User growth strategies in four major markets

The Internet has entered the second half, the demographic dividend is almost reaching its peak, the cost of acquiring customers is getting higher and higher, and the competition is becoming more and more fierce. It is not an easy thing to achieve growth. In response to the current situation of the industry, the author of this article proposes four major market growth strategies, which I hope will be helpful to you. Let’s take a look at it in the article.

1. Two dimensions of enterprise growth and four major markets

The growth rate of an enterprise depends on two factors: one is the difficulty of customer decision-making, and the other is the difficulty of competition from competitors.

For the first market, if we can find an incremental market (light decision-making + light competition), it would be a real blessing.

At this time, it depends on how fat this market is?

If it is very small, no one will care; if it can become big, heroes from all walks of life will come to attack it.

Therefore, this incremental market is not a fixed market segment, but a very short market window period. Commonly known as the big vent.

In this sense, innovation means developing one incremental market after another.

The second market is the volatile market (light decision-making + heavy competition), which seems difficult to understand.

For example, the entire catering industry dies every 1.2 years or so. This is because the threshold is too low and there are too many entrants, resulting in such a high mortality rate.

Therefore, the catering industry is a rotating market. Two years ago it was crayfish, last year it was braised chicken, and this year it was pickled fish.

The crop rotation market is just one of the volatile markets, not the whole of the volatile market. For example, there are breakthrough markets and volatile markets.

What does it mean to break through the market? Today's new energy vehicles are just that. A fierce industry reshuffle is underway.

Obviously, breaking through the market is a deep-seated trend. The crop rotation market is a bit worrying.

The third market is the deep-dive market (heavy decision-making + light competition).

For example, this is generally the case in B2B. The development is very slow. It may take 1-2 years from the first contact with a customer to the final sale.

However, the industry barriers are very deep, and the churn rate of customers is extremely low.

This market is often project-based and requires customized research and development, which is the reason for its slow development.

Whoever can transform the project system into standard product products in this market (even if it is 70% standard products + 30% project system) will enter a fast-track development channel.

There is another reason why this market is developing slowly. It means that the merchant attempts to sell 100 functions (big and comprehensive) to customers at one time.

Then, too many departments within the client are involved, and the interests of the departments are in conflict, resulting in the situation that no matter how hard you try, it won’t move. And even if you push it, it may not move. Knowing the big boss may not work. It’s an embarrassing situation.

As a result, some businesses blocked 80 of the 100 functions and opened 20 functions to customers for free or for trial at very low prices.

That's exactly the problem. The customer experience is very bad, which is equivalent to giving the user a Mercedes-Benz car and only giving the driver the steering wheel, accelerator and brake, but not the entire car experience.

According to the lean startup methodology, we should not give car parts to customers for trial. Instead, we should give customers a scooter (independently delivered product) to give them a complete vehicle experience.

In addition to B2B, health products that do not show obvious effects in the short term are also venturing into the market.

The fourth market is the stock market (heavy decision-making + heavy competition). This is when things get really troublesome and you have to compete on ecology and operations.

So, what should be our growth strategy in these four markets?

II. Growth strategies in the four major markets

The strategy during the window period (incremental market) is to seize opportunities.

What does it mean to seize opportunities?

In an incremental market, there is natural growth, which means that demand exceeds supply. So, even if you sit at home, customers will come to you on their own initiative. At this time, if you focus on the main product and sell the product functions, you will be successful.

Differentiated competition is not necessary at this time. The important thing is to find the main channel for product conversion and monetize the traffic as soon as possible. Because we don’t know how long the window period will be.

The strategy during a reshuffle period (volatile market) is to grasp the differences.

In a volatile market, why is it necessary to compete through differentiation?

The reason why the market fluctuates is that, on the one hand, supply and demand are cyclical; on the other hand, the number of deceased companies is greater than the number of newly added companies.

Those that died were those that experienced rapid growth and had serious product homogeneity.

For example, pickled fish, with the main selling point of "delicious fish and delicious soup", is product function marketing, which has natural growth in the incremental market, so there is no problem;

Later, the market became crowded and everyone rushed to each other's territories to compete for business, and all of a sudden the homogeneity of products was exposed.

The strategy during the solidification period (existing market) is to seize barriers.

For example: instant noodles are a stock market, while high-end instant noodles are an incremental market. The sales volume of instant noodles has stabilized nationwide, and high-end instant noodles are developing rapidly in first- and second-tier cities.

There are two reasons for this: first, high-end instant noodles, driven by the rapid growth in demand for takeout, have formed a substitution effect for unhealthy takeout; second, high-end instant noodles are sold on the Internet, and traditional instant noodle leading companies are anxious to catch up. The former is an opportunity (provided by takeout), and the latter is a barrier (that traditional giants cannot overcome). The strategy during the growth stage (deepening the market) is to seize the opportunity.

When deeply cultivating the market, long-term operations are the norm. If a detonating effect cannot be created at a certain node in the value chain, it will be very troublesome.

It can be product-driven, customer-driven, or financing-driven.

For example: several large platforms that have risen strongly in recent years, including Meituan Takeout, Pinduoduo, and Didi, have been continuously detonating at multiple points, especially leveraging the capital market, which has greatly compressed the long cycle of the industry.

Author: Cao Sheng

Source: Grayscale Cognition Society (ID: HDrenzhishe)