Discover Haier's Open Secrets

People seem to already know a lot about Zhang Ruimin and Haier. From smashing refrigerators to developing washing machines for washing sweet potatoes, from slope theory to market chain, from OEC to SBU, Haier's every move is familiar to the corporate world. However, when we interviewed Haier and Zhang Ruimin with "customer relationship management" as an entry point, we accidentally discovered Haier's "open secret".

Said "open" because Haier's success in customer relationship management was recognized, and it was one of the top ten companies in "China's Best CRM Implementation" in 2002. Said "secret" because Haier said that no one has interviewed Zhang Ruimin on this topic; Zhou Yunjie, Haier's vice president in charge of customer relationship management, also excitedly asked "CEConline" magazine: How did you come to interview customer relationship management?

Zhang Ruimin, Chairman and CEO of Haier Group, accepted an exclusive interview with the editor-in-chief of this magazine, analyzing Haier's customer relationship management and the "secret" core - the role of the CEO.

Users, customers, CEO

The CEO is the person who guides the direction of the company, so what guides the direction of the CEO? If you make a list or keywords, which factors do you think affect your grasp of the direction of the business?

I think the most important first is the user; the second is the employee; as a listed company, the other is the shareholder. Their requirements are completely different. Users demand high-quality and low-cost products, the better your quality and the lower the price, the happier he is. Shareholders demand the higher the profit, the better, and they want you to sell the higher the better. Employees want to increase their income as much as possible.

These three appear to be contradictory on the surface. However, if you can meet the needs of users, the contradictions can be resolved. That is to say, I create a user demand. Users who are willing to buy this product can pay a higher price, which is higher than the price of the opponent. The salary income of employees can also increase, and the dividends of shareholders can also increase. If we say that there is a sequence, the user must be the first. If the user's problem cannot be solved, the other two problems and conflicts will become more and more serious.

You're referring to users, not customers. For Haier, there is a difference between users (consumers) and customers (businesses). Why aren't customers high on this list?

We always believe that customers are not the same as users, although the two are always linked: to satisfy users more through the medium of customers. I think users come before customers. It's very simple, a big chain like Wal-Mart will kick you out tomorrow if you don't have users who want your product. The link between him and you is to see the needs of users. So I think that there are users first, and then there are customers. And some companies may reverse this order.

Haier's Customer Relationship Management (CRM) system is a system that has been praised, but we believe that CRM (and I think Haier should too) is more than just a software system. What is your understanding of customer relationship management?

I have seen a lot of descriptions and patterns in foreign countries. But I think there's one fundamental: what do customers want. Users definitely don't want a product from you, they want a solution and a demand. Not a refrigerator, but fresh food. What customers want is definitely not more goods, but more profits. No mall thinks that the more inventory I have and the more merchandise, the better the mall. He wants this product to stay for the shortest time and sell the most quantity. So what customers want is profit, not merchandise. Users want needs, not products. From this perspective, what we need to do is how to help customers make money and how to make users satisfied.

Just like the question you just raised, how do you rank customers and users? We also invite many customers to come here. We will set up a special sample room, such as the Wal-Mart sample room. I will analyze your customer base and user group. Wal-Mart's customers are ordinary people, while Sears' income is relatively high. The user groups are different, so I design products specifically according to the user groups. In this way, the product sells faster and sells more. In fact, the customer's request is to sell more and sell faster, especially fast. All he wants is speed. I start by meeting the needs of my client's client. Then customers will be satisfied and more money will be made.

So I think in customer relationship management, informatization is just a foundation, it can help you achieve what you do faster, but it doesn't tell you what to do. Or in other words, informatization can only help you do things correctly, it doesn't matter how to do the right things. So, for us, it's more of a real analysis of what users need.

What role does the CEO play in customer relationship management?

My own experience is that business leaders should think from the perspective of the customer, instead of letting the salesperson emphasize the reasons. If the sales performance is not good, they usually put the blame on the customer. For example, the customer is too It's rude, there's a problem. We've done a lot of work and he's not satisfied, there's nothing we can do. He tends to be on his side. But as a leader of an enterprise, it is very important to stand on the customer's point of view, not from his point of view.

Site, inspiration, CEO

The CEO is at the top of the corporate pyramid, far away from customers and users. What channels do you use to narrow the distance between you and your customers and users?

Channels include media, email, the Internet, and other business leaders do the same. But going down to the market terminal is the most critical. I used to go to big shopping malls and big chains, but now I also go abroad. For example, go to a Japanese shopping mall in Japan and communicate with the counter manager and store manager. Some situations are difficult for you to know without being there, and no one will tell you. Going to the scene is not only to understand some situations, but the most important thing is to generate some new ideas. This is usually unexpected. It's like going to the scene to breathe some fresh air and inspire some inspiration.

I went to a mall in the United States, a specialized electrical store. At that time, our wine cabinets were selling relatively well, and we asked the salesperson for any suggestions. He said that many low-income families in the United States do not have wine cellars and cannot afford such expensive wine cabinets. He may want to use the refrigerator to store two bottles of wine, okay? In addition, even if there is a large wine cellar, he mainly drinks these two bottles every day, and you can solve it in the refrigerator. We then developed a room dedicated to wine in the large refrigerator. If you don't go to the site, you don't have contact with users and salespeople in shopping malls, and product development will become passive water.

Do you have time to go to the mall often now?

If I'm going on a business trip abroad, I'll usually have to make this time. For example, when you go to Beijing, you will go to a shopping mall two or three hours before you get on the plane, and go to a shopping mall that is closer to the airport. In Qingdao, I usually go to shopping malls and several sales areas on weekends. It’s not about how much time there is, it’s about not being able to stop it, you have to keep watching.

Mr. Zhou said that he spends half of the year outside and visits more than 6 customers every day. You probably don't go to the mall as much now as you did in the early days, what changes have you made in the timing?

I haven't counted it since the beginning, but I'll go whenever I have time. I think it's better not to be regular, but it's not very good to let them feel the regularity when it is timed.

By "they" do you mean your internal staff?

Yes. There have been situations where as soon as they know where you're going, they're ready to go. Then you can't see the real situation.

So where are you going to tell them beforehand?

No, they don't even know where I'm going, even on Sunday.

When was the last time, the last time you were in a mall to talk to a customer?

Last week I also went to a shopping mall in Qingdao. The main thing is to look at our mobile phones, pen-shaped mobile phones. I thought this product would be a success, but it didn't come out well at first, not as well as we thought. Mainly go to the counter and listen to see what customers have different opinions on this. It turns out that customers are attracted to take a look, but the desire to buy is not too strong.

Why? Did you find the reason?

The average person doesn't realize that the laser pointer is of any greater benefit to him, and none of them feel that it is of any benefit for him to be miniaturized. So when I came back, I made a new package to reflect this fashion even more. This mobile phone can be put in a shirt. In the whole country, especially in the southern region, the suit can no longer be worn in May. Can set off a climax on this.

You make decisions when you come back?

Neither. I found the person in charge of this part of the mobile phone, and then I took out what they knew, and found that it was similar.

You won't be watched in the mall?

Definitely. But sometimes there is an advantage, he will tell you directly: I am your user, if there is any problem, I will tell you. Of course, you can't stay too long.

Meet individual needs

Do you still read newspapers?

I read it every day, and more on the Internet---our Haier Information Network. Every day on the Haier network, there are a large number of users' suggestions, dissatisfactions, requests, etc., and you have to read them. Because we put forward: "Users' complaints are the best gift of enterprises".

Are users' complaints passed on through customers, or are they directly reported by users?

Go directly to the Internet. It's not my website, it's Haier's website. The information reflected by the customer is not on this website, I took it from Zhou Yunjie.

You mean emailing Haier?

Yes.

Another famous story is that consumers in Sichuan reported that washing sweet potatoes in the washing machine caused blockages. Haier specially developed a large sweet potato washing machine. Did you learn this information yourself, or did someone below report it?

That's another thing we do in Chengdu, corporate mergers and acquisitions. When we left Chengdu, we went to the shopping mall and turned to a place on the outskirts of Chengdu. Said by the guy who took us there. But he's not a salesperson, he's a guy on the government side talking about mergers and acquisitions. We chatted about this in the van, whether the washing machine was selling well, what happened... When we came back, we raised this issue with the designers. In my opinion, the solution at that time was not to develop this product, but the most important thing was to solve the concept and awareness of meeting the needs of users. Because our designers think they should be taught that this is not for washing sweet potatoes, but for washing clothes. But he forgot that users have this demand and should develop this demand.

How do you tell if this is a need that deserves to be met with a general market, or a very specific need of an individual?

This is a big question. Of course, we hope to develop a large demand that everyone has not yet discovered, and turn individual requirements into a general one. If the washing machine for washing sweet potatoes is only used by one person, it will definitely not be worth the loss for the enterprise. this point is very important. The development of the washing machine for washing sweet potatoes did not form a large amount, because after all, this demand is relatively small. But this is a development idea. For example, we used the principle of washing machine to develop a machine that can make butter tea in Tibet, and developed a machine that can wash lobster in Anhui. A new idea was developed: production to meet regional individual needs.

But the example of the United States mentioned above must have formed a very large amount, because this is what the average low-income family will need, but not in the past.

The washing machine for washing sweet potatoes is not too large, but it can convey a message to the user, and the user can tell us more complaints, dissatisfaction, problems and regrets. You can meet the needs of washing sweet potatoes, then I have other needs, I will boldly reflect to you. In fact, it establishes an image of the company. We have a slogan: "The user's problem is the enterprise's problem". First of all, the user should tell you the problem. If the user doesn't tell you, how can it be?

As for the washing machine for washing sweet potatoes, did you go to the local area to understand the potential before you decided to develop it?

I also did a survey and came to the conclusion that it would not be too big. I was more about changing the minds of designers.

Have you ever analyzed whether it is profitable or loss-making from an economic point of view?

It won't be a loss because there's no need to recreate a mold, just a small change in it.

Three Stages of Customer Relationship Management

We know that Haier has set its own development into three stages: from 1984 to 1991, product simplification; from 1992 to 1998, product Diversification; after 1998, internationalization. What is the difference between Haier's customer relationship management in these three stages?

In the initial stage, we mainly focus on product quality. At that time, to some extent, there were no customers and no users on the surface. Because all the clients come to beg you. As long as I can get the goods in the mall, it can be a little more expensive. As a user, to queue up, invoice, as long as you can buy it. So many companies at that time, later collapsed in large numbers. Because they ignore the needs of customers and users, and focus on me, thinking how can I focus on you---I only need to give you the goods and it is a gift, what else do I need to do with you?

At that time, we decided on one. First, for the customer---there was no such name at that time, it was the shopping mall---we only gave it to the famous big shopping malls in the whole country. These famous stores are more reputable and users can trust them. You know about me smashing the fridge too. No matter how many cars are waiting outside, we will not produce low-quality products. We think sooner or later supply will exceed demand. Therefore, in the Beijing market, we used the money to buy back Haier's refrigerators from small stores, all of which were concentrated in the four major shopping malls in Beijing. At that time, the four major shopping malls were very famous and basically monopolized the Beijing market. What they sold showed what was the best.

At the stage of product diversification, what is now called customer management may be crucial, because you are not doing one product, there are many. There is controversy over Haier's diversification. At that time, we had an idea: there is no company in the world that can only make a refrigerator or a washing machine product that can stand. If you want to become bigger and stronger, it is impossible to make only one product. And we think that, for example, in Beijing, if you set up a maintenance center, a call center, and a marketing center to sell one product, the cost is too high.

During this period, we moved from a narrow quality to a broad quality, which is service. All of a sudden, 42 centers were set up across the country, and the investment was very large. But there is a way to diversify. So that no matter what problems the common people have, they can find you locally.

Later, in the internationalization stage, the debate on Haier became even bigger. Is it okay to go out, will I lose money... I raised a lot of questions. But I think to a higher level.

At this time, customer relationship management is no longer a simple business relationship, but a contract and contract relationship. The problem is mainly at the cultural level. Whether or not Haier can succeed in the future, I think it is the most critical to go through this stage.

Now I am not dealing with some Chinese clients, but clients all over the world. These clients have different requirements and different cultures. In fact, the key is whether the culture can be consistent. For example, the product you make is acceptable in the United States and acceptable in Europe, and everyone in the world thinks it is good, but it may not sell very well in the Middle East. Later found that your aesthetics and his culture are in conflict. He wants you to be gold at best, a color that you think is very beautiful may be a taboo for him.

What stage changes have taken place in Haier's channel strategy?

In the 1980s, our strategy was to enter big shopping malls, such as the four major shopping malls in Beijing and Shanghai 100. It should be said that it was very successful at that time, and it was launched all over the country at once.

In the 1990s, we began to not know enough about some new things, such as the hypermarkets, big chains that appeared in Shanghai, and later Gome. At first they fought a price war and we didn't have a good relationship with them. Later, from abroad, this is a general direction, not abandoning big shopping malls, but opening up new channels. At this time, it can also be said that the focus of customer relationship work has shifted to large chains, hypermarkets, and specialty stores.

In the late 1990s, it expanded to a global scale. For example, in the United States, it was determined to enter the top 10 chains. Now the top 10 chains have entered, of course, that share is not enough. Now to study the relationship between the 10 largest chains in the United States and us. For example, if the relationship with Wal-Mart in the United States is done well, Wal-Mart will be able to do well in the world directly. The same is true of Jia_Love. If you have a relationship with it in France, your relationship in China may also affect France, and your relationship in France may also affect the world. From local to global and global cooperation with large chains.

In addition to product diversification, Haier also has a problem of industrial diversification. Entering different industries, the customers faced by the company are different from those of the home appliance industry. What challenges does industry diversification pose to Haier's customer relationship management?

We're still exploring the sense that it may be difficult for businesses to deal with different customer groups at the same time. For example, Haier's pharmaceutical industry has not developed. But why enter the industry at the time? In the last century, I felt that there are two industries with the most promising future development, one is the information industry and the other is biological engineering. Now the development of the information industry is gradually smoothing, because the customer base of the information industry is almost the same as that of home appliances. He believes in your refrigerator, he will not disbelieve when he buys your TV, and he can also believe in buying your computer. The sales channels are all together. Phones are slightly different.

The pharmaceutical industry is completely different, completely different channels, completely different customers. This is very difficult. We are not developing fast in bioengineering. My analysis is because the customer base is completely different, such as hospitals and pharmacies, and the original resources cannot be borrowed at all. Therefore, in the diversified development, if the new industry is very far from the core industry in terms of customer relationship and target customers, there is not much opportunity.

The secret is innovation and speed

What we feel the most is that Haier is constantly innovating to meet the needs of users. If you want to sum up, what is the biggest secret of Haier's success?

Innovate to meet individual needs. Including now we turn designers into model managers, which I think is one of the biggest innovations. It is to combine our own developers with market demand to develop this demand, which is called creating demand. Developers have risen from developing products in the past to developing markets. His income is also tied to the market benefit of the products he develops.

Another thing we've done more successfully is speed. Many companies have discovered this demand, and whoever can meet and provide the fastest is the winner. Like our wine cooler in the US market is the most successful example. It turns out that the U.S. market is all built-in wine cabinets, which are placed in the cabinet. We make it independent. Americans thought it was impossible, but we launched it because we thought it was suitable for the middle class. It sold a lot at once, and it was very profitable in the beginning. The vice president of a large electrical appliance company in the United States came to us some time ago. They were bullish at first, and they were doing it, but they weren't as fast as us. It takes 18 months for them to develop, design and finish. He asked us how many months? Let's say 5 months. Large companies often have many prescribed procedures to go through, and they strive for product perfection.

But I think it's faster than perfect right now. Therefore, our current product is often the second generation after the first generation came out, and now it is the eighth and ninth generation. At the beginning, I thought that there should be many functions, but in such a short period of time, you can only push this concept out in the simplest form and improve it through the second and third generations. But the average big business thinks that this is not perfect, and it is more perfect and more perfect. However, what users need is this kind of demand, you can almost accept it, and you can improve it. For customers, what he wants is the speed of sales.