In the era of burning money, what should product managers do?

This is an era of "fleecing the sheep".

With the development of mobile Internet and the O2O industry, various traditional and emerging Internet companies have launched a fierce war for user subsidies. In order to acquire new users and improve user retention, various e-commerce websites and O2O companies are "burning" money without any ambiguity. So, there are free special cars, 9 yuan door-to-door beauty services, 1 cent car washes, 1 cent eggs, and all kinds of subsidies. In such an era of burning money, consumers have become the ultimate beneficiaries, and various behaviors of "taking advantage" are commonly known as "薅羊毛".

So some people say that this is a carnival of capital, product experience is not important, and product managers do not play such a big role in traditional Internet products. As long as you have money, engineers, and offline resources, you can get started. Is this true?

In my opinion, in such a money-burning era, the quality of product managers is put to a greater test.

1. Business model: an important part of product direction.

Slightly different from the traditional Internet, where evaluation indicators focus more on page visits, clicks, user activity, and content contribution, e-commerce websites and O2O products are more closely integrated with user consumption. Therefore, the business model becomes one of the primary considerations when formulating the product development direction. The idea of ​​increasing the number of users first and then considering the business model in traditional Internet pure user products is no longer realistic in this era.

Take the home delivery service in O2O products as an example. Now people would like to make all activities related to users’ lives into home delivery services. But personally, I think that some services are more about satisfying users' curiosity and sense of novelty without giving too much consideration to the business model. Take car washing as an example. There are now various door-to-door car washing services emerging one after another. There are two entrepreneurial teams doing this in the community where I live. Door-to-door car washing is known for being cheap and convenient, but there are indeed many problems. Some of my friends never want to experience it again after experiencing it once or twice. At present, there are three main problems with door-to-door car washing: 1. Micro-water car washing causes great wear and tear on the car paint; 2. Some community properties and venues do not support door-to-door car washing; 3. It is still the cost. Now is an era of subsidies. On the surface, car washers and car owners enjoy the convenience of low prices, but in fact, various transportation fees and wastewater recycling fees are not necessarily lower than traditional car washing. In my opinion, some people use door-to-door car washing, in addition to price factors, the main consideration is convenience, because traditional car wash places encounter queues on holidays and it is a waste of time. So is door-to-door service necessary to save time? Is it possible to consider optimizing and transforming the queuing and appointment process of existing car wash places? Urgent needs, high frequency, and ease of operation in door-to-door scenarios should be considered factors in the home service business model.

2. Crack down on fake orders - anti-cheating strategies need to be continuously optimized.

Where there is profit, there is deception. Nowadays, major e-commerce websites and O2O products will provide large subsidies to service providers and consumers during the promotion stage. When I was riding in a private car, I found out through chatting with the drivers that some drivers installed a bunch of car-related apps and used whichever one offered the largest subsidies. Some people specialized in studying fake order strategies and there were even such gang organizations. It is said that some people use ride-hailing apps to take their families to and from get off work every day, and both drivers and passengers defraud the platform of profits. According to the news, Uber China needs to pay 1.2 million yuan every day for 4% of fake orders, which is 36 million yuan a month. For any platform, cheating is a cancer, or even a criminal act, which will have the adverse consequence of bad money driving out good money on the entire platform ecosystem. Therefore, anti-cheating becomes something that products need to consider specially. Moreover, compared with cheating in the traditional Internet industry, many Internet products now have a variety of cheating methods, so the anti-cheating strategy is a process of continuous upgrading and optimization in the battle. Things that need to be considered include using the GPS positioning function of mobile phones to locate the service personnel's behavior path, analyzing the service personnel's order-taking behavior, assigning corresponding levels and permissions to the service personnel and consumers' platform behavior, and severely punishing cheaters.

3. Product strategy - not just online

With the development of Internet+, a round of information-based transformation of traditional industries is underway in full swing. Correspondingly, the challenges for product managers are also greater. When formulating product strategies, they must not only consider whether online users can use the product smoothly and whether the functions are easy to use, but also need to consider the strategy formulation involving offline processes. In the e-commerce industry, if it adopts a self-purchasing model, it is necessary to consider the principles of purchasing goods, including factors such as product quality, price, logistics, warehousing, etc. What O2O products ultimately present to consumers is the implementation of services. For problems that may exist in offline services, we need to think clearly about multiple aspects such as overflow and null that may occur during the use of functions and formulate process rules, just like we do when designing online functions. No matter how useful the online process is, it will be useless if the service staff is not adequately trained and there are flaws in the offline service. For example, a few days ago I booked a home beauty service through a platform. There is one thing that is worth learning. The online page explains the beauty steps step by step, and the offline service staff also informs you step by step during the operation. This way, the consumer experience is consistent and may even exceed expectations.

4. Spending money - spend money wisely

In this money-burning era of the Internet, subsidies are very important, because if you don’t subsidize others, they will. But you have to know how to spend money, otherwise it is likely to be wasted without you even hearing a sound, or it may even have a counterproductive effect.

First of all, the prerequisite for subsidies is that the service quality must be up to standard. Everyone may still remember the group buying war a few years ago. Some businesses participated in group buying, but the service was completely inadequate, and customers complained and vowed never to come again. Isn't this just shooting themselves in the foot? For example, a while ago, a certain car-hailing platform launched a policy of getting as much back as you recharge. But when I placed the first order, the driver told me that he had been assigned two jobs at the same time and asked me to cancel. The second time, I couldn’t get an appointment even though I made an appointment in advance. So I haven’t used up the 100 yuan I recharged yet.

Secondly, we need to consider whether the subsidy rules are clear and whether they will harm the platform's existing loyal old users. If a platform has always provided very little subsidies to old users, and then in order to attract new users, the subsidies given to new users are many times greater than those given to old users, it can easily cause negative emotions among users.

Again, user retention rate is a very important evaluation indicator to determine whether a product has healthy development. How to prevent users from using their subsidies to register and follow only to never come back again? In this regard, e-commerce websites have already found some better methods. For example, bundling promotions, where after buying product A, you can add a few dollars to buy a related product; building a growth system based on user behavior, so that users and service providers with good reputation get more and better services and rewards; package services, such as Amazon's free shipping all year round for an annual fee of $99. In short, on the basis of improving service quality and informatization, the intensity and frequency of subsidies should serve as a glue for user repeat use and a booster for word-of-mouth communication on social networks.

The Internetization of traditional industries has made our lives more and more convenient. Spending money plays an important role in cultivating user habits and changing users' inherent thinking. In fact, it is equivalent to the money from traditional advertising and buying traffic being put firmly on the users’ shoulders. But will the era of burning money continue? After the wave of burning money is over, how many e-commerce websites and O2O products will survive? For product managers, there are more challenges. What we need to do is no longer just simple product functions and logic, but to calm down, lower our posture and be down-to-earth, become an expert in this field who connects online and offline, and make the world a better place.

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