Zhang Lijun: What business should I do in the future?

Author: Zhang Lijun Founder of Entrepreneurial Yeast, well-known organizational innovation expert

Source: Zhenghe Island

In the past two years, all kinds of rapid changes have been dizzying.

The recurrence of the epidemic, the changes in the international situation, the adjustment of national policies, the iteration and development of new technologies, the changes in the demographic dividend and the flow dividend, carbon neutrality, metacosm... Too many changes have completely broken many of the business models and habits of thinking that we are accustomed to.

Faced with a harsh reality and an uncertain future, almost all entrepreneurs, entrepreneurs and managers can't help but have a feeling:

This business is getting harder and harder.

As a result, many companies began to try to transform, ready to take a new path, through the crisis, to maintain growth, to achieve sustainable development of enterprises.

Some operators in the To C business approached me: "Cherry, now that the To C market is saturated, do I want to transform and develop the To B business?" ”

Some bosses who do To B business also found me: "The company's account is almost out of money, To B is too difficult to get customers, making money is slow, do I want to try to do To C business?" ”

At this point, I usually tell them, "Don't worry! If you want to do To C or To B business, you must first know what is the business logic of ToC or To B business? ”

So, what is the business logic of the To C and To B business? How to do these two businesses well? This article will focus on exploring these issues with you!

01、What is the essence of The To C business?

What is a To C business? Simply put, when your income comes from individual consumers, your business is To C.

What are the characteristics of the To C business?

First of all, in to C's business, paying users are individuals, mostly impulsive consumption, and decision-making is emotional.

For example, if you see a certain cosmetic on TV, you think it's good, and you decide to buy it yourself. Sometimes you have to buy an expensive thing, you can't make up your mind, discuss with your husband, and buy it.

This decision cycle is short, so short that it may only take a few seconds. A foreign expert has done a study, consumers buy a product offline, the average decision-making time is 13 seconds, while online is 19 seconds. That is, the consumer made a decision within 20 seconds whether to buy or not to buy.

Secondly, the delivery cycle of the To C business is very short, and many times the products and services are sold, and the delivery is basically completed. Even if some To C businesses have after-sales service, the proportion of the entire sales process is still very small.

And To C is not afraid to complain, and the dissatisfaction of a small number of customers will be buried in a large number of customers.

To C is essentially a traffic business, its decision-making is often very fast, its consumption is very emotional, impulsive, many times, in the marketing of some packaging, gimmicks are very useful, the use of a certain point of human nature can break out.

Therefore, over the years, we can always see some Internet celebrity brands, suddenly rising, constantly financing and expanding, and opening many stores. But the tide rises and falls, these Internet celebrity brands come and go quickly, and many brands that were very popular two or three years ago have gradually disappeared in the market.

Why is that? Because the business of To C faces three important challenges:

First, traffic. Traffic is now becoming more and more expensive, and almost all To C businesses are looking for new traffic depressions.

Why do so many stores arrange for a bunch of people to pretend to queue up? It is creating a false prosperity. Yeast has a customer in the top 3 in the industry, he told me that his profit is only 5 points, because the money is used to buy advertising.

When traffic is too expensive and the cost of traffic far exceeds profits, this business model is not sustainable.

Second, the product. Taking retail as an example, what is the biggest challenge for a retail industry? Can you come up with a blockbuster single product.

Therefore, To C has very high requirements for a team to produce explosive products, and as soon as the product appears, it is easy to be imitated.

Third, the ability to continue to produce blockbusters. Why is it that many times a blockbuster product suddenly stops burning? It is because of the lack of ability to continuously produce explosive products. Your tea turned out to be very delicious, and no one drank it for a few years because of the lack of ability to continue to produce explosive models. The fall of explosive products may be accompanied by the rapid decline of new retail platforms.

To C's business exploded quickly, creating an internet celebrity brand, which can achieve billions of sales in three or four years. But many companies make money, but they are not worth it.

Because it comes and goes quickly, you can explode by making a hit and buying some traffic, but it may also be that your product will soon pass out.

This is the quality of To C, you always have to think about whether this thing can become a blockbuster, whether the next product can become a blockbuster.

02. What is the essence of To B's business?

What is the Business of To B? When your income comes from a business that pays you, your business is To B.

What are the characteristics of the To B business?

1. Decision-making is rational

To B is essentially buying your decisions and is absolutely rational.

Let me give you an example of a client who brought more than 80 managers to manage a workshop, and in the process, they made decisions for a whole month and a half.

Why did it take so long to make decisions? They are not bad money, really not distressed about money, the core is that he has to repeatedly argue and think about two questions: first, whether these management methods and tools taught by this company are applicable to our company; second, can I do internalization.

So, he's very rational. But once he believed it, the decision was very fast.

2. Accumulate grain and slowly become king

It is precisely because it is very rational that the requirements for you will be very high. Products, sales, brands, technologies, and operations must be done well, so I often talk about doing a good job of Dharma Five Fingers to do a good job of To B.

First, require your product to be very professional.

Second, ask that your service is professional. The core of ToB is product plus service, even a masseuse and a trainer must look for professionalism. This degree of professionalism is one is to get the customer, and the other is the professional degree of the product.

Third, ask that your reputation is good. Because we are all customers who introduce customers.

To B's over-the-top advertising is useless, even a small service will be introduced by friends. To B is word-of-mouth marketing, and brand building takes time.

So our company has a high-voltage line, but where customers make heavy complaints, there are severe penalties once and dismissals twice. Why? Because customers are our lifeblood.

Fourth, ask for your technique to be good. Because your technology is not good, the customer uses your product service, and his experience is not good.

Fifth, it is very demanding to manage your team. Because your delivery team needs to be very professional.

To B is slow, but this thing is also a barrier, and once a barrier is built, it will develop very quickly. The victory of To B is ultimately a victory of organizational ability, because it is the army group that fights. Therefore, we must accumulate grain and slowly become king.

3. To B is hard to make money

Let me give you an example, I coached a SAAS company owner who just raised hundreds of millions of dollars some time ago.

He told me, "I know I'm from a technical background, so I don't sell well. I also hired Ali's sales executives to manage sales, and I also found your Ali people to do training. After a year, the result is that the sales are still not engaged, and I still lose money. ”

I analyzed 3 dimensions with this boss.

The first dimension, I say your product professionalism and service are doing poorly. Because his regular customer renewal rate is only 30%, it means that his product is not professional, or his service is not in place.

In the second dimension, the customer selects the question. I look at his customer structure, the vast majority of his customers are very small businesses, salesforce success in the United States is that his customer structure is relatively medium and large customers, the repurchase rate is very high.

The average life expectancy of China's private enterprises and small and medium-sized enterprises is 2.5 years, and it may not be there next year when they are signed in this year, so it is unstable.

Third, the cost of customer acquisition for his new signings is very high. All of his new customers rely on sales one leg and one leg to run, a SAAS system for the boss to make decisions, and general sales can not reach the chairman. Even if you get the chairman, it is very difficult for the chairman to decide on this system, not a matter of money, selling 50,000, 500,000 is the same, because behind it is the chairman to make rational decisions. As a result, the cost of customer acquisition is extremely high, which is why the vast majority of SAAS companies in China do not make money.

03. How to do a good job in the business of To C?

Understanding the essence of To C and To B, let's talk about how to do a good job in the business of To C and To B.

Let's start with the business of To C.

In the Business of To C, you just have to get one person (customer). To C's product differentiation is strong, as long as your product quality is good, the value is high, or there is another point that can impress consumers, then consumers are willing to pay for such products.

So, what will the future business of To C do? I think the most important thing is to do a good job in 3 aspects:

1. Branding

Why is brand important? Because C-end individual consumers have limited ability to distinguish product quality, they pay more attention to the brand. The brand represents the popularity of the enterprise and the loyalty of consumers, and represents your position in the hearts of consumers. This perceived value can effectively reduce the marketing costs of enterprises.

In addition, the brand effect can also reduce the cost of choice for paying users to a certain extent. In To C's business, the customer pays is very emotional and impulsive, and when your brand is more recognizable in his heart, he is more willing to pay.

As I said earlier, now the business of To C, traffic is getting more and more expensive. Do a good job of branding, traffic will come naturally. Traffic is converted into sales, and it is not difficult to make a profit.

It should be noted that the core competitiveness of the brand's products must come from the ability to create explosive models. What does that mean? It's that your brand comes from your products and services.

Your products and your services must be good enough, more than a little better than others, so that you can turn quality into traffic, make it into a hit, and build a brand.

2. Supply Chain

To C's business is "blitzkrieg", consumer decisions, in seconds.

The success or failure of a To C business often depends on the speed of production, circulation, and response. Therefore, the supply chain is very important.

Why can Luckin continue to launch blockbuster products? One of the important reasons is that its supply chain is very strong, Luckin spent billions of dollars to build a supply chain factory, it imports coffee beans from Ethiopia, purchases coffee beans from Yunnan, the supply of raw materials is endless, and it is a winning step on the supply side.

Another example: why was Feihe able to stand alone in the "melamine" incident that year? It lies in the fact that Feihe attaches importance to the construction of supply chain factories and attaches importance to the safety of milk sources. As early as a year ago, Feihe began to build its own pasture, and the cows were raised by themselves to achieve independent control of the milk source.

It can be seen that To C's business is to be big, and a sound supply chain system is necessary.

3. Digitization

The To C business explores the needs of consumers' human nature. The functional attributes of the product, the marketing strategy, the number of production, the store, the pricing, etc., all come from the needs of the user. However, today's user is actually difficult to tell you directly what he wants.

You must analyze and judge the true intentions of users through detailed data collection. Data connects demand and guides the company's strategy and decision-making.

Therefore, digitalization is very necessary. Because only by going digital can you collect data more efficiently and conveniently, understand customer needs, and continue to produce blockbusters.

Luckin is the best new retail, because it uses numbers to tell you which product will be popular and why? Because it has the analysis of digital customer profiles.

04. How to do a good job in the business of To B?

Let's talk about the business of To B.

Unlike To C, which only needs to get one person (consumer), To B's business, you often need to get a group of people.

Why a group of people?

Because the link of its decision-making process is very long, it may involve many people in the middle, such as business departments, administrative departments, financial departments, etc., if the product exceeds a certain amount, it may also need to go through layers of approval, from the business boss to the company boss.

When the decision-making process link becomes longer and the interest game becomes complicated, if you want to make this business, you must plan carefully and strive to get a group of people.

So, how to do a good Job in the To B business?

1. Have love and create value for customers

Your customers are very rational, so they have very high requirements for you, at this time, can you create value for customers? Can you provide customers with good service?

If you lose the reverence for your customers, the customer will not choose you, even if they chose you before, they may not choose you later.

A customer renewal must first solve his problem, because first solve the problem of belief, buy your product, if your product can not bring him value, no matter how flickering, it is difficult to renew with you, so be sure to provide value and service.

And your reverence comes first and foremost from your love, do you love what you do, do you have a great passion to provide value to customers?

2. Improve organizational capabilities and build a moat of To B

As mentioned earlier, To B's decision-making is extremely rational, and the decision-making cycle is often measured in months and years. To B's business is a protracted battle, and it must rely on the "combination fist" to complete the order.

What does that mean? In addition to the product to do well, your sales, brand, technology, and operation must be done well in order to really impress the B-side customers.

For example, in terms of products, we must be customer-centric, know the needs of customers, so as to make better products and develop with high quality.

In marketing, you must be professional enough, really understand the product, really understand the needs of customers, and be able to use your professionalism to get customers.

In terms of brand, you must run your reputation very well, because the ultimate model of future business is the C2B model, when your brand has trust, customers will reduce the cost of decision-making, you can choose you in the fastest time, and the real value is your reputation.

Technically, your technique needs to be good enough. Because your technology is not good, the customer uses your products and services, and his sense of experience is not good, he may leave you.

In terms of operation, it is necessary to do refined operations, reduce customer acquisition costs, help user growth, and enhance product sales.

These 5 aspects need to be done by people behind them, so people's ability is particularly important.

For a company, to do a good job in the Business of To B, you do not want to improve the ability of one person, but to improve the ability of a group of people, that is, the ability of the organization.

Small businesses run businesses, and large businesses run organizations. When the organizational ability of the enterprise is truly improved, the front line fights, the middle and back office supports, and the coordinated operation, it will definitely win the victory of the To B business.

3. Be patient enough and wait for the flowers to bloom

To B is a thick-and-thin process, just as bamboo is barely visible in the first 5 years of growth, as it has been building roots underground that spread around before it leaps upwards 90 feet in 6 weeks. To B to a certain extent, the moat is done, To B will break out.

I said before, a company to develop organizational capabilities, a year can develop one or two modules is not bad, do not use To C thinking to make To B money, you must be patient enough, solid to run your organization, do a good job of Dharma five fingers, you will be able to wait until the day when the ToB business breaks out.

Finally, to answer the original question: To B or To C, what business should we do in the future?

In fact, you can do both kinds of business, but you must understand the essence of these two kinds of business. To do The Business of To C, you must continue to produce explosive products and constantly look for traffic depressions; to do the To B business, you must understand the principle of "slow is fast" and do a good job in organizational construction, because the victory of To B must be the victory of organizational ability.