Super detailed methodology to detonate user growth!

For an enterprise, whether it can grow rapidly depends on whether it can quickly acquire a large number of users. Users are the lifeblood of an enterprise. If a company has no way to acquire more users, even if it carefully polishes a good product, it will be in the embarrassing situation of no one being interested in it. The ultimate goal of an enterprise is to make a profit, and the premise for making a profit is the growth of user scale and the growth of enterprise sales. Only when the user scale continues to grow can the company achieve sustained growth in sales and profits.

Enterprise growth is determined by multiple strategic factors. Corresponding strategic factors play an important role in different stages of enterprise development, which can be summarized into the following seven:

1. Supply-driven growth

Supply mainly refers to the products or services provided by the enterprise. Supply-driven growth means that the products or services provided by the company fully meet the needs of users, thereby reversely driving the growth of the user scale.

Dimension 1: The original market gap is filled by creating effective supply products to achieve user growth.

Dimension 2: The width and depth of the supply product line determines user growth. The more sufficient the supply and the wider the user coverage, the more it can drive user growth.

The core of supply-driven growth lies in the matching of supply and demand and the matching efficiency. As long as the product solution meets user needs, solves user pain points, and fills market gaps, user growth can be achieved. When supply is insufficient and the market is still in a stage where supply exceeds demand, business growth should focus on increasing the amount of effective supply, releasing user demand and achieving rapid growth.

2. User-driven growth

Users are the lifeblood of business growth. User-driven growth refers to the behavior of an enterprise continuously acquiring new users, retaining new users and generating continuous consumption.

User-driven growth includes two aspects: one is the growth of the overall user scale driven by the growth of new users, and the other is the continuous growth of new users. These two aspects will help to increase the overall user base and drive growth in corporate performance. User growth is definitely not just growth in quantity, but rather effective user growth, user development, user monetization, user dissemination, and prevention of user churn. This is a systematic project. Growth is not a destination, but an ongoing process.

The core of user-driven growth lies in:

• Quality new user growth.
• User growth: Improve user retention, extend user life cycle, and increase user consumption frequency, consumption categories, and consumption amount.
• User monetization: Increase the commercial revenue of each user.
• User dissemination: If the product is good enough, it will form word of mouth, which will trigger users to spread the word and recommend it to their friends, thus achieving self-growth of the product. From self-propagation to acquiring new users, a spiral upward trajectory is formed. Excellent products will make good use of this track and continuously expand their user base.

Reduce the loss of old users: effectively recall lost users and reduce the outflow of water from the reservoir.

3. Product-driven growth

Internet products refer to the functions and services created by enterprises to meet user needs. They are the integration of website functions and services.

Through Internet product innovation, we continuously lower the user threshold, expand the target user group, and improve user conversion rate, thereby achieving growth.

4. Channel-driven growth

Channel refers to the source of traffic on the Internet platform. The attributes of the channel determine the quality of users and the degree of population matching, and the size of the channel determines the amount of traffic. How to screen high-quality channels, acquire accurate users, build a reasonable traffic source structure, and acquire customers at low cost and high efficiency are important issues that need to be addressed in user growth.

Every company has a limited budget for acquiring users. We must use data analysis to identify specific problems in each channel and make good budget allocations to achieve low-cost and high-efficiency customer acquisition.

The core of channel-driven growth: find traffic depressions, find accurate users, and adopt high-conversion-rate and low-cost methods to acquire customers.

5. Activity-driven growth

Activity-driven growth refers to the behavior of companies planning large-scale marketing activities at a designated time point or time period, through preheating, building momentum, and vigorously promoting online and offline, thereby achieving explosive growth within a certain time frame.

The Internet is an eye-catching economy and a festival economy. Major Internet companies plan large-scale events by "creating festivals" to drive explosive growth in their business in the short term. By planning our own festivals and public holiday events, we continuously create new performance records, generate huge brand exposure and user growth. After the event, a large number of users remained and performance showed a spiral growth trend.

The core of activity-driven growth: large-scale discounts and promotions in the short term to generate huge brand exposure, combined with large-scale channel promotion to achieve large-scale user growth. After the large-scale event ends, a large number of users are retained, driving a leap-forward growth in the platform's performance. The premise for activity-driven growth is that the platform’s own product experience must be good and it must have the ability to retain users. If the product experience is poor, users come purely for the event and do not experience the core advantages of the product during the event. This will cause users to become overly dependent on events. They will come when there are events and not come when there are no events. They will always need to rely on events to drive growth, which will cost the company a high price.

6. Data-driven growth

Data refers to all quantifiable indicators encountered by an enterprise in its daily operations. Through one-dimensional and multi-dimensional cross-combination analysis of these indicators, growth bottlenecks can be discovered, driving the enterprise to provide targeted and effective solutions to achieve growth.

1. Three elements of data-driven growth

The three important roles of data-driven growth are problem discovery, problem analysis, and problem review.

• Discover problems: Discover problems in the actual operation and business growth of the enterprise through data analysis. This includes all issues in the daily operations of an enterprise, including channel conversion, product conversion, user structure, user conversion, user growth, supply and demand relationships, and activity effects. Identify growth bottlenecks and make key breakthroughs.
• Analyze the problem: Find out where the problem lies through data analysis. Often the data we see is a result, but what causes this result? This requires tracing the root cause through data, finding the truth that is closest to the facts, identifying the factor with the highest correlation, and then prescribing the right remedy.
• Review question: Every review of the effectiveness of a growth strategy and a work review rely on data. Through data, we monitor the trend changes of core indicators, evaluate the effectiveness of growth strategy execution, and conduct periodic reviews to ensure that growth is targeted. Make growth more targeted and guided.

2. Complete data-driven growth indicators and systems

Establish a complete data-driven growth indicator and system, including company-level core strategic indicators, data systems from traffic to user growth, supply-side online efficiency data systems, and product data systems.

• Establish the company's core strategic indicators

If a company has one and only one core indicator, then it is the company's strategic indicator, and all resources and goals must be broken down around this indicator. By breaking down the core indicators, we can obtain data indicators for each team and each business module.

Strategic indicators are not constant and will change accordingly with the company's different pursuits at different stages of development. Once the strategic indicators change, other indicators also need to be adjusted accordingly.

• Establish a data system from traffic to user growth

We have talked about channel-driven growth and user-driven growth before. Channels and users are in a back-to-back relationship. Each channel is a long funnel, starting from UV to registration, first consumption, repeat purchase, 3rd purchase, 4th purchase, 5th purchase, becoming a loyal user, then a mature user, and finally declining until loss.

We need to analyze each link based on corresponding data indicators to see where the growth bottleneck lies. Channel analysis mainly focuses on traffic sources, traffic quality, conversion rates between links, and input-output ratio. An important responsibility of a channel is to acquire new users. For a certain channel, it is necessary to focus on analyzing whether the cost of acquiring new users is cost-effective, as well as the retention of new users, in order to judge the quality of the channel.

First, look at the results through the data to see whether the customer acquisition cost is high or low, evaluate the quality of traffic through average order value and retention rate, and form a preliminary conclusion. Then find the problem through the data. If the cost is high, the conversion rate is low, the channel quality is poor, the target audience is not accurate, or it is due to the means of acquiring customers, etc. Analyze the conversion rate of each link in detail, find out which links have low conversion rates, and guide operations to make targeted improvements.

• Establish a supply-side operational efficiency data system

The data on the supply side is mainly used to evaluate the supply-side online efficiency and supply quality. The vertical aspect is the funnel data model of each link from the supply of leads to the launch, which evaluates the efficiency of the supply launch and where the bottlenecks are; the horizontal aspect is the evaluation based on the interaction and conversion data with the user end after the launch, including order efficiency, supply quantity, supply quality, quantity of high-quality supply, matching degree of supply and demand relationship, sales rate, user purchase conversion rate and other data.

• Establish product data system

Products are an important carrier connecting suppliers and demanders, and bear the important responsibility of converting all demands into actual purchases. How to effectively match supply and demand, distribute traffic reasonably, and improve the conversion rate of the core purchasing process is the key to product success.

Product construction is a dynamic process that requires corresponding product upgrades based on the specific development stage of the business. The product also carries the activity trajectory of the user throughout the entire life cycle, from acquisition, conversion to retention, and growth. It is necessary to design products that conform to the user path based on the user characteristics and needs of different users at different stages to enhance user growth and conversion. Therefore, the product's data system mainly builds data indicators around the following two dimensions.

Dimension 1: Construction of data indicators based on the conversion of core purchasing processes into leads. This dimension includes the funnel conversion data of the entire core purchase process, from the home page to the list page, the list page to the details page, the details page to the order page, the order page and finally to the payment success page, as well as the bounce rate of each level of page and the conversion rate data to the next level page.

Dimension 2: Construction of product data indicators based on user growth. First, we need to find the key indicators from user acquisition to retention through data, and focus on strengthening them on the product side to increase user retention. Secondly, we need to find the behavioral paths of users at different growth stages to improve user purchase conversion rate and user dissemination range. We will discuss in detail how to explore user key paths and find the magic number for retention in the following chapters.

The core of data-driven growth:

1. Quantify things to make the business analyzable, traceable and summable.
2. Data is like the eyes of business people. By effectively diagnosing growth bottlenecks through data analysis and solving problems in a targeted manner, growth can be achieved.

7. Brand drives growth

A brand refers to a company's name, product or service trademark, and other intangible assets that constitute a company's unique market image, such as logos and advertisements that can distinguish it from its competitors.

Product brand refers to the product and has two levels of meaning: first, it is a combination of the product's name, terminology, mark, symbol, design, etc.; second, it represents a series of added values ​​​​of the product, including functional and psychological interests, such as the utility, function, taste, form, price, convenience, service, etc. that the product can represent. Brand concept refers to the idea that can attract consumers, build brand loyalty, and thus create a brand (and market) advantage for customers.

Brand is conversion rate. When a company has no brand awareness, the efficiency of channel customer acquisition will definitely not be high, and the ROI (return on investment) will also be very low. Brand building is a key factor in explosive growth. After having good products and good services, good marketing and promotion are needed to make the company brand deeply rooted in people's hearts. Brand explosion creates popularity, and popularity determines the number of orders.

The core of brand-driven growth: When brand factors occupy the minds of users, they can weaken the impact of other factors on users' purchasing decisions and increase purchase conversion rates.

1. Three Misconceptions about Growth

There are many misunderstandings about driving growth, among which the three most common misunderstandings are

1) Pursuing vanity metric growth

Vanity metrics refer to those that cannot reflect the core competitiveness of a product or the true value of a product. Vanity metrics are some superficial indicators, such as PV, UV, clicks, APP downloads, number of registered users, etc. The real core indicators are the number of active paying users, the amount of content that brings actual value to the business, the number of active sellers, etc. These indicators will vary depending on the business model. Vanity metrics look nice and make you feel good, but they don’t provide any guidance for your next actions other than inflating your ego.

How to avoid: Set the right core metrics at the right time.

There are three main principles for selecting core data indicators:

• The selection of indicators must be consistent with the core objectives of the business model, and the indicators of focus in different periods are different.
• No matter at which period, the indicators we focus on must not harm the core value of users.

If a product affects the experience of non-paying users, then this feature is a bad feature, no matter how much money it makes for the company. It damages the user experience, which will lead to user loss in the long run and will ultimately affect commercial revenue.

• These data must be aggregated and quantifiable.

Each indicator set must be quantifiable, only in this way can it be evaluated. For example, user experience is not a quantifiable indicator, but it becomes a quantifiable indicator after being replaced by user retention rate and user rating. This is the only way to measure whether what we are doing is effective.

2) User growth is all about quantity

Many companies blindly pursue the growth of user numbers without caring about user quality and user retention, resulting in a rapid growth in the number of users, but the actual company's performance and revenue do not grow at the same rate. This mainly depends on the following two aspects:

1. The quality of new users and whether they are target users;
2. Whether the new users generate retention and continuous purchases, that is, whether the new users are growing.

If the above two problems are not solved, it will lead to ineffective growth.

Excessive subsidies will attract a large number of non-target users who come purely for the benefits and will not generate any retention. The higher the actual payment amount of the user, the higher the retention rate, which means the actual demand of the user is higher and the number of new users is closer to the actual target number of users.

Therefore, user quality, user retention, and user growth are key factors in user growth.

How to avoid it: Make sure to acquire accurate target users and ensure quality user growth; improve user retention rate from all aspects and promote user growth.

User growth = effective user growth;

User growth = user acquisition × user retention rate (user growth) × user monetization rate;

Balance subsidies to adjust the ratio of target users and non-target users, and maximize the actual payment amount of users. The higher the actual payment amount of users, the closer they are to the real target users, and the higher the repurchase rate.

3) Rapid and premature user growth accelerates the product's death

Rapid growth is not always a good thing. When the product has not been verified by the market, the user retention rate is low, and the product is not perfect, excessive user growth will only lead to negative reputation and a large number of user losses, ultimately accelerating the death of the product.

How to avoid: Do the right thing at the right time, using the right method and investing the right resources.

Business growth generally goes through four important stages.

Phase 1: Discover customer pain points and explore solutions. Generally speaking, companies can test whether they can effectively solve user pain points by providing MVP (minimum solution).

Phase 2: Find the fit between product and market. You can measure whether your product satisfies users by two simple indicators: first, whether users have sufficient stickiness; second, whether users will feel "uncomfortable" if they stop using your product. If users feel your product is dispensable after they stop using it, it may mean there is no product-market fit.

The third stage: understand whether the product and channel match. As we mentioned in the previous content related to channel-driven growth and data-driven growth, it is necessary to find the matching relationship between products and channels through data analysis. With a very limited marketing budget, find the most efficient channel and increase investment.

Fourth stage:

The user base is growing rapidly. After completing the above three steps, the last step is to invest more resources and expand rapidly. At this time, the company can do a lot of brand promotion and marketing, improve the conversion rate of the channel through brand reverse, and drive user growth.

These four steps need to be carried out in rhythm. You cannot invest a lot of resources too early at the wrong time and invest resources in the wrong channels.

2. Four key factors affecting growth

1) Target market space determines growth potential

The space of the target market determines the size of the user base and future growth potential. The target market directly determines how big the first-level funnel of user conversion is. Under the same conversion rate, the larger the user scale of the first level, the more users can be converted, and the greater the growth potential and space.

The first thing to consider when choosing a market is the size of the market, that is, whether the market has sufficient future growth potential. If the market space is not large enough, you need to consider horizontal scalability, that is, whether it has the ability to expand horizontally without major changes to the product solution. If you want to maintain sustained growth, either the space in the same market must be large enough, or you must have the ability to expand horizontally, starting from a small point and then replicating and expanding horizontally.

2) Invisible funnel determines growth bottleneck

The invisible funnel refers to factors that cannot be discovered through existing operational data but will greatly affect the user growth conversion rate. The following two points need to be achieved based on a deep understanding of the industry:

• Solve growth bottlenecks through product innovation
• Gain in-depth insights into user needs, categorize user needs, effectively increase product supply, and release user needs to achieve growth

(1) Product innovation

There are two main ways to achieve user growth through product innovation:

1. Modification of existing products. The usage threshold of the company's own or industry's existing products is too high. Through product innovation, they can be transformed to lower the user usage threshold and solve the key bottlenecks that affect user conversion. The lower the threshold for product use, the higher the user conversion rate. Lack of significant growth does not necessarily mean that user demand is not strong or the market space is not large enough. It may be that the product solutions provided are too complicated, the user threshold is too high, and the user conversion funnel is artificially created, making it difficult to convert users and resulting in slow growth. After these bottlenecks are resolved through product innovation, a large number of users will be able to convert, thereby achieving user growth.
2. Open up new market space through product innovation. It appears in a completely new product form.

(2) User classification

User needs are diverse, and there are huge differences between different types of user needs. By analyzing the characteristics of user groups and their unmet needs, we can then provide reasonable guidance based on user needs, design corresponding products or services, release user needs, convert potential purchasing power into real purchases, and ultimately achieve growth.

Users on the Internet exist in the form of visitors, that is, traffic. However, it is impossible to judge the differences between different users simply from traffic data. In fact, there is a user attribute behind every visitor, such as big customers and ordinary customers, and there are very significant differences in consumption needs between them.

If they are provided with the same products and services, it will lead to the loss of major customers or the failure to form effective conversions. Only by providing differentiated and targeted products and services to different types of users can we capture a wider user group and achieve growth.

User conversion is a key link in user growth, and its essence is to solve some key bottlenecks that affect user conversion. It is necessary to conduct in-depth research on target users, refine their core needs, check whether their needs are met, and what factors influence their purchasing decisions. Then, through product innovation, lower the user threshold, classify users, increase the effective supply of more target users, eliminate factors that interfere with growth, and achieve growth.

3) The impact of market penetration on growth

Market penetration refers to the coverage of a product or service in the market, which is a comparison between current demand and potential market demand.

Market penetration rate = current demand for a product / potential demand for a product

Judging from the calculation formula of market penetration rate, when the market penetration rate is at a low level, it means that the company is in a huge incremental market stage, and the growth mainly comes from the conversion of new potential demand users brought about by the increase in market penetration rate; when the market penetration rate becomes higher and higher and the industry tends to be saturated, the industry growth rate will slow down. At this time, the company's growth comes from how to compete for existing market users. The product life cycle mainly consists of the following stages:

Phase 1: Introduction period. When a new product is launched into the market, it enters the introduction phase. At this point, customers are still unfamiliar with the product, and except for a few who are seeking novelty, almost no one will buy the product.

The second stage: growth stage. When a product enters the introduction phase and sales are successful, it enters the growth phase. This is the demand growth stage, when demand and sales increase rapidly, production costs drop significantly, and profits grow rapidly.

The third stage: maturity. After the growth stage, as the number of people purchasing the product increases and market demand becomes saturated, the product enters the mature stage. At this point, sales growth slows down and then turns to decline, and due to increased competition, advertising costs increase again and profits decrease.

Stage 4: Decline. With the development of technology, the emergence of new products and substitutes, and changes in consumption habits, product sales and profits continue to decline, and the product enters a period of decline. The demand and sales volume of the product dropped rapidly, while substitutes and new products appeared on the market, causing customers' consumption habits to change.

Growth suggestions: When the industry is in the stage of huge incremental market, on the basis of ensuring product experience, it should prioritize increasing effective market supply and occupy market share as soon as possible. At this time, the competition is about speed of seizing the market and user retention. When entering the stock market stage, the competition is about differentiation based on the same products and services. On the basis of improving the stickiness of existing users and reducing user churn, the main growth goal should be to convert competitors' users.

4) The impact of market competition on growth

Enterprise growth is actually a dynamic development process, accompanied by fierce market competition. Growth is the result of comprehensive and multi-dimensional factors. In different market competition environments, the anchor points of a company's growth strategy will be very different.

When the industry is in the incremental market stage, companies compete to see who can seize the market faster, acquire users more efficiently, and compete on channels, brands, and supply. When it is in the stock market stage, companies compete on price, capital, product innovation, user experience, service, and a series of comprehensive factors. At this time, growth requires finding differentiated advantages from competitors in order to seek breakthroughs.

From the perspective of the competitive situation, if you are in a lagging position, you need to find differentiated competitive advantages to seek breakthroughs; if you are in a leading position, you need to further consolidate your original user advantages and form barriers to prevent latecomers from easily poaching users; if the two are evenly matched, you can take the initiative to launch an attack and quickly lock in users and market share. Whoever launches the attack first will have the first-mover advantage.

Because of the influence of network effects, the better the user experience of a successful platform, the higher the scale benefits it will enjoy, and users will be more willing to pay higher prices for a larger network. Therefore, the higher the user base, the higher the platform's expected profit margin.

Developing an operating model

The operating model is the planning, organization, implementation and control of the business operation process of an enterprise. It is a general term for all management tasks closely related to product production and service creation. Simply put, it is a way of doing business. The main contents include:

• Business model: how to provide value and benefits to customers, including brand, products, service content, etc.
• Channel model: how to acquire users, reach users, and how to deliver services and value to users, etc.
• Organizational model: How to establish an advanced management control model to improve operational efficiency.
• Business model: how to manage customers to achieve growth in customer base and added value for individual customers; how to manage merchants to expand high-quality supply; how to improve the efficiency of transaction completion; how to achieve overall performance improvement, etc.

10 common operating models

(1) Direct sales model

The direct sales model essentially eliminates middlemen, reduces product distribution costs and meets customer demand for maximizing profits.

(2) Community Model

The community model refers to a company conducting marketing activities directly to users through self-built communities, third-party vertical communities or comprehensive communities.

The community model has low operating costs, is directly oriented towards users, and conducts marketing in the form of content and interaction. It is more suitable for new products with high user education costs, is oriented towards interests and hobbies, and is easy to build fan loyalty. It is mostly technology products, hardware products and learning communities.

(3) Content operation model

Content operation is an operation method that uses media such as pictures, text, videos, animations, etc. to convey content related to the company or product to attract user attention, give users confidence, and thus promote sales.

Content operation is a way of delivering information to consumers from the perspective of assisting and helping customers find answers. It has the characteristics of low cost, high efficiency and precision. Traditional marketing methods are more about interrupting users' thinking and delivering product information through vision and hearing, while the content method is to attract users with needs to actively pay attention and thus form sales conversions.

The platforms used for content operations include:

• Text-based: such as Weibo, WeChat public accounts, news media, technology media, Toutiao, Zhihu, Baidu Encyclopedia, Baidu Knows, related vertical communities, social groups, etc.;
• Audio: such as Himalaya FM, Lizhi FM, etc.;
• Video category: such as short videos, live broadcast apps, traditional video websites, etc.

Content operations are generally applicable to all industries. If the company itself is related to content, such as Luoji Siwei, Zhihu, etc., it will rely even more on an operating model with content operation as the core.

(4) Key customer model

Key account operation is a series of marketing combinations targeting key accounts.

(5) Distribution model

The distribution model is a type of circulation model, in which manufacturers distribute their products to various retail outlets through distributors (agents/dealers).

The biggest difference between the Internet distribution model and the traditional distribution model is that the traditional distribution model is accompanied by the transit of goods, while the Internet distribution only requires sales. Goods can be shipped directly by manufacturers, and there is no need for distributors to engage in warehousing and freight, which is more convenient.

(6) Experiential Marketing Model

Experiential marketing is a marketing method that fully stimulates and mobilizes consumers' sensory, emotional, thinking, action, association and other perceptual and rational factors through seeing, hearing, using and participating, thereby triggering consumers to re-recognize, understand and think.

The core of experiential marketing is to lower the threshold for consumers' first experience and reduce their psychological purchasing pressure and decision-making costs.

(7) Conference Marketing Model

Conference marketing refers to an operating model that sells products by finding specific customers and using family services and product briefings.

The essence of conference marketing is to lock in and develop target customers, to output corporate image and product knowledge to customers in an all-round way, and to provide care and hidden sales to potential customers as an expert consultant.

(8) Free Model

Free is a major feature of the Internet. The free model attracts a large number of users by providing basic Internet services to users free of charge, and then earns commercial income through displaying advertisements, member value-added services, paid services, third-party sharing and other streams.

There are mainly the following situations.

1. Basic functions are free + optional payment. Some basic functional services are free to users, and users can choose whether to pay according to their needs.
2. Free product + membership fee. Basic functions are free, but member value-added services are charged.
3. Free in the early stage + subsequent charges.

(9) Scenario-based marketing model

Scenario-based marketing refers to marketing behaviors that design specific consumption scenarios for consumers, stimulate their potential consumption needs, and thus effectively achieve the company's operating goals.

The core of scenario-based marketing is the psychological state and needs of consumers in specific scenarios, and the scenario is just a means to awaken certain psychological states and needs of consumers.

(10) Community Model

A community is a group of people with common interests and needs, and it has various forms. In the community, there is content and interaction. The community connects people and people, people and things, enhances the depth of marketing and services, establishes an efficient membership system, enhances brand influence and user sense of belonging, and provides new driving force for corporate development.

There are five types of communities:

1. Product community
2. “Like-enthusiast” type communities: Community users pursue a sense of identity and a sense of superiority.
3. Knowledge communities: Users are concerned about their own growth, so they value whether the community can continuously output valuable information.
4. Resource communities: The main purpose of users in these communities is to expand their personal connections and to establish cooperative relationships.
5. Mixed communities: This category may cover all of the above types, and communities divided by occupation, industry, etc.

In addition to the 10 operating models mentioned above, there are also O2O model, crowdfunding model, membership model, etc. The core is to explore an operating model suitable for its own development based on its own industry characteristics and business model.

Business model vs operating model

Business model is the way or method by which a company makes money.

• The essence of business is value exchange. To exchange value, you must first create value. Therefore, there are two questions that must be clarified: Who are your target customers? What value can you provide to them?
• How do you make money after bringing value to customers?
• What resources and capabilities do you have that can simultaneously create value for your customers and generate profits for your company?
• How do you achieve profitability?
• Where are the target users concentrated and what channels are used to reach them?
• Cost structure: the costs of the tools and methods used.
• Revenue model: the way a company creates wealth.

The operating model is the business method of an enterprise, which is a collection of methods such as attracting customers, employees and investors, and providing products and services to the market while ensuring profitability, as well as organizational forms. Any business model is realized through a specific operating model, and operating models with real commercial value have profit as their ultimate goal. To this end, the profit model is a specific means of making money, which ultimately realizes its overall business model through the operating model.

6 Core Growth Indicators of Internet Business Models

Common business models of Internet companies and their core growth indicators can be divided into the following six categories:

1) E-commerce

E-commerce has multiple transaction models, such as B2B, B2C, C2C, B2B2C, C2B, etc. The business models behind each transaction model are very different and need to be discussed separately. Here we focus on the most mainstream B2C model.

The specific analysis of the B2C model is as follows:

(1) Target customers: users who shop on the Internet.

(2) User value: E-commerce provides users with a convenient online shopping experience. Users can place orders online, complete payment (or cash on delivery), and the goods can be delivered to their door on the same day at the earliest. E-commerce has greatly reduced store opening costs, channel distribution costs, and commodity turnover costs, and has greatly reduced the user terminal retail price. Users can purchase high-quality, cost-effective goods on the Internet, which is the core user value provided by e-commerce.

(3) Core competitiveness: including product prices, logistics speed, shopping experience, richness of product categories, product purchasing capabilities and operational capabilities.

(4) Customer acquisition channels: Internet channels, such as search, navigation, online advertising, etc.; online and offline brand promotion to enhance brand awareness and thus increase the number of natural visiting users.

(5) Cost structure: including labor costs, commodity procurement costs, operating costs, logistics costs, inventory costs, etc.

(6) Profit model: The essence of e-commerce is retail, but the sales channels and transactions have shifted from offline to online. Its core is still exchanging goods for money. The basis of its business model is to earn the price difference of goods and charge a certain merchant service fee or share. With the development of Internet finance, e-commerce platforms provide Internet financial services to merchants and users on the basis of transactions, provide supply chain financial services to merchants, and provide investment and financial management value-added services to users, thereby deriving more profit models.

The growth of the e-commerce model depends on the quantity and quality of buyers and sellers and the efficiency with which transactions are concluded. The efficiency of the transaction between buyers and sellers depends on three aspects:

(1) Whether the product categories and quantity can cover the purchasing needs of enough users;

(2) Whether the price of the product is sufficiently competitive in the market;

(3) Whether the product experience of the e-commerce platform is good, such as the user experience of the purchase process, the speed of logistics, after-sales service quality, etc., these are factors that affect the purchase conversion rate.

Therefore, several core growth indicators of e-commerce can be determined as: product quantity (including the quantity of product categories and the quantity of single products), user scale, total transaction amount, and transaction completion rate.

2) Media website

Media websites are the earliest product form and business model on the Internet, and the website provides information and content for users to access.

• Target customers: Internet users.
• User value: Provide users with free news and industry trends.
• Core competitiveness: the quality of content editing and editing, the speed of content update.
• Obtain users: Obtain users through the content itself, inclusion of search engines, active user access and other tool software.
• Cost structure: including labor costs and operation costs.
• Profit model: implant online advertising to obtain commercial income.
• Core indicators of media websites: quantity of high-quality content, user visits, and advertising revenue.

3) UGC website

UGC refers to users displaying their original content through the Internet platform or providing it to other users. Users are both consumers of content and creators of content. Content is produced actively by users, and each user can generate their own content, unlike before, only a small number of people can produce content.

It is precisely because of the rapid development of UGC that the content on the Internet has grown rapidly, forming a situation of multiple, broad and specialization, which has played a very important role in the accumulation and dissemination of human knowledge.

But it should be noted that because everyone can generate content, it may bring about a lot of wrong, false and one-sided content, so you have to make a judgment on yourself and the platform also needs to review it. Websites such as YouTube are successful cases of UGC. Social networks, video sharing, blogs and podcasts (video sharing) are all the main application forms of UGC. Other typical representatives are Weibo, Zhihu, etc.

• Target customers: All Internet users.
• User value: Provide users with news, entertainment, information and professional content in a certain vertical field, etc.
• Core competitiveness: operational ability, ability to acquire users that can create high-quality content, and content operation capabilities.
• Obtain users: Search engines, application markets and content auto-propagation, etc. Obtain users.
• Cost structure: including labor costs and operation costs.
• Profit model: advertising or donation (such as reward) model, member payment model, etc. For example, Zhihu generates content through high-quality Q&A, and then monetizes traffic through advertisements.
• Core indicators of UGC websites: the number of high-quality content, the number of users who can produce content, the number of users who consume content, and advertising revenue.

4) Internet Finance

Internet finance refers to a new financial business model in which traditional financial institutions and Internet companies use Internet technology and information communication technology to realize financial communication, payment, investment and information intermediary services.

Internet finance is not a simple combination of the Internet and the financial industry, but a new model and new business that naturally arises to adapt to new needs after network technologies such as security, mobile, and payment are mature and accepted by users. It is an emerging field that combines traditional financial industry with Internet technology.

Internet finance is an organic combination of Internet technology and financial functions. It is a functional financial industry and service system formed on an open Internet platform based on big data and cloud computing. It includes a financial market system, financial service system, financial organization system, financial product system and Internet financial supervision system based on the Internet platform. It also has financial models that are different from traditional finance, such as inclusive finance, platform finance, information finance and fragmented finance.

The main application scenarios of Internet finance include Internet payment, wealth management, financial technology (personal credit, such as Ant Financial's Sesame Credit), cash lending, etc. This section focuses on explaining wealth management (i.e., investment and financial management platform-based business model).

• Target customers: Investment and financial management users with Internet payment capabilities.
• User value: Provide users with convenient, safe and portfolio products that are far higher than bank wealth management returns.
• Core competitiveness: including risk control capabilities, payment channel capabilities, platform brand trust endorsement capabilities, customer acquisition capabilities, and financial product innovation capabilities.
• Obtain users: Obtain users through search engines, social media, online advertising, application market, offline promotion, word-of-mouth communication, etc.
• Cost structure: including labor costs, capital costs, operation costs, marketing costs, and asset bad debt costs.
• Profit model: Obtain user funds at low interest rates, invest outward at high interest rates to earn interest rate spreads, and deduct reserves that generate bad debt risks.
• Core indicators of Internet finance: capital scale, profit, number of high-quality assets for foreign investment, and number of active investment users.

5) Tools and software

Tool software includes two categories: one is the Internet-based tool software we commonly use, such as browsers, antivirus software, download software, search engines, music software, office software, etc., which mainly provide Internet services for individual users; the other is SaaS (Software-as-a-Service, software and service) tool, which is an application model that provides software services based on the Internet, and is more inclined to provide software services to enterprises.

• Target customers: Internet individual users and corporate users.
• User value: Personal Internet access tools provide users with more convenient and fast Internet access services, and improve users' efficiency in a certain vertical field; SaaS is a solution to the problem of enterprise Internet access or enterprise operation efficiency.
• Core competitiveness: convenient, fast, easy to use, and improve corporate operation efficiency.
• Obtain users: Obtain customers through software market, search engines or sales channels, brand promotion, etc.
• Cost structure: including labor costs, channel costs, marketing costs, and sales costs.
• Profit model: The profit model commonly used by personal free software is to accumulate a large number of users by free tools, and then achieve commercial revenue through advertising and traffic distribution, such as the Qihoo 360 business model we mentioned earlier. SaaS software provides services on demand based on enterprise needs, and obtains profits in the form of monthly or annual fees, and obtains commercial revenue through paid functions or advertising.
• Core indicators of tool software: the number of tool users, the number of paid users/enterprise numbers, and commercial revenue.

6) Bilateral market (O2O/C2C/B2B), platform model

A bilateral market is composed of three parties: buyers, sellers and platforms, and buyers and sellers reach transactions or provide services through the platform. There are two core points of the bilateral market:

1. There are two different types of users in the market that act or trade through the same platform.
2. One user’s decisions will affect the results of the other user. Taking Taobao as an example, the users on both sides refer to consumers and merchants respectively. Without consumers, merchants would not want to open stores, and not enough merchants would not want to open stores, and consumers would not want to spend.

In order to attract one side of users, the platform needs to have a large number of users on the other side, but at the same time, only when there are a large number of users on this side, the other side of users are willing to trade through this platform.

Therefore, the platform faces the problem of which side of users is first cultivated and built, that is, how the platform balances the needs of users on both sides to ensure the largest transaction volume. The platform-type mode is like the two pedals of a bicycle, and it requires the coordinated force of both ends to move forward steadily.

The most important thing about the platform operation model is to "ensure that sellers or content providers make money." Because once the seller or content provider makes money, he will have the motivation to publish good products/update content, the products or content resources on the website will be rich, and users will naturally come in a crowd, so it will not be difficult for the website to make money. This is a virtuous cycle of ecosystems. At the same time, this is also a difficulty for an open platform: how to find a balance point, build such a virtuous cycle ecosystem, and achieve three wins?

• Target customers: Users who meet the platform's product positioning, and the platform provides users with a wide range of purchasing options. The platform model also belongs to the long-tail model, covering a wide range of users. For example, Taobao is nicknamed "universal Taobao" because there are enough sellers and a wide coverage, which is a very large long-tail market.
• Core competitiveness: platform operation efficiency, ability to acquire users of both buyers and sellers.
• Obtain users: Online marketing, mobilize merchants to promote themselves through off-site, and also bring users to the platform.
• Cost structure: including labor costs, operation costs, and R&D costs.
• Profit model: By helping buyers and sellers reach transactions online, obtain commission income; provide promotion services to merchants, obtain promotion fees, and charge platform service fees.

The difference between the platform model and the self-operated model: the core of the platform model is traffic distribution, which effectively matches demand and supply, and promotes the efficiency of transaction completion; the core of the self-operated model is to convert traffic into first-time purchase users, and then convert the first-time purchase user into a loyal user, cultivating users to continuously purchase.

The core of the former is to improve the monetization rate of traffic, while the core of the latter is the consumption frequency, amount of a single user, and the operation and management of the entire user life cycle.

Core indicators of the platform model: the number of active sellers, the number of active buyers, transaction completion efficiency, and transaction amount.

7) Disassemble core indicators and formulate growth strategies

The core growth indicators of different business models were mentioned earlier. Once the core indicators are determined, it is necessary to disassemble these indicators, analyze the path to implementing the core indicators, decompose more detailed business indicators, and guide each team to carry out specific work.

The growth strategy extends from core indicators, breaks down segmented indicators through a series of formulas, quantifies all the energetic indicators among the seven major factors that drive business growth mentioned above, and connects them together through a series of formulas and indicators to form a growth model.

Analyze the conversion rates of each link, analyze where the growth bottleneck appears, solve the bottleneck in a targeted manner, and drive growth through data.

8) How to disassemble core indicators

There are two main lines for the disassembly of core indicators: disassembly according to the main business process and disassembly according to the marketing funnel model.

(1) Disassemble according to business process

Business processes are a series of activities completed by different people in order to achieve specific strategic goals. Business processes are hierarchical, and this level is reflected in logical relationships from top to bottom, from whole to part, from macro to micro, and from abstract to concrete. Such hierarchical relationships are conducive to the establishment of enterprise growth models and the coordination relationship between corporate departments in order to complete the core growth indicators.

By dismantling the business process, we can clearly guide the enterprise in which links should be made, which departments should be coordinated, and what to do, and ultimately guide the implementation of growth.

The relationships between growth goals, strategies and tactics, business processes, and organizational structure are as follows:

• Goal: Determine what business needs and growth goals are.
• Strategy and Tactics: break down business processes, develop growth strategies, determine what tasks are needed, and how to execute them.
• Organizational structure: Determine the departmental organizational structure and how to divide the work and cooperate.
• Segmentation process: The segmentation process of different departments when collaborating on completing a task.

The flowchart is a simple and concise “thumbnail overview” that helps employees quickly understand how the business works. It contains several keywords: who, when, under what conditions, what did you do, what input, what output, whom you output, etc.

Generally speaking, first establish the overall operation process of the business process, then refine each content, implement it in each department, and establish relatively independent sub-business processes and auxiliary business processes and indicators to serve them.

Detailed disassembly steps

Step 1: Use the 5W1H method to describe the basic problems clearly.

Who is our main customer and who (which teams) should play a role in the process?

·What is the need we must meet? What are the main requirements? What is a secondary requirement?

·Why (Why) we need to meet these needs?

·Where is we need to provide products or services that meet our needs?

·When do we need to meet these needs? How important is timeliness and response speed?

·How to achieve the above tasks? What process is needed? How to manage these processes? What technical means are needed?

Step 2: Determine the top-level business process.

Top-level business processes refer to processes that have a direct effect on meeting customer needs and improving corporate performance, and can clarify the most basic logic of this business. The top-level business flow chart is a simple expression of the overall business.

Step 3: Start from the top-level business process and gradually disassemble it downward.

Starting from the top-level business process, from coarse to fine, a flow chart of second-level, third-level and fourth-level are generated, and the degree of dismantling is determined based on the complexity of the business, until it cannot be dismantled.

(2) Disassemble according to the marketing funnel model

The marketing funnel model refers to a quantitative model of conversions in which access users or potential users gradually change to purchase users during the marketing process. The key elements of the marketing funnel include the conversion rate of marketing links and adjacent links. The value of the marketing funnel model lies in the efficiency of each link of the quantitative and decomposed marketing process, helping us find weak links.

The focus of the marketing funnel model is to quantify. From the start point of user access to the end point, each link will cause user loss, decreasing in turn, and each step will have a conversion rate, and analyze it based on the conversion rate data generated by each link of the user. From access to purchase, users have more than one path, each path is a funnel, and the ultimate goal is transaction conversion.

Every step of the user's visit, from the maximum display volume to the minimum order volume, the shrinking layer by layer means that users are constantly leaving for various reasons, losing interest in the company or giving up purchasing.

What we need to do is to organize the funnel model data of each link based on the existing user path, analyze the factors that may cause user loss in each link, and make targeted optimizations, thereby improving the overall transaction conversion rate and improving the core growth indicators.

It should be noted that the entire user behavior is based on the final transaction as the evaluation standard, and the conversion rate of each link is closely related. We cannot simply look at the conversion rate of a certain link. We must use the final transaction conversion rate as the core conversion rate to guide optimization.

The detailed disassembly steps are as follows:

Step 1: Determine the core indicators and formulas: Profit = sales × profit margin - cost.

The company's profit is mainly closely related to sales, costs and profit margins. Multiplying sales by gross profit margins, and then deducting the total cost of the company is the company's gross profit (net profit also requires deducting income tax and other expenses paid by the company).

Step 2: Disassemble the core indicators one by one, as shown in Figure 2-16.

The formula for sales is further broken down: sales = traffic × conversion rate × customer unit price × purchase frequency.

The traffic can be disassembled into direct traffic and off-site traffic, as shown in Figure 2-17.

Direct traffic refers to the direct access of users through direct input of domain names or opening favorites, which is generally the traffic brought by the website brand itself; off-site traffic refers to the traffic brought by placing advertisements or replacing resources in various channels outside their own website.

Conversion is every conversion process brought about by each traffic after it enters the website. Conversion rates mainly include registration conversion rates, conversion rates added to shopping carts, order conversion rates and payment conversion rates.

The final increase in conversion rate comes from the increase in conversion rate of each link. Different categories can be broken down from the acquisition of traffic and the experience within the site to find the corresponding improvement methods.

• Profit Margin

Profit margin is mainly closely related to the purchase price and sales price of the goods. To have a high profit margin, either reduce procurement costs or provide retail prices. However, in a fierce competitive environment, increasing retail prices will affect market sales. Price is a double-edged sword. It is necessary to achieve a dynamic balance between purchasing price and selling price, which not only meets the needs of market competition, but also improves the profit margin of the company.

In addition, profit margin is related to the overall category structure and product structure of the website. The traffic categories used by enterprises to attract new customers are usually strategic losses, price wars, and are used to maintain market competitiveness, and the profit margin will be low or even negative.

New users need to be diverted to other high-profit categories to achieve profitability. Different categories must not only meet the needs of users to attract new users, be active and related, but also take into account the profit level of the company to ensure that the growth of user scale, sales and corporate revenue are positively correlated.

• Cost disassembly

Cost dismantling can be divided into operational costs, labor costs, procurement costs, logistics costs, warehousing costs, promotion costs, R&D costs, etc.

In summary, various cost expenditures have a lot to do with the scale of sales and the efficiency of operation. In the actual operation process, enterprises should reasonably optimize the cost structure and improve the efficiency of capital use. Sometimes, when nothing changes, adjust the cost structure and invest funds in places with the highest output efficiency will also achieve growth. Behind the cost is the actual operating conditions of the enterprise, and it is necessary to save costs and expenditures, but you must also dare to spend money where it is time to spend money and spend money on the edge.

Step 3: Quantify the indicators.

• Traffic indicators

UV: Unique visitors.

PV: Page views.

Access duration: the time the user accesses, measuring the quality of traffic.

Bounce rate: Measure the depth of user access.

Conversion rate: measures the quality and conversion effect of traffic.

• Sales indicators

Number of purchase users: The actual number of users who end up paying.

Order volume: Payment orders generated by the total number of users who actually paid.

Number of order items: The sum of the items of all orders.

Sales Amount: The total amount paid by the user.

Unit customer price: the amount paid by each user.

• Operational indicators

Number of registered users: The number of users who have registered behavior reflects the growth of registered users.

Number of purchase users: The number of users who have actual payment behavior reflects the actual transaction situation.

Purchase conversion rate: The number of purchase users divided by the number of registered users to reflect the conversion status of registered users.

Return and exchange rate: The number of orders that have been returned and exchanged is divided by the total number of orders to reflect the operation of the product.

Payment conversion rate: The number of successful payment orders divided by the total number of orders reflects whether the payment channel is smooth and why the user gave up the order.

·Repurchase rate: The number of users who purchase repeatedly over a period of time is divided by the total number of users, reflecting the user's activity.

• Brand influence indicators

·Brand influence indicators mainly bring active access traffic to the website. It mainly brings search traffic and traffic that users actively access through SEO search engine optimization.

• Business indicators

Business indicators reflect the actual cost and profitability of the company.

CPM: Cost Per Milli-impression.

CPC: Cost Per Click.

CPA: Cost Per Action.

CPS: Average cost per salse.

Develop a growth strategy

Corporate growth strategy refers to a comprehensive action plan adopted by an enterprise from a strategic perspective, in order to achieve the sustainable growth of the enterprise, gathering all efforts and developing core resources, and in a complex and changeable external environment for a long period of time.

The enterprise growth strategy mainly includes the following aspects: user strategy, platform strategy, product strategy, and market strategy

1) User Strategy

User strategy mainly includes the following key points: determining target users, determining product core value, user growth, user retention, user growth, user hierarchical operation and group operation:

(1) Determine the target user: What group is the target user and what characteristics are they all, and it is best to outline an accurate user portrait. That is, user information is labeled. By extracting these features, users’ needs can be predicted and operations can be carried out in a targeted manner.

(2) Determine the core value of the product: The core value of the product lies in what kind of services to provide to users and what kind of core needs to solve users. Only when the core value of the product is determined and the growth strategy revolves around the core value can healthy and sustainable growth be achieved.

(3) User growth: After determining the target users, we need to analyze where they mainly gather and are active, that is, the key channels for acquiring customers, including online channels and offline channels. After finding the target user and the channel, you need to analyze the channel attributes, user characteristics, and the core value and selling points of the product, organically combine the three, and acquire the target users through promotional means such as advertising, content output, and joint activities on the channel.

(4) Improve user retention and activity and promote user growth: Single transaction users cannot bring sustainable value to the company, which is invalid growth. Only when users retain, become active and grow on the platform and generate continuous consumption can they bring real growth to the company. Therefore, user acquisition is just the beginning, and retention and growth are the key.

(5) User hierarchical operation and group operation: When the platform users grow to a certain level, it is necessary to carry out refined operations to improve operational efficiency. User hierarchy and grouping are two important operational means.

2) Platform Strategy

Platform strategy refers to the platform continuously adding more content, services and creating new product solutions to better meet user needs and reach transactions.

After the platform's ecosystem reaches a certain scale, the growth of any party connected to the platform will drive the growth of the other party, and a strong network effect will be formed on both the supply and demand ends.

A successful platform is not just about providing intermediary services, but the core is to build a complete value chain ecological system, build ecologically around the needs of both supply and demand, and maximize the completion of transactions.

The platform strategy is to build a one-stop service platform for users, which content and services are provided, who will provide these content and services and how to provide them. Category strategies, merchant strategies, etc. common in transactional products all belong to the category of platform strategies; the common UGC, PGC and other content production and distribution methods on content platforms are also an important part of the platform strategy.

There are two modes of the platform: the self-operated platform model and the open platform model. For example, the self-operated part of JD.com belongs to the self-operated platform model, and Tmall belongs to the open platform model.

The self-operated model requires enterprises to do both supply chains and user operations, with a relatively long business chain; the open platform model mainly introduces high-quality suppliers through investment promotion or cooperation to help them improve their operating capabilities on the open platform, convert platform traffic into users of various partners, and match the suppliers on the user side.

Compared with the self-operated model, the open platform model has a shorter business chain and focuses more on merchant operations. When serving merchants well, merchants can provide better content and services.

3) Product Strategy

Product strategy refers to how an enterprise classifies products to better meet user needs, improve the operational efficiency of the enterprise, develop new product functions or services, and formulate a good product development strategy.

The product strategy is mainly formulated around the following factors: solving user pain points, improving user experience, reducing user decision-making costs, improving transaction conversion rate, time/cost/quality, and operational efficiency. Products can be divided into the following categories, and different products have different strategic priorities.

• Tool products: Solve user tool-oriented needs, focusing on easy-to-use, time-saving, and solving user specific problems.
• Transaction products: reduce user purchase threshold and decision-making costs, assist user purchase decisions, and improve user transaction conversion rates.
• Content products: Improve the quality of content production, lower the threshold for users to obtain content, and improve the efficiency of content distribution.
• Social products: Improve user communication efficiency, reduce communication costs, and allow users to quickly and effectively add friends and effectively obtain information.
• Operational products: Promote the achievement of operational purposes and improve operational efficiency, such as red envelopes, full discounts, flash sale, full return, etc.

4) Marketing Strategy

Marketing strategy is a process in which the company's marketing department determines the target market based on strategic planning, based on factors such as external market opportunities and internal resource conditions, selects the corresponding marketing strategy combination, and effectively implements and controls it.

(1) Types of marketing strategies

Market penetration strategy. The purpose of this strategy is to increase the sales volume of old products in the original market. That is, on the basis of the original products and market, enterprises maintain old users, strive for new users, gradually expand product sales volume, and increase market share of original products through measures such as improving product quality, strengthening advertising, and increasing sales channels. Market penetration strategies can be divided into the following categories:

Sell ​​existing products or services to existing customers. Explore the needs of existing customers, increase the purchase frequency and unit price of customers through event promotions, scenario construction, demand matching, etc., and achieve growth.

Sell ​​new products or services to existing customers. Add new categories or merchants to meet more needs of existing users and achieve growth by increasing effective supply.

(2) Market development strategy, also known as market development strategy. It includes two aspects: one is to find new market segments for products; the other is to find new uses for old products, find and attract new consumers in the traditional market, and expand product sales.

Sell ​​new products or services to new customers: Enter new market segments, develop new products or services to meet more user needs, and extend them based on the existing product line. Develop new products to meet the needs of potential customers.

Selling existing products or services to new customers: When the platform is oversupply, it is necessary to continuously acquire new users to achieve growth. Find new market segments or new consumption scenarios for purchasing existing products or services, reconfigure existing products or services to meet the needs of new customer groups; combine existing products or services to sell in a way that attracts consumers.

(3) Market development strategy, also known as new product market strategy. In order to maintain market share, gain competitive advantages, and continuously expand product sales, enterprises must improve product quality, stimulate and increase demand.

(4) Mixed market strategy. In order to improve competitiveness, enterprises continue to develop new products and use new products to open up new markets.

(5) Steps to implement marketing strategy

Step 1: Analyze market opportunities.

Before entering a target market, companies need to conduct investigations and research from the perspectives of consumers, market supply conditions, competition conditions, etc., to identify, evaluate and select market opportunities.

Consumer analysis: Who are the main target users of this market, what are their core pain points, whether they are willing to pay for it or whether they have the ability to pay.

Market supply analysis: To address the pain points of target users, what are the solutions provided by the current market, what are the advantages and disadvantages, and whether they are substitutable.

Value status: Is the competition in the target market fierce? Is it a red ocean period or a blue ocean period? If a company enters this market, who are its competitors, what are its advantages and disadvantages, and what potential competitors may exist. If it is a blue ocean market, how long does it take for the company to develop after entering the market? Judging from the current competitive situation of the development of the Internet, a new market may become a red ocean market in at most 3 months. Whether a company can establish competitive barriers in such a short period of time is all issues that companies need to think about.

Based on the above analysis, it is also necessary to conduct a comprehensive and objective evaluation of the company's own capabilities, market competitive position, corporate advantages and weaknesses, and to check the consistency between market opportunities and the company's purpose, goals and tasks.

Step 2: Choose the target market.

The choice of the target market is a strategic strategy for corporate marketing and an important part of marketing research. The company should first segment the market it enters, then analyze the characteristics, demand trends and competitive conditions of each market segment, and choose its own target market based on the company's advantages.

Step 3: Determine the marketing strategy.

Corporate growth is the comprehensive result behind a set of combined punches. The traditional classic marketing theory - "4Ps" marketing theory (Product product strategy, Price price strategy, Place channel strategy, Promotion promotion strategy, and strategy Strategy) is still applicable in the Internet era.

Product strategy: Focus on development functions, require the product to have unique selling points, and put the product's functional demands first. What kind of product functions can be used to solve what users’ needs? For example, Qunar provides a product function of air ticket search and price comparison to solve users' needs for purchases at low prices; Dianping provides a restaurant content review function with LBS positioning to solve users' needs for finding food; Didi Chuxing provides a mobile APP ride-hailing function to solve users' one-stop travel needs.

Channel strategy: Channels are the source of traffic. The source of enterprise traffic is divided into two parts. One is user active search, that is, brand traffic; the other is to match user needs through channels, find user groups that match product positioning, and establish contact with users. Channel strategy is mainly divided into the following steps.

1. Determine the promotion channel and find the location of the target group users.
2. Find materials that match the promotion content: what material is written, what copywriting is written, what psychological expectations are for users to come in, what pages are pushed to, and optimize the effect through data analysis.
3. Optimize operations to improve the conversion rate of each link, reduce customer acquisition costs, and improve operational efficiency.

Price strategy: formulate different price strategies based on different market positioning and different marketing purposes. A common price strategy on the Internet is the "hot product strategy", which drives traffic by creating hot products and thus achieves conversion. The essence behind it is the marketing logic of traffic categories. "Traffic categories" come from traditional retail. Retailers establish different role models based on different contributions of the categories. Traffic categories play the role of attracting customers. By selecting some products with low unit prices, high sales volume and sensitive user prices to subsidize, the prices will be very low and more traffic will be obtained. We will explain this part in detail in the following chapters. In addition, differentiated price strategies can be formulated for different channels. For example, special discounts are provided for special channels, so as to jointly promote them and gain more users.

Promotional strategy: a series of marketing activities including brand promotion, advertising, public relations, promotional activities, etc. Due to the strong connection attributes of the Internet, promotional activities and brand activities can be spread explosively in a short period of time, and are one of the most effective tools to drive user growth. The most classic cases, such as Tmall’s “Double Eleven” and JD’s “618” and other e-commerce festivals. Promotional strategies need to build a complete system, such as determining what promotional activities to do at what point in time and what category planning to do.

Promotional activities generally follow the laws of the industry and conform to the characteristics of seasonal and situationality. Common promotional activities are classified as follows:

• Brand Activities: The main goal is brand promotion.
• ·New recruitment activities: The main goal is to acquire new customers.
• Large-scale festivals across the network: Double Eleven, 618.
• User education activities: It is often used when an important function is launched, such as Didi drivers launching, announcing the first price for free; and for example, how to improve the quantity and quality of UGC evaluations, and plan an activity to improve user UGC evaluations to effectively stimulate the improvement of UGC content.
• Improve a certain indicator in a certain period of time: such as how to increase weekend sales and daily product activity.
• Category activities: such as the hot pot festival.
• Important festivals on the website: such as anniversary celebration.
• Festival creation: Baidu glutinous rice’s 37 Girls’ Day and 517 Foodie Festival.
• Industry hot marketing: such as the release of a large-scale movie or the taking advantage of a hot event.
• Festival activities: such as Christmas, Spring Festival, etc.

Author: Huang Tianwen

Source: Small things about operations (ID: yunying166)