Four steps of business model

In most business models, whether gaming, community, Internet, mobile Internet, search, or e-commerce, the main line can be understood with four keywords: arrival, conversion, retention, and monetization.

The four links are funnel. No matter from which the user goes, they all go down the funnel, and the more they leak, the less they leak. Therefore, each link will have a "rate", that is, using outbound traffic, divided by inbound traffic. For example, arrival rate, conversion rate, return rate, and payment rate.

There are two "quantities" at both ends of the Four keywords, one is "exposure" and the other is "ARPU" (average revenue per user, average sales of each user ).

Interestingly, each company has two important functional departments: one is called the "Marketing Department", which is in charge of the upper part of the funnel. The other is called the "Sales Department ", responsible for the lowest point of the funnel, and find a way to collect money from the user's hand. Perhaps because these two departments are directly related to money, they are often the departments that the boss attaches the most importance to, and even the jobs of other departments are all transferred around these two departments. The work of these two departments is most likely to be KPI-oriented. In general, it is: "big advertising and selling more money ". At this point, some people may feel a little bit-Isn't this the core KPI of most companies? In addition, when many managers describe why the company's performance is poor, they often use the mantra that "the market is not good" or "the sales are not good ".

Some people may have been impatient with this. What do you mean by your simple introduction? What is the most basic logic in any business school ?! The old Jane hasn't gone to the business school for gold plating, but the old Jane wondered, why is there a company with a big pass name that is so basic commercial knowledge actually implemented?

Enterprises make money. How fast and easy to make big money is the dream of every entrepreneur. Therefore, the core competence of an enterprise is the ability to make money continuously for a long period of time. There will be many people who spend money to drop advertisements and pull people. As long as the funnel is successful, as long as the pull volume increases, end sales will always increase. Put more pressure on the sales department, and short-term performance will also increase. But is this all about the business?

The professional and dedicated Marketing Director on the market will first find the marketing channel with the highest ROI (usually relatively accurate), but such channels are always limited. Therefore, if you want to improve the customer flow requirements in the previous sections, the ROI will inevitably decrease. That is to say, the market cost shared with each customer will increase, so it will become increasingly cost-effective to increase the market investment without limit.

What is the most efficient way to do sales? The problem is that there is no sustainability. Every company expects to "squeeze" as much oil from a single customer as possible. However, they often forget that customers are not dummies. When the value you provide is significantly higher than the cost paid by the customers, the customers will purchase them repeatedly, even with friends and family. When the value you provide makes the customer feel "expensive" and "cost-effective", it will reduce the desire to purchase, resulting in conversion rate, return rate, and rerate deterioration in the funnel.

Unfortunately, there are a considerable number of enterprises and business leaders on the market, either marketing addiction or blindly trusting in the sales drive, there are indeed many speculative companies that make money in the short term-if it is just a short-term profit method, there is no mistake. However, if such an enterprise has long-lasting value, it will be difficult to find it. Companies with over-sales experience suffer from Li Ning last year and Baidu this year. Due to the old saying, it will be paid back sooner or later.

Throughout the past few years, companies that have been so vigorous and miserable are all focused on non-program market expansion and sales-driven business. At home and abroad, great companies that can create value persistently, both online and offline, are making an article in the intermediate stage, that is, "Conversion" and "retention ". Competition for "Conversion" and "retention" is more difficult to compete for market and sales, and more complicated to manage, but this is a sustainable and barrier capability. This is the true competitiveness.

A visionary company will grow together with its own customers and upstream and downstream companies. It will not only give way to short-term benefits, but also promote the ecological environment better. It not only understands farming and hunting techniques, but also knows how to cultivate water and soil. Mountain forests and plants are rich and rich for a long time.

In the short term, market investment and sales drivers can indeed achieve good performance growth, but in the long term, the company's core competitiveness lies in its ability to continuously create value beyond the customer's expectations at controllable costs. When you write in the fields of marketing, product provision, and customer service, you can find key value points and solve problems creatively so that customers can gain, feel, and recognize them, other problems can be easily solved. If you do not focus your company on customer value creation, but on the market and sales level, and let the product and technical personnel run along with the sales, the competitiveness of the company will sooner or later become exhausted.

Therefore, in the four phases of arrival, conversion, retention, and monetization, the two links are closely related to the company's competitiveness. In the final analysis, it is the ability to create perceptible values for your users and customers.