Click to view details A trail of clues, a thousand miles of foresight. This article attempts to summarize clues from all aspects of 2018 to predict what long-term trends are. 1. The main function of annual summaries is to stir up anxiety Every New Year, many people like to summarize the past and look forward to the future. Luo Zhenyu of "Dedao" even holds a New Year's Eve speech every year, with live streaming. It's really too flashy. The implication behind this is that every year is so magical and changeable, and the future is different each time. This is also a major source of public anxiety. But is this really right? "There is nothing new under the sun," many basic principles and truths do not change for hundreds or even thousands of years. Even things like the Industrial Revolution, the rise of national consciousness, and the internet wave last at least decades. We need to take a longer view. Bouncing up and down with small waves every year is hard on both the heart and the body. The same applies to the marketing profession. Over the past year, marketing directors have been very anxious, feeling they lack new skills, and have thrown themselves into various studies. Influencer economy, micro-business thinking, cross-border, community marketing... it's overwhelming and exhausting. (From a collection of "jargon" shared by a colleague) But clear-eyed people actually understand that while new sayings emerge endlessly, the essence remains unchanged. The basic logic supporting all these tools and tactics hasn't changed. So should we still learn those dazzling tactics? My opinion is that as marketing leaders, you can understand these things that change every year, but don't be overly obsessed. You should spend more time thinking about what long-term trends will affect marketing in the next decade. 2. Brand expert Li Jiaoshou says the brand model is declining Coincidentally, just as I was thinking about this issue, two friends shared a course from Chaos University with me. I glanced at it and immediately decided to watch it because two important factors attracted me: One factor is the speaker. The speaker is Li Jiaoshou, the "marketing genius" who published multiple viral articles, was acquired by Baidu in early 2017, and became a vice president at Baidu. After leaving Baidu earlier this year, Li Jiaoshou didn't reopen his public account and kept a low profile. It's rare for him to appear, so I had to take a close look. Another factor is the theme: "The Logic of User Management in the Next 10 Years." I was just thinking about big trends, and this lecture is about the logic of ten years—it hit the spot. Li Jiaoshou's style hasn't changed much. He still likes to simplify complex problems and start with counterintuitive conclusions (after all, most people only understand simple things). He said that "traffic logic" and "brand logic" have declined. In the future, we need to "manage users." Because traffic logic and brand logic, especially the latter, are the marketing logic of consumer goods in the industrial era, with the core purpose of making consumers remember you. But in today's information explosion, this logic is increasingly ineffective. Before going to Baidu, Li Jiaoshou wrote articles teaching people how to build brands. Now he suddenly says the brand model doesn't work, which is really frustrating. But it's okay; everyone is learning and progressing. Li Jiaoshou says that consumers now increasingly demand personalization because they are gradually becoming "single and wealthy," so consumers need to be segmented finely for operation. Li Jiaoshou also found a living example: Japan's Tsutaya Books. While most people focus on online, Tsutaya Books went against the tide and achieved success in physical retail. Today, CCC, the company behind Tsutaya Books, owns over a dozen commercial centers, 1,400 franchise stores, and more than 60 million members. Traditional bookstores follow a "selling space logic," pursuing conversion rate and sales per square foot. Tsutaya Books is different. Its genius founder, Muneaki Masuda, said something particularly magical: "The problem with bookstores is that they are selling books." So Tsutaya Books follows a "buying space logic," essentially managing people rather than products. It uses real-time data from each store to provide comfortable experiences and various products for specific groups. In plain terms, it uses data analysis results to guide store operations. Store operations are not measured by conversion rate but by the length of time people stay. By making customers comfortable and happy, it ultimately achieves profitability. Tsutaya Books is actually a data-driven consulting company. 3. "Consumer operations" is gradually heating up Since September 2018, I have led a team that is essentially doing "data-driven consulting work." So I'm particularly interested in this topic. Li Jiaoshou said that the biggest opportunity for consumer goods companies in the next decade is "consumer operations." (The name "consumer operations" is actually not very accurate, but since no better name has been found, we'll use it for now) This coincides with what Alibaba has been promoting in recent years: "consumer operations." Alibaba was, of course, an e-commerce sales platform, following a traffic operation model, with the focus always on acquiring new customers. But in recent years, Alibaba has been striving to transform. The confidence for Alibaba's transformation comes from data. It's no exaggeration to say that Alibaba is at the forefront in utilizing consumer behavior data. In 2017, Alibaba launched the "Brand Data Bank," providing merchants with consumer behavior data within the platform, following the so-called AIPL path. That is, based on the relationship between consumers and brands, you can classify them into Awareness, Interest, Purchase, and Loyalty. Combined with various characteristics consumers show during shopping, brands have the opportunity to develop different marketing strategies for different groups. In 2018, Alibaba continued its efforts, led by Tmall's FMCG division, and cooperated with Bain to launch the FAST metrics, further providing a reference for brand consumer operations. The so-called FAST is Fertility (total brand population), Advancing (conversion rate from awareness to loyalty at each stage), Superiority (number of super users), and Thriving (activity of super users). In fact, if you look at the definition of FAST, especially S and T, you can see that the focus has gradually shifted from acquiring new customers to managing existing ones. Whether "consumer operations" is a long-term trend is not up to me, Li Jiaoshou, or Alibaba to decide. But a trail of clues, a thousand miles of foresight; my belief in "consumer operations" comes from many clues. For example, this year I went to Beijing to attend GrowingIO's growth conference (a thousand-person event; growth hacking is really popular). GrowingIO's founder, Zhang Ximeng, former senior director of LinkedIn's US business analytics department, said at the conference that the growth hacking model needs to change. The original growth hacking model is AARRR: Acquisition, Activation, Retention, Revenue, and Referral. Zhang Ximeng said that's wrong; now it should be changed to RARRA, meaning first look at Retention, Activation, and Referral, then talk about Revenue and Acquisition. From an app development perspective, it means emphasizing making the product good first, then promoting it. From our perspective in consumer goods, isn't it about managing existing customers well before recruiting new ones? All industries are feeling the decline in traffic and the importance of more refined user management. 4. A traffic pool is better as a "retention pool" Let me give another example. At the beginning of the year, a book called "Traffic Pool" was very popular, written by Yang Fei, CMO of Luckin Coffee and former CMO of UCAR. He applied his experience from the chauffeured car industry to coffee, and for a time he was very prominent. I also read the book and wrote an article about Luckin and Starbucks. In the book, Yang Fei kept talking about how to use growth hacking techniques to achieve fission marketing, how to obtain large traffic, and how to effectively convert traffic. Yang Fei calls his "traffic pool method" a "quick and dirty" marketing theory. Honestly, it's interesting and inspiring. But in the end, it's still a traffic model. At the end of 2018, reports suddenly emerged that Luckin had a net loss of 857 million yuan in the first nine months. Luckin said "this loss is in line with expectations" and that it will continue to subsidize users in different ways at different times. This statement seems familiar... Soon an article explained this familiar feeling. Its title was: "Will Luckin Become the Next ofo?" Really, I think the person who wrote that title is particularly sharp. Luckin Coffee and the shared bikes represented by ofo both started with a model of using large subsidies to acquire users. A few years ago, people who praised the shared bike model said not to worry about losses; with users, you have everything. So what is that "everything"? No one said. But I guess it implies "operating users to gain greater value." But up to now, shared bikes haven't found that greater value. What about Luckin Coffee? Can it find it? I think it's quite uncertain. Whether buying coffee or renting bikes, the scenarios are too simple and too tool-like. Unless you need to scan a code, no one would open their app to browse around all day, right? Apart from running P2P ads, I can't think of much operational space. Alibaba is much better. After all, many women have developed the habit of browsing Taobao when idle, spending a lot of time there. Miss A from Alibaba told me that she thinks if Yang Fei's "traffic pool" were changed to "retention pool," the meaning might be right. That's a one-word teacher. So Starbucks is very obedient, welcoming Alibaba with open arms and sharing data. What it values should be the rich consumer operation space that Alibaba, as a "retention pool," can provide? (What, you say Starbucks only values Alibaba's traffic? That can't be so shallow, right? That would disappoint me in Starbucks.) 5. Difficult, so it's interesting However, the concept of "consumer operations" is not very clear at present. For example, Li Jiaoshou didn't explain clearly how Tsutaya Books uses so much data to optimize "consumer experience." After all, for those of us who do the work, the details of execution are the most important... Similarly, Alibaba's ecosystem, although ahead of other platforms, doesn't have full data support. Currently, the "operations" that can truly target segmented consumers within the platform are also limited. So, saying that Alibaba helps brands achieve consumer operations is premature. Transitioning from a traffic model to a consumer operations model is a long and arduous task. I like Li Jiaoshou not because he is always right, but because he likes to think, and even when he's not sure about something, he dares to make judgments. For example, he said that Coca-Cola is something that can't do consumer operations. Because doing consumer operations isn't just classifying consumers and running targeted ads; it's using data to evolve products. Just as Tsutaya Books uses data to evolve the services/products it offers to customers. How can Coca-Cola evolve its product? It's the real thing; it can't be changed. Transitioning from a brand model to a consumer operations model is even more difficult. For example, my team was doing data analysis services for a milk powder brand in 2018. The milk powder brand competition is super fierce, a red ocean, and the product itself is hard to change based on consumer behavior data. If we change our thinking, what if we were operating consumers in the maternal and infant category? It should be based on our understanding of this group, providing other products/services? Toys, clothing, education... If we could evolve products this way, the imagination space would be huge. But would a milk powder brand do business in other categories? Well, Li Jiaoshou was right again: the industrial era created constraints, and consumer goods companies are structured with brand models, making it hard to turn around. Another important point: the Chinese market is complex and vast, and it will definitely not be a one-size-fits-all shift from traffic and brand models; multiple models will coexist for a long time. For example, first- and second-tier cities may adopt consumer operations, while the brand model remains particularly effective in lower-tier markets. How to balance and choose tests wisdom. But if you identify a long-term trend, it will never change due to temporary constraints. The brand model and traffic model will always face challenges, and companies and platforms will inevitably face major transformations. Transformation is good for companies and people who struggle to stand out under the old models. We are fortunate to be born at such a time. "Consumer operations" is an opportunity for all consumer goods companies hoping to overtake, and also for all proactive marketers. Let's all work hard, starting from 2019. Source: Yogurt Brother's Workplace Survival Guide (ID: YogurtBrotherSean) -END-