Source: Gray Cognitive Society (ID: HDrenzhishe) Author: Cao Sheng In recent years, Gray Cognitive Society has developed proprietary growth theories and a large number of practical tools, serving 200+ clients. Based on first-hand data from client cases, and without involving clients' business secrets, we have distilled some practical rules for your reference. Clients are mainly divided into 4 types: large head brands, large waist brands, medium head brands, and small emerging brands. These four types of enterprises are at different growth stages, and their overall competitive strategies, brand strategies, marketing strategies, and product strategies are all different. Let's analyze them one by one. ****Large Head Brands What problems do large head brands mainly encounter? 1. The dividend of mobile internet traffic has disappeared (from the golden age to the bronze age). 2. Large head brands face generational shifts in consumers. 3. Competitors are diverse, and cross-industry competition is increasing. 4. The category ceiling has been reached, and how to expand the category has become a new challenge. Growth solutions for large head brands often focus on competitiveness, especially competitiveness in omnichannel competitive strategy. Large head brands do not lack market, channels, or performance; they lack stronger competitiveness. This competitiveness is an innovative competitiveness that aligns with the new era, new consumption, and new customer groups. For example: connecting online and offline channels, connecting public and private domains, and connecting content and products. Each enterprise is unique, and the omnichannel competitive strategy is too grand. What are the actionable entry points for solutions? 1. For enterprises that are good at traffic operations but have unclear product logic and serious product homogenization, we recommend the solution: Virtual IP + Content Assets. Virtual IP refers to positioning the relationship between the brand and customers as a certain social relationship, where the product can carry this social relationship and stably produce content assets that match the brand tone at low cost. 2. For enterprises with relatively fixed market patterns, supply chain capabilities but lacking internet operation capabilities, we recommend the solution: Investment-driven Growth. Traditional brands invest in new internet brands, indirectly reaching new consumer groups through new brands, while making up for the lack of supply chain capabilities of new brands, forming an innovative value chain. 3. For enterprises that have reached the industry ceiling, with complex business lines and complex headquarters functional structures, we recommend the solution: Internal Incubation. Focus the current main mature businesses and mature customers on the front line of business, matching them with the existing organizational structure. The main goal is to enhance brand momentum and establish competitive barriers. For non-core businesses that are currently small in volume but growing fastest and in an upward industry cycle, establish them as a second line of business, granting certain special rights in personnel, finance, and affairs. The core is explosive growth and quickly seizing market share. For new businesses that are in their infancy but serve the next generation of customers, establish them as a third line of business. Neither set limits nor interfere with front-line resources, and establish a horse-racing mechanism. Once a clear trend emerges, allocate corresponding resources. Projects incubated internally, if conditions are mature, can introduce external investors and operate independently. As performance grows, the group can even become the second shareholder, with the management team as the largest shareholder. 4. For enterprises that mainly focus on large-scale, wide-span products and services, especially those with strong technology but market growth not keeping up with technological progress, we recommend the solution: Restructuring Product Logic. Restructuring product logic means redesigning customer solutions covering multiple products and services based on customer usage scenarios, with the value easily perceived by customers as the main line. When developing scenario-based customer solutions, 2B and 2C should be connected. 2B enterprises can market in 2C ways, and 2C enterprises can also market in 2B ways. 5. For enterprises with a large number of internal business software systems and significant annual investment in digitalization, we recommend the solution: Digital Decision-making and Digital Assets. Digitalization is an investment of super-large funds and super-large scenarios; enterprises should start with small scenarios. First, optimize digital decision-making capabilities and build small but refined data dashboards with decision-support capabilities; Second, turn key resources, key assets, and key factors affecting performance into digital assets, laying the foundation for improving performance through data-driven approaches. 6. For enterprises with strong management and operational capabilities, and strong scientific governance capabilities, we recommend the solution: Operations Optimization + Operations Audit. From a strategic perspective, first establish an operations middle platform. It is not simply centralizing business permissions or digitizing business. The core of the operations middle platform is to centralize reusable resources and internal capabilities with internal scale benefits, serving both front and back offices, but the middle platform should not be too large, maintaining the flexibility and enthusiasm of the front and back offices. In addition to optimizing the operations middle platform, it is also necessary to conduct operations audits on key business actions for key performance goals. For example, for new product e-commerce pages, both front-line business personnel design and operate, and the operations middle platform conducts operations-level audits. According to our empirical data (incomplete statistics), after two levels of operations optimization, page bounce rates decrease by 30%~50%, and average reading time increases by 30%~50%. Without promotion, the conversion rate of natural traffic can roughly increase by 3 times. 7. For enterprises with a long history, core customer groups undergoing generational shifts, and significant differences between online and offline customer groups, we recommend the solution: Brand Youthification. Brand youthification does not mean the entire group's brand publicity becomes youthful, but rather developing new products for young people with streamlined SKUs, flexible supply chains, and social attributes that match their tone. It is not recommended to undertake a major brand upgrade for the entire group, as it often has negative effects on existing customer groups. Large head brands should be able to find a spirit at the philosophical and social value level to manage cross-generational customer groups. 8. For enterprises with already leading market share, we recommend the solution: Category Marketing. Promote the category more, differentiate the category more, conduct small-cost category innovations, expand the scenario share of this category in overall customer minds, expand the total social demand, and lead the entire industry to improve together. It should be noted that a category is not an industry attribute, but the customer decision path and market education cost. Many enterprises misunderstand the definition of category, leading to deviations in marketing effectiveness. ****Large Waist Brands There are 3 main reasons for performance growth obstacles for large waist brands: First, insufficient brand momentum. In customer minds, they are not as dazzling as head brands. When customers see head brands, they are more likely to evoke emotional connections and brand recognition, so conversion rates are higher. Large waist brands often lack brand momentum. Second, insufficient strategic capability. In competition with large head brands, the overall strategic capability is insufficient. The Matthew effect of the strong getting stronger is often increasingly evident. Third, unclear differentiation, and product services are relatively homogeneous. Large head brands often have pricing power and dominance over upstream and downstream, while waist brands can only imitate and follow, leading to a very passive competitive situation. Similarly, each enterprise is unique. When we want to improve performance, what are the specific solution entry points? Usually, in large consumer goods markets, large waist brands can also gain a good market share due to strong organizational capabilities. Therefore, our solutions focus on brand power enhancement and brand operations optimization. 1. For enterprises with brands lacking memory points, weak presence in customer minds, and low repurchase rates, we recommend the solution: Rebuilding Brand Power. Brand power building mainly focuses on three dimensions: First, create a good brand recognized by business: strong strategic capability and high social status; Second, create a good brand recognized by customers: strong product capability and good reputation; Third, create a good brand recognized by the industry: strong industry position. Have some unique skills in the industry and a differentiated competitive advantage. 2. For enterprises with traditional methods, focusing on channel construction and self-operated stores, and relatively weak strategy, we recommend the solution: Building Strategic Capability. The internet era has given birth to many technology-oriented business strategies and tactics. Therefore, our strategic capability must adapt to these environmental changes. Usually, we form a customized strategic combination from 8 strategic directions: incremental competition, stock competition, cost leadership, solution-based, traffic-driven, user-driven, data-driven, and cognition-driven, and implement it into a complete strategy and action plan. 3. For enterprises with traditional products, low online sales proportion, and mostly outsourced online operations, we recommend the solution: Brand Keyword Matrix. Because internet traffic is mainly keyword-based, traditional enterprises often emphasize brand image and value delivery when promoting their brands, with insufficient understanding of keywords. When customers think of certain keywords without any prompts and can actively associate with the merchant, this brand building and brand communication capability is a breakthrough for offline brands to achieve both brand and effect online. It also effectively avoids the dispersion of product-focused seeding on platforms like Xiaohongshu, which fails to form an overall online traffic aggregation. For enterprises with external marketing consultants and operations partners, brand strategy and marketing strategy are often suggested by external partners, but demand strategy, product strategy, and business strategy still need to be grasped by the enterprise itself. Therefore, the principles and causal relationships of brand keywords still need to be mastered by the enterprise. 4. For enterprises with all industry selling points, no memory points in brand image, and products mainly based on industry attributes, we recommend the solution: Communication Symbols. Without communication symbols, customer recognition costs are high, memory costs are high, and decision costs are high. A communication symbol is not a simple slogan or overwhelming promotional posters, but content asset building derived from customer word-of-mouth, based on high customer net promoter scores. Good communication symbols are easy to understand, remember, and awaken, and have a very positive effect on customer subconscious and decision guidance. 5. For enterprises with low gross margins, limited marketing budgets, and products mainly based on industry attributes, we recommend the solution: Traffic Products. The benefit of developing traffic products is that, with a small or even zero budget, you can significantly increase touchpoints with ordinary audiences, then through a user operations funnel, gradually filter out potential target customers, matching customer acquisition costs with traffic product pricing, roughly breaking even or slightly losing. Still, it has a very large financial contribution rate. Traffic products can be cross-industry marketing, co-branded products, or even not the company's main business. Many enterprises do not pay enough attention to or understand this point. 6. For enterprises with weak differentiated competitive capabilities and no decision-driving force in customer minds without prompts, we recommend the solution: Creating New Categories. To be honest, this requires great entrepreneurial courage and strategic determination. Large waist brands have strong follow-up and imitation strategies, but lack motivation and decisiveness in creating new categories. Creating a new category means a significant difference from existing industry products, requiring some risk. Innovation may not succeed. But if you always stay in the middle sequence, the position of the entire brand pool in customer minds will gradually sink or even disappear, and the systemic risk is also very large. ****Medium Head Brands Problems for medium head brands usually focus on 3 aspects: First, strong technical capability but slow market expansion. Second, small and beautiful, with limited market size. Third, regional market, not a national brand. Similarly, each enterprise is unique. When we want to improve performance, what are the specific solution entry points? Solutions usually start with marketing capability. 1. For enterprises with unclear product logic or developing new products along professional technical lines, we recommend the solution: Expanding Categories in Reverse from Customer Needs. Medium head enterprises often have strong technical capabilities and are leaders in a certain market segment, having formed their own operational advantages and thinking inertia, making it difficult to break out. To help enterprises break out of themselves to expand categories, we usually use methods along: Explicit customer explicit needs (fourth incremental market), explicit customer implicit needs (third incremental market), implicit customer explicit needs (second incremental market), implicit customer implicit needs (first incremental market), to break thinking inertia. Using this method for innovation workshops has particularly obvious effects. 2. For enterprises with strong product professionalism, strong customer professionalism, and strong professionalism in the use process, we recommend the solution: Product Dimensionality Reduction. Medium head brands are often professional brands. The stronger the professionalism, the smaller the customer base. Therefore, we divide customers into five categories: professional market customers, semi-professional market customers, mass mainstream market customers, mass zero-basic customers, and herd-following customers. In recent years, China's consumer goods market has seen a product dimensionality reduction dividend, such as Lamian Shuo (professional ramen eaten at home), Saturns Bird Coffee (professional coffee available anytime, anywhere), and Master Tong (from art to copper-wood furniture). This model integrates product + service into a dimensionality-reduced solution, suddenly sinking into the mass mainstream consumer market, expanding the customer base and increasing order density. 3. For enterprises with products that have technology but insufficient premium capability and limited room for improvement, we recommend the solution: Developing Service Products Along Technology. Medium head brands often have technical capabilities and can develop new capabilities, new products, and new services. For example, Michelin produces tires as one capability, but Michelin retreaded tires have a longer lifespan than ordinary truck drivers. So Michelin provides tire total service packages for logistics companies, which is a service product expanded along core technical capabilities. 4. For enterprises with strong product capability, a large sales force but lacking professional marketing personnel, especially content marketing personnel, we recommend the solution: Content Marketing. These product-oriented enterprises generally lack the ability to communicate with the market, adhering to the belief that product equals customer value. However, from the customer's perspective, customer value is divided into two types: perceivable value and non-perceivable value. How to convey non-perceivable value to the general public through content marketing, and then through the marketing funnel, find potential target customers, is often the performance growth space for this type of enterprise. ****Small Emerging Brands Problems for small emerging brands often manifest in 3 aspects: First, immature products and poor stable delivery capability; Second, low natural traffic and low order density; Third, almost no brand presence, so low momentum conversion rate. Similarly, each enterprise is unique. When we want to improve performance, what are the specific solution entry points? This type of enterprise should first focus on internal strength, starting from product capability itself. 1. For enterprises without entrepreneurial experience, incomplete teams, but with technical capability, product differentiation, or an incremental market window, we recommend the solution: Explosive Product Incubation Methodology. We have specifically developed five-step methods for internet brand explosive product incubation and traditional brand explosive product incubation, implementing lean startup concepts into specific, executable, measurable, and iterable business strategies and actions. 2. For enterprises with entrepreneurs of great vision, experience in large projects, and internet genes and cognitive advantages, we recommend the solution: Small but Strong Growth Model. Cold start usually involves creating a product matrix around customers: marketing products, traffic products, and repurchase products, forming the simplest growth model, winning by business model. Because this type of enterprise team has cognitive advantages, they see business tricks and cognitive points that are completely different from industry mainstream. 3. For enterprises with strong execution capability, always having comparative advantages in certain aspects when doing the same things, we recommend the solution: Super Big Single Product. Enterprises with strong execution are particularly suitable for internet thinking: bold assumptions, careful verification. Single-point breakthrough, rapid iteration. Super big single products are divided into two types: First, used for traffic and building relationships with customers, with subsequent conversion using other products; Second, for industry chain volume and price rising together, mainly depending on product capability and customer cognitive cost. It is usually recommended to create a super big single product with volume and price rising together, selecting a target price band, finding customer circles, scenarios, and pain points around it, and breaking through this price band. ****Summary Sun Tzu said: In battle, there are no constant conditions, just as water has no constant form. Regarding performance growth, many entrepreneurs say: It's not that I don't understand, it's that the world changes fast. The practical rules we have summarized above are at best a direction for exploration and a starting point for practice. Behind them, there is a lot of hard practical work. For example, it is necessary to break down performance goals from three levels: strategy, marketing, and operations, implementing overall performance goals into key actions of key indicators for key personnel. In 2022, we summarized our original theoretical research and practical rules into four public courses, covering competitiveness (omnichannel competitive strategy), product capability (super big single product), marketing capability (explosive growth), and brand capability (brand moat). We are also very fortunate to encounter many entrepreneurs with great vision. Entrepreneurs are scarce resources and the source of power driving the progress of the entire business society. Compared with the social contributions of entrepreneurs, our contribution to performance growth is still very small, only playing a supporting role. I hope these practical rules are helpful to everyone. _ -END- _