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I have been communicating with entrepreneurs from different industries and found that there are still some "old-fashioned" business concepts guiding their behavior, and they also have the dream of gaining high capital favor and going public.

I have always been an investor who considers risk before return, especially in the current environment where gray rhinos are running around and black swans are flying around. The priority should be to survive, not to fly.

I would like to share some thoughts on business concepts in the current environment for your reference.

Providing personalized services and stickiness enhancement for high-net-worth individuals, and providing low-priced and cost-effective services and products to ordinary consumers are the currentThe only business logic。

Someone asked, what about the people in the middle? There is no middle person. Now there are only these two types of people, no middle class.

In the past few years, entrepreneurs had an illusion that Chinese people were very rich and had strong demand for high-end consumption, so they could at least afford light luxury. In fact, there weren't that many high-net-worth people. You think there are a lot of people and a lot of money because you don't distinguish between many fake rich people.

What are fake rich people? They are people with an annual salary or income of hundreds of thousands to millions. They also appear in luxury cars, golf, beauty salons, luxury stores, and Michelin restaurants, and they also consume, but definitely not frequently. Their consumption is a self-reward and a way to socialize upward, seeking to move up the social ladder.

If the marketing strategy at that time did not differentiate the targets, the limited consumption of these people would cause the operators to pay too high a proportion of the cost, and at the same time would create the illusion of a huge market.

In fact, the truly wealthy people, in terms of numbers, may account for less than one-tenth of the high-spending customer base, while more than 90% of them are carefully calculating within their annual budget of hundreds of thousands to several million yuan, and some even overspend, trying to maintain a balance between face and substance.

You may think that this budget is high, and it is enough. Sorry, they don’t have this budget now. First, the financial situation may not allow it, and second, there is a lack of expectations for future growth, so they dare not consume, let alone overdraw.

Another illusion back then was consumption upgrading. People thought it was easy to sell high-priced daily necessities to ordinary consumers, such as ice cream costing dozens of yuan, cultural and creative products costing hundreds of yuan, pots and pans, cigarettes, alcohol, and small appliances costing thousands of yuan. Business was booming.

The problem is that a large part of it is contributed by the fake rich people mentioned above. In addition to the upward links, they also need to show off downwards to differentiate themselves from ordinary people and gain a sense of superiority. What's more, compared with real high consumption, this money is not a big deal and there is a separate section for it in their budget.

The other small part is the self-reward of ordinary consumers, as well as the exploration and attempt to upgrade a better life.

But now, the former's income has dropped too much and is extremely unstable, so the budget is too tight, while the latter has given up completely, feeling that they have paid too much IQ tax before and can no longer afford it.

Therefore, the establishment of previous business concepts was largely based on the relatively high proportion of pseudo-rich people, the so-called middle class. However, our middle class is the most vulnerable in the changing environment. First, they have no accumulation and reserves, second, they have no independent self-sustaining ability, and third, they are likely to be the main contributors to credit and debt business. Therefore, the logical basis of the current business concept must be anchored by the two types of people: the real high-net-worth people and the ordinary, or even the bottom-level consumers.

Let’s talk about high net worth individuals first. You can only establish the right strategy if you believe that these people are few enough, difficult enough to deal with, and have little loyalty.

That is: abandon the path of general dissemination, stick to word of mouth and small communities; do not limit yourself to one product and service, but form a group of like-minded people; do not expect to get rich overnight or go public, the crowd is limited, and making money honestly and quietly is the best way to go.

Explain——

Because this group of people is small, and there are so many of your colleagues around them, whether it is food, daily necessities, tobacco, alcohol, tea, insurance, beauty or health care, any rich person in any industry can have seven or eight people who have added WeChat and send messages every now and then.

Therefore, wealthy people have seen enough of the world and are familiar with all the scams and tricks. Therefore, the customer acquisition rate of traditional advertising, sales meetings and other methods will become lower and lower, and the customer acquisition cost will become higher and higher. In this way, some people are forced to take the path of ripping off as many customers as possible.

Just like some courses that cost tens of thousands or hundreds of thousands of yuan, some people found that nine out of ten people at the table were sales consultants and shills, and they were the only ones who were wronged. The result of this can only be a vicious cycle.

Therefore, the most reasonable approach is to maintain existing customers, make friends with them, exchange hearts with them, care for all the life and emotional needs of customers in an all-round and sincere manner, go beyond the product or service itself, establish stickiness to achieve loyalty and repeat purchases, and then gradually integrate into the people around the customers without any utilitarianism, so as to win word of mouth and recognition.

This approach consumes a lot of time and energy, and the results are slow and the returns are not great, but it is stable and long-lasting.

The next way to increase profits is to form a group with like-minded people, not the same industry.

You need to find people who share the same intentions and ideas as you do, and whose customer base labels highly overlap, so that you can achieve win-win cooperation.

You are in the field of Chinese studies, he is in the field of health preservation, and she is in the field of tea ceremony. If the three of you each have a group of loyal customers, when you are combined, everyone's customers will increase by two or three times, and the customer experience will be good. It's a one-stop service, with introductions from acquaintances and endorsements.

High net worth individuals are also unwilling to try various things everywhere, as there are salespeople waiting eagerly for them everywhere, and they can be scammed if they are not careful, so it is better to do business with someone they are familiar with.

The key point of this path is that you must be cautious when choosing partners, and your values ​​are more important than professionalism!

Let’s talk about the ordinary consumers. Is it a difficult task to have both low customer unit price and high cost performance?

Yes, it is difficult, but it has to be done.

For example, what is your psychological price for a cup of daily coffee of decent quality? If two or three years ago, the benchmark was the well-known large chains, a cup of American coffee would cost at least 20 yuan. The price of the American coffee in the store I used to go to most often has dropped from 22 yuan a dozen years ago to 28-30 yuan now.

However, the other day I received the same answer from everyone: 9.9 yuan! The store price is about 15-18 yuan, and when the number 18 was mentioned, everyone showed a very reluctant expression. In addition, everyone has a clear and common price perception for high-quality instant or drip coffee: 4-5 yuan per cup.

This is the inevitable result that a mature market will face when the consumption environment deteriorates.

So how do we accomplish the task of making this product high-quality and competitively priced?

The first step is to trace the source, find good places of origin and factories, shorten the supply chain, abandon overly high-end materials and ingredients, abandon overly sophisticated and demanding production and processing, and only choose the mid-to-high-end part to ensure quality.

Today, the domestic industrial chain is sufficiently developed. If you choose carefully, you will definitely be able to find a suitable source, and the logistics are also very complete, so you don’t have to worry about going to third- and fourth-tier cities or the Midwest to find partners.

Secondly, we need to shorten the sales chain and reduce the number of agency levels. We would rather give up a few points in a single link, and work harder at both ends and remove some intermediate links. In the current environment, as long as there is money to be made and more profits, no one minds doing more.

Thirdly, we need to optimize the parts with the largest costs. If the costs are in materials and production, we should travel all over the country to find the lowest prices; if the costs are in promotion and sales, we should use the money that should be given to advertising companies and influencers to distribute to users and create amateurs.

Why do so many factory owners open live broadcast rooms and engage in self-media? The cost of the Internet is already very high. The cost of accurate and effective single customer acquisition may have exceeded one thousand, and the cost of using the platform is also rising, whether it is an e-commerce platform or various market segments and local life platforms. How to find the key to optimization is a lesson that is a bit tedious and difficult, but you have to learn it.

Finally, be creative. Creativity is the most difficult thing to achieve, but it can bring the highest returns. Soy milk is popular because of a mixing cup, coffee is popular because of a beautiful small can that can grow small succulents, and a razor that sells like crazy is because of its compact size and fashionable shape.

What best represents cost-effectiveness is not the relationship between cost and selling price, but the price users pay for aesthetics, convenience, and emotional value.

The above is the most important and basic concept, and here are a few other ones.

Pay close attention to profits. No matter how many things you do, don't do a business that loses money. In the past, you could do it because you had capital to pay for it and support it. Don't think too much about it in the future.

Compared with profit, nothing else is important. Don't consider market share, industry status, or corporate valuation. The most important thing is how many orders you have made and how much profit you have earned. A gross profit of tens of thousands or hundreds of thousands every month is good. In this way, you can survive, the company can survive, and your employees can survive.

Being alive is the most important thing. From a business perspective, it means as long as you don’t leave the table, everything else can still be possible.

Pay close attention to cash flow. Many companies fail not because of lack of business or even lack of profits, but because they are clearly doing well, but suddenly collapse. The reason lies in cash flow management.

In addition to the business itself, the amounts of various investments and payment dates, real-time statistics of mandatory payments (including utilities, rent, and salaries that cannot be delayed), peak cash flow estimation, tracking of accounts receivable and account period management, and especially the relevant terms of borrowing and accepting investments and liability for breach of contract should all be considered as important as business operations, or even more important.

At present, it is strongly recommended not to operate by borrowing, especially short-term borrowing for long-term use! It is also not recommended to accept investments with hard targets and repurchase requirements.

It is recommended to expand in the field of rigid demand. The so-called rigid demand does not mean that food, clothing, housing and transportation are all rigid demands. There are also subdivided non-rigid demands in the field of daily life. Coffee is not a rigid demand, but it is for certain groups of people. Therefore, all rigid demands are for certain groups of people.

If a product or service is not a must-have for everyone, then it is definitely not a rigid demand. For example, massage and foot therapy can be considered a rigid demand, but high-end clubs are not. In the current environment, cost-effective food, clothing, housing, transportation and health are rigid demand areas, and comfort-oriented social, community, personal growth and mental health needs, as well as light entertainment, assets and personal hedging are gradually becoming rigid demands for more people.

It is necessary to find a population of sufficient size and products and services that are in urgent need of them, so that the entire business model can have a secure foundation.

A product that’s based on an imagined need and a really good ego and is thought to make everyone’s life better is probably not going to have much of a future.

For most people, getting better is no longer a necessity; reducing costs and increasing efficiency is the key.

The above views only represent personal opinions and may be incorrect and insensitive, but the survival rate will be slightly higher.

Those who have strong confidence in survival and a strong vision for the future may disagree. I also sincerely wish you success.

It doesn’t matter whether the opinions are consistent or not. As long as more and more companies can succeed and survive, it will be a good thing.

No.5915 Original first article | Author Liu Jie

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