2020 is the year when online consumer demand has experienced explosive growth.

When it comes to online consumption, e-commerce is inevitably indispensable; if we look at it from the perspective of the overall development of e-commerce, we will find that the traffic structure is increasingly concentrated in the oligopoly.

Tencent controls the content ecosystem and the entrance traffic on social platforms, Baidu and ByteDance focus on search and information flow, and Alibaba continues to consolidate e-commerce traffic...

Under this oligopolistic structure, it is becoming increasingly difficult for e-commerce brand sellers to obtain traffic, and the threshold is getting higher and higher.

Against this backdrop, the focus of e-commerce operations has shifted from attracting new users to vertical operations that focus on existing users, namely refined operations .

Refined operation is the survival rule for e-commerce brands in the new era. So how should refined operation be carried out?

Share the methodology and practical experience of enterprise refined operation, mainly interpreted from four modules:

1. The necessity and key of refined operations;
2. Four misunderstandings of refined operations;
3. Practical analysis of refined operations of consumer products;
4. How to determine the most suitable private domain model for your brand.

1. The necessity and key of refined operation

This section will focus on two topics:

• In the post-epidemic era, why can refined operations help companies achieve sustained growth? How does it help?
• What kind of internal skills do enterprises need to cultivate in order to carry out refined operations?

1. Refined user strategy

The necessity of refined operations In the past 2019, the growth rate of total retail sales of consumer goods slowed down, the number of newborns decreased, the population growth slowed down, and the demographic dividend no longer exists.

The sales of hypermarkets fell by 3%, and among fast-moving consumer goods, the proportion of declining categories reached an alarming 26%.

In 2020, due to the epidemic, these sets of data may only get worse.

So what do these falling numbers indicate?

This shows that the era of wild growth has passed, and the overall environment is moving from high growth to normalization - this is a change in the overall environment of consumer goods.

At the same time, during our communication with consumer goods traders, they all talked about several phenomena:

First: Product homogeneity is becoming more and more serious.

For example, when it comes to the women's clothing industry, few brands can stand out and occupy the minds of consumers, becoming the representatives of the entire category. Most users are just trying out new products. In today's context of difficulty in acquiring traffic, a low repurchase rate is a very bad thing.

Everyone hopes to get rid of product homogeneity and innovate in products or services.

Therefore, we recently created a concept - "product service"; here, a very low-key brand "Zhiben" quietly made the list. Their reputation is very good, and their killer feature is service.

Before purchasing their products, you must undergo a skin test diagnosis before the customer service will recommend the product; if your skin type is not suitable, the customer service will actually recommend products from other brands to "dissuade" consumers.

It can be seen that one way to avoid industry homogeneity is to better combine products and services.

Second: User needs are constantly being segmented.

The 2017 Nielsen China Consumer Products Research Report mentioned that Chinese consumers are no longer a "uniform group" but have shown distinct diversity; various groups are emerging, such as singles, Generation Z, and small-town youth; and different users have different needs, which cannot be simply characterized by major trends.

Third: The traffic dividend disappears quickly.

It’s not that there are no small traffic dividends, but they are disappearing faster and faster; Taobao and short video platforms do have new traffic dividends, but once the new dividends are discovered, they will soon be copied, and there are always people eyeing this traffic.

We all miss the days when we could acquire customers with just a few dollars, but we also have to face the reality - the cost of acquiring customers today is ten or even a hundred times higher than before.

As the growth rate slows down, extensive traffic strategies will cause huge traffic losses and rising costs; therefore, more and more companies are beginning to try more refined and user-focused traffic strategies.

The development of technology also makes refined operations possible. The online and digital sales of consumer goods have become very mature, and the collection of massive data provides the basis for efficient analysis.

Nowadays, online channels for traffic, sales and promotion are very sound:

First, brands can adopt the DTC approach to reach users directly, without having to blindly guess user demands; second, onlineization can make all data visual, and every click, view, and purchase of consumers can be recorded to form a series of labels; finally, these data can be analyzed in a visual background to achieve the goal of adjusting strategies and continuous iteration.

Fourth: Customization.

Users, as human beings, exist in the sales process.

The rise of private domains and live streaming has added an interactive feature to marketing - that is, brands no longer just keep instilling their own ideas and functions, but instead allow users to participate in the construction of selling brands, which is more humane.

In short, the popularization of onlineization lays the foundation for the refined operation of data and channels. At the same time, users are looking forward to our attention more than ever before; therefore, when exploring the needs of different groups and meeting their needs, we no longer need to limit ourselves to price reduction as the only means, but can use more diverse means:

• Content: Good content can make the product's selling points and functional points more concrete, lower the threshold for users to understand the product, and create a favorable impression of the product. Companies need to carefully plan their own dissemination content according to the characteristics of different content platforms and KOLs who bring products, so as to better reach customer groups.
• Private domain: Private domain is a good soil for refined operations. After half a year of development, private domain has become a standard feature of consumer goods companies. Everyone hopes to retain users in the private domain, create a user pool that can reach users at any time, and make user communication and services more efficient and simple.
• Live streaming sales: Live streaming makes online sales more humane and improves interactivity. Live streaming sales is an emotional and immersive self-experience. On-site demonstrations and introductions save the trouble of choosing, and consumers can immediately know whether the product is suitable for them. Live streaming, as a very efficient way of selling goods, requires refined operations itself, and should also become a handle for the overall operation of an enterprise.

Combining the above phenomena, we can find that the changes in new consumption are reflected in three aspects: people, goods, and places.

People - When the population and demands become more segmented and diverse, the goods will also be differentiated accordingly.

Goods - In order to meet user needs faster and more specifically, many brands no longer rely on OEM, but build their own supply chains; relying on onlineization, brands can have more direct contact with users and needs, and brands can co-create products with users; for example, the lemon sparkling wine jointly launched by Jiang Xiaobai and Sprite is a new product created by users bringing together the two brands.

Field - Marketing positions are becoming more and more online and diversified; they are closer to users, more conducive to dialogue between brands and consumers, and can generate more interactivity and human touch.

Among these three perspectives, the arrows point to the order from people to goods to places; this means that people among the three elements are the driving force, driving the changes in goods and places, and it is also the key to driving user growth.

Constantly meeting users' changing needs and deeply tapping into user value are the reasons why a company can achieve sustainable growth.

Therefore, only by putting people first can we achieve sustainable growth.

So how can we achieve people-oriented?

The answer must be: deeply explore user value and refine operations.

The essence of refined operations is also to operate people; the purpose of operations is actually to sell goods. It is to use the right time, right channel, and right method in a repetitive process to give the right users what they want; thereby exchanging value with users and promoting sales - this is the only way to deeply tap into user value.

When user needs and behaviors become more and more segmented and differentiation objectively exists, if brands want to meet user needs at the right time and through the right channels, they must be refined.

If the operation is a mess, every user group will be dissatisfied.

So what is the right time and channel?

One of Wanglaoji’s famous scenes is the hot pot scene. Its main sales channel is direct sales in offline hot pot restaurants, which is also a very important channel. Chinese people are worried about getting a sore throat when eating hot pot. At this time, if you can buy Wanglaoji directly from an offline hot pot restaurant and drink it immediately to reduce the heat, it is in line with the scene constructed by the brand slogan "Drink Wanglaoji if you are afraid of getting a sore throat".

2. The key to refined operations

From the bottom up, the essence of refined operations is people-oriented; user needs are the premise of refinement. Only by meeting user needs can we achieve true refined operations, rather than refinement for the sake of refinement.

The second foundation and basis is data.

Consumers’ behavioral data, experience, and purchase links, every action can become a basis for decision-making in subsequent strategy formulation; this requires brands to establish an effective data monitoring system, conduct data monitoring by channel, and have a comprehensive perspective on the entire platform.

As of now, Taobao has Business Advisor, Douyin and Kuaishou also have multiple self-built or third-party data platforms, and many self-built mini-programs and H5s, which can help brands conduct data analysis; but the difficulty is that the data from various platforms cannot be connected, and it is difficult to see the overall behavior of consumers clearly.

One brand uses the mobile phone number as the only field. After associating it, it can use the overall order aggregation system to analyze consumption data on the entire platform, but browsing and clicking data can only be counted by platform. (If you have a better way to see data from the entire platform, please tell us in the comment section at the end of the article).

Through data, we analyze user portraits and needs, and then segment them according to different dimensions. We optimize operational strategies and experience links for different segmented user groups, and finally use the iterative PDCA process to continuously optimize the strategy. In fact, it is a cyclical iterative process.

Refinement is an operational approach that requires continuous small steps and iterations.

Starting from the user is the premise, data, strategy formulation and decision-making are the foundation, and then matching the appropriate strategy to the appropriate target group, continuously iterating, and moving forward in small steps; this is similar to lean entrepreneurship, with an MVP to start a business in the market, and then iterating, and expanding when it is appropriate.

My definition of refined operations is:

• In a narrow sense, refined operations are to collect data through analysis, comprehensively understand user portraits and behavioral habits, and continuously iterate using scientific methods and strategies; to provide differentiated services based on different users and scenarios, with the aim of maximizing user value.
• In a broad sense, refined operations are a kind of operational thinking; based on data and people-oriented; constantly iterating and taking small steps; and cultivating the company's ability to grow in the long term.

3. Core capabilities required for refined operations. What capabilities does refined operations cultivate? It’s definitely not just operational capabilities.

The first thing to develop is data capabilities.

Fine-grained operations are extremely dependent on data, and operations and even the entire company must be data-aware; some companies will set up special BI data positions to acquire, analyze and evaluate data - data can truthfully reflect the current situation of the company and make decisions more scientific and efficient.

The second is content power.

In different scenarios and channels, using different touchpoints to deliver persuasive and attractive brand information and selling points to segmented target groups requires strong content capabilities. For example, Xiaohongshu needs to set content direction and focus based on different KOLs and fan groups, and can even help KOLs produce content.

The third is insight.

By gaining insight into the market trends behind the data, you can understand where your target users are and what their preferences are.

If your target audience is those born after 2000, you need to reopen QQ and try to penetrate a fan circle to see if you can understand their “jargon” and why this star makes them love him so madly.

If your target customers are people in a professional field, you need to break into their circle and see if you can join their chats, use the professional terms in this field to package yourself like an insider, and dominate a small topic.

Data power, content power and insight are all capabilities required for refined operations. With these capabilities, the company's overall capabilities will be greatly enhanced.

In addition, product strength and refined operations interact with each other. Refined operations rely on strong product strength. If the segmented needs of users cannot be met, no matter how refined the strategy is, it will be useless.

Leverage user data behavior analysis to feed back to products and give them more optimization and development directions; this capability requires brands to continuously accumulate, so that they can efficiently discover or meet user needs regardless of whether it is an incremental or stock era.

2. Four Misunderstandings of Refined Operations

In actual practice, we found four misunderstandings in refined operations.

1. Treating users as traffic, not focusing on emotional recharge

The most typical example is to bring Taobao's strategy into the private domain and hold activities at low prices every day, which will definitely be deleted by users.

Although user stratification has been done, if different discounts are simply given to different groups, then it is not truly people-oriented and does not start from the needs of users, but is simply refined for the sake of refinement.

2. Rely only on data

Treat data as data and ignore the users behind the data; what is more important than the data itself is what we can see from the data.

If all your changes are based on blindly following the results of the data without your own insights and thinking, it is easy to fall into a pit.

3. Either a mess or very detailed

In the past, business operations were usually a mess. Once they started to become more refined, it was easy to go too far and blindly pursue detail, dividing people into ten or twenty categories.

But when it comes to actually making strategies, you will be confused because it is too detailed and it is impossible to make differentiated strategies - the degree of refinement actually depends on the actual operating conditions of the company.

4. Only use operational means and do not focus on content output.

It is very important that the content conveys the brand selling points, positioning, and concepts to users. If you only use discounts and preferential operations to refine them, allowing users to be completely driven by price and ignore your product itself, this is not a long-term solution.

3. Practical analysis of refined operation of consumer goods

1. Scenario segmentation First, let’s talk about scenario segmentation and operation.

Nowadays, after a basic product becomes popular, many brands will segment the consumption and usage scenarios, and then make more vertical and differentiated products to meet the more specific and differentiated needs of small groups within the large group.

For example, Nongfu Spring, 500cc is their enduring basic model. Through data and market analysis, Nongfu Spring has segmented users' demands for water and derived other scenarios:

For example, there are large-packaged drinking water for home use; sports packaging designed for fitness scenes that is easy to open and close and not prone to spilling; and there are also banquet scenes that are designed to be high-end and prestigious; in addition, there are different types of water produced to meet the different demands of infants and middle-aged and elderly people for water quality and trace elements.

After launching this "product matrix" strategy, Nongfu Spring's sales increased by 18%.

Their approach is to accumulate user data by creating basic products, analyze the demands derived from different scenarios, and gradually create a product matrix; horizontally, they can develop a larger user group, vertically, they can improve the user's purchasing level and deepen their understanding of the product value.

In the beauty industry, you can also find some brands launching new products based on the product’s segmented scenarios: a blush and eyeshadow palette is designed for travel scenarios where people don’t want to bring cosmetics; and a lipstick that doesn’t stain cups is actually a selling point for social scenarios.

Scenario segmentation and channel segmentation can also be coordinated.

For example, Costco is more of a place for families to buy large items, and customers may go there once every two or three weeks. Some yogurt brands make large packages specifically for this purpose, and they are very popular because everyone thinks they are very affordable.

2. Another basic direction of refined operations based on user group segmentation is refined operations based on users.

It can be divided into three typical directions, which are used in different stages of operation:

• In the user life cycle, users at different stages require refined operations;
• Different users contribute differently to the product and have different values, so they need to be stratified and operated in a refined manner;
• Carry out refined operations based on the natural attributes of users.

Here I would like to share some refined operations based on life cycle and product contribution.

Color user life cycle model We can divide the process of user's brand awareness to loss into five stages.

The value created by users at each stage is different, with a trend of first increasing and then decreasing. The output operation strategy should be based on the demands and values ​​of users at each stage.

To carry out refined operations throughout the life cycle, the first step is to define users at different stages.

For example, a certain baby food brand defines the user's first visit to the mall as the introduction period. At this point in time, the user has just learned about the product, is still waiting and wanting to know more, and does not have a strong sense of trust.

If a user has not placed an order for 30 consecutive days, we regard it as entering a dormant period - he may not be satisfied with the product, or it may simply be a quality issue, which requires more research.

After the definition, first look at the existing number of users in each stage. Mature users are the best, with strong stickiness and good repurchase rates. If we want to increase the number of users in the introduction period, we actually need to attract new users to supplement the user pool.

After defining the users and their characteristics, apply different strategies for different layers. For example, if you want users to stay longer in the mature stage and not go to the dormant stage, then for those in the introduction stage, you need to lower the experience threshold.

Taking the baby food brand as an example, during the introduction period, the brand will provide free consultations with nutritionists to demonstrate its professionalism, and at the same time offer newbie discounts and small packages for users to try.

During the growth and maturity stages, brands will want to ensure that users continue to purchase and do not enter a dormant period, while also increasing the frequency of use. The recommendation at this time is to introduce users into the private domain and regularly organize exclusive activities; at the same time, you can also set up some user storage systems to allow your users to deposit something with you so that they will not leave.

In fact, refined operations based on the life cycle are to magnify the value of users in their life cycle, encourage them to buy more, and extend the user's life cycle to encourage them to keep buying.

The second direction of refined user operations is to conduct refined operations on users based on their contribution or interactivity to the product.

Generally speaking, brands will first give different strategies to users at different levels, and then set up mechanisms based on the model; just like the membership mechanism, higher-level members are often more deeply bound to the brand, which is equivalent to storing something with the brand.

This pyramid model is what I summarized when I was at Le Pure. You can see that 1% of people have been buying this brand and are even working with the brand to build the brand. They are no longer at the product identification stage, but at the brand identification stage, meaning they want a sense of participation.

The 9% of brand participants are our communication nodes. When we do activities, they are very willing to promote it, firstly because they like the brand's products; secondly, they recognize the consistency between the brand and their personality, or they hope to use this brand to shape some personality and give these people some materials to share and spread.

But what really supports your business are these 90% silent shopping users, ordinary consumers who buy through discounts and new products.

There are also some people who, based on their first purchase and early repurchase, can be seen to have the potential to grow into brand communicators and co-builders. For these users, the brand can design an upward mechanism to help them grow.

To this end, Le Chun will first design different operating methods and rewards for different levels; for example, if brand communicators need a sense of superiority, then they will be given priority to purchase new products and invited to visit the company, so that they can be closer to the brand and identify more with it.

Afterwards, an upward path will be set up for each level of users; at the same time, a sense of scarcity must be maintained. The top level requires an application system and there are limited places, so everyone will feel that there is a sense of scarcity.

The focus of upgrading the user membership system is to ensure that the incentivized behavior (buying/sharing) is the key behavior required.

At the same time, what the brand provides needs to be what users really want - benefits or a sense of honor are the basis for the operation of the membership upgrade system; these rights and interests must also be effectively communicated to users at various touchpoints so that they can actually use them.

3. Channel segmentation The refined operation of consumer product channels is divided into refined operation of incremental channels and refined operation of existing channels.

The refined operation of incremental channels focuses on acquiring new customers, and matches different strategies according to the user characteristics and needs of different consumption channels and traffic channels (such as Douyin and Xiaohongshu).

The refined operation of incremental channels requires small-scale testing first, and then large-scale deployment after the ROI breaks even. After stable customer acquisition, new channels can be explored and developed.

Here we mainly talk about existing channels, that is, the operation of old customers.

The purpose of operating existing channels is to tap into customer value and bind users to the brand.

At present, the main operating channel for old customers is the private domain. So how can we carry out refined operations in the private domain?

In fact, the essence of private domain is humanized operation.

The essence of private domain is to use brands to establish relationships with consumers, use an IP to materialize the brand, allow the brand to interact with users, and turn users into friends of the brand and virtual spokespersons of the brand.

By interacting with IP, users gradually form closer relationships. The longer the time, the greater the value they gain for both parties.

4. How to determine the most appropriate private domain model

So how can brands determine the private domain model that best suits them? First, you need to make a judgment on your capabilities and business type and be clear about your own strengths.

It needs to be analyzed from three dimensions:

• Are you a channel category or a consumer category?
• Are you IP or non-IP?
• Are you self-operated or do you have stores?

The first dimension is channel category or consumer category; channel brands include Watsons and Miniso; the goal of the channel direction is to sell goods, without so much brand baggage.

As for consumer brands, this brand may only sell my products, except for some very low-frequency joint marketing; for example, Meiko Powder is such a case. In addition to selling products, the brand direction is more about maintaining the brand tone.

This is the difference between channel categories and consumer categories, and the operations of the two are also very different.

The second dimension is the dimension of content attributes, IP type or non-IP type.

Different content attributes lead to different private domain models.

The IP category refers to a brand that has its own big IP and can accumulate a large number of high-quality fans. The private domain is just the monetization of their IP fans. When doing private domain, these brands do not need to rebuild the IP; and these brands have their own content production capabilities and do not need to call on others to produce content.

Non-IP players, such as Taobao players like Perfect Diary, do not have IP images; for this reason, Perfect Diary created a Xiao Wanzi image and recruited KOC and KOL to produce content.

These two types of brands are also very different. You can take a look at how Perfect Diary encourages users to produce content.

The third dimension is the production channel, which is divided into self-operated, BA and KOC.

If you already have offline stores, like Kidsland and Xibei, you need to focus on store owners; through their professional capabilities, empower them to operate private domains and help the overall company sell products.

This process has three dimensions and directions to choose from, but different dimensions also mean different risks.

For example, when there are fewer people at the beginning, you can use the self-operated model of the center; later, in order to increase the private domain, you can change to a model that empowers KOCs, but there is a possibility of chaotic pricing.

If it is a BA model, it will be easier to manage because the store owner is a member of the company and is more motivated, so the management effect will be better.

Finally, I would like to say that refined e-commerce operations are never achieved overnight, and there is no one-size-fits-all methodology. Trying, improving, iterating, and optimizing are the eternal tasks for brands that want to achieve growth through refined operations.

Moreover, the development, competition and changes in consumer markets of different enterprises will bring more and more rich colors to the field of refined operations.