Methodology for monetizing popular products!

Nowadays, products are updated and updated in an endless stream. In order for a product to successfully attract a large number of customers and achieve efficient traffic generation, it not only depends on the core and quality of the product itself, but also on corresponding operations and marketing. So, how can we make a product a hit and monetize it efficiently?

In the two articles "How to Create a Hot Product" and "The Underlying Logic of Hot Products and Traffic", we mentioned that hot products have three characteristics: Hot products = high demand * high spreadability * high conversion rate.

• High demand: efficiency in matching products with demand;
• High communicability: amplification efficiency of coding and media;
• High conversion rates: Causal efficiency in decision making and motivation.

These three aspects correspond to product attributes, traffic attributes and monetization attributes respectively.

Today we will introduce the third part, the underlying logic of hot product monetization.

There are many methodologies for monetizing hot products. Today we will focus on introducing a three-step method for monetizing hot products : two light, five heavy, and three ecosystems.

One, two light

What does the two light refer to?

The two light are the most basic logic for monetizing hot products.

The basic logic of monetizing hot products = light decision-making * light competition.

This is the most core method.

Easier said than done, how to interpret the logic behind it?

This can be the life cycle of a product, the life cycle of a market, or it can represent the life cycle of an industry.

At point A , the market begins to grow rapidly. When demand far exceeds supply, there will be natural traffic, and people will come to us even if we sit at home. This is a time of light decision-making and light competition.

At point B , demand and supply begin to balance, and decision-making becomes difficult. Natural traffic is gradually shrinking, and no one will come if we don’t operate it. After the customers come, because there are many competitors and supply and demand are basically balanced, the difficulty of decision-making gradually increases. This is a time of moderate decision-making and moderate competition.

At point C , supply far exceeds demand, and it becomes a matter of heavy decision-making and heavy competition.

Generally speaking, light decision-making and light competition are always positively correlated with supply and demand.

The difficulty of decision-making gradually increases from point A to point B and then to point C, corresponding to mild, moderate to severe respectively.

In other words, if we can continue to find market point A, we will always be in a state of monetizing our hot products.

We define this market as an incremental market .

Incremental markets are something you can only come across by chance. Can you give an example? How to implement it?

Let’s give you another business tool with thinking attributes:

Let’s take yam flour as an example.

The explicit needs of explicit customers: customers want to buy and come to you directly.

Customers hope to buy better yam flour with high cost performance and good quality. We just need to find a relatively better product to match their needs based on the decision points that customers are concerned about.

The hidden needs of explicit customers: Is there a potential customer group who understand us but refuse to buy from us?

For example, if you are someone who eats fresh yam and knows the functions of yam, you just don’t want to eat yam powder. There are several reasons:

1. You may think that yam noodles are not a vegetable, but I just like to eat vegetables. There is no way to change this;
2. You think yam powder is not as nutritious as fresh yam;
3. You think something might be added to the yam powder and you are very worried.

This is called the implicit demand of explicit customers.

What are the explicit needs of implicit customers ?

Maintaining health is a basic need of the people, and red bean and barley tea is a common tea for removing dampness. The main ingredient, red bean, is neutral in nature, while coix seed is slightly cold in nature, so when the two are mixed together, they are also cold in nature. People with cold stomach may feel uncomfortable after drinking it.

At this time, if you add yam powder, red bean, coix seed and yam powder will become a solution for removing dampness for people with cold stomach.

This is called the explicit demand of implicit customers. The needs of this group of customers are mainly for removing dampness. They are not direct customers of yam powder, but I realize commercial monetization by meeting their needs.

Hidden needs of hidden customers: Yam noodles are mostly sold in retail, can they enter the catering industry?

Guangdong people love to make soup, and fresh yam is a food with a particularly low cognitive cost in Guangdong, so there is no need for customer education at all.

High-end takeout in Guangdong requires soup, and we can provide high-end yam noodles. This is an idea of ​​moving from retail to catering.

This is the hidden demand of hidden customers. It had nothing to do with us originally, but now we have a certain relationship with it and can achieve conversion.

The same yam powder can be transformed in different markets.

• The hidden needs of hidden customers are the first incremental market.
• The explicit demands of implicit customers are the second incremental market.
• The implicit needs of explicit customers are the third incremental market.
• The explicit demand of explicit customers is the fourth incremental market.

Remember the product life cycle curve mentioned earlier?

The explicit market of explicit customers, if at point A, is the fourth incremental market. If it is at point C, it is a stock market.

To sum up, the two light things are, on the one hand, highly desirable but unattainable, and on the other hand, they challenge our business skills and there are ways to do it.

Second, the fifth

It is difficult to transform the five important things into the two light things , which is a bit similar to the transformation from Western medicine to traditional Chinese medicine.

Western medicine is more about solving a problem immediately, but the two light medicines can solve the problem.

The fifth level is equivalent to entering the state of traditional Chinese medicine, which achieves an overall healthy health effect by improving physical fitness, enhancing immunity and other factors.

What is the fivefold solution? What is this health-preserving method? The answer is: growth operations .

What is Growth Operations?

Growth operations are about delivering value to target customers in a continuous and stable manner, achieving three responses through three means.

Which three methods? Traffic operation, customer operation, and content operation.

Which three reactions? Transactional reactions, relational reactions, and cognitive reactions.

• Transaction response: Increase customers’ desire to consume.
• Relationship responsiveness: increasing customer touchpoints and trust.
• Cognitive responses: Changing customer perceptions and behaviors.

We want to achieve five-fold monetization through growth operations.

1. Case: QB house

In the 1990s, QB house founder Kuniyoshi Konishi went to get a haircut and couldn't stand the long waiting time.

He found that many people's demand for quick haircuts was not met, so he simply opened his own quick haircut shop, providing short-time, low-cost haircut services of 10 minutes for 1,000 yen.

When we develop a product, how do we tell whether it has product power?

First, we need to see whether the customer value is accurate and how large the customer value is.

Customer value can be divided into two categories:

Customer value = customer perceived value + customer imperceptible value.

When we make a hit product, we want to make the customer-perceivable value huge and the customer-imperceivable value small.

This is the logical relationship between hot products and customer value.

How does QB house amplify customer perceived value?

First, optimize the overall details.

Traditional barbershops face severe homogeneous competition, have complicated processes, and are very time-consuming.

QB house selected 5 aspects for optimization to bring a new customer experience.

There will be someone standing at the door of a traditional barber shop to greet customers. When you arrive, they will open the door for you and guide you to the appropriate seat. In other words, you have to go into the store to know whether it is full. After entering, I found that the place was full and then left. It was a very bad experience.

There is a queue calling machine at the entrance of QB house that supports payment by card.

There are three lights outside the door with different meanings: green means no waiting is required, yellow means you need to wait for 5 minutes, and red means you need to wait for 10 minutes. At this time, you can judge whether to come in to get a number for a haircut based on the light.

This is the value perception point, and the customer experience is very good.

Second, despite this optimization, it still doesn’t work.

There are three major pain points in marketing:

1. Cognitive impairment ;
2. Desire to buy ;
3. Behavioral habits .

We found that these three obstacles exist in the quick-cut industry. The Japanese are a nation that pays more attention to rules and craftsmanship. Suddenly a disruptive quick-cut industry emerged, which seemed to be cutting corners, and their recognition level was very low.

They found that the effect of promoting quick cuts was not very good, so they changed track and returned to the fifth level .

Heavy decision-making and heavy competition are on the surface, while heavy R&D, heavy operations and heavy marketing are below the surface.

We will work on the three types under the water, and then try to make the two types above the water milder.

QB house changed its marketing track and declared itself to be a time industry.

If I save you 50 minutes, it is more valuable than if I save you 5,000 yen. As soon as this sentence comes out, its target customers are very clear.

Good marketing means that when you shout out a slogan, some of your target customers will be able to sense it and feel like you are calling them as soon as they hear it.

Who would be touched by this sentence?

Those who earn 10,000 yen per hour or who aspire to earn 10,000 yen per hour. The former cares more about the value of their time. The latter has a heavy workload and a fast pace, and wants to make more money and work hard to improve their quality of life.

Hair cutting is a functional thing, and saving time helps you save money, which is a mental thing. QB house has moved from the product battlefield to the mind battlefield, seizing the users' minds from another track.

Objectively speaking, it is not feasible to transform hair cutting into a time industry, so heavy marketing is needed. After heavy marketing, the effect appeared immediately.

QB house not only focuses on marketing, but also does heavy research and development on hardware.

For example, there are three sets of hairdressing cabinets in the room for barbers to use, and the supporting facilities are all foldable.

The hairdressing products are carefully selected, including collars made of environmentally friendly paper, and a small vacuum cleaner has been developed to clean up broken hair. Once the vacuum cleaner is plugged in, it only takes a few tens of seconds to clean the customer's head and scattered hair, which is comfortable and quick.

Working hard on the three aspects beneath the surface, heavy R&D, heavy marketing and heavy operations , eventually turned into light decision-making and light competition . This is the core essence of the Fivefold Transformation View.

QB house thus became the first brand in the world that dared to open a barber shop in the subway (subway traffic is very difficult to monetize on a large scale), and later became a world-renowned fast-growing company.

2. Case: Herman Miller

What is category marketing strategy?

Many people have a wrong understanding of categories. They think that if a brand is promoted in an advertisement, it is equal to the category.

We often see some advertising slogans: "I am a leader in xx industry" and "What we produce circles the earth five times" are typical examples.

On the other hand, if the customer’s decision point is equal to the keywords in your advertisement, this is called a true category. If the customer’s decision point is not based on the keywords of your advertising slogan, it is a pseudo category.

Take electric cars as an example. The slogan is: We are the largest electric car in China.

If customers really use scale as a decision point when making decisions, this is a true category. If customers make decisions based on battery life, it is a pseudo category.

Herman Miller is a B2B company that makes office furniture and has almost no individual business. The furniture B2B industry faces severe homogeneous competition, making marketing very difficult. If you can make office furniture, others can do it too.

So what is Herman Miller’s category marketing strategy?

I am the largest office furniture manufacturer in the United States.

I am the highest end office furniture manufacturer in the United States.

Neither of these.

It targets three categories: administrative office, action office and life office .

After the US financial crisis, Herman Miller found that many of its traditional target customer groups were no longer viable.

Fast-growing Internet companies are an incremental market. The corporate culture emphasizes openness, the office environment is more casual, and they are willing to use simple tables and chairs.

At this time, it would be difficult to sell if they still promoted themselves as an administrative office, so they created a new category called mobile office and entered the Internet company market.

In an Internet company, it is equivalent to point A, where demand far exceeds supply.

These tables and chairs, which are simple and convenient, are not expensive. What should the company do if it has income but no profit?

It is better to sell services than to sell products.

The target customers are no longer the company's executives. Who spends the longest time at the desk? Obviously a programmer.

Internet companies attach great importance to talents. The canteens of world-renowned Internet companies are particularly luxurious, and some units even allow employees to bring their pets. They try their best to make their employees more relaxed, comfortable and creative in the work environment.

So after the action office, Herman Miller came up with the concept of the living office .

Designed for programmers who sit in front of computers for more than ten hours, Herman Miller created the ergonomic chair Aeron, giving priority to top programmers, with the aim of making them comfortable.

Due to its excellent experience and good reputation in the circle, Aeron was defined as a dedicated chair for top programmers and became the standard configuration of large companies such as Facebook and Google in their early days.

Herman Miller positions itself as a technology service provider, and the design and production of office furniture are centered around technology.

It is probably the first time for most people to hear that there are so many systems in office furniture.

This system or that system is actually always educating customers: I am not selling products. The logic behind the solution is that we have the technology, and it is acceptable for the product to be slightly more expensive.

In this way, Herman Miller broke through the heavy decision-making of its customers and stood out from the heavy competition.

It is very difficult to transform the five heavy levels into the two light levels. Many times it is something that can be desired but not achieved. However, there is a way to do it.

The method lies in growth operations, continuously and steadily delivering value to target customers, and achieving three responses through three means.

Author: Cao Sheng

Source: Grayscale Cognitive Society