This article comes from the WeChat public account: Chaotic University (ID: hundun-university) < span class = "text-remarks">, author: Cao tiger (Kotler consulting Group International partner), formerly titled “Wan word text Record: consumers have changed! “, The picture from: IC photo
After the Black Swan incident of the New Crown Epidemic, we paid special attention to a topic: In a world full of uncertainty and discontinuity, how should we constantly adjust ourselves to meet challenges and achieve organic growth?
The big business changes caused by the Black Swan incident
The new crown epidemic makes people discover that growth and marketing must be reviewed around consumer growth. So what has happened to our market and consumers? What opportunities and challenges does this change mean for enterprises?
First, let’s talk about the market changes caused by the new crown epidemic.
Change 1: After the Black Swan incident, profound changes in consumer psychology and behavior will spawn five new consumption patterns
Based on the PDCA model: consumer psychology (Psychology) , consumer demand (Demand) , consumer shopping methods (Consumer style) and consumer expectations for brands (Attitude) Analysis of these four dimensions, I think the new crown epidemic situation will spawn and accelerate five new consumption patterns. Understanding of the new consumption model will help us quickly formulate and optimize the original marketing strategy.
New changes have taken place in consumer psychology: First, people are more at ease. For the future, the certainty and good expectations are broken, and consumers are more inclined to grasp the present. Second, when the future is full of uncertainty, the psychology of striving for upstream and enhancing competitiveness is taking a dominant position. Third, people began to seek meaning and sum up life from a metaphysical perspective to get along with uncertainty.
The new changes in consumer psychology have produced or deepened five consumer demand patterns.
Consistency in the predicament and the consumer psychology of striving for the upper reaches have spawned self-development consumption. So fierce social competition, we must improve our competitiveness. Knowledge payment, overseas study tours, and qualification certification exams are designed to enhance the competitiveness of the workplace; aerobic exercise and low-carbon water diet are designed to enhance the competitiveness of the body; plastic surgery and beauty are designed to enhance the competitiveness of the face value.
Consumer psychology that seeks meaning has given birth to psychic consumption. When people continue to seek to surpass others, they often wonder whether I have gone too fast, whether my desire for material and success has occupied all of life? Such self-doubt has created a demand for eternal and beautiful things.
Take a few examples of psychic consumption. For example, art is the language of soul communication, which can inspire and nourish people’s hearts. There are also meditation, meditation, let us calm down and truly return to our hearts. Therefore, these beautiful, timeless, definite and inspiring products and services are what consumers need.
The third type is self-conciliation consumption. During the long life struggle, everyone will feel frustrated, anxious, and helpless. Because a mountain is higher than a mountain, endless comparisons make every person in society fall into the “inferiority”. Therefore, consumers began to try to return to life itself, give up comparison, and let themselves go. When we would sayNo, our Yes really makes sense.
Those self-reconciled consumer brands can really touch the hearts of consumers today. Some time ago, I saw an advertisement from a mobile phone manufacturer. The theme of the advertisement was reversed from the commonly used concepts of black technology and Chinese pride. I used the very weak “I can’t” theme, which made people feel very real. Today, we lack real, non-X brands.
The fourth kind is family caring consumption. This new crown epidemic situation allows us to have a lot of high-quality time with our family, especially business people. There has been an outbreak of family-related consumption, such as parent-child interaction and family insurance.
The last one is home consumption. Online live broadcast, karaoke, and playing games, I can be very happy and immerse myself in my small world. Hoarding goods, home ownership and lazy economy are all this type of consumption.
The five new consumer demand models are of great significance to brands.
Consumers have new demands on brands. In the past, the brand was relatively simple, either tall, or very high-value, or very humorous. But today, consumers want brands to have an attitude towards social events and to speak out, rather than make a big fortune. In today’s commercial consumer society, many consumers’ perception of values comes from the spread of brands. So today the responsibility of the brand is very important because you are part of the entire consumer behavior values. A sustainable brand can output positive values and interact with consumers who share common values, turning them into loyal users.
At the same time, consumers want brands to bring new ideas to their life scenes. For example, DJI has introduced mecha fighters in addition to drones, which is very interesting. For example, Ikea, every time I go to Ikea, I find new life ideas, not just to buy things here.
In the case of IKEA, consumers also want the brand to be a cultivator of their interests. I don’t want the brand to make my money every day, but I hope you and I can grow together and help me build interest. For example, IKEA has cultivated my interest in arranging narrow spaces and matching colors. A flower brand taught me to arrange flowers, making me the most fleshy in the community.
Consumers also want brands to help them build a platform to build relationships. Some time ago, I participated in a concert organized by an electric car fan and invited Deng Ziqi. The fans are very loving. I was so moved that I almost bought this electric car. I know that there is a fan called “Chop Hand Brother”, this is a loyal user,Since buying this electric car on the first day, more than 400 people have been recommended to take a test drive. Many of our social relationships today revolve around common brands, interests, and IP. It is an important scenario for us to build weak relationships. Brands should play a role in this regard.
In addition, consumers also want the brand to be my trusted expert. The brand wants to be an expert and expert in a certain aspect. It is very vertical and deep. I can trust this brand for any problem. It is absolutely good to buy it.
So for the company, the brand is the most important moat for competition. For any company that is building a brand, the following questions need to be considered: Are you worthy of customer trust? Have you exported values with attitude? Did you help customers develop interest? Do you help your customers build relationships?
Change 2: After this unprecedented “new scene social consumption experiment”, the role of new media and new channels was confirmed
The new crown epidemic has created a new environment for social consumption experiments. New media and new channels that have been questioned in the past are confirming their effectiveness.
Where are the media and channel changes? I summarized a picture. Everyone ’s life scenes are digitized, and all behaviors leave digital traces, which means that who we are, what we think, and what we do can be stored, analyzed, and optimized.
This digital business model is dominated by the super hub. Ali, Tencent, JD.com, and ByteDance are all super hubs. From product selection, standard formation, purchase decision, ex-post evaluation, relationship maintenance to repurchase, the super hub covers all links. Any hub can complete the 5A link of the consumer purchase journey described by Kotler, thus forming a Complete closed loop.
Under such circumstances, brands must use these platforms to achieve growth. At the same time of growth, the brand needs to stand on its own stand and think flexibly. Many of the things we learned today are influenced by the brainwashing of the super business center. For example, the private domain trafficNian, this is what the platform organization gives you. But if you are a brand or channel, your logic is not necessarily like this, you have to have your own perception and position.
Platformization is already an unavoidable reality in marketing, but we should not passively give up the power to directly contact channels and customers.
In the era of digitalized life scenes, brands should rebuild their ability to connect with customers.
Change 3: Enterprises begin to re-examine their core business and development model: do future business, from opportunistic growth to strategic development
In the past, most companies ’business models were upstream value creation models. This means that the main activities of the company are distributed in R & D and products. But today, technological progress is very slow. Significant technological breakthroughs have tended to halt, upstream upstream innovation has stalled, and a large number of enterprise products have been homogenized.
The center of value creation gradually turns from upstream to downstream. Of course, I’m not saying not to engage in R & D and product innovation, these are admission tickets. If the product doesn’t work well, what competition can we talk about? What brand to talk about? What kind of private domain traffic? Not at all. But when the product is ready, it does not mean that you can gain a competitive advantage.
In a word, The value created by marketing is downstream value, and the value created by R & D and production is upstream value . Most industries today have entered the era of downstream value dominance. So, in this era of marketing value domination, how to achieve growth?
Why build a moat?
Talking about growth today is about marketing. On October 12, 2019, at the “Future of Marketing” conference, Mr. Kotler talked about what is true marketing. He said that the traditional definition of “marketing” is about sales teams, advertising and promotion to increase sales, and the newer definition is to create, communicate and deliver superior value for the target market. But Kotler’s latest view is that the essence of marketing is a series of business principles that drive companies to achieve organic growth.
I think this definition is very good, let marketing return to the essence. When it comes to marketing, many people think that it is sales promotion, or communication, and those who do the Internet think it is to engage in operations. But marketing is actually how companies can achieve all the business principles of continuous growth by creating customer value. Marketing covers a variety of theories such as 4P, 4C, and 4R, but the essence is about customer value.
From a meso and micro perspective, where does our growth come from?
This chart tells us all the sources of growth, such as new products, new customers, new value chain combinations, new geographic locations and new markets, each dimension is subdivided. This picture can inspire your ideas, but it does not tell you what the priority is. To achieve organic growth and build a growth engine, one must transform the analysis of growth sources based on logical reasoning into corporate goals and core capabilities.
To grow, we must build two pillars. The first must have a growth moat; the second must find growth leverage.
An enterprise must first build a growth moat, and business cannot be done without a moat. In a large number of market-oriented competition areas, branding and digitalization are important growth moats. why? Because branding and digitalization are two very difficult things, it takes time, organization, courage and a little luck to do it. These four things are put here to become a moat, others can’t steal and imitate, they can only fight by themselves and accumulate by time. Anything that needs time to accumulate will often have a strong irreplaceability.
First look at the brand moat. Products are everywhere, but there are few real brands. Today, doing brand launch will find it difficult. why? The channels are all fragmented, unable to form a focused force, and almost do Brownian motion without energy.
Now, relying solely on hard broadcasting is still far from detonating consumers. We need to use content to stimulate emotions and buildEstablish relationships to break down consumer doubts. In the final analysis, the brand is always a story between you and the consumer that has not been finished. After the 90s, Gen Z and other new generations acquire media and recognize brands through highly personalized methods, so the tones and breadth of their favorite brands are very different.
Then look at digitization. From now on, an important sign that determines the success of a business is to learn to accept and use the ability of digital tools, otherwise you still Xiaomi plus rifles against other aircraft cannons. The essence of digitization is to online customer demand, thus integrating the entire supply chain. Because it is difficult to do, it is a moat.
How to build growth leverage?
Next, we talk about growth leverage.
The first lever is the customer. Without dealing with customers, how can there be income. Therefore, the operation and improvement of customers, the optimization of customer structure and customer relationship, and the improvement of customer lifetime value are our important growth tools.
The second lever is the product. We can increase revenue through product upgrades and price increases, we can launch basic products to expand the customer base, and we can also launch a product portfolio, which is a complete set of solutions to provide services for customers.
The third lever is the channel. How well the channel is used often determines whether you are a billion, tens of billions or billions of companies. An enterprise that does well in e-commerce, tens of billions is a ceiling, and you see that the three squirrels are exactly tens of billions. The most popular private domain traffic and social e-commerce recently are on the scale of one billion. And how big is the scale of offline channels? It is hundreds of billions. What is the source of the difference in scale? It is the integration of channel resources.
The improvement of channel structure and channel efficiency is one of the secrets of Chinese local companies to defeat multinational companies. Looking back at the early mobile phone and home appliance markets, TCL and Skyworth defeated Japanese companies, domestic mobile phones defeated foreign mobile phones, etc. Found the key point of effort for the channel model. The growth rate of e-commerce today is very fast, but the total e-commerce retail sales in 2019 will still only account for 23.16% of the total society, and the volume is still very small. A large number of offline channels are ignored, this is a huge gold mine. Why is the cost of traffic so high? One thing is that offline business cannot be done. This is brainwashed. You can’t do it if you can’t do it.
Let ’s talk about the first lever in detail: the customer.
The first point of view, standing in the customer ’s cornerSpeaking of degrees, marketing has entered the 4.0 era, an era of customer capitalism. Enterprise value is the net present value of all customer values; the growth of customer lifetime value is the fundamental source of enterprise value added.
From a growth perspective, what is the value of the company? The most accurate is the sum of the net present value of all customers in this enterprise, which is NPV. Multiply the number of times each customer buys a product each year, multiplied by the customer’s unit price, multiplied by the customer’s life cycle, add up all the numbers and then discount, this is the value of this enterprise. From this perspective, truly valuable companies are those with long customer transaction times, high customer unit prices, high purchase frequency, and high recommended purchase rates. We have done a statistic. In the financial industry, every time the customer retention rate increases by 1%, the net profit increases by 17%. This ratio is very impressive.
Customers are so important, but it ’s getting harder and harder to keep them happy. This leads to a second point of view: in the era of new consumerism, it is no longer enough to satisfy the needs of customers. It is necessary to make customers happy and give them meaning in life.
What is new consumerism? Today, consumers are not buying a basic product, but buying value, social sense, technological sense and meaning, and an unforgettable memory. If the products provided by the company still remain in use value, then they face a very big problem, because many companies do not have a deep understanding of what customers buy, and basically understand it from an industrial perspective.
A Harvard professor said in his book that the manufacturer sells 0.5-inch drills and thinks that customers only buy them because of good quality and reasonable prices. After investigation, they found that they were not. The customer bought a 0.5-inch drill specifically for hanging family portraits and doctoral certificates. In other words, manufacturers think they are selling drills, but they are actually selling beautiful memories of life.
So, we must deeply understand customer needs, desires and desires . The manufacturer provides customers with a total value, which is equivalent to an onion. The onion heart is the use value of the product. The outer circle of the onion heart is the emotional value of the product, and the outer circle is the experience value of the product.
Modern customers not only need to eat eggs, but also organic eggs, especially eggs from hens with special values. What is an egg laid by a hen with values? It is an enterprise that operates a chicken farm in accordance with the concept of sustainable development and in a responsible manner to the common people in order to produce valued hens.
So, we must go beyond the narrow product perspective and understand deeply what value we create for customers. Everyone’s cognitive depth must go beyond the level of consideration. If someone asks