---
title: "Yi Shenghuo Upward: B2B Frontline Practical Notes - Data-Driven Operations to Enhance Enterprise Efficiency"
description: "On May 10 at 8 PM, New Distribution invited guest Xiang Shang, founder & CEO of Yi Shenghuo, to share insights on 'B2B Frontline Practical Notes - Data-Driven Operations to Enhance Enterprise Efficiency' in the New Distribution Open Class. The content was practical and thought-provoking, and New Distribution has edited and organized it for interested readers."
author: "向上"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2018-05-11"
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# Yi Shenghuo Upward: B2B Frontline Practical Notes - Data-Driven Operations to Enhance Enterprise Efficiency

> On May 10 at 8 PM, New Distribution invited guest Xiang Shang, founder & CEO of Yi Shenghuo, to share insights on 'B2B Frontline Practical Notes - Data-Driven Operations to Enhance Enterprise Efficiency' in the New Distribution Open Class. The content was practical and thought-provoking, and New Distribution has edited and organized it for interested readers.

On May 10 at 8 PM, New Distribution invited guest **Xiang Shang, founder & CEO of Yi Shenghuo**, to share insights on "B2B Frontline Practical Notes - Data-Driven Operations to Enhance Enterprise Efficiency" in the New Distribution Open Class. The content was practical and thought-provoking, and New Distribution has edited and organized it for interested readers.
**Online course sharing content is as follows:**
For B2B small store users, they don't care about macro trends, your strategy, whether you are TO-VC or TO-business, how much you have raised, or whether you are national or regional, direct or matching. With user-driven as the core, what should the B2B operational focus and KPIs be?
For B2B enterprises, all dreams are based on the premise of survival. This era changes rapidly; the internet, venture capital, and capital operations have overturned many business common senses. Enterprises must survive and have cash flow. Where does cash flow come from? From speculation, financing, or business?
No matter how great a company is, it ultimately must return to A-B=C, i.e., revenue - cost = profit. Failed companies have different reasons, but almost 100% of them violated this common sense or rule, and the company collapsed because it was negative.
No matter how great a B2B is, regardless of strategy or model, whether matching or direct, whether your warehouse uses robots or manual operations, the essence of B2B is the same: sell "goods" through "platform stores" to "store users," and then deliver goods to users through offline "warehousing and distribution." All B2B tactical operations will land on three dimensions: user development and maintenance, platform store order operations, and product sales and management.
In actual operations, we found this set of formulas:
First, transaction volume = user count * ARPU (ARPU - Average Revenue Per User, i.e., average revenue per user or average order value), based on user operations.
Second, transaction volume = SKU1 quantity * unit price + SKU2 quantity * unit price + ... + SKUn quantity * unit price, based on product operations.
Third, transaction volume = order count * average order value, based on platform store operations.
These three transaction volumes are consistent, meaning the company's business goal is unique, but the KPI focus of different departments in the organization is different.
Since Yi Shenghuo defined itself as a "platform-level business," all business behaviors are finance-oriented, i.e., how to increase revenue and reduce costs, which has become the company's top-down core goal. Today, I will share some practical dry goods from Yi Shenghuo's front-line command operations from the perspective of financial operations, starting from the three dimensions of "user operations, product operations, and store operations." How does DT technology promote lean management in B2B enterprises?
01
**How does DT technology achieve refined user management?**
Let's look at a scenario case: I once communicated with a distributor who claimed to have 3000+ users.
Question: Are these 3000 stores your controlled stores or strongly controlled chain stores?
Answer: No.
Question: Are there more than 3000 stores that have, at some point, purchased from you to some extent?
Answer: ¥%%...... Probably so.
Question: That is, you have served more than 3000 stores in total, but only as service relationships, and relatively loose and fragile ones. They wouldn't necessarily listen to you?
Answer: *%%¥#...... That's right.
**Comment:** All peers need not worry; those who often claim millions of stores are probably in the same situation!
Question: How many stores purchase from you each month?
Answer: **¥......, we deliver 100+ orders daily, and some stores place several orders a month. The exact number of stores is about &¥%@¥
Question: Which stores are churning (sleeping, not ordering), and which are high-quality users?
Answer: We have many large-order users who order from us long-term. At first, I rely on memory, like counting family treasures.
**Comment:** Unable to control the position of each store in the sales funnel.
Question: How often do stores place orders?
Answer: Stores vary; there is no fixed pattern.
**Comment:** Unable to achieve precise management of store purchase cycles.
Question: What goods do stores generally purchase? What is your share?
Answer: I only know which items in the warehouse sell well; if it comes to each store, I really can't remember.
**Comment:** Unable to achieve personalized purchase needs for each store.
Without DT technical support, store management and operations are entirely based on feelings and memory, and personalized service cannot be targeted.
**Three principles of user operations:** Retain old users, develop new users, and increase average order value.
Translated into data-driven operations, sales volume = user count * average order value. If you want to increase transaction volume by 20%, there are two paths: 1. Focus on old users, increase each store's average order value by 20%; 2. Increase both user count and average order value by 10% each, resulting in a 21% sales growth.
If you are always like a monkey breaking corn, losing old users while developing new ones, you are noble and selfless, silently contributing to B2B literacy. The cost of developing a new user is 6-8 times that of maintaining an old user. Stabilize your old users and continuously increase transaction depth; only then are new users valuable. The biggest advantage of DT technology is precise management down to the single store and its status.
**Internet pirate business rules:**
The internet pirate business rules can precisely distribute stores in the above intervals, using a fine-tooth comb management method to force upgrades. DT technology for user operations can solve: precise management of any store's position in the sales funnel; precise management of any store's sales cycle; precise management of any store's personalized needs, promotions, and value contribution.
**Yi Shenghuo's user operations are divided into three steps:**
Step 1: Do density, KPI focus is on user count and activity based on density;
Step 2: Do depth, KPI focus is on single-store penetration rate and transaction share;
Step 3: Do profit, KPI focus is on store profit contribution.
Yi Shenghuo is currently between step 2 and step 3.
This is a further advancement based on the pirate business rules. We classify users according to the comprehensive score of RFMS dimensions, forcing a normal distribution into the above intervals: Recency, Frequency, Monetary, and SKU count per order. The higher the SKU count, the more stable the user. This is a comprehensive score combining our traditional business philosophy with Yi Shenghuo's operational characteristics.
In actual operations, from iron-level users to diamond-level users, there will be a normal distribution initially, and then we want each level of store to upgrade; maintaining the level is also acceptable, but downgrading is not allowed, as downgrading means transaction volume may decrease, or even become dormant or lost.
Backend data refreshes the current status of each store daily. Any abnormal transaction status of each store can be checked/received by frontline ground teams, and they can handle it precisely and promptly.
For abnormal movements of gold-level users, the sales director will go to the scene; for diamond-level users, such as a significant decline or even dormancy, I will personally communicate with the user to understand the reason. There is no abnormal movement without reason; user feedback/dissatisfaction/complaints are exactly the space for Yi Shenghuo to advance. For stores that purely take advantage of discounts and some difficult or malicious customers, we will separately mark them and put them on a blacklist. Some junk users who refuse to change despite repeated education will be resolutely abandoned!
**One more point:** Why do density and depth? This is related to the efficiency and cost of urban distribution. The income of freight drivers comes from the amount of goods delivered or how much they can earn per day? The cost structure of delivering 3 trips a day versus 1 trip a day is vastly different! For a truckload of goods, the shorter the radius or the fewer delivery points, the higher the delivery efficiency and the lower the cost per item.
I really don't understand how some so-called national platforms, which neither emphasize network density nor transaction depth, solve their distribution costs. Nor do I understand why so-called nationally cooperating brands, whose transaction volume allocated to each region is almost negligible, even less than a fraction of regional sales, get better policies than regional ones?
02
**How does DT technology achieve refined product management?**
There are many profit models for B2B, such as matching-based rent collection, charging distributors a commission; self-operated product price differences, earning the spread; charging merchants entry fees, sponsorship fees, and listing fees; charging store franchise management fees - which goes beyond the scope of B2B.
The core connection between stores and B2B platforms is still the circulation of goods. For stores, the rigid demand for B2B is to buy the right quantity of goods at the right price at the right time.
Whether self-operated or matching, the final service to stores depends on the transaction volume of goods. All platforms, marketing, supply chain, and other organizations ultimately serve the transaction of goods. Transaction volume = SKU1 quantity * unit price + SKU2 quantity * unit price + ... + SKUn quantity * unit price
Of course, pure transaction volume can create illusions that the capital market likes to see. The core of B2B product operations is product gross profit. Product gross profit = transaction volume * (product gross profit - warehousing and distribution fee rate - promotion fee rate) > 0, only then is the transaction meaningful.
We distribute all products into four quadrants based on sales volume and profit rate in a normal distribution.
Precisely for each SKU, we manage the sales volume and profit rate with year-on-year and month-on-month comparisons. The advancement of dog products lies in profit rate control, pushing them toward the cash cow interval; the advancement of star products lies in sales volume control. Profits not obtained are all worthless; they are the best product belt for promotions. Cash cow products require continuous management of both sales volume and profit rate indicators. For products with low profit rates and low sales volume, we unhesitatingly remove them from shelves, replace, and update.
I have seen some self-deceiving B2Bs, for example, buying a bottle of water for 20, selling for 23, returning a coupon of 5, and then proudly saying they earned 3 yuan on this water, a profit rate of 13%, automatically filtering out the promotion fee rate and even the warehousing and distribution cost. The promotion fee rate is debatable; perhaps it can be allocated to a few explosive products forming a promotional aircraft nose, but warehousing and distribution costs are direct expenses incurred in product operations; how can they be ignored?
DT technology also has an important function: internal procurement management, out-of-stock rate, and inventory turnover control. Through ERP, timely inventory alerts, one-click procurement, and one-click warehousing can not only significantly reduce out-of-stock rates but also effectively improve turnover rates and warehouse utilization.
03
**How does DT technology achieve refined store operations?**
Here, the store refers to the B2B platform; all ordering and transactions are completed through the platform. The biggest difference between B2B and B2C platforms is that B2B is business, is work, and requires ordering efficiency; B2C is consumption, and requires the fun of browsing.
Let me tell a small story: When I was a child, I was very naughty and liked to dig bird nests. When my parents weren't looking, I would climb trees to dig bird nests. One day, my mother said, "Since you like digging bird nests so much, let you dig to your heart's content. From tomorrow, dig 100 bird nests every day." Within 3 days, I was completely tired of it.
Stores selecting goods and placing orders on the platform is a long-term, continuous, repetitive task, not fun. The entire platform procurement experience must be simple and smooth. For example, industry comments say that WeChat has overtaken Alipay by several streets, one reason being that WeChat requires one less click. That is, users select the most SKUs in the shortest time.
A procurement experience starts with the motivation to log in to the platform and ends with product delivery and after-sales care. If we break down the procurement experience into segments, like a river, any blockage in any link may cause a decline in flow.
I created seven steps for store operations, each step is a point of operational force and a point for secondary sales. 1. Entry trigger → 2. Login (entry) → 3. Store selection → 4. Exit (submit order) → 5. Waiting for goods status → 6. Product delivery → 7. After-sales care.
**Step 1: Entry trigger.** For example, you organized a brilliant promotion or member reward, but found it ineffective. Why? Ultimately, you found that users didn't know about it.
**Step 2: Login entry.** How many users log in daily, and how many actually log in successfully and enter the homepage? Why the decline?
**Step 3: Enter the store.** How many users check in, how many place orders, and how many just browse? Why don't they order?
**Step 3: Product selection.** The key is how to let users select the most appropriate SKUs in the shortest time? The most SKUs? With thousands of products and hundreds of pages, don't challenge users' patience. "Don't make me think, don't make me hesitate; what I see is what I need. You should understand me better than I do."
**Step 4: Submit order.** Users re-check the product sequence in the order; submitting the order is like shopping in a mall, where there is often a last-minute sales opportunity at the checkout counter;
**Step 5: Waiting for goods.** From order submission to product delivery, there is a waiting process. Status reminders not only reassure users but also give them a sense of participation;
**Step 6: Product delivery.** On-site payment, returns, user experience evaluations, and other operational traces must be reflected in the system;
**Step 7: After-sales care.** For completed orders, proactively follow up within 2-3 days; this is also the beginning of the next sale.
Store operations, externally for users, focus on extreme smoothness, enhancing user participation and perception; internally, when managing employees, we should increase user entry activity, breadth and depth of web browsing, effective online time, and SKU concurrency, ultimately pointing to the average order value per order.
**Summary**
At the beginning of this sharing, for B2B small store users, they don't care about macro trends, your strategy, how much you have raised, or whether you are national or regional, direct or matching, robots or manual operations, because these users cannot perceive them or they are irrelevant to them.
Users can directly perceive the 4 major contact points of a B2B platform: ground team, store (platform), products, and drivers. Translated into enterprise departments, these basically correspond to ground team, procurement team, platform operations, and supply chain. Although each department has different functions, the goal they revolve around is completely consistent: transaction volume = user count * ARPU = order count * average order value = product quantity * product unit price. Behind driver delivery is supply chain efficiency, which is the key point for cost control.
An enterprise may not be able to unify thoughts, but it can definitely unify goals. As long as the goals are consistent and everyone works together with one heart, breaking through is only a matter of time!
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