Xiuyu Group Li Xiaoning: Digitalization has given the business a lot of vitality. Use data to verify the direction of the business instead of slap the head.
We need to go through all the business radii and paths digitally, and use the data to verify the direction of the business, not pat the head, not rely on feelings.
On December 19th, the Entrepreneurship Future 100 Business Summit and 2019 Entrepreneurship Annual Conference Enterprise Digitalization / Intelligence Forum was held at Four Seasons Hotel in Beijing. The chairman of Xiuyu Group, Li Xiaoning, published the theme: "Digitalization Makes All Businesses Repeatable "Speech.
Sharp views are as follows:
1. The service industry is not highly standardized, so it will not touch people's hearts through advertising, but should acquire customers by tracking customers and sharing customer experiences;
2. The essence of business is to get more customers, and customers spend more frequently, rather than one customer buying more orders;
3. Businesses can be repeated again, because all businesses are not digitized based on people's business logic. Digitalization is not just a process of tracking assets.
The following is a record of Li Xiaoning's speech:
Digital marketing is actually very abstract. Thank you very much for helping us organize our digital operations as a supplier over the past year.
Digitally verify business logic
What is digital operation? I am the founder of a company and I think I am a very good salesman. I was born with a keen judgment on the market and customers. It ’s just that we did n’t know what to say and do not understand in the past. I found that there was often no way to communicate clearly with my team about my business logic. Later I realized that the tracking process of the entire business logic was a natural reaction in my mind. But for the entire team, they have no way to reason about this response. This response is the digital process we face today.
Before that, we spent nearly 100 million yuan on the company's basic informatization construction, procurement financial system, ERP system, HR system, etc. I suddenly wondered one day whether these investments will help my business? At the time, I felt that all the investment in information technology was a process of burning money. It seemed to improve efficiency, but it did not improve business.
So, I sorted out the most important parts of our company in three parts: the first is customers, the second is money, and the third is goods. I asked myself, does anyone care about money? The information system at this stage manages this money. Things are also managed because these systems also manage things.
Do we have anything to hold our customers? I suddenly discovered that we didn't have anything to control our customers. Our customers are unilaterally held by a certain employee in the store. Our members are cold data. We don't know where he came from, who made the money and where he lost money. We know nothing about customers.
I felt fear at this time. I suddenly felt that we were doing a blind business and our management radius was getting smaller and smaller. What exactly is the management radius? In fact, it is the final judgment and capture ability of customers.
Under such circumstances and entanglements, we have reached cooperation with Tiepco since last year. For more than a year, I have a deep feeling that all industries in China are worth redoing. The main reason is that we need to digitally re-run all the business radius and path, and use data to verify the direction of the business. Instead of slap the head, not rely on feeling. Because our feelings may be wrong.
Yesterday we found a bug, and some customers bought products without spending any money after superimposing various promotions. As a result of this internal discussion, we have strengthened internal audit. However, if we rely on human resources to enhance auditing, then we still do nothing digitally. For our traditional businessmen, we are used to one thing that is not done well. It is because this person has a problem with his working attitude or working skills. It is difficult for us to imagine how to solve it with a system.
So we have a deep experience. In the past, our company's process was to make a budget, such as a target of 1.5 billion turnover next year. First let the business department say how much each company should sell. The cost-effectiveness of the training department, marketing department and financial department all followed. It ’s all about head shots. Let ’s do it together. Last notice, this is our business. This is our original workflow.
Since last year, we have adjusted this order. Let's talk about the business six months or one year later. First, colleagues in the information department will sort out the core indicators of this business logic and what the business processes are. They will sit down and discuss the implementation path of informatization. Then the finance department performs the accounting, the marketing department makes the plan, and finally the business department. In order of importance, our company's business units are ranked as executives.
We used to think that the business department created value, and the administrative department was the auxiliary execution department. Today, this sequence is because we believe that administrative logistics, also known as the business middle stage, has now become the most important command center. All business results should be in The command center can see it.
Digitization based on people
We started to feel that what we were doing was a very traditional business, and it was even considered to be of little value; the cost of direct sales was particularly high, high rents, high manpower, and limited management radius. After digitizing, we found that the business suddenly burst into great vitality. We suddenly discovered that we had many advantages before, but we didn't know where the advantages were.
For example, we can reach the ground, and customers have a lot of contact with us. Our customer service life cycle is relatively long, from 20s to 80s. Knowing all these before was all feelings, and to what extent and how often the frequency depends on feelings. Today is different. We can see clearly whether a customer visits 4 hours or 4 hours 10 minutes a year, which category and who will buy the most times, including the characteristics of employees.
We found that all work became characteristic. For example, we discuss what is a good employee, and our information department will use data to prove what is an indicator of a good employee. Another example is to define high-quality customers. We can now know who are 90, 80, 60, and 20 customers. So how do I promote my customers from 20 points to 50 points, from 50 points to 80 points? This kind of marketing does not rely on skills. It should be in-depth member development to help members never recognize, like, and familiarize themselves. Good quality to be willing to spread.
This is the list of customers we make. From the path of serving customers at different stages, we can easily summarize which courses are most easy for a new customer to buy, which courses can be used by intermediate customers to stabilize them, and which courses are our highly profitable. Project, with the logic of which course foundations have the strongest customer purchasing ability.
On this basis, we have made many internal adjustments ourselves, including the expansion of the management radius. Now even if I don't go to the branch office, I can still meet with the branch managers very clearly, because we are meeting with the customer list. In the past, we used data to meet. You only completed 800,000 for one million results, and a fine of 200,000 if you didn't complete. Today, we will explore the process in which the 200,000 gap may be caused by your failure to complete.
Our approach has changed overall. Now we will drop business to the point, to the people. By the end of the year, everyone is budgeting. The previous two days, our human resources department made a salary budget for next year. The finance department said, "It's too high, we need to cut it to 25 million." The human resources department agreed. I said it was wrong, why is it 25 million instead of 25.39 million? Can I go to each store to make a budget, taking into account factors such as customer volume, growth rate, and employee hours? Now that we have done it, we will find that all the dimensions in it can be done with data.
At the same time, we have made a plan for "everyone's own media and everyone's salesman". We can forward our articles from our media to our own social media, and we can give you rewards for reading. Customers recommend to friends, we can also give him rewards, we turn our customers into our partners. We used to rely on advertising to acquire new customers. Today we discount advertising costs to old customers and pay employees for sales.
After the system that Tiep helped us to launch in July this year, in the three and a half months from July to December, our entire company gained more than 40,000 new guests. What is this concept? During the same period, we opened a Tmall flagship store. The operating cost of the Tmall flagship store is very high. After three months of desperate operation, I found that we spent a lot of money to only get more than 200 customers and only 40 effective customers. From the perspective of customer acquisition costs and order value, We "buy back" 5,000 yuan customers with 100,000 yuan, we can't do it anymore.
We have a deeper experience. The service industry is not highly standardized, so it will not touch people's hearts through advertisements. Instead, we should acquire customers through tracking and sharing of customer experience, and one-on-one communication. We couldn't follow in the past, but now it's all possible.
This brought us a huge business reversal. In the second half of this year, our revenue increased year-on-year, mainly due to the improvement in the market brought by customer sharing. At the same time, digitalization can track the rewards that can be given to everyone who contributes to the company's market growth, and our employees will also receive this reward. Employees and customers are in excellent condition. Another benefit of this is that all our employees' salaries have risen.
The system's improved booking capacity can also save us effective time. In the past, employees made 5 customers and 7 customers a day, the income was definitely different, and the company costs were also different. In the past, I also joked that our industry is like the taxi industry. It sells employee time. If our employees are idle, the cost is high; if our employees are not vacant, the cost is low. Today, digital marketing helps us solve these problems.
Now, our entire company is full of confidence in the future, because we suddenly found that the entire company's operating efficiency has increased dramatically, and our ability to capture business and customers has surpassed all our past thinking. We can see customers so clearly, we can comprehensively track all the tracks of customer service, and the process becomes simpler.
Change business model
In the past, when we were doing retail, we often talked about heroes, but today we will calculate the salaries of employees every time they reach customers. The pay logic also changed from how much money you received and how much money you received to how many customers you got. And the rewards you get at different stages of the guest are also different.
In the past, employees were only friendly with the customers who brought him the biggest orders, and the orders were small, but now the relationship between employees and customers has become more friendly, and the customer service experience has naturally improved. The entire team has gone from pursuing money to chasing the customer's life cycle and development path, and the entire business has formed a virtuous circle. An intuitive figure is that our company's refund rate has dropped by 90% in the process.
We couldn't achieve even this kind of knowledge before, but now we can return to the essence of business. The essence of business is to get more customers, and customers spend more often, rather than one customer buying more.
Customer referrals have also become a business model. We have completely cancelled the external advertising investment. In the next three years, we plan to relocate the street-facing stores, which may be moved upstairs and some other not-so-good locations, because the dissemination of customer information no longer depends on shop signage and street signs. As a result, our future rent costs will drop by 50%.
All this change comes from digital tracking. In the past, all our business was single-line, the company managed the stores, the stores managed the employees, and the employees managed the customers. We used to worry about this line breaking every day because customers had nothing to do with our back office. After the connection, when all businesses are maintained by customer radius and path, this is a very clear whole. The overall linkage and reaction capabilities and our ability to judge business are improving. The loss of other people and Transfers and replacements brought about by changes are also very easy.
Now, the cooperation between our company and Dipu Zhao has just begun. Many functions have not yet been launched. The plan has only gone a dozen percent, but we have clearly seen the impact on business. I am not an IT person, but after experiencing this year for myself, the deepest feeling is that business can be repeated again, because all businesses do not digitize business logic based on people. Digitalization is not just a process of tracking assets.
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