Breaking Business Anxiety with Long-termism
Author: Deng Fei
"China's economy has entered a new era"
"Today's consumer era has entered the experience economy era, and consumers' purchasing motives have upgraded from the previous 'have it or not' to the 'want it or not' stage..."
No matter what era it is, the business economy will encounter ups and downs, and history has repeated itself countless times. China, a rapidly rising world-class economy, has also experienced major economic cycles under the wave of reform and opening up.
Now, fueled by the pandemic, China's business and economic situation is also being tossed about in public opinion, with most voices calling it "consumption downgrade." What we can feel is that many brands have disappeared, people's willingness to buy has declined, and data from major platforms remains sluggish, causing many companies to tighten their belts and stay in a "slimming down" state. Moreover, many foreign enterprises have reduced their investments and related budgets in China, making the Chinese market seem depressed, and many entrepreneurs have fallen into a state of extreme confusion and deep anxiety.
China's economic development has reached a point where the era of land-grabbing is over, and now it has entered an era of innovation and efficiency. If we still try to solve today's difficulties with old ways of thinking, I think it will be difficult.
In the 30 years since reform and opening up, we have fully enjoyed the demographic dividend and the structural advantages of the market. Overall consumption was in the era of "have it or not" and "good or not." Now the consumer era has entered the experience economy era, and consumers' purchasing motives have upgraded from the previous "have it or not" to the "want it or not" stage. What are consumers buying? Is it more about product functions or the value behind the brand? If consumers are no longer making decisions based on satisfying their basic functional needs for goods or services, then businesses must find the match and resonance between brand value and consumers' personal values.
From the data, GDP in the first half of 2024 maintained a growth of 5%, and total retail sales of consumer goods reached 27 trillion, achieving a growth of 3.2%. Moreover, online retail, physical goods, platform network services, online tourism, and online dining all showed significant growth.
In the short term, China's economy may show localized and minority "consumption downgrade" phenomena, but in the long run, this is different from traditional consumption downgrade. Our economy is changing in a spiral manner, not mechanically returning to the starting point. From this perspective, it is not difficult to see that "consumption upgrade" is the eternal topic of our market. We just need to re-arm our enterprises with new thinking, upgrade our brands, and make brands the choice for quality life today, becoming the manifestation and extension of users' and consumers' values.
The meaning of business existence is to enhance social welfare and efficiency through value exchange. The development of human society and the progress of civilization come from new divisions of labor brought about by exchange activities, which gave rise to the merchant class. Merchants and later entrepreneurs, through innovative integration of products, customer needs, and sales channels, optimize resource allocation, thereby reducing overall costs and improving social efficiency. This is the most fundamental logic of business and the ultimate value of business.
The Long-termism Upheld by Enterprises
"The long-termism upheld by enterprises is an effective and innovative strategic thinking centered on people, which we call [Brand Loyalty Growth Innovation Thinking]."
People are the foundation of everything. All activities in human society start from people and ultimately return to people themselves. The so-called long-termism upheld by enterprises is an effective and innovative strategic thinking centered on people, which we call [Brand Loyalty Growth Innovation Thinking]. In Marxist theory, it means using people-oriented innovation to gain monopoly status and obtain generous profits, so all capital will follow, and the process of following is the process of profit averaging. This innovation brings excess profits, capital follows, and average profits are generated. After profit averaging, new innovations will break this equilibrium.
GSP Consulting's Brand Loyalty Growth® is a magic weapon for enterprise long-termism and sustainable development, and a systematic method to help enterprises develop healthily and create eternal momentum. In this system, it is broken down into three major growth empowerments for enterprises.
1. Growth in Brand Salience
"Growth in brand salience is not a slogan, but a mindset centered on user value, and the ability to plan and continuously execute consumer value-driven business development."
The growth of brand salience can be expressed in plain language: let more people know it, let more people love it, let more people own it, and let more people praise it. Any brand that does not hold a user value perspective and only pursues blind numerical growth will inevitably face long-term weakness and intermittent anxiety. Those brands that remain strong and continue to develop, such as Nike, Lululemon, Apple, Disney, etc., are constantly innovating and upgrading their brands to grow consumer salience, and constantly injecting new content into their brands. Therefore, there is no brand that lasts forever, only a generation of consumers.
To remain invincible in a fiercely competitive market, it is necessary to continuously inject new energy and annotations into the brand to win consumers' attention and value resonance. The core users faced by enterprises at different stages are different, and enterprises need to periodically identify and continuously pay attention to users. Growth in brand salience is not a slogan, but a mindset centered on user value, and the ability to plan and continuously execute consumer value-driven business development.
2. Business Growth
"Brands must fully utilize the architecture of full relationships, full journeys, full scenarios, and full links between consumers and the brand to build a moat for the enterprise brand."
China's economic progress has spanned several stages of the West. Today's consumers will no longer pay for necessary consumer goods, so we magically find that real estate developers who sell houses have positioned themselves as urban life service providers; car dealers who sell cars have positioned themselves as builders of the driving travel ecosystem; financial institutions have positioned themselves as creators of the financial service ecosystem, and so on.
So today it is not difficult to find that the relationship between brands and consumers has changed. Consumers are not satisfied with establishing only a transactional relationship with brands. In other words, if a brand still only stays at the transactional relationship with consumers, that is too weak and can easily be preempted by competing brands. Therefore, brands need to transform transactional thinking into relationship management thinking with consumers. Redefine the DTC model. Brands have always been able to use a large number of dealer systems to help increase market share, but they absolutely cannot disconnect from consumers in this era. Brands must fully utilize the architecture of full relationships, full journeys, full scenarios, and full links between consumers and the brand to build a moat for the enterprise brand, thereby achieving precise and effective operations and bringing sustainable loyalty growth to the brand.
3. Capability Growth
"The improvement of digital intelligence capabilities is to help enterprises quickly, accurately, and efficiently handle the transmission of value, and help enterprises realize value on a larger scale, rather than putting the cart before the horse."
The improvement of enterprise digitalization capabilities is no longer a new topic, but if we put it together with capabilities such as brand salience and business operations, and view it as a whole, from value to business, from business to digital support, then we can accurately position it. Digital intelligence serves business, and business is guided by value, so digital intelligence will also be guided by business and value. Thus it is easy to understand that the improvement of digital intelligence capabilities is to help enterprises quickly, accurately, and efficiently handle the transmission of value, and help enterprises realize value on a larger scale, rather than putting the cart before the horse. The scope of digital intelligence is actually quite broad. While carrying out digital intelligence, it often brings a series of reforms, such as optimization of organizational structure. In the construction of capabilities, the traditional organizational forms and structures of most enterprises can no longer support the rapid development of enterprises in the experience economy. Therefore, enterprises that are business-first often cannot achieve sufficient growth when organizational capabilities do not match, and may even hold them back.
If a person has no long-term concerns, they will surely have immediate worries. Short-term opportunism will inevitably make us extremely anxious. Only by empowering the long-term development of enterprises through brand loyalty growth thinking can it become the eternal driving force for brands to transcend economic cycles.
Text | Deng Fei
Editor | San
Image | Clay
Layout | Tom