The three laws of traffic products

Why can Waipojia’s Mapo Tofu be sold for as low as 3 yuan per serving, and why can IKEA’s Billy bookshelf be sold in 5 seconds? Why did Xibei Oat Noodles become so successful after reducing its dishes from 200 to 33? Behind these, the value of traffic products and the three laws that can be learned are revealed.

1. Imagine two scenarios, which one do you want to be in?

In recent years, many of my friends who are senior executives in enterprises, whether in traditional industries or the Internet, have complained about the troubles caused by traffic:

• What should we do with the difficult traffic growth and the increasingly high customer acquisition costs?
• With a limited budget, how to expand channels and attract traffic?
• How to accurately convert customer traffic when the cost of acquiring customer traffic is so high?
• etc.

When it is my turn to speak, I will ask everyone to follow me and imagine two scenarios:

• Scenario 1: A company or a person is pushing a boulder up a hill. When it reaches the top, they give it a gentle push and let the boulder roll down the hillside by itself.
• Scenario 2: The same company or individual has been pushing a boulder forward on flat ground.

If it were you, in which scenario and what kind of company or individual would you like to be?

The essence of business ultimately comes down to product competition, traffic scramble, and conversion rate optimization. The real solution to the traffic problem is not to be trapped in the channel to find the answer, but to combine oneself to explore new ways out.

Thinking in a different way, can we design a way to use products to drive user traffic and get out of the dark forest? Push the heavy stone of "traffic product" to the top of a mountain, and then push it down the mountain from the highest point, converting the potential energy into the maximum kinetic energy, allowing the stone to roll smoother and farther, and gain more and deeper user coverage.

The answer is self-evident. Some companies have reached one level of growth after another because they have insight into this essence.

For example, Lei Jun, the Steve Jobs of China's IT industry, has created traffic products such as Xiaomi mobile phones, Xiaomi batteries, and Xiaomi power strips. He himself realized the rules after seeing a small restaurant late at night and put it into use later.

In 1999, on an autumn evening in Beijing, the weather was a bit cold. Lei Jun and his colleagues were walking on Zhichun Road in Beijing after working overtime. There were few pedestrians on the road, but not far away, there was a long line in front of a small restaurant.

He was very curious and asked his colleague next to him if he knew why this place was so popular.

My colleague said that this restaurant is very famous in this area and there are always queues. There's nothing special about this restaurant, except for one signature dish, which is very authentic and very affordable.

It was from that moment that Lei Jun realized that in the information age, only by creating traffic products with "signature dishes that are popular all over the world" can the goal of orderly operation of the company be achieved. At this point, he secretly made up his mind to build a business similar to the "small restaurant with queues" and have his own traffic products.

Since traffic products are so important, how should we build them?

Here are three typical cases for you to reveal the three laws of creating traffic products:

2. Why is the spicy tofu at "Grandma's Restaurant" as low as 3 yuan per serving? ——High cost performance

Many people are familiar with Waipojia Restaurant. Every time you go there, there is a queue, and there is a queue at every store. It is a fast-fashion restaurant targeting young people and family gatherings. The location principle of this restaurant is very clear. It is opened in a large shopping mall, targeting places with high traffic of young people.

What attracted me to Grandma's House was its name, which gave rise to a sense of familiarity - "I was brought up by my grandmother, and grew up eating her food when I was a child."

According to data from Dianping.com, the average per capita consumption at Waipojia is around 60 yuan, whether in Hangzhou, Shanghai, Beijing or Shenzhen. In general, the food at Grandma's is cheaper and more affordable than that at restaurants of the same level.

There are quite a few dishes at my grandmother’s house, but every time I go there, I always order the special dish, the 3 yuan “spicy tofu”. This dish is basically a must-order for everyone. It seems to be in limited quantity, so you have to rely on luck to order it. Many people on Dianping.com share the same feeling as me, and think that the meal is worth it because they ordered this delicious and cheap dish.

Indeed, a small roadside restaurant cannot offer this price, but it actually happened in a restaurant with very stylish decoration. From a certain perspective, spicy tofu is Waipojia’s traffic product. It is extremely powerful and is equivalent to giving it away for free. The cost-effectiveness is extremely high.

Such behavior will not only make users feel that they are getting a great deal, but will also keep them coming and become a topic of conversation after dinner when chatting with friends. This is the first characteristic of traffic products: extremely high cost-effectiveness, making users feel that they are getting a good deal. In other words, it means "I have what others do not, I am better than others, and I am cheaper than others."

3. Why can IKEA’s Billy bookshelf be sold in 5 seconds? ——Sense of participation

When it comes to IKEA, you must be familiar with it like me. There will be one or two pieces of IKEA furniture in your home. However, you are probably unfamiliar with the concept of "IKEA effect".

I will keep you in suspense for now and talk about the origin of IKEA's unique design concept:

One day in the 1950s, Kamprad, the founder of IKEA, was loading furniture into a car with his employees when he discovered that the tables took up too much space, making them difficult to move and taking up too much space. When calculated in this way, the labor costs and transportation costs are not small, which makes Kamprad, who is obsessed with reducing costs, very uncomfortable.

He thought about it for a long time, and suddenly an idea occurred to him: he could save a lot of money if he took the furniture apart and reassembled it at home. So, IKEA designed the Billy bookshelf based on this idea.

Billy's bookshelf is not only simple, practical and classic, but can also be modified at will, giving people a sense of unpretentious modernity. It was therefore named one of the "50 inventions that have made the modern economy possible".

According to IKEA's official website, an average of one Billy bookcase is sold every 5 seconds around the world. There are now more than 60 million Billy bookshelves in the world, almost one for every 100 people. Because of its ubiquity, Bloomberg uses it to compare purchasing power around the world.

Are you as curious as I am about why Billy's bookshelf, a "traffic product", can be so enduring?

American behavioral economist Dan Ariely once had a concept: the effort we put into a thing not only brings changes to the thing itself, but also changes our evaluation of the thing. The more work we put in, the deeper the attachment we will have.

This concept is also very suitable for explaining the IKEA phenomenon. People are keen to buy IKEA's semi-finished furniture and assemble it themselves at home. Therefore, economists call this the "IKEA effect".

Have you noticed that the second major characteristic of traffic products is that it must make users put more effort into the product and enhance their sense of participation. In other words, "the more the user pays, the more emotional he will be."

4. Why did Xibei Oat Noodles become so successful after reducing the number of dishes from 200 to 33? ——Less but better

Today, Xibei Oat Noodles has opened more than 300 stores in more than 50 cities across the country. Every store it opens is a hit, making it the world's largest single chain brand of Chinese stir-fried dishes. The biggest contributor behind this is undoubtedly the upgrade of Xibei's third-generation stores.

People often say "you only see the new people laughing, but not the old people crying", and it is estimated that not many people will remember the appearance of the "unpresentable" versions of Xibei 1.0 and 2.0. However, during the development process, the founder Jia Guolong and his team must have done something right to make the third-generation stores "a hit every time they opened."

Let's explore the laws of development behind it:

Version 1.0

Around 1990, Xibei’s main stores were usually opened on the edge of the city. They were large street-side stores covering thousands of square meters and offering nearly 200 dishes . Perhaps Xibei’s die-hard customers will remember “Harvest Stack”, “Big Willow Tree”, “Mother and Daughter Kitchen”, and the singing of the choir, which was really like “eating oat noodles in the cave and singing mountain songs with great joy”.

This was recorded in the CCTV documentary "Making Wealth from Land" that it made for Xibei. This is what Xibei 1.0 looks like. The highlight is the liveliness of the venue, but the management is chaotic, inefficient, and extremely dependent on the personal ability of the store manager.

Version 2.0

After 2010, Xibei started to move into urban commercial complexes with an area of ​​700 to 1,000 square meters. The 200 dishes were reduced to about 100 dishes, and the simple country auntie was transformed into a beautiful oat noodle girl.

Although the 2.0 version at this time was also profitable, the model was too complicated, the management was too tiring, the efficiency was low, and it could not meet the needs of expansion.

Version 3.0

In the summer of 2012, Jia Guolong organized a five-day "Xibei Model Discussion Meeting" for middle and senior management with the theme of "What kind of model do we want to create?" The meeting discussed three models of Xibei stores: "120-dish model", "90-dish model" and "60-dish model". Finally, the "60-dish model" was established as Xibei's main model for the future.

But Jia Guolong was "not satisfied". He used his privilege as a boss and insisted on changing the "66 points" that everyone agreed on to "33 points".

Everyone was resistant at first, but later they found it was not bad - originally there were 66 dishes, with 10 chefs each making 6 dishes; after it was changed to 33 dishes, each chef made 3 dishes. Not only can the quality of the dishes be better guaranteed, but the food can also be served faster and less hectic.

However, customers complained about the 3.0 store for half a year, "What on earth is Xibei trying to do?!" "The store is too small, there are too few dishes, how come Xibei has become a fast food restaurant!"

After half a year, customers got used to it and stopped complaining. Moreover, all operating indicators of the 3.0 store were significantly higher than those of the second-generation store.

The small store model and small but fine dishes brought by the third generation of stores also give Xibei more confidence to implement the "delicious food strategy". The "small store model + few but fine dishes" of the third-generation stores has brought about explosive development of Xibei Youmiancun. The number of stores has soared from 60 at the end of 2014 to 325 at the end of 2018, making it a leader in Chinese cuisine.

Jia Guolong said at the review meeting that only delicious food can attract customers. In the past, we proposed "very delicious, very clean, very warm" which was an average effort. Now we have adjusted it to super delicious: "very, very, very delicious, very clean, very warm". Only then did Xibei dare to publicly promise to customers "Order with your eyes closed, every dish will be delicious, and if it doesn't taste good, you won't have to pay."

Xibei is practicing the idea of ​​"traffic products" with super delicious taste and ushering in its spring.

The third characteristic of traffic products is to change the inertia of average force in the past, but to exert extreme force at certain important nodes, so as to be concise and precise.

In other words, "it is better to dig one well than to dig wells everywhere."

In the final analysis, business operations are a process of energy production and energy transformation. If you build up enough potential energy for a traffic product, when it rolls downhill, as long as you work harder on marketing and channels, its rolling range will be wider, broader and more powerful.

Grasp the cost-effectiveness of traffic products, increase user participation in product design, and make every effort on important product nodes, so as to create a "traffic product" with great potential.

After reading these three stories, you are welcome to share your feelings and gains in the comment section?

Author: Chen Huiming

Source: Chen Huiming