Interview with executives

As the leading enterprise of electric vehicles in China, Weilai has won wide attention in the market with its unique concept of "user operation", but it has also spawned a discussion on the profitability and sustainability of this model. In the dialogue with Guan Mingyu and Zhou Guansong, two global management partners of McKinsey, Qin, co-founder and president of Weilai, shared the innovative thinking and valuable practical experience of Weilai's user operation concept from the perspectives of the underlying logic, input and return of user operation and the reference provided by Weilai's practice to the whole industry. 0 1 The underlying logic of user operation McKinsey: User operation is a major feature of Weilai. Why does Weilai do user operations? What is its underlying logic? Where is the core competitiveness reflected? Qin: In the business model, whether an enterprise has natural long-term contact with users is a major prerequisite for users to operate. Take the real estate and property industry I was engaged in before I founded Weilai as an example: the property is naturally suitable for users to operate, because the owner has lived in your community for ten years; But real estate is not like this. After the real estate transaction, the buyers and sellers basically stopped contacting. This simple analysis of today's automobile industry will find that most car companies actually have no user contact. Let's take a look at the transaction process of typical traditional car companies: in the pre-sales stage, we mainly contact potential customers through various marketing means; In the transaction stage, the car is sold to the dealer. For car companies, the whole transaction is actually over; In the after-sales stage, apart from the recall, there is little contact between car companies and car buyers. Therefore, in the whole life cycle of vehicles, traditional car companies have almost no user contact and no room for user operation. In Weilai, we have long-term contact with users through direct sales and direct service to meet the preconditions of users' operation. As for why we should do user operation, there are two main starting points. First of all, we have been in contact with users for such a long time and have such a deep experience. The value potential of user life cycle is obvious, so can we release this part of value through user operation? Secondly, we hope that our vehicle brands can enjoy a certain premium. The above two points are the premise for us to build a series of business practices of user operation. Consumers' willingness to pay is always driven by acceptability and sensitivity. On the one hand, we strive for perfection in R&D, purchasing and manufacturing products to meet the rational pursuit of consumers; On the other hand, it also creates long-term high satisfaction through user operation as an important support for brand added value. Let's make a hypothesis: if Weilai doesn't do direct sales or user operation, but just imitates the distribution system of the traditional OEM, how much can our car sell? My personal intuition is that the price may be reduced by 20% today. For a long time, the pricing of China car companies has a "ceiling": the same product, even a China car, may be better, but it is customarily 20,000 yuan cheaper than a Korean car, 30,000 yuan cheaper than a Japanese car and much cheaper than a German car. It seems that only in this way can the market be opened. In this environment, do car companies dare to say "no" to such pricing? Even the price is tens of thousands more expensive than German brands. Why is it more expensive than that in Germany? Although this is a hypothetical question, it is an important discussion topic in the early stage of our business. Through many efforts including user operation, Weilai has achieved a very intuitive result, that is, a relatively high brand premium. At present, the average fare of Weilai is higher than that of some traditional luxury car brands in Germany, and it is much higher. If the traditional strategy is tens of thousands cheaper than German luxury brands, then our pricing is tens of thousands more expensive than theirs, and the difference between these two pricing can be said to be our added value. This is the most intuitive result brought by our user operation. McKinsey: Besides the premium, you also mentioned the value mining of the whole life cycle of the vehicle. Can you tell us something about this? In addition, some people say that the so-called "user operation" means that sales should improve customer relations. What do you think of this? Qin: You can't simply equate user operation with relationship building or some superficial interaction. User operation needs a complete system capability to support. From the beginning, Weilai focused on building its own system, such as APP, NIOHouse, worry-free service, NIOLife and so on. These measures not only help us to improve user satisfaction and ensure the brand premium, but also benefit us from the value mining of users throughout their life cycle. Take NIOLife as an example. At present, the penetration rate is above 50% of users' stock, and each user spends an average of 2000 yuan a year. Of course, some of them are exchanged through integration. Is it difficult for users to operate this thing? It's not difficult. It's not difficult. What's not difficult? A user who spends 400,000-500,000 yuan to buy a car and is destined to be bound to Weilai for at least five or six years, as long as the experience is good, there is a high probability that it will drive some other consumption. Let's take the property as an example: the owner who bought a mansion is quite satisfied with the quality and service of the property. Now the property has introduced some other value-added services, such as home appliance repair, picking up and dropping off children, etc., which are more reasonable than the outside prices, and the owners are of course more at ease. Then why is it difficult for users to operate? First of all, the car companies that distribute the system can't do it. How do they bypass the dealers to sell these value-added services? Secondly, the operation logic and enterprise architecture of the traditional automobile industry do not support user operation. The traditional KPI of OEM department may not fully take care of the long-term interests of enterprises: for example, what the marketing department wants to push, first of all, it must prove the return on investment of that year. But in Weilai, the concrete financial returns of these things we do may take several years to realize. Therefore, user operation decisions can only be driven by people who have absolute control over the company and truly agree with this concept. In other words, the people who do things and the people who make decisions must be the same people. Input and return of user operation McKinsey: user operation needs real money. From the user's point of view, I will be happy to spend more money on me. However, from the perspective of investors, we will naturally care about whether the user operation mode can make money for the company. Qin: With regard to financial returns, we have our own bicycle life cycle business model, which includes two most important items: bicycle sales cost and bicycle service cost in the whole life cycle of vehicles. Bicycle sales costs include advertising, new car launch, etc. According to the traditional model, Weilai's cost in this respect can't be lower than that of traditional luxury brands, but it will be much higher. For example, they all buy TV commercials for 30 seconds, and the cost is similar, but the advertisements of traditional luxury brands can trigger the annual sales of nearly one million units, and the advertising expenditure of bicycles will be significantly lower than that of Weilai. Such a huge gap, even if we achieve the ultimate in efficiency improvement and accurate delivery, can not be pulled back. Therefore, if we want to compete with traditional car companies with scale advantages, our style of play must be differentiated. How is this differentiation reflected? We feel that we can only work hard on one variable, and that is user recommendation. In this way, Weilai's only feasible strategy is how to systematically increase the proportion of old users recommending new users. This is back to high satisfaction, because high recommendation rate comes from high satisfaction. However, high satisfaction alone may not produce high recommendation rate, and there must be a certain transformation mechanism to cooperate. This requires us to increase the frequency of activities, especially offline activities, and make the recommended scenes as natural as possible, so that users can bring friends happily, without being blunt or selling. This kind of play is different from the common purposeful promotion activities in the industry. In addition to user recommendation, holding large-scale activities with hot results is another important measure for us. Take the first NIODay at the end of 20 17 as an example, the order received within 24 hours after the event is enough to meet the delivery for one and a half years. Of course, at that time, the capacity of the new factory was limited and the delivery time was too long, which led to the loss of some orders. In the end, the actual situation was that it was delivered for one year. The number of orders received at a press conference is enough to deliver for one year, which means that there is no need to invest in big advertisements in the next year, realizing systematic cost reduction; The saved resources can be invested in the maintenance of existing interested users, and the cost will be much less than that of investing in big advertisements to acquire new potential customers. In addition to the bicycle sales cost, another important item in the business model is the bicycle service cost. In previous years, when vehicle sales were low, the unit cost might be exaggerated; However, with the increase of sales and ownership, the unit cost will gradually return to the normal level. Take Brother Lu Fu as an example. When the sales volume was limited in the previous two years, such as 20 18, the average daily user service of a road service brother was only about 1. However, by 202 1, it was close to the daily average of nearly six orders, with a huge increase, reaching the limit under the 8-hour working system. Looking at changing power stations, of course, it will cost a lot of money at first, but it all depends on the angle of this matter. I told the person in charge of NIOPower that if Weilai did not directly operate the power exchange service, but purchased services from outside to achieve the same satisfaction with energy replenishment, then the procurement cost would definitely be much higher than today's self-operated model. The report may reflect the losses caused by service users, but it can also be interpreted as the investment in purchasing customer satisfaction, which may be more accurate. To sum up, in terms of sales cost optimization, Weilai relies on differentiation; In terms of service cost, we should do our best through the initial investment, then optimize the bicycle service cost by increasing the scale, and finally achieve breakeven. How does Weilai create a new endurance experience through the "charging map"? -Runwise.co In summary, Weilai relies on differences in sales cost optimization; In terms of service cost, we should do our best through the initial investment, then optimize the bicycle service cost by increasing the scale, and finally achieve breakeven. In addition to the cost, Weilai can also get the service income of the whole life cycle of the vehicle. Our business scope is wider than that of ordinary car companies. In addition to regular business, Weilai also covers peripheral products, used cars and other businesses. Under the traditional style of play, the whole value chain will be completed by more than a dozen companies in seven or eight industries; But in Weilai, it's different. Film pasting and caliper modification can be done by yourself. In addition, due to the simplification of circulation, the prices of these services can be lower than those of 4S stores, which can benefit consumers while still maintaining reasonable profits. Weilai also has some optional projects for smart cars, such as NIOPilot and NOMIMate. Thanks to the product experience and good user relationship, the optional rate is very high, between 50% and 60%. At the same time, more and more users are getting used to receiving paid services in NIOHouse, such as drinks and venue rental. Of course, part of the payment here is done through points. Of course, we are currently in the stage of "saving character", so we will reinvest part of our service income in user services. In order to ensure that all these measures can protect the interests of users as much as possible while taking into account financial performance, we have set up a well-functioning user relations department. Traditional OEM does not have this department, but in Weilai's system, the user relations department is very important. We need this department to make rules for user groups, which is comparable to the Senate in ancient Rome. Sometimes, even if Brother Bin and I make a judgment, the user relations department will still stand up and say "No, this will hurt the interests of users". Mckinsey: NIOLife is Weilai's special business. However, some people have commented that as an automobile company, it seems unprofessional to invest in NIOLife. What does Wei Lai think of this? Qin: NIOLife is mainly responsible for the development and sales of products around Weilai. From three employees at the beginning, it has developed all the way to a team size of about 100 people today. We will define and design our own products, and then find the supply chain implementation. Because we strive for perfection in personnel recruitment, supply chain construction and quality standards, it is no exaggeration to say that the ability of our department is no less than that of top enterprises in the corresponding industries. For example, 202 1 began to set foot in red wine, and achieved direct cooperation with French wineries to jointly create Weilai's exclusive vineyard. For another example, we have a hot-selling thermos cup. We designed the cups, defined the quality standards, selected the manufacturers, and finished the final factory inspection by our quality inspectors. New models, new colors and new concepts are developed every six months. We hope that by providing users with good services and products, users will feel that they are worth the money. At the same time, Weilai can also obtain reasonable profits through the optimization of system efficiency. We can understand the incomprehension and even criticism of the outside world you mentioned. However, we feel that NIOLife's capacity building should not be opposed to the main automobile industry. At present, the user penetration rate of NIOLife has exceeded 50%, and the penetration rate will be further improved with the ability of all aspects in place. With the expansion of the delivery scale, this investment will not only cause pressure on the United States, but will become a new value growth point. To put it another way, in the long run, it is more cost-effective to invest in building capacity and improving "character" today. Let's make a pure hypothesis. If 1 10,000 vehicles are delivered in the first year, the average loss per vehicle is 1 10,000 yuan, and the loss is 1 100 million yuan; When there are 1 10,000 users, as long as an average car earns 100 yuan, there will be 1 100 million back; If the ability has been cultivated at that time, assuming that each car can earn 1000 yuan on average, then one billion will come back. Therefore, everything we are doing now is to obtain reasonable and sustainable profits when the base is large enough. So push back and see what kind of investment level may be needed at present. McKinsey: Fellow from Weilai is a very special group. As you mentioned before, Weilai will optimize the cost of bicycles by expanding its customer base. Can Fellow mode help Weilai achieve this optimization? There is always an upper limit to the number of customer relationships that each colleague can maintain. What do you think of the standards of fellow models? Qin: The purity of fellow travelers and the upper limit of per capita service users are our next extremely important topics. With regard to the purity of Fellow, in the early stage of our development, due to the small user base, old user recommendation was combined with other more traditional marketing models, but the proportion of old user recommendation will be higher and higher in the future. Therefore, it is necessary to improve the purity of the Fellow model, and through the adjustment of the distribution mechanism, Fellow can gain more personal benefits by serving users. There is no standard answer to the problem of per capita service user limit, and we need to keep trying in the process, such as improving the service limit through better digital empowerment and systematic team division of labor. At the beginning of my business, I talked with the personal finance executives of a bank, and they created a very sticky operating model, which deserves our respect. For example, if users of their wealth management products want to move, the first thing that comes to mind is not to find a moving company, but to consult a financial consultant. How does this bank achieve such high customer stickiness? Is to do your job well through a reasonable division of labor. There is a person in their team who is responsible for the little "big sister" role of parents. He may not need particularly deep financial knowledge, but his EQ must be high. There may be a person who specializes in handling complaints for customers, and so on. Through reasonable division of labor, it is an obvious truth that the combat effectiveness of a 1 infantry class composed of seven individual soldiers must exceed that of individual soldiers multiplied by seven. With the combination of digitalization and organization, Weilai Fellow has great potential. Of course, we are far from doing it today, but it makes us very excited, which shows that there is still a lot of room for growth. Mckinsey: Weilai is entering European countries such as Norway and intends to introduce user-operated systems into the European market. How's it going? Qin: We have just started in Norway. From a qualitative point of view, the user satisfaction and enthusiasm we get are the same as those in China. It used to be said that Norwegians were cold and withdrawn, which was wrong. Socialization is the common demand of human beings! Before selling cars in Norway, we recruited a local user advisory group, and more than 800 people signed up. Finally, more than 200 people were selected to give us various opinions, including APP, NIOHouse, test drive process and so on. We have started to deliver cars in Norway, but there is great pressure from logistics in the short term. The reference significance of Weilai's customer operation practice to the industry McKinsey: Weilai's customer operation model has obviously become the benchmark of the industry. Many car companies are also testing the model similar to Weilai, or adopting the agency model. Do you have any comments or suggestions on these attempts by colleagues? Qin: The agency model has appeared many times in history. Of course, in the end, it will be tested by time. The running-in between theoretical beauty and secular business relations will bring great challenges. After all, front-line sales and service personnel are not employees of car companies. Of course, the actual situation of each enterprise is different. The average price of Weilai has reached more than 400,000 yuan, so we will plan the whole life cycle value of the vehicle on the basis of this pricing, and then use this long-term value to achieve today's investment level. It is true that many companies are pointing to Weilai now. Most of these companies are industry predecessors and are more capable than us. My opinion is that it is not necessarily a good thing to look like Wei Lai at the executive level; However, it may be a good thing if Weilai has similar thinking process and underlying logic, but the actual implementation plan does not look similar in the end. Just like we are in China, no matter how much we earn, we always have a family reunion during the Spring Festival. The family may eat jiaozi together, and the family may explore the Antarctic. The form of reunion may be different, but the essence is actually the same. We should learn the essence of family reunion, not the form of Antarctic exploration. McKinsey: If everyone's underlying logic is the same, hasn't Wei Lai lost one of her greatest characteristics? Qin: I don't think so. I don't believe that Weilai's business will go bad if everyone adopts the same underlying logic. On the contrary, this will accelerate the acquisition of the share of traditional fuel vehicles by smart electric vehicles, and Weilai may become better. The automobile industry does not belong to the winner-take-all, but a hundred flowers blossom. Even to the extreme, a car company will have a share of 10%~ 15% at most. I never thought that the poor life of others is the premise for Weilai to live well. If others live poorly, Weilai may not be able to live well. I think in the automobile industry, what is more important is logical self-consistency and capacity building. We sincerely believe that all new electric vehicle companies should do better. Fuel vehicles still have a market share of 70~80%! If we don't fight for such a big market, 20~30% people will cooperate with each other. McKinsey: One last question. Cars are very complex industrial products. Some people may say that the so-called user operation is actually dispensable as long as the products are good. what do you think? Qin: Good products are very important, but it is not enough to have good products. In history, many companies' products performed well, but they all went bankrupt in the end. Besides, what is a good product? Different times have different definitions of good products. In the same generation, the quantity may change constantly, but under the background that intelligent electric vehicles replace fuel vehicles, the definition of good products may change qualitatively. Some people say that a good car product has good collision safety and a 5-star rating. Of course, we have all these, but we don't deliberately publicize them, because these are already the threshold requirements. Many media have dismantled our cars and found that the quality and materials of Weilai are not worse than those of traditional big-name car companies, or even worse. Therefore, our pursuit of good products should be forward-looking, not looking for swords. "Hit the moving target" is a sentence that Brother Bin often says, and it is also our requirement for ourselves. It means that the definition of goals and standards should be advanced, just like shooting a UFO target. You must aim at its extension line, not its present position. Therefore, our great task at present is how to define the next generation of good products, and infer our practice and investment today from the definition of this good product and good service. The conclusion is that in the era of traditional fuel vehicles, car companies will pay more attention to short-term sales targets rather than long-term customer satisfaction, and similar practices are also in line with the competition law of the fuel vehicle era. However, the rise of smart electric vehicles poses a challenge to this: due to the product characteristics of smart electric vehicles and the new generation of consumers' weariness of traditional car retail and service models, the once "golden rule" has been struggling in the era of smart electric vehicles. Weilai's user operation mode has found a new way to maintain long-term customer satisfaction. For such a new thing, many traditional car companies have experienced a mental journey from "looking down" to "not understanding", then "not being able to do it" and even "not catching up". In this regard, we believe that long-term thinking is the cornerstone of user operation; Any car company that intends to improve long-term customer satisfaction through user operation must find a balance between short-term financial indicators and long-term satisfaction. Building a user enterprise can't just stay in the slogan or appearance of "being good to users", but should go out of the past "comfort zone" and make drastic changes from the overall vision, corporate culture, institutional setup, assessment indicators, daily operations and other aspects. Winning users can win the future, but in practice, car companies should combine their own reality and ability boundaries to formulate targeted user operation systems and gameplay, avoid blind obedience, and strive to avoid the embarrassment of "Huainan is orange and Huaibei is bitter". We are: Runwise Digital Innovation Community. We have prepared four special contents for you: forward-looking scheme research, latest practical cases, scientific thinking methods and innovative technology tools. Runwise Digital Innovation Community provides you with a large number of business cases (free of charge and without registration) and provides you with a variety of innovative schemes (free download). 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