In product operation, why do we need to create hot products!

Why do we want to make a hit product? How do hot-selling products affect B-end and C-end customer acquisition? The author of this article will use O2O as an example to explain in detail the role of hot products in user growth.

1. The important role of hot products in attracting traffic

The term "hot-selling item" comes from e-commerce . It refers to a single product or a category of goods with particularly large sales. By creating a star product to gain traffic, the next step of purchase conversion is made. The ability to operate a hit product determines the ability to attract traffic.

People often talk about hot articles with 100,000+ reading volumes. In fact, the logic is the same as that of hot-selling products. Often a hot article can bring a large number of fans, which is why everyone is keen to chase hot spots. Taking WeChat public accounts as an example, every significant increase in the number of followers is due to writing a high-quality article.

2. Category logic behind hot products

Retailers establish different role models based on the different contributions of categories. Hot-selling products happen to belong to the traffic category within the category structure and play the role of attracting customers.

Category Framework Model for Retailers:

Traffic categories:

Categories that attract customers to shop contribute greatly to sales, but are usually more price sensitive, so gross margins are lower. They are usually high-exposure categories. They can further promote sales of other categories.

Flagship categories:

The retailer's logo represents the retailer's brand and image. Customers choose the retailer as the first choice for this category. It contributes huge sales and profits. It requires retailers to invest more resources in the long term than other categories.

Profitable categories:

Lower price sensitivity than target flagship and traffic attracting categories. Compensation for traffic attracting categories in terms of gross profit, with higher profit margins. In most cases, sales are driven by the retailer’s existing traffic.

High conversion categories:

Typically niche, convenient or restocked categories, usually have higher margins, lower price sensitivity than flagship and traffic-attracting categories, and are driven by the retailer’s existing traffic in most cases.

Emerging potential categories:

Current sales and profits are not high, but the overall market is developing rapidly. Sales are driven by existing customer traffic. Retailers need to invest more resources than their sales contribution to promote their growth in order to promote their further development.

What is the traffic category?

"Traffic categories" come from offline supermarkets, mainly those categories that attract customers.

What are the characteristics of traffic categories?

Products with high sales volume, low unit price, high price sensitivity, low gross profit, strong versatility and seasonality are usually high-exposure categories, which can further promote the sales of other categories. For example, books are to JD.com, movie tickets are to group buying; in offline large supermarkets and shopping malls, the various "dumping" products that first attract consumers' attention and occupy the "right time", "right place" and "right people" are actually the traffic categories of the supermarkets;

Why did JD.com want to deal in books at that time?

JD.com's core categories are 3C, which are all high-unit-price, low-frequency consumer categories. In order to increase users' purchase frequency and cultivate user stickiness, JD.com chose to enter the book category. The book category is a typical example, with high frequency, low price, and strong versatility, which is of great help in improving user stickiness and purchase frequency.

Why do group-buying banks subsidize movie tickets?

Movie tickets play the role of a traffic category in the process of acquiring customers on group buying websites; in addition, McDonald's, KFC, Weiduomei and other merchants with wide store coverage and strong versatility are also widely used as traffic categories to attract new customers.

From 2013 to 2015, we saw that a large number of subsidies in the group buying industry were concentrated in the movie and catering categories. Through subsidies, ultra-low-priced hot-selling products were created, attracting users from offline to online.

3. The role of creating hot products in acquiring B-side users

B-side customer acquisition

In the early stages of development, a platform often faces the paradox of "which came first, the chicken or the egg". On the one hand, it lacks the supply capacity on the B-side, and on the other hand, it faces the problem of how to acquire customers. It is difficult to acquire customers without high-quality supply, and it is difficult to talk about high-quality supply without user scale and transaction volume. What should we do if we have no money and no resources in the early stages of development?

Creating hot products and establishing benchmarks and star merchants is a very good market breakthrough.

Back in 2010, at the beginning of the war between thousands of groups, Nuomi.com launched its first order of Jackie Chan Yaolai Cinema single-person movie tickets at 29.9 yuan, which became a hit as soon as it went online. A very remote Jackie Chan Yaolai Cinema in Wukesong became extremely popular because of this. The people queuing up to watch the movie stretched from the second floor to the first floor, and even directly to the side of the road several kilometers away. Nuomi quickly opened up the situation with this order.

From then on, we had a benchmark merchant, and when we talked to other merchants, we had a case, which made it easier to attract investment; at the same time, through this order, we acquired a large number of users in a short period of time, completing the initial primitive accumulation of the platform. In the early stages of platform development, how to concentrate all resources on one point and produce an explosive effect at one point will help the platform quickly overcome the cold start problem in the early stages of its establishment.

The same principle also applies to other industries. For example, in the early stages of Zhihu's development, the celebrity influencers who joined the platform, such as Kai-Fu Lee and Keso, were equivalent to their "hot products". The entry of these superstars attracted the first wave of high-quality users, and also ensured the first batch of high-quality question-and-answer content.

When doing community operations, the opinion leaders at the top of the pyramid are their "hot products". For an educational platform, celebrity lecturers are their "hot products"; through one hot product case after another, they attract more people on both the supply and demand sides, thereby increasing the overall transaction volume of the platform.

4. The huge role of hot products in acquiring C-end users

C-end customer acquisition

Users need an entry point to understand a new platform, and hot products are a very good entry point for attracting users. Only by allowing users to quickly make their first transaction can there be a chance for repeat purchases and retention, which will lead to more sales conversions.

When I was in charge of the operation of Nuomi at Baidu, I created a lot of popular products, such as "Eat McDonald's for 1 cent", "Eat KFC for 1 cent", "Watch a movie for 1 cent", "Eat a big meal for 1 cent", etc. They all had high sales volume, low unit price, users were highly sensitive to price, and they were highly versatile and suitable for all ages. By launching one hit product after another in various cities, the number of new customers in each city has been rapidly increased, thereby rapidly increasing the city’s market share.

Unlike e-commerce, O2O is very regional. There are very few businesses like McDonald's and KFC that have multiple stores across the country and provide standardized services. Therefore, the ability of such hot-selling products to attract new customers is very strong.

5. The long tail effect of hot products

The hot-selling products themselves will spread, and combined with online PR communication, it will bring a lot of topic publicity, which will in turn bring a lot of natural traffic and long-tail traffic.

6. The important role of creating hit products in improving team operational capabilities

In the early stages of building an operations team, it is necessary to develop the following capabilities of the team by creating cases of single product hits:

Distill the core selling points and product packaging of products; how to carry out channel promotion ; how to improve traffic conversion; how to set prices for promotions and plan activities; how to manage projects and coordinate various teams to operate efficiently.

An excellent operation team must first learn how to sell a single product well, then learn how to operate a category well, and then operate the B-end and C-end well, and finally operate a platform well. Constantly accumulate experience in winning battles, and integrate small victories into big ones, so that you can do things in a more organized and more comfortable manner.

In the process of creating popular products, the team can exercise their ability to understand the product, the industry, event planning , traffic conversion, project promotion, and the entire project operation.

Case Study

Here is an example to explain it in detail:

One day, I received a task to sell all the assets within 3 days. The time was tight and the task was heavy. What should I do?

A normal team might panic when faced with this situation, but my teammates are used to it and are fully prepared. They usually do this:

1. Call a meeting with the students in the asset management team to discuss the characteristics of this asset, what are its selling points, whether it has a high interest rate, how long is the term, whether it is transferable, and what are its advantages compared with other products currently on the site?

2. Determine asset pricing and promotions. To sell a large asset in such a short period of time, you must have a relative advantage in pricing. Check past historical data to find out what the sales speed is like in a certain pricing range and whether subsidies are needed. After confirming these, we started to act separately. The asset team is responsible for pricing and placing orders; the operations team is responsible for event pages, material production, writing promotional copy , and arranging channel promotion;

3. Launch online traffic promotion and check the data at any time to make material adjustments and position optimization.

Promotional copy should be concise and powerful, concise but precise.

As shown in the figure below, you only need to tell users two pieces of information: one is "win a free iPhone" or SLR; the other is "win a free iPhone". Any one of these pieces of information is enough to attract users to click.

The operations team should have a table like this in hand, which shows the approximate location, the size of the material, the amount of traffic at each location, the conversion rate , and what resources should be used for activities of different scales, so that they can be prepared at any time, as shown in the following figure:

4. Look at the data and summarize.

Look at the sales data, the data of each channel, the conversion rate data, and the data of the activity page; analyze the problems and shortcomings of each operational detail, which ones need to be optimized and improved, and which ones are done well and can be reused next time. This cycle repeats itself, allowing the team to always stay on a positive path.