The content comes from the public account "Growth Black Box Growbox"
Main writer: Zou Xiaoxiao
Interviewee: Yolo
Producer: Grow the black box editing group
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This August, Growth Black Box interviewed Mr. Wang Sai, Managing Partner of Kotler Consulting Group (KMG) China and Chief Expert of Digital Marketing Strategic Transformation.
Studied by Philip Kotler, the father of marketing and author of Marketing Management, Wang Sai has a unique and systematic understanding of corporate growth. He said frankly that in recent years, the so-called strategies on the market have become increasingly empty. Because the strategy of the enterprise is different from the national policy, there will be many micro-competitive behaviors or customer value-oriented behaviors in the enterprise, so when people give 100 definitions of the strategy, these strategies are just a document.
The book "Good Strategy, Bad Strategy" by Richard Rumelt, a professor at the John Anderson School of Management at UCLA, points out that a company is either for organizational development or business development, and the core of business development is growth.
In addition to the hollowing out of the strategy, many companies' interpretation of marketing is becoming more and more one-sided at this stage. We often hear people praise a marketing event for doing a great job, and Wang Sai emphasizes that the essence of marketing is how to help customers create value, and the company can also get benefits at the same time.
Therefore, from marketing, rising to strategy, and then leading to growth, growth black box and Wang Sai launched an in-depth dialogue.
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Growth is a core keyword in today's Chinese business community. When the West talks about growth, there are two major booms.
One is the "growth hacker" we are familiar with, they effectively combine data, operations, marketing and other elements, which is also the bullseye of many contents of the growth black box.
The other is to constantly explore "growth strategies", such as McKinsey's three-level growth matrix, Bain's core expansion strategy, and Kearney's growth matrix, which is the company's business strategy level of growth exploration.
These two factions are not opposed, but integrated, and they are trying to draw the golden line behind the "good strategy vs bad strategy" and "good marketing vs bad marketing" of the enterprise - growth.
Wang Sai told us that his direction is the latter, because today's growth strategy is often really ignored by many companies, so there will be a series of companies such as Luckin and OYO, which continue to grow users, but experience the result of "big failure". Not only that, but many companies have misconceptions about "growth" itself.
The bigger the company, the better, the more business areas, the better, and even the more users, the better, is the most typical misunderstanding of enterprise growth.
In Wang Sai's view, the first big misunderstanding is that expansion = growth.
Is it necessarily good for the company to grow if it expands indefinitely? Wang Sai said that Founder and HNA are counterexamples.
Is more business areas growth? Sometimes too many cross-fields are easy to lose focus and blur their advantages.
Is the more users the more advantageous it is? Not even. "Now everyone will only stare at the business goals, but do not know how to do effective range quantification in growth, range quantification is to streamline their own market behavior, the so-called 'less is more', if the means used are too much and too fancy, reflecting that the goal is not clear enough."
Wang Sai worked as a consultant for Yiling Pharmaceutical in 2020, "I first help them confirm the business growth target, and then help them calculate how many customers are needed under this goal, as well as the business contribution of a standard customer for one year, and then disassemble according to the extreme scenario, so that the senior management can clearly see how many customers are needed." ”
In the same year, a real estate leasing company in Shenzhen found Wang Sai, on the basis of the growth target, Wang Sai helped him calculate that even if it is fully rented, it only needs 400 cornerstone customers, so it decomposes the marketing target according to the customer, and after four months, it does achieve a full lease, and the vacancy rate of the surrounding real estate projects reaches 40%.
"Precise growth based on algorithms is the direction I pursue." Algorithm and quantification are the growing words that Wang Sai constantly mentions.
Most companies today look at problems separately, for example, in the absence of a clear business growth structure, lack of organizational capabilities and lack of direction, blindly expand in order to seek growth. In fact, really good companies will do subtraction, around the structure to do subtraction, for example, there are a number of listed companies in northern Europe, and only about 5 people are listed.
The second curve is very harmful to China.
A misconception about growth, in addition to size and users, is about the second curve.
Just as the landing of the "amoeba business model" has encountered a dilemma in China, so has the second curve. In the practice of being a consultant to many companies, Wang Sai found that many domestic companies have not even done a good job of the first curve, and they plan the leap of the second curve every day, wanting to expand the scale and expand the field, making the so-called second curve become a blind change.
Wang Sai once proposed the "five lines of growth" - the retreat line, the growth bottom line, the growth line, the outbreak line and the skyline, of which the growth bottom line is the cornerstone of the company's growth and ensures the company's continuous business cash flow. The reason why these companies can continue to explore new growth businesses and the second curve is that the "bottom line" is strong enough, even if the exploration fails, it will not hurt the bones.
Taking Amazon as an example, Bezos has repeatedly emphasized that Amazon's value today is based on three major businesses - AWS (Amazon Web Services, amazon's cloud computing IaaS and PaaS platform services), e-commerce platforms and Prime members, which on the surface, Prime members and the former two are not in the same range or height, but equivalent to an option or sub-business in a business.
So why is it brought up separately? Because prime membership is the bottom line for Amazon's growth. It is with 150 million members that Amazon is able to continuously and clearly quantify its sustainable value to the capital markets. In fact, Amazon has failed many projects, but as long as the bottom line is not shaken or broken, there will be no big problem.
Tencent, Ali, Meituan and other companies are the same, the reason why they can continue to shape the "second curve" is that their basic business is highly consolidated: Ali is firmly on the throne of e-commerce, Tencent has 1.2 billion WeChat users, and Meituan has become a super traffic black hole of local life, which is a solid foundation for them to constantly try new businesses.
Therefore, Wang Sai said that only on the basis of a clear bottom line, the growth line and the outbreak line have significance. "In the early days, Luckin continued to use burning money to build an explosive line, wanting to expand lightning, and indeed forgot the structure of the bottom line, and Starbucks, the continuous accumulation of cash of members every year accounted for 1/4 of the annual sales; the same fast-growing store opening OYO, is also this problem, lack of bottom line and moat, so it also encountered problems in rapid growth."
So what is the right solution to growth? Wang Sai replied: There is a moat, a clear growth line, an outbreak line, and a high skyline. At the same time, there is customer value, sufficient differentiation, and pricing power.
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70% of the new consumer brands we see today will not exist after 5 years.
When it comes to the current business boom, new consumer brands must be at the forefront. However, Wang Sai is not optimistic about today's new consumption boom, and he believes that 70% of the new brands will disappear in 5 years. It's not that the boom is nihilistic, but that most of the new brands haven't built a clear moat.
He clearly proposed that if you want to see the market structure behind this boom, we must start from the supply and demand relationship of the consumer goods market, the earliest is less than supply, and later it develops into oversupply, and today is the era of abundant economy.
In the era of undersupply, the core of marketing growth is channels, and TCL, Haier, Lenovo, etc. are all king by channels. As long as you establish a little brand awareness and expand some store channels, it is easy to get the market. If this style of play is placed in Southeast Asia today, it is not only still effective, but also crushing.
When supply exceeds demand, brands need to segment consumers. For example, when consumers buy TV sets, there are seven or eight brands to choose from, TCL, Skyworth, Hisense, Panasonic, Sony, etc., then the brand side should find a way to distinguish consumers in advance, and summarize several types of preferences, and then position the product to accurately match the needs of different consumers and form a brand.
However, such a supply exceeds demand, after some competition and elimination, the same product category remains in the market at most more than a dozen brands. But in today's Internet age, consumers want to buy a bottle of drink, open Taobao there are 50,000 or 60,000 stores. This means that some industries have entered the era of abundant economy.
What is the Age of Abundance? It is that when consumers are faced with near-unlimited choices, there are major changes in what they really want and the channels they want to achieve, and a new set of business models has also risen, because in the digital world, scarcity can be said to be non-existent. The contradiction between unlimited supply and limited time and space for consumers is the root of his belief that many consumer goods will swim naked after the tide.
When the choice is unlimited, the limited or even scarce nature is a consumer resource, which includes not only the consumer's people, but more importantly, the consumer's time, space and wallet. Therefore, pure user-centricity is not enough, but the marketing selling point should be implemented into the customer's behavior, and the consumer-centric step should be pushed forward, and the consumer decision-making should be the center. A good marketing strategy is both market-oriented and preferred for consumer behavior decision-making.
So where is the growth point of consumer goods in the era of abundant economy? Wang Sai's answer is - demand slicing.
"Slicing" sounds a bit abstract, but it is not difficult to understand, put the demand into time and space to do slicing, to see how their products are connected with a certain time and space point in the consumer's daily life, to solve the problem in this space-time point.
For example, if a consumer only needs to buy one bottle of drink a day, but there are 10,000 products waiting to be selected, then it may no longer be just a basic problem of whether the product quality is good or not, and the simple brand.
In this example, brands may seem to face different dilemmas, but to solve them, the growth model of brands needs to be studied how to effectively embed them in consumer decisions.
Brands need to think about how to turn consumers' elastic needs into rigidity.
The core logic of the "demand slice" just mentioned is to rigidize the elastic demand. However, most consumer goods today can meet not the rigid needs of consumers, so how to change?
For example, Wang Sai said, "Himalaya used to have many kinds of products, but the market has been tepid, until later found a point, which probably means driving to and from work in Shanghai, it takes two or three hours at a time, and listening to Himalaya on the way back and forth is a good choice." Red Bull is also very interesting, the slogan is 'thirsty to drink Red Bull, sleepy, tired to drink Red Bull'. Their marketing behavior is correct, not only let you consume, but even tell you when and what scenario you should consume, which is equivalent to accurately influencing consumer behavior decisions. "
Red Bull has a large number of consumers working overtime in 996, truck drivers and even college entrance exam candidates, precisely because its consumption point is very rigid in time and space.
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Wang Sai said that when he studied growth, he focused on "structure". For structure is the necessity of combining a number of elements, and necessity is the meaning of structure.
Rational structures are based on economics. Wang Sai's supervisor, Philip Kotler, was a student of the economist Samuelson in his early years, and because the two curves of supply and demand in economics were too abstract, Philip's doctoral dissertation examined what the micro factors that really determine the relationship between supply and demand are.
The basis of the birth of modern marketing is a series of elements in economics and applied economics, and there is a fundamental difference between management and economics - economics has inevitability, management is possible. For example, in the prisoner's dilemma that we often talk about, in the general scenario, two prisoners will confess. But once the scenes are switched and they are allowed to repeat the game indefinitely, the two prisoners become neither confessing. This is the inevitable structure of economics.
Therefore, only by clarifying the structure of growth can we truly interpret growth.
The so-called growth structure refers to the inevitable solution of the growth trend formed by the combination of micro and micro elements in the growth of enterprise business. "Now there are many companies that do not study the principle and prefer skills-level things," Wang Sai said, "which leads to becoming like Wang Yuyan, who can do a lot of kung fu, but does not know where to use it, or even use it in the wrong place." ”
This is also wang Sai's original intention in writing the book "Growth Structure".
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Free shipping growth structure Uncertain era of corporate growth bottom card growth five-line (set of 2 volumes) by Wang Sai Citic Publishing House Books ¥75.6 purchase
In the book, Wang Sai divides the growth structure into seven substructures.
The first is "business structure", the core of which is to analyze how the enterprise business is optimally combined. Business structure is also known as the "five lines of growth", Wang Sai once wrote a book "Growth Five Lines" dedicated to dismantling these five lines - retreat line, growth bottom line, growth line, outbreak line and skyline.
The second is the "customer structure", the expansion of the enterprise, behind the inevitable customer needs, customer assets, customer portfolio as a support, customer structure refers to how to effectively combine these three customer elements, so as to provide growth potential for enterprises.
The third is the "competition structure", because superior competitiveness can help enterprises stabilize their customer sources and profit areas, effective profits can support the steady growth of the company, and enterprises that lack competitiveness are very easy to form a strange circle - constantly serving customers, but they have little profit in competition. Therefore, how to strengthen competitive advantage in growth is extremely critical.
The fourth is the "differentiation structure", which helps companies build barriers in competition to form a growth engine that is different from competitors, including the differentiation of resources, the differentiation of models, and the differentiation of cognition.
The fifth is the "asymmetric structure", which is suitable for companies that are already in differentiation but cannot avoid industry leaders and other competitors, helping them to find the inevitable weak points in the competitive advantage of competitors, and to achieve overtaking growth in specific market segments.
The sixth is the "cooperation structure", the market is not only "competition", but also "cooperation", cooperation methods will sometimes be more than simple competition to bring growth to enterprises.
The seventh is the "value structure", the various growth of the enterprise, and ultimately need to settle on the value, by the customer value, financial value, company value and other formation of the value hierarchy to drive the growth of the company, is the explicit criterion for judging whether the growth is effective.
The integration of these seven sub-structures is the "chess game" behind the "chess game" of enterprise growth that Wang Sai tries to draw.
Of course, everyone attaches importance to strategy, but in fact, for an enterprise, many strategies only give direction, and do not have inevitability. Its context is "what I want to be", the focus is on the word "want", and whether it can be completed or not is two different things, just like the relationship between what to do and how to do.
Therefore, the evolution of the "growth strategy" into the "growth structure" is that Wang Sai wants to find a definite connection from uncertainty, so that the strategy can be "dismantled and fallen", and the marketing can be "up and pulled open". Wang Sai said that he was making a positive exploration, and quoted the famous quote of the German classical philosopher Immanuel Kant as the end of his new book "The Structure of Growth" -
"Reason holds its own principle in one hand, and studies and experiments according to that principle in the other hand, and rushes to nature."