Gain insights into consumers and activate new opportunities for marketing growth!

Contents:

• Theoretical basis: Explain the underlying methodology of NetEase user research and a new attempt at user insight
• Practical Guide: How to examine brands through the lens of consumer values ​​and achieve a deeper understanding of consumers
• Research example: The latest research found that the choice of mobile phone brand is closely related to user values
• Latest thinking: Uncovering NetEase’s latest thinking and product layout in the era of user research 2.0

Full text of the speech:

Today, based on a very interesting work experience I’ve had in recent years, I’d like to spend some time with you to discuss a topic that is worth thinking about: How should we understand consumers, or our users?

I've worked on a lot of interesting products. I think creating products is a really beautiful process. It’s a process of constantly building connections with people, and people are really, really complex. You can imagine how difficult it is to understand your girlfriend or boyfriend, and you can probably get a feel for how difficult it is to understand all kinds of users. My understanding of the product can be summarized in the following sentence: Our company needs to try its best to understand users, including C-end users and B-end users, and then turn the needs that meet the value of both parties into reality.

Why do I emphasize the concept of "meeting the values ​​of both parties" so much? I think these are two things that we must consider at the core of our product design:

1. What our company wants to get from this product, simply put, is why we do it.
2. What can users get from this product? Why do they need us and rely on us? To put it bluntly, why should it be me?

So here we actually need to introduce the concept of "understanding users". Users are so complex and changeable. What methods can we use to understand them through various clues?

1. NetEase’s latest user research methodology

First of all, I believe that Internet practitioners should be familiar with user research.

In my previous experience with game and social products, product managers are often deeply involved in every user research link. The more common research methods include: in-depth interviews, focus groups, usability testing in qualitative research; and questionnaire surveys in quantitative research, etc. We collectively call this information collection and analysis on individuals: small data research.

A major significance of small data research is to understand the inner attitudes of users and to conduct in-depth investigations after discovering certain phenomena. In this process, many needs beneath the surface will actually emerge, and we can also use some very professional methods to make a well-founded prediction of the user's future behavior.

However, user research is something that seems simple, but in fact it has many aspects and a certain threshold. Here I would like to tell a story that had a great impact on me, to prove that unprofessional user research can actually cause harm to a business. Sometimes, even what the user says in person is "unreliable".

1. How users “cheat” you

The protagonist of this story is Coca-Cola. In the 1880s, competition between Coca-Cola and Pepsi was fierce. Then Coca-Cola thought of using user research to optimize its products. They poured both Coca-Cola and Pepsi into cups and asked background check users to conduct a blind test. The result showed that nearly 60% of the users thought Pepsi tasted better.

This result stimulated Coca-Cola, so based on the results of this survey, they modified their own formula in accordance with the taste of Pepsi. After another blind test, New Coke was far more popular than Pepsi, so this innovation was launched to the market with great confidence.

What is the result? This may be the most failed innovation in business history, and it even triggered strong protests from consumers. In the end, Coca-Cola had no choice but to change back to the classic flavor. I think everyone may be very curious about what exactly causes such a huge cognitive bias towards consumers.

Social psychologist Gladwell made some speculations about this phenomenon. There may be two main reasons:

The first reason may be related to the blind testing method. In our common on-site tests, consumers take a small sip, savor the taste carefully, rinse their mouths with water in the middle, and then take another small sip. You can imagine that this testing method is actually completely different from the way we usually drink Coke. We call Coke the fat house happy water, because you have to drink a whole bottle in big gulps to enjoy the full happiness. Pepsi actually tastes slightly sweeter than Coca-Cola, and when users were tested at the venue, they tended to prefer sweeter drinks when taking small sips, but if they were to drink a whole bottle, the excessive sweetness would be counterproductive.

The second reason involves the complexity of consumer psychology. When consumers buy a product, they don't just focus on the product itself. They will also take into account factors such as packaging, display, brand awareness, and brand promotion attitude into the consumer experience. Therefore, the reason why Coca-Cola is favored by consumers is not just because of its taste. Its brand, packaging, and red and white colors are all packaged together and integrated into the consumer's experience of drinking Coke. In other words, even if there is a cola today that tastes exactly like Coca-Cola, the overall perception score it brings to consumers cannot be the same as Coca-Cola.

I believe that after listening to the above story, everyone will have some experience. We still need to use more professional methods to conduct user research and obtain more in-depth and accurate user insights.

2. Big data is everywhere

We just talked about small data research, and now we can turn our attention to big data research. Today's society has undergone tremendous changes compared to the social environment in the 1880s. In fact, users leave many, many traces on the Internet that are difficult to hide.

For example, a boy claims that his hobby is reading, but Douyin knows that his favorite thing is dancing girls with long legs.

I saw a piece about data insights a while ago and found it quite interesting. He said: If you stay on the video on TikTok for 2-3 seconds and then delete it, it means you are not interested in the content; but if you delete it quickly the moment you see the video in public, it is likely that you are trying hard to hide your inner liking for it in public.

Now let’s talk about our big data insights. Basically, we can capture user behavior from three aspects: content experience journey, consumption experience journey and life behavior footprints. Through these data, we can actually observe our user groups from different sections.

We no longer rely solely on users to "tell the truth", but instead portray them 360° through their real behavior. In the past, a professional survey might take several months to get answers, and these conclusions were relatively static, preventing us from dynamically obtaining the latest insights. Big data has changed this inefficient production method, providing insights into users in a more real-time, faster and more diverse manner.

But having said that, I have to pour a bucket of cold water on everyone.

There are really a lot of companies on the market now that claim to have data, but in fact, the insights they provide are very thin. For example, the data portraits I am showing you now are some very basic demographic attribute portraits, which lack the handles for further implementation for enterprises.

These user portraits, which are mainly based on natural attributes, generally cannot capture the user's true preferences, and thus cannot help companies truly understand the user's demands in depth.

2. In-depth interpretation of consumer value

As an established Internet company with more than 20 years of history, NetEase has accumulated hundreds of millions of valuable user data. However, how to use these data to gain deeper insights into Chinese consumers is still a proposition that needs to be considered.

In the process of exploring this issue, I came across a book - "The Truth of the Moment" produced by consulting firm Roland Berger. This book reveals the inseparable relationship between brand building and "people". There is a sentence in it that I have excerpted here. This sentence can be the cornerstone of all the user value exploration I will talk about later: consumers' consumption behavior is complex and changeable, but their inner values ​​are relatively solid and stable.

Later, I had the honor of having many in-depth exchanges with the senior management of Roland Berger. At that time, I felt that this methodology of consumer values ​​was really full of charm, so I would like to share it with you here.

Coincidentally, the birth of this methodology is also related to Coca-Cola and Pepsi. Also in the 1880s, Pepsi-Cola used many trendy rock stars as brand ambassadors, which dealt a heavy blow to Coca-Cola's market position.

At that time, Roland Berger was commissioned to carry out the Coca-Cola brand upgrade and transformation project. The methodology behind the entire brand project was finally summarized into a brand value methodology called Profiler.

This theory emphasizes a concept, that is, what the brand says is not important, the most important thing is what consumers actually receive. Consumers' purchasing behavior is not as simple as just paying money and getting the goods back. The success of a brand occurs when it delivers the value of its products and services at every touchpoint, resonating with consumers’ values ​​again and again. In other words, consumers will only make positive purchasing decisions when they recognize the brand’s values.

Different brands actually deliver different values ​​in different product lines. Universal values ​​include rational values ​​and emotional values. For example, when Columbia sells hiking bags, it will emphasize the rational values ​​of its product quality, load-bearing capacity, and waterproofness. What about Chanel? It conveys to girls more mysterious emotional values ​​such as luxury, social status, and brand heritage.

Many times, the emotional value of a brand is easily overlooked. However, from this picture, we can actually see that when the rational value of products A and B is the same, and the emotional value of product A is higher than the emotional value of product B, the total value of product A actually exceeds that of product B.

Here, we need to introduce the concept of surplus value, which means the surplus extra value obtained by consumers themselves and the net value of the product after deducting the purchase cost from the product value created by the product and brand. In this comparison, although product A is more expensive, customers are willing to buy product A because they get a higher net benefit.

1. The value research model of implementation - Red Blueprint

I have just talked about emotional value and rational value for so long, and you may feel that the idea of ​​studying value is really a bit mysterious.

How do we study value? How should value research be applied?

Roland Berger also considered that there is a need to describe value in a more concrete way. Therefore, after thousands of brand projects, they summarized 20 common value points for consumers.

Here we can see rational values ​​such as "personal efficiency, high technology"; there are also emotional values ​​such as "novelty/coolness, excitement/fun".

Then, we can spread these 20 values ​​out on a two-dimensional chart according to two dimensions.

The horizontal axis represents your brand proposition, whether to get users to spend more or to shop more restrainedly;

The vertical axis represents what the brand conveys, whether it is extreme sensibility or extreme rationality, or whether it finds a balance in the middle.

For these 20 values, there is a very rigorous research model and calculation logic.

The values ​​of individual consumers can be described through research. By superimposing the values ​​of consumers who purchase a certain brand, the values ​​of the brand's purchasing population can be obtained.

What I am going to show you now is the red blueprint of Apple’s brand value points.

Let me give you a brief interpretation of this picture. The blue part means that users are more in favor of these values; the red part means that users are less sensitive to these values. The color levels shown on the contour lines show the gradient in value recognition.

From this picture, we can see that Apple users have a very high degree of identification with the values ​​of "prestige", "trendy/cool", and "innovative technology", but at the same time they are quite indifferent to "total cost". It seems that consumers who buy Apple products are not short of money.

Different industries, different brands, and different user attributes will actually have a very obvious impact on the value point red blueprint. Let me show you the difference below.

2. Different brands

First, let’s take a look at this picture. In this picture, I circled users of three different car brands in Guangdong Province and checked their value point red and blue charts.

From the figure, we can clearly see that the value points that consumers of these three brands prefer are very different.

• Volkswagen: Prefers comprehensive cost and smart shopping values, other brand value features are not obvious
• Honda: More inclined to the values ​​of excitement/fun, personal efficiency, and innovative technology
• Nissan: Obviously, we pay more attention to rational value points such as service and emotional value points such as affinity.

3. Different regions

The next picture actually reveals a more interesting phenomenon.

I put the graphs of mass users in Guangdong Province and mass users in the three northeastern provinces together for comparison. We can see that in Guangdong Province, mass users care most about value points such as "comprehensive cost" and "smart shopping". This indirectly reflects that in Guangdong Province, the mass brand power is actually relatively weak. But this situation has changed a lot in the three northeastern provinces. We can see that in the three northeastern provinces, the general public is more inclined to identify with values ​​such as "dignity", "trendy/cool", and "quality".

Through the analysis and interpretation of these changes, brands can make more precise marketing investments, more accurate media selections, and design differentiated marketing plans based on the characteristics of different regions.

4. Different individuals

Of course, we can also interpret the value point red blueprint for designated individuals or groups.

Like Li Ming in this picture, he is a person with obvious modern rational values.

He pursues personal efficiency very much, hopes to obtain relatively high-quality services and products, and is not particularly concerned about the cost.

If we compare two different brands with Li Ming’s value point red blueprint, we can judge Li Ming’s possible preferences based on the similarity of the value points.

According to the comparison of the overall value point distribution in the figure, we can see that Li Ming is very likely to like a local consumer electronics brand, and a certain international consumer electronics brand does not attract him.

3. Practical cases in the mobile phone industry

Next, I would like to use a real case study in the mobile phone industry to illustrate how this brand value methodology can be used to implement marketing.

When we select a target brand, we first need to conduct a comprehensive diagnosis of the brand and other competing products of the brand.

In this picture, we placed many mobile phone brands and their corresponding brand values.

On the left is the red blueprint of the value points of our target customers, and on the right are other competing mobile phone brands.

Other mobile phone brands have their own relatively unique brand tone. For example, Apple advocates "fun" and "novelty"; Xiaomi advocates value points such as "vitality", "progress" and "smart shopping".

But our target customers only have the basic value points of "pragmatism", "quality" and "trust", which shows that the brand has not yet formed its own distinctive brand image.

We can observe a phenomenon in the mobile phone industry that is worthy of attention, that is, the insight of phone replacement.

After selecting a specific brand or model, we can observe the corresponding replacement situation.

For example, here I take Huawei mate20 as an example. You can see that in August 2020, users who want to change their mate20 will give priority to mate30, iphone11, P40 pro, P40 and other models as their next mobile phone.

Knowing which other models the users of our target model will switch to, we can also do a deeper analysis to find out what the characteristics of these lost users are.

Through the three red and blue pictures here, we can compare and find that the people who switched from mate 20 to iphone 11 are closer to the users of iphone 11 in terms of the two value points of [noble] and [trendy/cool]. It is highly likely that groups that hold these values ​​will identify more with Apple, and there is a risk of loss.

After we have completed the overall diagnosis of the target brand and its corresponding market, we will then use three steps to help clients identify their most important target groups and outline their brand positioning.

The first step is to segment consumers. Simply put, it means distinguishing several groups of people with significantly different values ​​in this industry. Then conduct further research on different groups of people.

In the second step, we need to screen out the target group that is most suitable for brand development based on three aspects: market attractiveness, brand influence, and brand matching.

The last step is to further break down the target population and extract the core value points, which can serve as an effective starting point for the final implementation plan.

1. Consumer Segmentation

First, we segmented consumers in the mobile phone industry based on their value points.

In previous insights, I believe everyone has come across models that use basic demographic attributes to segment the population. For example, women with children, aged 30-35, and living in first- or second-tier cities are divided into one category; young working women who have just graduated and have a salary of 6,000-8,000 are divided into another category.

But I don’t know if you have noticed that this method is actually unable to well interpret the essence of consumers’ brand choices. By differentiating the value points, we can actually find similarities in users' choices of consumer goods. Currently in the mobile phone industry, we have found eight groups of people with distinct characteristics, who have very significant differences from before.

For example, the "Efficiency Experts" who account for 16.5% here are a group of people who pay great attention to the quality of life, pursue a more efficient life, and are not so concerned about the price of goods.

The 10% of the group are "avant-garde and stylish". They also have strong economic capabilities and are not sensitive to prices, but they are more pursuing a high-end, personalized and trendy lifestyle.

2. Screen the most valuable target groups

Once we have confirmed the population segmentation of a certain industry, we can use qualitative, quantitative, big data insights and other methods to gain more concrete and comprehensive insights into each group of people.

For example, you can learn about various demographic attributes, such as occupation information, income information, age range, city of residence, etc. Another thing that cannot be ignored is the need to use various research methods as much as possible to understand the differences in the psychological states of people in different segments, such as their attitude towards life, attitude towards work, etc.

Next, we need to evaluate the potential of the population from three aspects, which are as follows:

1. The first is market attractiveness: the overall size of this population, its economic value, and the overall proportion of high-value people.
2. The second is brand matching, which is mainly to judge the degree of each group's cognition and recognition of the brand.
3. The last point is brand influence, which mainly depends on which groups of people can lead other groups and influence their brand choices.

Finally, we can use the algorithm to complete the following population screening.

It can be seen here that the core groups are quality followers and trendy newcomers, who can also have a positive impact on the two groups of avant-garde and efficiency experts.

As for the two groups of people who pursue affordable and happy living and those who pursue economical and practical living, their values ​​in all aspects are lower than those of other groups after a complete assessment, so they do not need to be the first targets.

3. Extract and interpret the core value points

Then at this time, we need to carefully study the current value status of the target population and the radiated population. In simple terms, we need to understand what they prefer and what they are less sensitive to.

We must also consider the brand’s genetic inheritance, which is the brand image that the brand has always been focusing on. Finally, we also need to think about how to differentiate the value points we set for our brand from those of our competitors.

It can be seen that after a series of calculations, [Explore Fun], [Enterprising], and [Vitality] are the top 3 scoring value points. These are the three value points that the brand needs to promote.

At this point, you may be wondering, now that we have confirmed the value points, what should we do next? How can we really make use of the value points?

Indeed, once we have arrived at the target value point, the work is not yet done. We still need to refine our interpretation of value points.

Now, we have integrated NetEase's billions of massive data and Roland Berger's many years of brand theory, and transformed the analytical methods mentioned above into a digital product "Digital Profiler", which aims to help companies with brand positioning and customer segmentation, thereby supporting their marketing strategies and sustainable growth. You can click "Read original text" to experience it.

4. CEM: A rigid demand in the era of refined management

Today's business environment is actually undergoing a major transformation. Companies have gone from competing for territory and traffic in the wilderness to now having to embrace the era of experience economy that requires more intensive cultivation.

At this time, a term often appears in front of everyone - CEM: Customer Experience Management

If CRM is a tool in the era of extensive growth, then CEM is a rigid need in the era of refined management. CEM, like CRM, is a platform for dealing with customers. The difference is that CRM is mainly responsible for early tracking and management of sales interactions, while CEM analyzes customer data after sales to provide better services. The purpose of this strategy is to increase brand loyalty and repurchase rate.

Currently, NetEase is deeply engaged in the following four experience dimensions: brand experience, product experience, user experience and marketing experience. As for brand experience, we have taken a big step forward, and we warmly welcome partners in the consulting and research fields to join us and work together on the new path of experience economy.