No. 1 in the category so that users would think of your brand when they mentioned a certain category.

At that time, we must continue to create user reach and frequency recommendations, so that users will remember you and know that if they want to remove dandruff, they should choose Head & Shoulders, and if they want to remove stains, they should use Tide.

This era was a gradual transition from people looking for goods to people searching for goods. It was not until 2010, when PC e-commerce emerged, that we entered the 3.0 product era.

The product era has truly realized the era of people searching for goods. Brand is the search logic of single product keywords, and the core business indicators are traffic conversion rate and average order value.

If we consider the life cycle, there is also the repurchase rate, but in that era, the repurchase rate was most likely unable to be actively influenced and operated.

The difference between the product era and the brand era is that in the brand era, people focus on the benefits of the product. As long as you say what value you can bring, users will believe it. Now people focus on what their needs are and what you can bring.

But in the product era, people are paying more and more attention to why you bring this value, whether it is because of the good formula or fabric, or because of the cooperation with a certain professional organization.

Therefore, in the product era, the ingredient party and de-branded product architecture appeared, such as NetEase Yanxuan.

Now we have gradually entered the user era, and the core is that we have truly entered the era of goods finding people, with systematic recommendations and various platform algorithms.

In the user era, we should focus on how many users you have that can be reached in both directions from the logic of converting traffic into average order value. Users with two-way contact can bring three core values: purchase value, social recommendation value, and media communication value.

The purchase value is buying for the first time and buying more times; the social recommendation value is being able to recommend it to more people, achieving fission growth, and significantly reducing customer acquisition costs; the media communication value is obtaining UGC, which can reduce customer acquisition costs and expand the user traffic pool.

Moreover, in the past three eras, products have been centered around categories, focusing on one large category and expanding to different groups within the scope of the category.

In the user era, you should focus on users, break down category boundaries, and create products centered around users and scenarios. In other words, there is no need to be overly concerned with one category. Scenarios are a necessity, but categories are not necessarily a necessity.

The product category can change. You can drink it today, eat it tomorrow, and get acupuncture or injection the day after tomorrow. But once you occupy a certain scene of the user, such as afternoon tea or before bed, it is a necessity.

If you are making products in the same category, then every time you innovate a new product, it will affect the sales of your original products, because consumers may buy A instead of B. But if you occupy the scene, it often forms a chain.

For example, if you are creating a sleeping scene and the product is pillows, then consumers will simply buy pillow A instead of pillow B. But if you are focusing on user scenarios, such as pillows, aromatherapy, quilts, earplugs, etc., a linkage will be formed, and the LTV of user purchases will be increased.

Therefore, the entire consumer era has actually evolved from people looking for goods to people searching for goods, and now to goods looking for people. People's attention has shifted from channel positioning to brand category positioning, and now to the positioning of users' long-term life cycle value.

2. Three core evolution trends in the user era

In the user era, there are three core evolution trends:

First, the industrial chain changes from series to parallel.

In traditional consumer retail, the entire industry chain is connected from manufacturers to brand owners, through service providers, distributors, and platforms, and finally to consumers.

There are three major problems with tandem:

The first major problem is that there are a large number of people involved and they are inseparable, so there are a lot of operating and communication costs.

This will lead to the second problem, which is profit dilution, as every participant needs to share the profits. In fact, each party did not get much, and even if you increase the cost from 10 yuan to 100 yuan, the user value is not high.

The third problem is single data. Traditional companies only know how much you sold for, while new companies should know who buys you, why they buy you, and how they buy you.

Now, through the DTC business model operation, parallelization can be achieved and each participant can face consumers directly.

The second trend is the transformation of consumers into consumer merchants, and the logic behind this is also related to LTV.

In addition to being the first to work in the private domain and become a seed user, I also did one thing, which was to let my users become group leaders in the seed user group instead of ourselves.

Although I know how to operate it, I will let the active users in my group become group owners and let them operate it. There is basically no cost, just give them some products.

In this way, the activity, authenticity and participation of the entire group will be very high, the group owner will feel empowered, and users will be willing to actively participate.

Therefore, in addition to considering how to get consumers to buy from you, you also need to consider how to get consumers to recommend content for you, split into your fans, and help you with operations, agency, distribution, and franchising.

In this way, we can form diverse and deep relationships with users and generate more user value.

The third trend is “all time and all domains”.

Traditional offline retail is “half time and half domain”, and PC e-commerce can only be said to be “full time and half domain”, but now new retail should be full time and full domain.

Full time means 24 hours, and full area means the place where people, goods and goods are. Online business can increase users' awareness of your products. It is efficient, but the experience is not the best, so you need to consider how to build offline scenarios to allow users to have a good experience.

When we run a retail chain, we find that if we provide a good user experience, the conversion rate and average order value will be significantly higher than online. At the same time, you also need to have some of your own venues, such as mini programs, cloud stores, etc.

At the human level, you need to digitally integrate users and venues, allowing users to become consumers in different venues.

At the goods level, every product sold should obtain user data in reverse, including browsing, searching, purchasing, repeat purchase, and comment data. This will enable the supply chain to be reconstructed in reverse and ultimately achieve digital user-driven and integration of people, goods, and places.

There are three sentences in the user era:

First, users are both people and traffic, but ultimately they are still people.

Second, communication between people is more trustworthy and natural than communication between people and things , so we should try our best to build trust, rather than just fast and efficient conversions, but more importantly, the relationship links between users.

You can even create IP, such as founder IP, branded IP, and product personalized IP. IP itself is about building trust.

Third, you must mobilize the user's five senses so that the user can have a full-scale experience of your product.

Therefore, in the user era, we must pay attention to differences and changes, shift from seller thinking to buyer thinking, think about what users really need, rather than creating demand for products and making the mistake of self-immersion.

The next step is to break the boundaries of categories and focus on users and scenarios to build a product system, rather than just a single category of business, because scenarios are the real needs, and finally achieve user relationships and mutual understanding.

There are actually still big problems in the user era. Today's users are passive, do not refuse, are not responsible, and do not remember.

In the era of media and traffic, a large number of products and brands are being supplied, and with more and more new consumer brands, there are not enough young users.

After being overloaded with information and products, consumers really have no need and no way to remember you, and searching behavior will become weaker and weaker, but this is the current situation and there is no way around it. So I hope to achieve the four major relationships between users and brands through full-time and full-domain user operations and services: remember, buy, trust, and self-propagate.

Such a virtuous self-circulating relationship allows your user growth to develop sustainably.

Based on the past ten years of experience in the consumer products business, I have summarized a brand global growth system called the 4411 system.

First of all, we must continue to rotate four battles, namely business strategy, traffic generation, purchase conversion and private domain closed loop.

Business strategy is about doing the right thing, choosing the right users and tracks, and doing a good job of brand positioning. Brand positioning requires not only the surface design, color, and shape, but also the underlying brand personality, vision, and marketing and channel strategic planning.

The next three battles are about doing things right. Traffic generation is about efficiently acquiring traffic through various means online and offline in public and private domains. Purchase conversion is through digital operation means, purchasing conversion to retain digital assets, and then operating efficiently, and finally landing in a closed-loop battle in the private domain.

To win these four battles, we need to accumulate four core capabilities, including user operation, content operation, event operation and data operation.

When we are able to fight, we should gradually establish a digital business center.

Digital operations include three levels:

First, front-end operations should focus on digital platforms. Whether it is the current decentralized traffic platforms such as Douyin, Bilibili, or digital channels, digital assets must be retained during the operation process.

Second, digital middle platforms should be built at the middle level, such as user middle platforms, data middle platforms, supply chain goods middle platforms, etc.

Third, we need an organization that can adapt to digital growth so that we can fully realize digitalization in the front, middle and back ends.

Finally, there is another big gene, which is the growth organization gene.

Many business growths must adapt to the organizational system. We can no longer use traditional departments such as marketing, sales, and e-commerce to achieve growth in the new consumer era.

I hope everyone considers the goal of overall growth, not just sales and profits, but more importantly, the continuous improvement of users' LTV and CAC ratio.

1. What are the core indicators of brand global growth?

LTV is driven by purchase value, social recommendation value, and media communication value. CAC is continuously optimized through various high-quality and efficient user, data, activity, and content operations to control the increase in marginal costs.

The four core ways to increase LTV are product innovation, content seeding, brand trust and experiential services, which will not be elaborated on.

(1) How to effectively control customer acquisition costs?

In addition, I will focus on four effective methods to control customer acquisition costs: search positioning, advertising optimization, social fission and retention recommendations.

First, search for positioning, such as using target search terms to position the content. You don’t have to just look at category words and brand words, but you should also pay more attention to user behavior words, interest words, scene words, and efficacy words, and use these words to position yourself.

Nowadays, more and more consumers’ searches are conducted on content brands, not just on the traditional Tmall e-commerce platform.

Search behavior on pure sales platforms is likely to cover brand and category search terms, but on content, scenario, and demand platforms, people will search more on behavior, demand, and scenarios.

Therefore, we need to make a position, put the search terms uniformly in the content, and realize text crawling.

The second step in advertising optimization is to iterate and conduct AB Testing. You can use third-party tools to splice and combine the copywriting, portraits, product images, and renderings into 100 different short videos using a few materials.

Then do AB Testing and iteration, and after the iteration, make a breakthrough in a single point. This will optimize the advertising customer acquisition cost. The key indicators are the click-through rate and conversion rate of different materials.

Third, social fission. The customer acquisition cost of the user pool can be controlled within one yuan, and can be as low as a few cents, achieving very high efficiency.

Don’t think that the cost of entering the user pool seems to be only a few yuan different, but in fact it is a world of difference.

After entering the user pool, there will be two levels of conversion. The first level is the traffic-type conversion, which is to direct traffic to your mini program, online store, and offline. The second level of conversion is the purchase conversion after entering the store.

If the conversion rate of these two conversions is 10%, then 3 yuan will enter the user pool, and the final conversion acquisition cost will become 300 yuan.

Nowadays, many public accounts’ information flow or WeChat Moments advertising costs an industry average of 6-10 yuan, and the better ones cost 3-5 yuan. The cost of conversion and customer acquisition is basically several hundred yuan.

But if you can reduce the user pool acquisition cost to 1 yuan or even less, the conversion cost will be reduced by hundreds of yuan. This way, it may even be possible to make money or break even on the first user purchase, and make money in the future.

Fission is not just a fission tool. What you need to consider more is to make a good hook and find small B who can help you promote.

The last step is retention recommendation, and we need to create a user recommendation mechanism.

We need to think about the overall growth of users from the end to the beginning, and consider the improvement of LTV, not just sales and profits, but also long-term user growth while keeping CAC customer acquisition costs under control.

(2) User Path under Global Growth

If you want to achieve global growth, you need to break down the user's path into each step and create corresponding operational resources and capabilities for each step.

There are six steps for users, namely awareness A (awareness), interest I (interest), evaluation E (evaluation), purchase P (purchase), loyalty L (loyalty), and recommendation R (recommendation).

E (Evaluation) is the core user path that I have specially highlighted in bold. Everyone says that we need to plant grass, but will users definitely buy immediately after they have planted grass?

In fact, a large number of users do not buy as soon as they see a product being sold. Instead, they will search, add to cart, collect, read comments, and even check how many notes and videos the brand has on Xiaohongshu and Douyin, how many influencers have recommended it, and do evaluations. Only when they feel more reassured will they make a purchase.

R (recommendation) is also very important. A brand not only wants repeat purchases, but repeat purchases + recommendations represent the highest level of recognition of your product.

Moreover, once users achieve recommendations, sustainable growth of the entire user pool is achieved, and new users become A (Awareness), and they are not the users you have attracted by spending a lot of money.

It is also worthwhile to deeply understand the capability system of mainstream traffic platform algorithms. For example, the platform has three major algorithms: multi-level recommendation algorithm, collaborative algorithm, and forced reach algorithm. These different algorithms require everyone to understand and evolve.

You can also explore the algorithmic logic behind the platform. For example, if you browse Xiaohongshu and Douyin, you will find that out of 10 articles on Xiaohongshu, more than 60-70% of the content is from influencers you don’t follow, but if you browse Douyin, at least half of the content is the latest content from influencers you follow.

So you will find that there is the algorithm logic of the platform behind this, that is, the weight of the relationship link between users and creators, which is high and low on these two platforms.

This will also guide you to choose more small influencers on Xiaohongshu when selecting influencers, and fewer large influencers on Douyin.

2. How to fight the “four major battles”?

Now I will introduce the 4411 global growth system in detail.

(1) Business strategy and traffic generation

The first battle is a business strategy battle.

Business strategies include track selection for categories, such as supply and demand method, track and self-cognition method and other different track selection methods, as well as strategic population selection, brand building, underlying thinking, visual specifications, product paths and so on.

Once you have a business strategy, you need to generate traffic. Here are the four most popular traffic types:

The first is the public domain channel. For example, e-commerce uses parcel cards to direct traffic to its own user pool, but now more efficient traffic can be achieved through AI calls.

The second part is the content platform, which consists of three parts.

The first is content marketing traffic, which is what everyone calls content seeding. Content seeding is also a very important system. This system does not mean that you have found a very awesome MCN, but a five-element system of seeding, which focuses content marketing on the five systems of people, goods, place, effect, and way.

People are the target population. Different brands have different target populations and how to choose influencers.

I have a quantitative scoring system for selecting influencers, which has achieved a 10-fold increase in the quantitative efficiency of grass-roots promotion, and mainly focuses on five quantifiable indicators: the influencer's grass-roots promotion power, influence, cost-effectiveness, stability, and matching degree.

This system is not only used on Xiaohongshu, but is more often used to select influencers when doing Weibo. In fact, the logic of crossing cycles is that each cycle has superficial indicators, but the underlying selection method and logic do not change.

The second source of content traffic is self-built IP numbers.

For example, in 2018 and 2019, we created Douyin's pet IP with millions of own accounts, which was achieved through a set of actionable paths including planning, positioning, content, development, traffic generation, and monetization.

Now all decentralized platforms need to build their own matrix IPs, whether it is the founder IP, brand IP, product IP or official account, so as to cope with the platform's AI algorithms.

The last one is content diversion, which is to attract traffic. Everyone should consider how to get traffic from public accounts, such as Zhihu traffic and entertainment traffic.

In the future, content will definitely become a set of strategic thinking for new consumer brands, which is to form an integrated capability system that can not only choose the right people, the right platforms, and the right content, but also create content on its own.

The third source of traffic is seed users.

At that time, we were working on a brand in New Zealand, converting traditional yogurt users into a new and precise group of people: mothers who had time to bake.

Moreover, we landed these new groups and found seed users on homemade food platforms such as Xiachufang. We attracted a seed user pool of nearly 2,000 people at almost no cost.

The fourth is advertising traffic generation, which is achieved through various core traffic methods such as delivery, A/B Test iteration, etc.

(2) Three major focuses of sales conversion

The third battle is the sales conversion battle, which includes e-commerce operations, live broadcast operations, offline retail, and channel retail.

I have listed the most important core capabilities in each field and the operational system implementation points that need attention. The core thinking is digital implementation.

The second is to achieve saturated penetration.

Don’t over-expand all at once. We used seed users and private domain traffic to drive our category ranking first on Tmall, and then we were invited by JD.com as a new brand.

The third is monetization. We need to consider both immediate monetization and semi-monetization.

Semi-monetization is the user evaluation system mentioned above. Users may not buy immediately, but the traffic from brand word and grass-roots word searches, add-to-cart and favorites can be tracked.

After tracking it, you multiply it by the estimated conversion rate and average order value, and this output must also be recorded.

(3) Private domain closed loop: It’s hard to start, but it gets easier as time goes by

The most important point of the fourth battle is the private domain closed loop.

The traditional public domain system has public domain taxes, which is offline rent in exchange for traffic, and online conversion plus discount in exchange for exposure plus conversion, so the marginal cost of traffic is getting higher and higher.

However, due to platform competition, the average order value will often decrease marginally. Finally, it is difficult to make repeat purchases under the thinking of public domain platforms because there are no tools and they cannot be reached.

It is becoming increasingly difficult to operate according to the traditional operational logic of people searching for goods, so now we should base it on a user pool that can be directly reached in both directions, paying attention to his total consumption in the user pool, relationship chain recommendations, UGC and secondary delivery. Only this kind of thinking will produce a private domain.

In fact, the essence of private domain is not various operating methods, communities, or circles of friends. The core point is the operation of the long-term life cycle value of users.

Therefore, under the private domain operation system, in order to build user traffic retention, there must be three top-level designs rather than direct operations.

The first is the closed-loop origin, which is the user pool and goals you have created.

If your goal is to build a high-potential LTV and high-trust business, then you should build a personal or brand IP.

If you want to do a general education business, you need to make long-term introductions and recommendations, and focus on establishing one-on-one operations between you and the user, because this is not instant and he also has many purchasing options.

Whether it is a business with high customer orders or a business with longer life cycle value, there should be more accompanying operations, that is, one-to-one construction.

Traditional consumer products require more multi-touchpoint operations, such as community + one-to-one + circle of friends + live broadcast, so where the closed loop origin is determines the construction of your private domain path.

The second is the contact closed loop. I have verified the following six effective closed-loop paths for connecting the public domain to the private domain:

Ultimately, brands need to create a business path that suits them in the private domain.

I have always felt that the difference between the core strategies of public domain and private domain is that public domain is platform operation. After recognizing the platform rules, it can operate platform rules efficiently. Therefore, public domain business is actually easy to start, but it becomes more and more difficult to do it.

Why? Because everyone is investing and constantly rewinding, I compare public domain operations to directional off-road in the city. You know where to go at every point, but when you run in a pair of shoes, someone is already riding a bicycle or driving a Mercedes-Benz.

However, the implementation of private domain operations is users, not platform operations. It has no rules, and you need to find the rules and implementation paths yourself. Therefore, it is difficult to start a transaction in the private domain, but the more you do it, the easier it is.

Compared with the horizontal directional off-road in the public domain, the private domain is more like an Amazon Plain adventure. You don’t know anything when you first enter, but once you find your own closed-loop path, you will form a private land, and others will most likely not go to your private land, and you can slowly expand your business.

The third is to create a character.

Private domains create character designs, because private domains need to create trust, not rapid conversion. Of course, rapid conversion is necessary, but to really retain users, you still need personalized design and trust.

Therefore, we must drive users from the public domain to the private domain based on customer acquisition, identification, retention, activation, conversion and value.

Private domain accounts are not just about selling goods. In addition to selling goods, they also need to establish content experts and personal companionship services private domain accounts to form a variety of user correlation and companionship private domain operations.

The community is not only a sales community and a marketing community, but also a content and event community, sharing category knowledge, forming trust, and checking in activities.

According to our target content, it can not only achieve the user's activity in the private domain, but also drive the user's UGC ratio in the public domain.

By checking in, we can also stimulate users' usage of the product, and repurchase will occur after use. I can estimate the usage of each user, and then make targeted recommendations in real time to let them repurchase.

Therefore, everything can be connected, from the public domain to the private domain, from online to offline, from the first purchase of users to repurchase, from repurchase to recommendations.

3. Four capabilities required for global growth

Based on these four battles, four major abilities are required.

The first is content operation capabilities. Most people may think that doing content is to assess the amount of exposure interactions. The amount of exposure interactions is indeed very important, but the issue of traffic entering the store must also be considered.

The traffic to the store can be traced from several aspects:

First, the traffic of brand search terms is the incremental amount of brand search terms before and after planting grass; second, the incremental amount of purchase and collection; third, the traffic of planting grass words will also guide users to search; fourth, the incremental amount of entering mini programs.

In addition to the traffic itself, we also need to pay attention to efficiency, which is the cost of entering the store alone.

For example, the traffic in several aspects may generate 1,000 UVs. For these 1,000 UVs, how much content cost do you generate? Dividing this content cost by 1,000 UVs is the cost of a single traffic flow to the store.

This single traffic cost in the store is the efficiency indicator of the content team. It cannot be added without restrictions. Instead, the subsequent relationship between LTV and CAC should be considered, so the core capabilities of the content team operation can also be considered.

The second capability is user operation capabilities.

User operation capabilities are simply classified, hierarchical, and phased operations, because each user is different, and users must do segmentation and not do large and unified operations.

Simply put, it is the RFM model, which includes three indicators: the time when the last purchase is from the last purchase, the frequency Frequency, and the unit price of the purchase customer.

The most recent purchase is very close to the customer and the purchase frequency is relatively high, but the average order price is actually a regular user.

However, users who have the latest purchase time, low frequency and very high average customer price are very potential users.

At this time, we have to consider how to bring more times? For example, cross-category recommendations, or recommend some new services or traffic diversion products, so that they can try new product experiences.

The third ability is event operation ability.

Event operations should connect online and offline to achieve efficient transformation. It is not just how to do big promotion activities, but more about how to think about making conversions through some effective offline.

For example, we opened a new store some time ago, and lined up the entire street offline. Each user participated in the event. He could enter the store and enter the private domain. He went to the live broadcast room at night to form a landing, and then made social recommendations to form a digital operation acceptance.

The last capability is data operation capability.

Of course everyone will analyze the data, but the most important thing is to let everyone consider attribution.

Everyone may also do grass planting and other products, but they need to use various operating methods to attribute which one is the most valuable to you.

There is also a major business center, which is the digital middle platform, which generally conducts digital business from three levels.

In the early days, it was enough to use third-party tools and platforms to retain some basic data and then open it up, without spending too much money and people.

When the business reaches tens of millions or hundreds of millions of dollars, you must start the privatization deployment of public clouds, such as buying some Alibaba Cloud space, and then finding a third party or own small team to establish the retention and deployment of privatized data.

When you achieve a larger business volume, 1 billion or even more, you must start to build a private cloud privatization deployment, which is equivalent to starting to buy land and build a house by yourself.

4. Four underlying logics of growth tissue genes

Finally, there is the growth tissue gene. During the process of tissue gene change, we found that traditional tissue genes can no longer adapt to new consumption, but there are four underlying logics.

The first logic is user thinking, which requires thinking from the user's perspective, not just thinking for the user.

For example, a girl tells you that she is very cold. People who think about users will think that we will run and jump rope, but people who really think from the user's perspective will think that they should hug her.

The second is decentralization.

Nowadays, the trend of many platforms is decentralization, and the core logic of decentralization is the emergence of individuals.

What is the emergence of individuals? In the past, traditional organizations were called centralization. The specialist reported to the manager, the manager reported to the director, the director reported to the general manager, and the general manager finally made a decision and then uploaded it in turn.

This is a single-point series-type organization. This kind of organization has strong management and control because the business complexity is not that high, and you can find the right direction through headquarters or senior management experience.

But in a diversified and decentralized environment, individuals should emerge, that is, young people familiar with the platform in the team should make business decisions on the operational side.

Most of my current team are born in the 1995s. I will ask them to do specific content because their feelings are more correct and they will think from the user's perspective.

Therefore, we must be a decentralized organization, rather than a centralized and strong control.

Including content, it is also true. Many people used to do content, such as the general manager and director reviewing each content, and revising it well, and it looks like a public relations article in the end. This kind of content has no value on the content platform, and the platform will even ban or deduplicate such content.

I remember when I was doing platform operation, a large company came over and told me that we had planted more than 1,000 notes, but none of them were done.

They were confused. I searched and found that more than 1,000 articles looked like they were made by one person, and they were all in a unified way of posing and ad copy. This kind of content was not in line with the current decentralized logic at all.

The third is de-empiricalization.

Experience is important, but the underlying logic behind experience is the most important.

For example, the examples of the selection logic mentioned earlier, how to choose a person on Weibo, how to choose a large account on WeChat, and which indicators should be referred to when choosing on Douyin Xiaohongshu. In fact, they all rely on experience, but the underlying logic is the most critical.

So you must consider whether it has an underlying logic organization.

Finally, it is refined operations.

Regarding refined operations, the most important point is to quickly iterate all information and data during the operation process.

For example, after publishing a content, you should record the changes in the likes, collections and comments generated by each content release every day.

When you find that a content has a rapid increment one day, you can do two things:

First, understand why this content is popular rather than other content. This content may represent the current trend of platforms and users, whether it is reviewing or grasping social hot spots, etc., and then you can use similar content to find more experts or use your matrix number to enlarge it.

Second, use platforms such as advertising information flow tools to push this content to a further level.

You can use the platform's multi-level recommendation algorithm and advertising forced access algorithm to make your content that could have been interacted with tens of thousands of times to form a explosive article.

However, according to traditional non-fine operation, there is an article that runs well after ten days. Everyone clapped their hands and summarized it. If you do it next time, you will actually lose the possibility of an outbreak.

To sum up, there are three key points to building a new brand:

First of all, new consumption and new paths are reshaping all categories, just like the six major growth paths I mentioned earlier.

Second, the user era has arrived. We must use the perspective and logic of the new user era to create new products and good brands that truly belong to users around users and scenarios.

Third, we must consider the whole-time and all-region, open up the public and private domains, and all-region growth is the king, and all-region growth is the end battle for all consumer-oriented businesses.

Q1: How to obtain real repurchase rate growth? Are traffic more passers-by who are impulsive in consumption?

Answer: Users have three major life cycle values: the problem that purchase value solves is to buy more, the value of social recommendation is to attract more people, and the value of media communication is to promote more word of mouth.

According to my experience, there are several main ways for new brands to achieve real repurchase rate growth:

First of all, the most important point is the product. When we were at Procter & Gamble, we paid great attention to the three moments of truth.

The first truth always tells users when they hear about our products, whether it is advertising, expert recommendation, channel or media recommendation, they must focus and move the selling points of the products.

The second truth moment is that when consumers see us in their purchasing channels and platforms, our products must be obvious enough. For example, offline, we must have enough surface and shelves, and e-commerce must occupy the pit and occupies the top ten or the first page in the search position.

The third truth moment is the moment when you use the product. This moment is often the most affecting the user's repurchase, because this is the real user experience.

A good product generally has three core values, namely, it is good-looking, easy-to-use and fun.

The first thing is to be good-looking. Nowadays, young people pay attention to the economical appearance. Without a good-looking appearance, consumers cannot be willing to understand their rich inner self.

Second, it must be easy to use. It is easy to use because of product experience, such as the skin feels very good, the taste is great, it feels addictive, etc.

Third, it must be fun . For example, the unboxing experience of your product is very good, and the use of it is particularly interesting.

Therefore, we must ensure a good repurchase rate, and there is no doubt that good products are good.

In addition to good products, you should also connect your products and users as much as possible, and enable two-way communication between brands and users.

Here the superficial actions are introduced into the private domain, and there are two more points:

The first is to form two-way trustworthy communication with users.

Don’t urge users to buy and buy immediately. Instead, in addition to sales-oriented personal private domain accounts and communities, establish content-oriented and active accounts and communities, so that users can be retained and professional.

At the same time, we must provide good user services.

In the past, brands encountered problems with product quality feedback from users. For example, if they use the product, they will be useless, and this one is less and less; the second is that I will help you return the product, which is also the most common practice.

But our approach is to ask professional trainers to sort out the problems. In the end, it may not be caused by the product, but by the weather or eating habits.

So we recommended him to go to the dermatology department for a medical treatment at that time. As our trainer said, it was caused by seasonal changes and diet, which eliminated his doubts about the product.

At the same time, he will also think that we are very professional and repurchase, so we need to have trustworthy two-way communication.

The second is to truly retain user assets within the enterprise.

For most consumer products that are not in-depth communication, such as ordinary food, drink, washing and care products, you can’t talk to them too much professional content. At this time, to retain user assets, you must know when he bought it last time, what he bought it, where he bought it, and why he bought it. At this time, you can make targeted recommendations.

For example, we can target coupons to different people, and some users can make corresponding growth and conversion of repurchase rates just by just one sentence.

The third method is to innovate and further iterate new products to cause repurchase.

I don’t think it is certain whether traffic brings more impulsive consumption passers-by.

First of all, it is actually better to buy impulse in the consumer goods business.

There is a book called "Fast and Slow Thinking", which tells that people have two sets of thinking systems, system one and system two. System one is impulsive and unthinking, while system two is thinking rationally and hesitant to make decisions.

In fact, all consumer retail businesses must drive the user's system one and let him think emotionally so that he can buy quickly.

The so-called traffic is to think about the user's personalized needs and the user scenarios. Then, in the corresponding channels for obtaining seed users, it is meaningful, so that people can have the desire to buy for the first time, and then combine it with good products to form further repurchase.

In addition, through some initial rapid transformation, private domain fission and social fission, some passers-by who do not know us will indeed attract.

Because we are fission, we can attract tens of thousands of new users a day. These users may just come because of recommendations from friends and product benefits. At this time, you have to keep up with the operation system, don’t reject passers-by, but think about how to turn your way into fans.

You have to consider how to undertake it. In the six paths of AIDPLR I mentioned earlier, think about how to turn these people from A (knowledge) to I (interest).

For example, if you want to take over in a private domain, you should be equipped with a set of content, speech and customer service system, make recommendations in a private domain, simply tell him who I am, what is my brand, what products are there for him to try, and do some live broadcast operations, etc., to transfer passers-by to fans.

There will be many passers-by walking away, but don’t be afraid. As long as you calculate the cost of passers-by’s customer acquisition, the cost of passers-by is likely to be relatively low. Divided by the retention rate, you can calculate the real retention cost of customer acquisition.

Then, through the passerby conversion rate and purchase after 30 days, the ROI or LTV for the first month is divided by the multiple of CAC. Then, through the operation of the road-to-turn fans every month, the improvement of LTV can be considered, and CAC can basically be controlled.

Q2: In addition to the decentralization of the tactical execution level, how can organizational genes find key partners that complement each other at the strategic level?

Answer: There are not many secrets to find a partner. The condition that must be met is trust. This may mean the duration. Just like the partners I am willing to work with must have known each other for at least a few years, and it is best to be a partner I have worked with.

Because everyone has experienced business cycles, especially during recession or difficult periods, they are the best at seeing their character.

Second, we must think about the opportunity for people to push others.

Although you may not be able to find someone you have worked with, you can recommend someone you recognize through friends you trust, break the barriers and thresholds of trust, and find him.

The third thing depends on your individual ability.

If you have extremely comprehensive personal abilities, you may not have a partner immediately in the early stage. You can train some second-level partners, such as finding some partners among the backbone, and you can undertake core business in the future.

Or your personal abilities are relatively limited, but very profound, such as the R&D and supply chain are particularly strong, but they don’t know much about traffic. You can first find some young people to be core backbones and delegate power to their decentralized business during the business process.

Author: Lion Bright

Source: Inspur New Consumption (ID: lcxinxiaofei)