Introduction: Designing a sound consumer strategy is key to winning consumer mindshare. The end of the channel chain is the consumer, often referred to as the user. Most business failures occur at the consumer stage: a product battles through layers of channel hurdles, only to be rejected by consumers, rendering all efforts futile. This stems from a flawed product strategy. The core of product strategy boils down to three points: customer acquisition, repurchase, and average transaction value. In plain terms: guide consumers to buy; drive them to buy again and form habitual purchases; and find ways to increase the quantity or amount of each purchase. Today, we'll discuss these three aspects.

Market profiling before implementing product strategy Strictly speaking, these three basic consumer strategy actions need to be performed continuously, but in reality, resources are limited, so priorities must be set. I usually recommend starting with a thorough market profile, using two common dimensions: first, annual per capita consumption of the product (annual sales divided by regional population); second, the competitive landscape of the regional market (which can be market share data from third-party sources or comparison of the top competitor's annual sales volume or value).

  • High per capita consumption and strong competitiveness: Brand awareness is high, and product distribution is smooth. The consumer strategy should focus on increasing average transaction value.
  • High per capita consumption and weak competitiveness: The brand has some recognition but is suppressed by competitors; consumers prefer competitors. The strategy should focus on driving repurchase.
  • Low per capita consumption and strong competitiveness: Brand awareness is high, but category awareness is low; consumers are unfamiliar with the category, but those who know it buy your product. The strategy should focus on customer acquisition.
  • Low per capita consumption and weak competitiveness: There is category awareness, but brand awareness is low, and it's not the first choice. The strategy should focus on a small target group, addressing acquisition, repurchase, and transaction value simultaneously to cultivate a core loyal customer base.

Consumer strategy: How to drive customer acquisition There are four core points: acquisition, retention, activation, and conversion. We'll elaborate from three angles: product, market, and operations.

1. Product side. This involves leveraging product differentiation or development methods to achieve acquisition. Common methods include:

  • Trial and experience: The most effective and common method for FMCG. It allows consumers to experience the product through sight, smell, touch, hearing, and taste, but requires careful design.
  • Word-of-mouth: Product is the primary driver and bridge between company and consumer. Good product + positive word-of-mouth = hit product. It proves the product is well-made, loved, and solves needs, and it expands reach organically while saving marketing costs.
  • One product, one code: This helps control costs. Methods include product invitation codes (sent to target consumers to spread via social circles), new-user incentives (specific benefits for first-time buyers), and incentive-based acquisition (redirecting advertising costs directly to consumers).

2. Market side. The marketing or sales department achieves acquisition through advertising, alliances, and events. Common methods:

  • Advertising: From CCTV's "loudspeaker" to today's multi-media "gentle rain," forms evolve with technology, but the goal remains.
  • Brand alliances: For example, Nongfu Spring's "Forbidden City bottle" attracted fans of the Forbidden City.
  • Offline events: Many brands run campaigns during holidays like Women's Day, Qixi, Mid-Autumn, and Spring Festival.

3. Operations side. The operations department uses promotion and event planning. Common methods:

  • Content seeding: Platforms like Xiaohongshu and Bilibili are hubs for seeding; planning content that resonates with the target audience is key.
  • KOL/KOC fission: Essential for spreading via opinion leaders or consumers, either organically or paid, to achieve campaign goals.
  • Algorithmic push: For example, on Douyin, most content is algorithm-recommended—not necessarily what you want, but what they want you to see. Push notifications are effective and timely, using user operations, refined recommendations, and user insights to deliver new products to target consumers.

Consumer strategy: How to drive repurchase Repurchase rate refers to the number of repeat purchases of a brand's product or service; higher rates indicate greater loyalty. To improve repurchase, consider four aspects:

1. The product must have repurchase attributes: Good products can excel in taste, health, convenience, addictive flavors, cost-effectiveness, strong name recall, packaging experience, or distinct memory points. They can be all-rounders or specialists. But remember, invest in "valuable good products"; applying the right methods to the wrong product won't yield results.

2. Increase consumer stickiness: For example, with one product one code, the "code" drives acquisition, while the "coupon" drives repurchase. After first scan, coupons like second bottle half price, discounts, or points encourage repeat purchases, forming habits.

3. Seek new channel and scenario opportunities: Matching channels with scenarios boosts repurchase. For instance, community convenience stores can create family life scenes, while office building stores can cater to work and late-night scenarios, linking needs to purchase habits.

4. Continuously tell brand stories: With abundant choices, consumers hold the power. Building genuine communication is essential, yet few brands tell compelling stories. Mastering this can provide a competitive edge.

Consumer strategy: How to increase average transaction value Average transaction value is the total amount a customer pays per purchase. Two ways: get consumers to buy more or buy more expensive items. For a single product, price and quantity are negatively correlated; higher prices reduce quantity, lower prices increase it. Thus, finding the right price (considering profit) and maximizing sales volume are key.

1. How to get consumers to buy more?

  • Price promotions: Stimulate more purchases via discounts, effective for price-elastic products.
  • Bundle sales: A variation of discounting, e.g., buy a high-priced item, get a low-priced one free.
  • Buy-and-gift: Similar to bundling, common for new product promotions or clearing near-expiry items, also boosting sales of similar products.

2. How to get consumers to buy more expensive items? Every consumer has a psychological account—an expected price for each product. To raise transaction value, raise that psychological account. For example, chocolate is just candy, but as a love gift it commands a high price; diamonds are stones, but as wedding symbols they fetch astronomical prices. Designing added value is one way to sell at higher prices.

3. Create consumption hotspots Examples include Baixiang instant noodles, Huiyuan juice, and Erke, which gained public support through social responsibility, leading to "irrational consumption," greatly boosting transaction values.

Designing a sound consumer strategy is key to winning consumer mindshare, aiming to stimulate purchase desire and establish a virtuous cycle of sell-through.

Further reading: Hai You: New Distribution contributing author, senior researcher, offline channel marketing practitioner, and designer of channel coverage models for enterprises. He has provided channel consulting for over a dozen first-tier brands with positive feedback.