4 common misunderstandings in product operation!

A few days ago, a friend left a message saying: During an interview, an interviewer asked her what problems she had encountered in the process of product operation and hoped that I could answer them.

This is a bit difficult for me because I am not an operator. However, because I have been dealing with traffic all the time, I have also met with operations colleagues and had a brief chat with them.

Let’s start with a well-worn model. Students who are engaged in product operations should know that product operations are basically carried out around the 2A3R model.

• Acquisition: mainly refers to acquiring customers, how to make users notice your product in the massive application market;
• Activation: Whether the user has completed a complete business process on your product, such as a transaction, taking a taxi, etc.
• Retention: Mainly refers to whether the user’s use of your product is one-time? If there is a similar demand scenario in the future, will it be carried out on your platform?
• Retention: What is the product’s business model? How to make profit?
• Retention: Similar to the traditional NPS value. After using your product, are users willing to recommend it to other users?

The above is a very classic growth methodology, but theory is only theory after all. In the actual implementation process, there will be many seemingly insignificant factors that will affect the final effect of marketing operations. I have worked with a lot of product operations personnel, and here are some typical cases of misunderstanding that I often encounter.

1. The more traffic, the better

"Our event is expected to bring in XXX profits, so we need to provide enough traffic." This is what many product operators often say, especially those operating on some large platforms. Because there are many business lines involved, it is impossible for the platform to allocate all traffic to one of the business lines, so there will inevitably be competition for traffic.

For example, on large platforms like Taobao and JD.com, a company may have dozens of business lines, and each business line will strive for more exposure opportunities at the main traffic entrances of each APP. More exposure opportunities means more traffic. We see the three-screen entrance icon on JD.com’s homepage.

Under the current premise that the cost of each customer flow remains high, every company will find ways to invest huge financial, material and human resources to acquire customers. But sometimes we find that although the traffic has increased, the company's profits have not increased.

I had a WeChat friend who was running a very niche O2O business. In order to attract traffic, they cooperate with a large corporate platform. On the one hand, the platform will direct traffic to them, so that they can start quickly. On the other hand, the platform also fills its own business lines, which can complete the business loop to a certain extent and increase the value of traffic. It seems like a "win-win" situation, but the result is not very satisfactory.

Although there was a lot of traffic reaching the landing page every day, in order to launch it as quickly as possible, they hastily launched the landing page without careful design. As a result, after users came in, the page often crashed, and most users reported that they didn’t know where the search entrance was and couldn’t find what they wanted.

So, more traffic will definitely be good?

To a certain extent, the more traffic there is, the greater the value it generates for the business, and this is undoubtedly true for free traffic. But if it is paid traffic, you need to measure the ROI of your customer acquisition. Because the ultimate goal of acquiring customers is to improve conversions, you need to consider whether your landing page’s ability to handle so much traffic. Another thing is whether your target audience matches the target audience of the customer acquisition channel, otherwise it will be a waste of time.

2. Discounts will definitely attract users

If there is anything that can most touch users' nerves and arouse their desire to buy, it must be low price. Therefore, for many operators, discounts are definitely the first choice of operational means during some big promotions and major events.

Discounts do help improve traffic conversion rates, but for platforms, sometimes unscientific discount plans can cause the platform to suffer losses.

For example: In order to welcome a big sale, a business department started a discount promotion. Taking into account that old products are not very popular among users, the operation staff started selling many popular products at 50% off, and the lowest price was even 10% off. The traffic of the event grew explosively and there were a lot of orders, but in the end the operation team was not rewarded. Since the average order value was too low, although the order volume increased, the final transaction GMV of the event did not increase. So in this case, this operation is still a failure for the platform.

No matter what kind of marketing method you use, you need to consider the ultimate goal of your operation. A formula was mentioned before:

Sales = average order value × traffic × conversion rate

For operational activities that use GMV as the KPI, you cannot just look at the increase or decrease of one variable. Different operating methods have different effects, but the company's goal of pursuing profits will not change.

Users are most sensitive to price, and price is also the most attractive means of operation. If you are in the stage of attracting new customers, it is correct to use low-priced goods to attract customers, but you cannot offer big discounts and promotions on popular products. Because discounts and promotions sacrifice platform revenue in exchange for increased traffic and event exposure, it is important to comprehensively consider whether the discounts and promotions are "worth it."

For example, why do JD.com’s book category often have big discounts? Because the book category is not for making money, but for increasing user stickiness. It uses a high-frequency, low-priced category to drive sales of other categories, thereby achieving revenue for the entire platform. This is the real purpose.

3. When choosing a channel, you focus too much on the flow of the channel, but not on the quality.

Someone may argue: Isn’t the purpose of operation to operate traffic? What’s the point of operation without traffic?

What I mean here is that when many operators choose channels, they will ask their partners, what is your current DAU? How much is retained in seven days? If these numbers are large, then you feel that the cooperation will definitely bring benefits to your business. However, most operators overlook a very important thing, which is the quality of traffic.

When choosing a cooperative channel, generally speaking, a large and comprehensive channel is often not as efficient as a vertical channel in terms of bringing business conversions. Because for vertical businesses, the traffic on the platform has been carefully selected, and the users coming in are all target audiences, so they are more likely to intersect with your business.

Therefore, as an operational marketing personnel, when choosing a cooperative channel, you should pay more attention to the fit between the channel traffic and your own business. Although the volume of a highly compatible channel traffic is not as large as that of a large platform, in terms of conversion effect, it is definitely higher than a large and comprehensive channel.

4. Using data to speak may not always work

After communicating with many of my colleagues who are engaged in product development and operations, I found that everyone is now beginning to pay attention to data, using data to measure product effectiveness and using data analysis conclusions to guide product decisions. Data has become a recognized standard.

I am working as a strategic product manager, a position that involves using data to do things. After doing it for a long time, you will find that sometimes data cannot solve all problems.

There was a case where we wanted to find a good position in a feed stream to use as an advertising spot for traffic commercialization. After extracting online data from the past month, I found that the CTR (click-through conversion rate = number of clicks/number of exposures) of a certain position was very high, so I thought that if this position was left empty for advertising display, it should generate a very high conversion rate.

However, after a period of time, it was discovered that the advertising effect was not good, because the materials provided by most advertisers did not match the tone of other cards in the entire feed and were easily ignored by users.

When we are working on growth and operations, many activities will set some indicators to see whether the activities are effective or not, but does a good performance on this indicator mean that your business will definitely be good? Data is not omnipotent. The relationship between data and users is always a game of rationality and sensibility, and as an operations marketer, you need to find a balance.

The above four points are probably some common misunderstandings about operations that I have summarized. Many specific cases will be derived from each misunderstanding, so you may wish to take a closer look.

Author: Xia Huren

Source: Xia Huren