The red envelope subsidy method is no longer effective. Try using prospect theory to promote and attract traffic!

In the past few years of the Internet 's rapid development, the Innovation education we received has borne fruit. Product managers, operations managers, programmers and other people have become both civil and military talents. By implementing their wolf nature, they have transformed our motherland, which once had a mess of consumer and service industries, into a country with the most developed consumer and service industries, surpassing Japan and even the United States.

At the same time, consumers have become increasingly difficult to please after being accustomed to the fancy red envelopes given out by products such as Ele.me and Didi during the O2O boom.

Today, if you still want to make a product and attract venture capital , it is almost impossible to find similar products on the market. Not only are you surrounded in front and pursued from behind, the most difficult problem you have to face is:

How exactly do I attract initial purchases and experiences?

Is the red envelope method the only option left?

What should you do after you get used to the red envelope method?

Others are using other people's products and they are using them well, why should they change mine?

Even if my product is 10 times better than others, it cannot withstand path dependence!

Let’s first take a look at why it is so difficult to promote new products? What is the reason behind this?

The reason is very well explained by the well-known Kahneman in "Prospect Theory". Here I would like to borrow a few words from Sun Weiwei, the author of Gambler's Creed, to illustrate the prospect theory:

1. “Two birds in the bush are worth a bird in the hand.” Between certain benefits and “taking a gamble,” most people will choose certain benefits. The so-called "quit while you're ahead and put the money in your pocket." This is called the "certainty effect."

2. The happiness brought by picking up 100 yuan for free is difficult to offset the pain brought by losing 100 yuan. Call it “loss aversion.”

3. Most people's judgment of gains and losses is often determined by a reference point. For example, in a multiple-choice question between "others earn 60,000 yuan a year and you earn 70,000 yuan a year" and "others earn 90,000 yuan a year and you earn 80,000 yuan a year", most people will choose the former. This is called "reference dependence".

When you see this, are you thinking about something? Have you ever thought about the benefits and losses you provide to consumers?

Your product could be one of three things:

1. The cost of acquiring the consumer remains the same, but the consumer is provided with a better solution (a product that is 10 times better still doesn’t explain why it is 10 times better);

2. The cost of acquisition for consumers decreases, providing the same solution as the consumer’s original choice (at half the price);
3. The cost of consumption and acquisition has increased, and the solutions provided to consumers are better than the original options (the product is 10 times better and 30% more expensive, such as the concepts of consumption upgrade and affordable luxury that we most often see).

For the first one, can you be sure that your product is 10 times better that consumers can perceive it?

And something he can confirm and identify with?

He would rather choose the existing deterministic solution than your uncertain solution which is 10 times better. (Two birds in the bush are worth a bird in the hand). Of course, this problem can also be solved by referring to the method in the following text.

The second one is actually the easiest to deal with. When you are sure that your target user group is extremely sensitive to cost-effectiveness, you don’t even need to emphasize that it is as good as his original solution. People's perception of the benefit of "money" is always the most direct and clear.

I guess some readers will complain at this point, saying that innovation is everything these days, and which innovation doesn’t cost money? How can a product be 10 times better and still remain priced the same? Aren’t they all the third type?

right! The third one is the most difficult! The profit after deducting the benefits you bring to consumers from the additional costs they have to pay is very difficult to compare with the original choice. Consumers are too lazy, so they almost give up trying to figure out whether your benefits and costs are more cost-effective or less cost-effective than their original solution. It is natural that they turn a blind eye to you!

What should I do then? Is there no solution?

You may be able to get some inspiration from the first two. There are several ways:

1. Improve the comparability of the costs or benefits of new products

1. Enter the market at a low price

This is the simplest method but actually the least effective, so I strongly recommend that you do not use it and will not discuss it in detail!

2. Price subsidies

You saw what I just said about the second type. People are most sensitive to prices, so the simplest and most effective but widely criticized method here is the upfront subsidy! Through upfront subsidies, the monetary cost perceived by consumers is aligned with that of the original solution, and then they can perceive the benefits of your product. This highlights the benefits of the new product and encourages conversion decisions.

There are countless examples of using price subsidies to quickly establish comparative advantages in the minds of consumers. All kinds of O2O products that have been popular in recent years all took this path in the early stages.

But the problem arises again. After all, subsidies cannot last forever. They only treat the symptoms and not the root cause. New products must always be profitable.

3. Introduce reference points to highlight your “benefits”

Here, let us review the third point of prospect theory in the previous article: most people's judgments on gains and losses are often determined by reference points . Therefore, we can make the benefits of our products more visible by changing the objects of comparison for consumers.

Here I want to talk in detail about how to make comparisons to highlight the benefits of your product. A friend here wants to answer quickly. Of course, I will compare the advantages of my product with the disadvantages of other products! Then the question arises again, what are the advantages of your product? You would say that a certain function of my product is particularly good, the channel of my product is particularly close to consumers, and my product is "black technology".

To these answers, I just want to say “Haha!” This is the benefit in the eyes of "merchants", consumers will definitely not see it that way! The only thing consumers care about is “what needs does it meet for me?” Yes, next let’s talk about what needs the products can meet in the eyes of consumers.

In order to answer the grand question of "consumer demand", we need to spend a little time to trace back and see how our human society and civilization have developed to where we are today. Because only modern people have a variety of needs. If our ancestors were simple and honest, they would only have a few needs such as "eating, drinking, defecating and urinating".

Looking back at history, our human ancestors faced the pressure of survival. They needed to pick mushrooms and hunt rabbits. In the process, they learned to cooperate, tribes were born, and division of labor evolved. At the same time, they learned to use tools , began to create inventions, and opened a new chapter in human civilization. Later, we had today's modern civilization. So, to exaggerate a little, if Robinson had not met Friday, he might not be considered a "person".

In summary, "human" is a concept in the temporal and social categories, which determines that "human" has "temporal" and "social" needs. For example, from the perspective of time, we want today to be better than yesterday; in order to make today better than yesterday, we have the need to create and innovate. From a social perspective, we have the need to be a good employee and a good spouse; we have the need to communicate and interact with others to form exchange relationships; we have the need to integrate into the group to avoid loneliness; we have the need to express our own personality and be seen by more people.

Back to the question of how products introduce reference points, since humans have so many strange needs, every product actually only needs to find the "point" that is better than other products in "solving a certain consumer need" - that is, the "benefits" in the eyes of real consumers, and let consumers know clearly and strongly, so as to motivate consumers to take action.

Li Jiaoshou once summarized some "points" that may be better than other products in "solving certain needs of consumers ". I will talk about them briefly to see if they can help everyone find that "point" for their own products.

Time context (today’s is better than yesterday’s)

• Accessibility: My product enables you to do things that you couldn’t do before!
• Portability: My product makes you feel more convenient than before!
• Novelty: My product makes you feel different from previous products!
• Performance: My product helps you achieve tasks that previous similar products could not achieve!
• Reduced risk: My product is less risky than my previous product!
• Process experience: My products make you feel better than before!

Social categories (You are not a person! You are a person in a group!)

• Customization: My products allow you to show your uniqueness!
• High-end: My products help you break into the high net worth group!
• Ideal Self: My products make you become someone you should be!

Therefore , we just need to find products that are worse than ours in a certain "point" and then use them as a weapon; or find the "point" where we are really better than others and fully highlight it.

For example:

Do you remember the enameled cast iron pot that was very popular during last year’s Double 11?

For a cookware that costs nearly 10 times as much as an ordinary pot, its "unknown benefit" seems so insignificant compared to its "10-fold increase in cost."

For consumers who have never heard of enameled cast iron pots, how can they respond to the call for consumption upgrades from many businesses and buy these extremely expensive pots?

Generally speaking it is difficult. This problem is just like what I said before: the additional cost is directly visible (at least 1,000 yuan), but the potential benefits are indeed unclear - how delicious is the food? How delicious is it? Who knows?

What should I do then?

right! Just find a suitable "reference" to let consumers clearly feel your "benefits"!

What? Are you going to tell me that you chose Supor sold in the supermarket?

Oh! no! You can't do this! This will only increase consumers' stronger perception of benefit uncertainty and high costs!

The correct approach is that we need to find a practical "point" that is better than other products in "solving a certain need of consumers" and then tell him and let him know!

Well, think about it, among the pile of needs in the time category and the social category, which one is more "real":

Time context (today’s is better than yesterday’s)

Accessibility: I wanted to cook better meals before, but now I can do it with this pot?

Haha, a Michelin three-star chef can also cook well with an iron pan, right?

✘

Portability: Cooking is more portable and cooked in seconds? No

✘

Novelty: Yes, it is different, it is enameled cast iron!

So what? There seems to be nothing different

✘

Performance: Can it last a lifetime?

I don't need that long...

✘

Reduce risk: Less chance of undercooked food?

Hehe

✘

Process experience: Does a flower bloom in your heart while cooking? It seems possible, but few people believe it, right?

✘

Social categories (You are not a person! You are a person in a group!)

Customization: My name is not engraved on it!

✘

High-end: It is indeed high-end, atmospheric and classy! But do they really want to use such high-end pots? It seems that some people sincerely hope so.

But if you choose high-end products, once you choose low-end pots for comparison, you will easily fall into the quagmire of "high-end" being difficult to verify in advance, which will only increase the uncertainty of benefits and the strong perception of excessive costs.

The high-end here requires an education market. Keep it for now.

Ideal Self: You are awesome with this pot. It goes well with your Bosch cabinets and Thermador oven.

√

So, do this: choose a knife from Zwilling or Orpheus that costs tens of thousands of dollars as a reference, and tell him: Since you have used such high-end knives, you must know how important a good pot is for cooking and how much it matches your status!

Let's analyze it more carefully : as a pioneer of consumption upgrading, the benefits brought by a set of good knives have been recognized by a wave of consumers. The problem of "the benefits of kitchen utensils are not easy to verify in advance" has been almost solved by knife pioneers. Consumers who accept good knives recognize the concept that "high-end kitchen utensils are really better." So you make him feel that compared to the knives that cost tens of thousands of dollars and give him a good cooking experience, good pots cook delicious food and are cheaper than knives and are more in line with his high-end status, then they can accept it.

4. Transform OR combination products to form a comparison

What if your product is truly novel and a groundbreaking solution, but you really can’t find a suitable reference?

What needs to be done here is like the old saying goes, "If there are no conditions, create them and move forward!" It is difficult to find a reference for this product itself, but it may be easy to find a reference if you combine it with other products or fine-tune the product positioning!

For example, the example of coffee entering the Chinese market that Jiaoshou mentioned before. Since domestic consumers have no habit of drinking coffee and cannot find a good reference, they changed the product attributes from "drink" to "gift" and focused on "novelty" in the gift market (there were no such gifts before). At the same time, the gift market is driven by marketing and is not sensitive to product cost-benefit, so it was successful.

For example, the "bundle promotion of yogurt and cups" that we often see in supermarkets, and the combination sales of "toner and facial mask paper or cotton pads" that are common on Taobao , all use the form of combination to increase profits and make them easier to perceive. Compared to finding out that you bought toner but have no cotton pads at home, this combination sales really allows consumers to feel the benefit of "convenience".

2. Leverage consumers’ past experience

But what should we do if it is difficult to find a reference object in the "present moment"? Then let’s look for the answer in consumers’ past minds.

1. Take advantage of consumers’ past failures

Then don’t compare it with others. Use the “psychology of experience acquisition” that Li Jiaoshou mentioned in the pain point copywriting before and compare it with consumers’ past “failure experiences”! Remind consumers of past failures and let them compare their past losses with your product.

For example, I adapted the copy of a financial product based on a joke from 2016: "If I didn't buy a house this year, I would have been busy for another year! If I bought stocks this year, three years of hard work would have been in vain! - XX financial management, no busyness and no hardship, annualized x%."

2. Leverage past successful experiences of consumers

Or remind consumers of past successful experiences so that they feel the benefits of your product are similar to past successes. For example, "Your Majesty, do you still remember Xia Yuhe by Daming Lake?"

Just kidding, the most typical example is still the WeChat business copywriting mentioned by Li Jiaoshou before: "10 years ago, you missed Taobao, don't miss WeChat business today"; for example, "Xiao Ming next door achieved a comeback because of the programming class, you are smart and will not miss today's AI training!"

So, is there anything that cannot be viewed from a different perspective? Marketers must be good at using the powerful weapon of "contrast"!

【summary】

People have a hard time accepting new products because:

1. “Two birds in the bush are worth a bird in the hand” – Uncertain benefits of new products

2. “Loss aversion”. - The uncertain benefits of new products are unlikely to offset the money spent

3. Most people’s judgments on gains and losses are often determined based on reference points, which is called “reference dependence”. You need to find a good reference

How to make new products more acceptable?

1. Improve the comparability of costs or benefits of new products

1. Low price & disguised low price (not recommended)

2. Introduce reference points and highlight your "benefits":

Accessibility, portability, novelty, performance, risk reduction, process experience, customization, high-end, ideal self

3. Modify or combine products to form a comparison and highlight the "benefits"

2. Leverage Consumers’ Historical Experience

1. Take advantage of consumers’ past failure experiences: Use the psychology of experience acquisition to remind consumers of their past failure experiences;

2. Take advantage of consumers’ past successful experiences: Remind consumers of their past successful experiences and let them feel that the benefits of your product are similar to past successes.

Therefore , "comparison" is the key point to promote consumers to make decisions!

The author of this article @静静 is compiled and published by (Qinggua Media). Please indicate the author information and source when reprinting!

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