---
title: "The Algorithm of Growth and the Brand Thinking Model"
description: "Growth is undoubtedly the primary goal of an enterprise, with all work revolving around it. The first pillar of growth is the product, the second is traffic, the third is user operations or brand, and the fourth is culture. The formula for growth is: revenue equals average order value multiplied by the number of users, with repurchase rate and diffusion index determining the upper limit. To build a brand, the thinking model involves creating scenarios, labeling, social engagement, and spreading."
author: "空手"
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published: "2021-06-22"
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# The Algorithm of Growth and the Brand Thinking Model

> Growth is undoubtedly the primary goal of an enterprise, with all work revolving around it. The first pillar of growth is the product, the second is traffic, the third is user operations or brand, and the fourth is culture. The formula for growth is: revenue equals average order value multiplied by the number of users, with repurchase rate and diffusion index determining the upper limit. To build a brand, the thinking model involves creating scenarios, labeling, social engagement, and spreading.

Undoubtedly, growth is the primary goal of an enterprise. All work done by an enterprise is for growth, revolving around it, whether it's strategy, brand, or marketing. So how exactly does an enterprise achieve growth, and what elements constitute growth? **I believe the first pillar of growth is the product.** The value and price of the product itself are the primary factors determining growth. Whether consumers think you're worth buying and how much they're willing to pay for you is one of the first questions in the user's purchase decision. **The second pillar of growth is traffic.** Traffic is essentially customer flow, which is customer acquisition. Creating content and running ads on internet platforms like Douyin, Weibo, and WeChat is acquiring traffic; advertising on traditional four major media is also acquiring traffic, including offline ground promotions, channel promotions, and customer visits, all ultimately for acquiring traffic.
Only with customer flow can there be transactions and conversions. How an enterprise acquires traffic and the scale of users it obtains is the second pillar of growth. The product's average order value multiplied by the number of users acquired constitutes the enterprise's revenue, and these two form the foundation of growth. **The third pillar of growth is user operations, or brand.** Because a brand is essentially about operating users. In the past era of dividends, enterprises focused on purchasing traffic, which was continuous, making customer acquisition relatively easy and low-cost, so they didn't place much emphasis on brand building and user operations.
But as dividends disappear and customer acquisition costs rise, whether an enterprise can retain each acquired customer, turn them into fans and loyal consumers, achieve retention and repurchase, and even attract new customers through them, has become the key to marketing. This not only concerns whether high acquisition costs can be amortized but also determines whether growth can be sustained. **Finally, the fourth pillar of growth is culture.** Whether an enterprise's brand can keep up with, adapt to, or even guide the development trends of social culture determines the enterprise's vitality.
Only when a brand conforms to cultural consumption trends and collective consumption psychology can it break through its circle, gain recognition from a broad consumer base, achieve fission and diffusion at the social level, and form social popularity. Culture determines whether an enterprise can achieve exponential growth.
Thus, we arrive at a growth formula.
To achieve growth, an enterprise must either improve the product and product mix to raise the average order value; expand communication and scale to increase customer numbers; enhance user loyalty and manage customer lifetime value; or turn the brand into a social culture and spread it out. In the end, there are only these few paths to growth.
As mentioned, average order value and user numbers form the foundation of growth, while repurchase rate and diffusion index determine the upper limit of growth.
Let me explain the diffusion index here. Originally, I used the term fission index, but after much deliberation, I switched to diffusion index. The term fission is based on the AARRR model, the consumer behavior chain of acquisition-activation-retention-revenue-fission.
But I think fission is more technical, mainly referring to operational tactics based on WeChat platforms. The term diffusion, along with the innovation diffusion theory behind it, better fits my vision of a brand's large-scale imitation and spread at the social cultural level.
This is my algorithm for growth.
After understanding the key variables of growth, we know the direction of our efforts. Next is the second question: How to excel in these four variables of growth? The four keywords I offer are scenario, label, social, and spread.
Growth first depends on product power. The value of a product can only be presented in the user's life scenarios and application scenarios. Consumers experience and feel the product's functions based on specific scenarios. In specific scenarios, consumers can understand what the product means to them and what role it plays in their lives. **So scenarios determine the product's ability to monetize.**
Growth second depends on marketing power. Of course, what I mean by marketing here is narrow marketing, i.e., promotion and customer acquisition. For a consumer, whether they become your customer depends on how they perceive your brand.
The key to perception is labels. Labels compress all the complex product and brand information into a concise presentation for consumers, enabling rapid cognition and communication in their minds, thereby greatly reducing marketing costs. **Labels determine the efficiency of user cognition, and thus the efficiency of customer acquisition.**
Growth third depends on user operations capability. In recent years, enterprises have increasingly emphasized community operations and private domain traffic. More and more internet-famous brands and new brands growing on Taobao, WeChat, and Douyin have begun to focus on brand building to win customer recognition and loyalty. The reason, as mentioned earlier, is that dividends have disappeared and customer acquisition costs are rising, so it's necessary to operate users.
The key to operating users well is social interaction. Only by establishing social relationships with consumers can enterprises build long-term connections. **Social interaction thus determines the quality of user operations and the strength of brand relationships.**
Growth finally depends on social influence. According to the innovation diffusion theory, for a new product, idea, or practice to be accepted and adopted by the general public, it must go through a process of dissemination among members of the social system, following a bell curve. Innovation diffusion is a fundamental social process.
For an enterprise's product to diffuse, become a phenomenal hit, and achieve brand breakout, its weapons are technology and culture. Especially today, with rapid societal changes, shifting consumer groups, and the emergence of various technologies and media, cultural ruptures have been created, offering unprecedented opportunities for brand cultural innovation.
If enterprises seize this ideological power, they can achieve brand fission and diffusion, winning over a large consumer base. **Spread determines the degree of social diffusion.**
Based on these four themes, we arrive at a standard formula for building a brand.
The thinking model and logical steps for building a brand are: create scenarios, attach labels, engage in social interaction, and achieve spread.
Now, let me elaborate on each.
The term scenario has been one of the hot words frequently mentioned on the internet since around 2014. But regarding scenarios, I think a few points haven't been clarified.
**First, what exactly is a scenario, and how is it defined?** Once a word becomes popular, it's easily abused, and eventually everything becomes a scenario, with the connotation and extension unclear. This is language corruption.
**Second, what specific role do scenarios play in enterprise marketing?** Everyone talks about scenarios, but what role they actually play in marketing hasn't been considered from the essence of business. But only by clarifying this can we truly apply scenarios to marketing.
**Third, how can enterprises design consumption scenarios based on their product characteristics and target groups? Are there universal elements, steps, and formulas?** Just talking about scenarios is useless; the important thing is how to develop scenarios.
First, I want to answer the marketing value of scenarios. **The greatest marketing value of scenarios is that scenarios create demand.** Human needs arise in scenarios; different scenarios generate different needs. Scenarios create demand.
In March this year, shared power bank companies collectively raised prices, drawing unanimous criticism from media and consumers. Let's look at the pricing strategy of shared power banks: in business districts and hospitals, it averages 3-4 yuan/hour; in scenic spots and stations, 5-9 yuan/hour; in bars and nightclubs, 10 yuan/hour.
Different scenarios, different pricing, fundamentally because consumers' needs and willingness to pay differ across scenarios. When you're at a bar with someone of the opposite sex waiting to meet you, and your phone is dead, would you use a power bank at 10 yuan per hour? For consumers, the value of a power bank is clearly different in different scenarios.
The value of scenarios is to create demand and drive consumers to make purchase decisions. **Therefore, enterprises need to find the timing and occasion that best stimulates consumer demand and makes consumers feel the value of their products.** This is the definition of scenario in the marketing context. Enterprises should also build scenarios for their products based on this. **Scenario design includes two parts: scenario experience and scenario trigger.** Experience is psychological, aimed at letting consumers feel the product's value and stimulate demand. Trigger is behavioral, aimed at reminding consumers to take action and trigger purchase behavior.
**Scenario experience includes three levels: sensory, emotional, and meaningful.** First, what sensory feelings does the product bring to consumers, and how is the product's value "visualized" for consumers? That is, consumers should see, hear, smell, taste, and touch the product's functions and quality. Feeling is real; value that can be felt is true value.
Second, what emotions can the product associate with consumers? That is, the consumer's mood when consuming the product—whether happy or calm, confident or flamboyant. Finally, what meaning does the product bring to consumers, in terms of self-respect and self-actualization, or group belonging? Sensory, emotional, and meaningful correspond to the body, heart, and spirit levels. **Scenario triggers include four variables: timing, occasion, action, and frequency.** These variables answer how consumers should consume your product: when, where, and how to consume and use it (the action and frequency of consumption). It's like adding the word "daily" before nuts. The reminder of consumption frequency "daily" created a market worth tens of billions.
Thus, we get a scenario development formula—
A so-called brand is the integration of consumer experiences in specific scenarios. Experiencing the brand is the first layer of brand thinking.
Next, let's talk about labels.
To get consumers to buy your product, you first need to tell them who you are, what you do, and how you're different from similar products. This requires enterprises to convey information to consumers, including product and brand information. How to convey information? For a long time, two major approaches have formed in the advertising industry:
**One is the 4A company approach—single claim + integrated communication.** Extract a core concept for the brand, create multi-dimensional, three-dimensional creative expressions and content around the concept, and then output it through various media combinations.
**The other is the local marketing company approach—brainwashing ads + media bombardment.** Simplify advertising information into one sentence, such as "sales are far ahead" or "go wherever you want to shoot," and then flood mainstream strong media (CCTV or Focus Media) with massive placements, repeatedly bombarding consumers' eyes to force them to remember. But the problem is that in today's digital age, both approaches are very expensive and increasingly inefficient, because consumers have begun to take control of information.
In this era of information explosion, it's easy to think that consumers don't lack information at all. Enterprises bombarding them with a pile of information is just annoying and tiresome for consumers.
**What consumers truly lack is not the ability to acquire information, but the ability to organize and absorb it.** How to make disordered information orderly, how to simplify information. In other words, as Mr. Liu Run said in a recent article, the biggest gap between people is no longer information asymmetry, but cognitive asymmetry. Cognitive poverty is the greatest poverty of a person.
So, **what is the end of information simplification? It's labels.** Labeling is our way of understanding the world, a survival ability we evolved over millions of years. If enterprises want to achieve information symmetry with consumers, they should heavily invest in media and ads. But if they want to achieve cognitive symmetry, they should attach labels to the brand and consumers.
**The greatest marketing value of labels is helping enterprises lock onto a "mental track."**
If someone wants to start a business and build a brand, the first step is to choose a track. Traditionally, tracks refer to categories. Categories vary in size, so some tracks are wide and long, while others are narrow and short. If you choose the wrong track, no matter how fast you run, your final results may still be worse than others.
For example, in the convenience food category, Luosifen has now become a major track, second only to instant noodles, incomparable to other rice noodle products. But why are tracks wide or narrow? Why is Liuzhou Luosifen's market size much larger than Guilin rice noodles in the same rice noodle track? Why has the Luosifen track surged in recent years, leaping from a street snack to a national food?
Actually, it's not that the product itself has changed, but that consumers' perception of Luosifen has changed. **The real track is not in the category, but in consumer cognition.**
The value of labels is to help brands break through original physical category limits, find a broad mental track in consumer cognition, and help brands find first-mover advantages and achieve differentiated competition among competitors on the same track.
It's like sparkling water. Originally, it was a very small track in the beverage market. But when sparkling water was labeled "healthy," it immediately broke through the original small category limits and gained broad development prospects, because health, fitness, and bodybuilding align with today's consumption trends.
So we see that whether it's sparkling water, sports drinks, tea drinks, coffee, or even cola, they're all shouting "0 sugar, 0 fat, 0 calories."
This also shows that today's tracks are no longer straight and non-intersecting like in the past, but curved and overlapping.
**Consumers' decision logic is no longer "category thinking, brand expression."** For example, if I want to drink cola, I buy Coca-Cola; if I want orange juice, I choose Minute Maid or Weiquan Daily C; if I want tea drinks, I choose Master Kong Green Tea.
**Today, consumers use "scenario thinking, label cognition, brand expression."**
For example, if I'm tired from overtime today and feeling down, I want to drink "happy water for couch potatoes," so I decide to buy cola or milk tea. If I've just finished exercising and want something healthy, I choose based on my preference among Genki Forest, Oriental Leaf, Weiquan Daily C, or sugar-free cola. If I'm buying a drink with breakfast and want something "nutritious," I decide to buy milk, juice, or soy milk.
Labels determine the enterprise's market size and user mental capacity, so enterprises should decide marketing information based on their designed brand labels—what to say to consumers and what content to convey.
In an enterprise's information strategy, there are two most important parts: **one is brand text**, which includes the brand's core claims, slogans, etc. Core text defines the brand; **the other is the content spectrum**, which is the brand's content display on platforms like Weibo, WeChat, Douyin, Kuaishou, Bilibili, Xiaohongshu, and Zhihu.
But content can't be covered by one sentence; it must be rich and three-dimensional, with various forms like text and images, long videos, short videos, notes, answers, and for different consumer groups, seasons, and marketing nodes, content must have different information points and angles.
So, content can be refracted from brand labels into a complete, colorful spectrum. I call it the "content spectrum."
For example, the clothing brand bosie, which has grown very fast in recent years, is traditionally a designer brand operated with fast-fashion playbook. But from the mental track perspective, bosie labels itself as "genderless, ageless."
"Genderless" helps bosie lock onto diverse male and female consumer groups—whether couples, best friends, or parent-child, all can wear it. And "genderless" also aligns with today's social culture of gender equality.
"Ageless" can satisfy the new generation's pursuit of a youthful feel, hoping their dressing style is full of childlike innocence, campus style, coolness, and neutrality.
Bosie's rapid growth is actually based on the mental tracks locked by these two labels. Let's look at the directions and perspectives of bosie's content marketing (i.e., the "content spectrum").
Enterprises find their mental track through brand label design, then expand and interpret the labels through brand text and content spectrum.
OK, we get a label design formula—
What is a brand? It's actually the process of attaching labels in consumers' minds. Enterprises should choose the most suitable cognitive label, determine the brand's identity and unique attributes, thereby finding their mental track, making it easier for consumers to know you, recognize you, and identify with you.
Then, based on this core label, the brand should set brand text (for advertising and marketing promotion) and determine the content spectrum (for self-media and content creation). Label branding is the second layer of brand thinking.
Next, social interaction. **To evaluate the quality of an enterprise's user operations, it's not about how much money consumers are willing to spend on the brand, but how much time consumers are willing to spend on the brand.**
Are consumers willing to like, comment, and share your content? Are they willing to participate in your activities? Are they willing to watch your live streams? Are they willing to join your communities? Are they willing to speak for you online and in interpersonal interactions?
If none of these happen, then the enterprise has only established a transactional relationship with consumers, not a social one.
Today, all internet giants and internet products compete ultimately on how to occupy users' time and space. Everyone has only 24 hours a day. If you spend more time on Douyin, you naturally spend less time on WeChat; if you're always playing Honor of Kings, you naturally spend less time shopping on Taobao.
Recently, I read an article titled "The End of the Internet is Content." Even tool products like Didi, DingTalk, and Boss Zhipin are doing content, inviting quality content creators to join (in recent months, I've received many platform invitations).
**Why is everyone doing content? Because only content can occupy users' time. If users don't spend time on you, where does your traffic come from?**
Why does Taobao insist on live streaming? Because the essence of Taobao is "browsing," not "buying." Consumers spending more time watching live streams on Taobao will develop stronger identification with Taobao, build stronger connections, and spend more money there.
For brands, how to get users to spend more time on you? One is to do content, and the other is to engage in more social interaction with consumers, getting them involved. The source of participation is the product. Enterprises should involve consumers in the stages of product R&D design, production, and launch operations. Products co-created by users naturally form a strong connection with users.
Look at Xiaomi. From the very beginning of developing the MIUI system and Xiaomi products, consumers were involved, which is why Mi fans are so powerful.
Also, NetEase Cloud Music. For a music platform, the core competitiveness is music copyrights, right? NetEase Cloud Music has no advantage in copyrights, but the various divine comments in NetEase Cloud Music have stuck users, expanded brand influence, and built competitive barriers.
It can be said that NetEase Cloud Music is a product co-created by the enterprise and users. So in 2017, when NetEase Cloud Music's music comment special train subway ads launched, they went viral and became a national-level marketing event. Secondly, brands should establish empathy with consumers in communication and achieve resonance of discourse. **For B2C, the greatest significance of a brand is to empathize with consumers, while for B2B, the main role of a brand is to provide trust endorsement.**
To build trust, constructing a shared discourse system with consumers is very important. Let consumers speak for your product's goodness, so as to build user reputation, which may further develop into industry standards, becoming an important basis for consumers to choose products in the industry, and even becoming public opinion, helping brands build social influence.
Truly good PR is not when enterprises spend money to have media publish a bunch of soft articles and press releases, but when consumers speak for you, creating content on various platforms to showcase and praise your product. Such user-co-created discourse is more authentic and more touching. Especially when a brand faces a crisis, good crisis PR cannot be separated from the support and endorsement of fans.
Finally, as the saying goes, there are no permanent friends, only permanent interests. A brand can only establish sustained connections with consumers by forming a community of shared interests and sharing benefits with them.
**In the past, the main means of enterprise marketing was to purchase users from media; today, enterprise marketing must purchase users from users.**
Why are users willing to join your community, buy your membership, and become your private domain traffic? Because you've given them discounts (or shared valuable content). Communities with weekly flash sales and monthly member activities are active and can retain users.
Why are users willing to forward your links to friends and family and help you fission? Because you've provided discounts, red packets, and coupons.
As long as enterprises are truly willing to invest time and effort in users, share value and benefits with them, share valuable content and knowledge, and invite users to participate in brand operations, users will definitely return more than expected.
Now, we get a social interaction process formula—
I once wrote this passage in my public account (which was even plagiarized into a book about content marketing):
"Building a brand is actually a process of co-creation with consumers. Enterprises, on the path of value sharing, content resonance, communication resonance, and organizational symbiosis with consumers, form a community with users, thereby completing brand construction. A brand is a community built by the enterprise's product and its consumers."
Social branding is the third layer of brand thinking.
Finally, spread.
To clearly explain the social diffusion and spread of a brand, we must introduce a concept—meme.
It was coined by the famous British evolutionary biologist Richard Dawkins in his brilliant book "The Selfish Gene." The English word meme is modeled after the word gene. It refers to the gene in social culture.
Memes are units of cultural expression like beliefs and catchphrases. Like genes in biological evolution, they are replicated and spread in social culture. Of course, genes are replicated through heredity, while memes are replicated through imitation. Gabriel Tarde, one of the three founders of French sociology, explained all social life phenomena with the two factors of invention and imitation. He believed human society is a cyclical process of invention, imitation, conflict, and adaptation.
**Imitation is the most basic social relationship and the ultimate element of social behavior. Society is composed of groups of individuals who imitate each other. Social relationships are essentially imitative relationships.** According to the innovation diffusion curve, how does a new product or brand become popular? Ultimately, it's that a small group of people first tries the product, then triggers mass imitation. Why does the mass imitate? Because of memes. So I personally understand memes as the motivation for imitation. I understand the English word meme as the replication and transmission of speech, ideas, and behavior from one me to another me.
Tarde therefore said, **imitation is communication.** The ultimate goal of brand communication is to get consumers to imitate the characters in ads to purchase and use the product.
Here, by the way, my understanding and insight into mass communication have been profoundly influenced by three statements that have had a groundbreaking impact on my advertising and brand communication work.
**The first statement is by communication master McLuhan: "The medium is the message."**
The media and technological tools that transmit information are sometimes more important and meaningful than the information itself. What affects our understanding and thinking habits is often not the information, but the medium that transmits it.
**The second statement is by Don Schultz, the father of integrated marketing: "Marketing is communication, and communication is marketing."**
The so-called 4Ps—product, price, place, promotion—are all about conveying information to consumers, and consumers' reception and cognition of this information is crucial. Consumer communication is the entirety of marketing, and information dissemination is the only sustainable competitive advantage for an enterprise.
**The third statement is Tarde's: "Imitation is communication."**
The ultimate goal of communication is to form consumer imitation from speech to behavior. Imitation in speech is word-of-mouth about the brand; imitation in behavior is collectively consuming and using a brand. The mission of social spread is imitation, and the means is memes.
Now, let's set aside the academic definition of "meme" and talk about what exactly can trigger people's eager sharing and imitation in marketing communication.
**My view is that all memes in brand communication are responding to the relationship between people and society.**
Because humans are naturally social animals, social interaction is human nature. Alfred Adler, the founder of individual psychology, believed that the three major problems in life are work, social interaction, and sex. Actually, aren't work relationships and male-female relationships also social interactions? So the only problem life must face is social relationships.
Only when brand communication involves content about how we view ourselves, how we view work and family, how we view gender, love, and marriage, how we view the country and the world—content related to social relationships—can such communication attract public attention and discussion.
Now, here's the final diffusion mechanism for spread—
Cultural branding is the fourth layer of brand thinking.
_**-END-**_
Source: Kongshou (ID: firesteal13)
_* Due to reposting factors, some content has been deleted._
**Are you "watching" me?**


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