How does marketing guru Lei Jun grasp consumer psychology?

Xiaomi Motors' first model, SU7, was officially launched on March 28, and its price was finally unveiled. Remarkably, within just half an hour, the model received over 50,000 orders, which marked a good start for Xiaomi Motors' sales cycle. This achievement reminds us of the grand occasion when Xiaomi mobile phones were launched that year, and Lei Jun once again proved his marketing prowess. So, how did he do it?

On March 28, Xiaomi Auto's first car, Xiaomi SU7, was officially launched on the market, and the price of this car was finally revealed. However, after the press conference, another number was even more shocking. In just half an hour, it received large orders for more than 50,000 vehicles. This achievement undoubtedly made a good start for Xiaomi Auto's sales cycle.

This phenomenon of a successful start reminds people of the grand occasion when Xiaomi mobile phone was released that year, which was also an instant hit and highly recognized by the market. Lei Jun, the helmsman of Xiaomi Group, once again proved his marketing brilliance.

Lei Jun's strength lies not only in his ability to produce high-performance products, but more importantly, he knows how to grasp consumers' psychology through these products, establish emotional connections with consumers, and stimulate consumers' desire to buy.

It is said that Lei Jun understands consumer psychology, but what exactly does he understand?

1. Cause marketing, the role of real persona

Over the years, Lei Jun has always given people the image of being kind, sincere and down-to-earth. Intentionally or unintentionally, he has been strengthening this image, and people don't think he is bragging.

When he says ecosystem is valuable, everyone thinks it is too much. When Jia Yueting says ecosystem, everyone thinks it is too much. When he says it is not profitable, everyone thinks it is not profitable. When others say it is not profitable, everyone thinks it is a scam.

This actually means that you reap what you sow, and the image you create will determine the impression you give to consumers.

From the perspective of marketing psychology, this belongs to cause marketing. Cause marketing is a marketing strategy that combines business with public welfare, and aims to increase product sales, corporate profits and improve social image by providing solutions to specific social problems.

Nielsen once conducted a global survey on CSR, which showed that 50% of consumers are willing to pay a higher price for services or products provided by companies that give back to society. When companies behave ethically, consumers believe that the products they sell will also be better.

For example, Erke donated 50 million yuan to the flood disaster in Henan Province, so netizens were willing to buy more than 20 million yuan worth of goods in its live broadcast room in one day. Baiyang employed a large number of disabled people, so netizens made its live broadcast room’s sales exceed 10 million yuan in 7 days. Wahaha has done a lot of charity work, so after Zong Qinghou’s death, everyone flocked to Wahaha’s live broadcast room.

Here, good cause marketing needs to be extended. When Lei Jun has been building a kind, sincere and real image, people will believe him and not think he is fooling people. This strategy is not a traditional product and price competition, but touches the emotions and values ​​of consumers, and becomes a deep, emotional connection.

With this connection, consumers are more willing to support, purchase and recommend Lei Jun's products.

2. Stimulation generalization, high cost performance

Many people think that Xiaomi should create a new car brand, but Lei Jun did not do so. He used the mobile phone brand on the car. The principle behind this decision is stimulus generalization.

Stimulus generalization originates from behavioral psychology. It refers to a phenomenon whereby when a stimulus (such as a brand logo, product design, sound, or any specific marketing message) is associated with a response (such as purchasing behavior, brand loyalty, or positive emotions), other stimuli that are similar to the original stimulus can also trigger the same or similar responses.

What does Xiaomi stand for? It stands for high configuration and high cost performance. When Lei Jun extended the brand to the automobile category, SU7 was destined to be out of the high-end category, but he successfully established the impression in consumers' minds that Xiaomi cars also have high cost performance.

Before SU7 was launched on the market, the question of “Are there any rivals within RMB 500,000?” and the comparison with high-end brands such as Porsche were all aimed at strengthening the brand image.

Extending the Xiaomi brand to cars and leveraging the effect of stimulus generalization is also a low-risk strategy in the early stages of car manufacturing.

In the automobile market, some excellent products (such as Porsche) have proven their success. Xiaomi has further reduced prices on this basis, thus achieving maximum benefits with minimal risk.

This is the same strategy as when Xiaomi Mi 1 was launched: the market has proven that consumers are yearning for smart Android phones priced above 3,000 yuan, but they just think they are expensive. At this time, Xiaomi launched a phone with a configuration of more than 3,000 yuan and a price of 1,999, which reduced the risk to the greatest extent.

3. Similarity principle, really like Porsche

Xiaomi is designed like a Porsche. Why? Because Porsche is recognized for its good looks.

The human brain has an innate preference for beautiful designs, which has been confirmed by functional magnetic resonance imaging (fMRI) studies. When consumers see beautiful designs, their brain activity becomes more active and their reaction time shortens, indicating that beautiful designs directly affect people's emotions and decision-making processes.

Importantly, the principle of similarity comes into play here. This is the tendency for consumers to group items that look similar or are similar in certain features together, and expect them to be similar in other attributes as well.

When the Xiaomi Mi SU7 is said to resemble a Porsche in design, it is more than just a superficial resemblance. Porsche as a brand stands for excellence in design and performance, with each of its models being a perfect blend of aesthetics and engineering.

By making the design of Xiaomi SU7 similar to Porsche, Lei Jun is actually taking advantage of consumers' positive impressions and emotional connections with Porsche to enhance the image and appeal of Xiaomi cars in the minds of potential customers.

At the same time, Xiaomi SU7 is like Porsche, which is the principle of similarity and stimulus generalization at work at the same time. One strategy of stimulus generalization is competitive brand imitation, where competitors will imitate the product features, packaging or advertising style of the market leader, hoping that consumers will transfer their positive feelings about the leading brand to their products.

Although this practice may pose a risk of brand infringement, it demonstrates the potential application of the stimulus generalization principle in market competition.

Xiaomi is like Porsche, which is talked about by consumers. Of course, it will also have negative backlash, such as the joke below, but for a brand-new car brand, doing so has more advantages than disadvantages.

4. Scarcity: Wanting but not getting

The highest level of a scumbag is to make you want something but not get it, and to make you give to him/her without asking for anything in return for a long time. The highest level of a salesperson is to want something but not get it, and to make you yearn for it forever.

Lei Jun is a master of psychology, which is largely reflected in his hunger marketing.

The essence of hunger marketing is actually the scarcity principle. In short, the scarcity principle means that people's demand and value perception of scarce items far exceeds those of easily obtained items.

This principle was also cleverly applied to the sales of Xiaomi SU7. Everyone knew that the initial production of Xiaomi SU7 would be insufficient, which created the scarcity of the product and a sense of tension and urgency among consumers. When the product was released, consumers would compete to place orders in the hope of becoming one of the earliest owners. Those who placed orders posted their posts on social media, which in turn triggered others to rush to buy.

After the Xiaomi car was released, many people rushed to place an order. Some people placed an order just to show off, but wanted to change their mind the next day. So the following joke appeared, which reflects the result of scarcity:

What you mean is that you accidentally clicked on the ordering page, then accidentally selected your personal car model, then accidentally filled in your name, then accidentally filled in your 18-digit ID number, then accidentally touched and agreed to the "Purchase Agreement", then accidentally touched "Pay Deposit", and finally accidentally touched the six-digit bank password/fingerprint payment/face payment, then clicked "Lock Configuration", and then confirmed the lock. Is this what you mean, sir/madam?

Not only that, Xiaomi has also launched the F code. Not only are the orders worth showing off, but the F code also represents a privilege that is worth showing off to make others jealous.

In the early years, Xiaomi claimed that it did not deliberately engage in hunger marketing, but rather had to do so because of insufficient production and high user demand. We will not speculate on the truth of this statement, but the ultimate fact is that almost every time a new Xiaomi phone is available for purchase, it is sold out within a few minutes.

In addition, Xiaomi's marketing method is actually a strategy of small-batch production, observing market feedback, and expanding production again based on demand. It can be said that it is the earliest practitioner of "lean entrepreneurship" among Chinese companies.

5. Raise expectations first, then set prices

How to price is one of the most important decisions for Xiaomi Auto.

Since Xiaomi announced its plan to build a car in 2021, consumers and industry observers have been curious about the pricing of this upcoming new player. Over time, this curiosity has turned into a strong sense of anticipation, and every piece of gossip about the price has sparked a heated discussion. However, Xiaomi is in no hurry to satisfy this curiosity.

Before the launch, Xiaomi created a high-end, high-performance impression for SU7 through long-term market preheating. This strategy not only gave consumers a clearer understanding of the product's performance and configuration, but also virtually raised their expectations of product prices.

The information about SU7 has been released continuously, but the price has not been announced. This takes advantage of the Zeigarnik effect, which is a principle in psychology that refers to the fact that people remember unfinished or interrupted tasks more clearly than completed tasks.

Lei Jun has been conducting marketing preheating on Weibo for a long time, and took advantage of this psychological effect by showcasing the advanced technology and performance of SU7 at a technology launch conference but deliberately not revealing the price.

During the entire pre-marketing, Lei Jun would occasionally say things like "9.9 is impossible, 19.9 is also impossible", "Are there any competitors under 500,000?" and similar statements, making the public believe that SU7 would be a high-priced car.

This strategy keeps consumers in suspense, curious and expectant about the price, and keeps them paying attention to Xiaomi SU7, increasing discussion and attention on the product.

Before the final price announcement, Lei Jun’s carefully crafted speech further raised consumers’ expectations of the SU7’s cost and value. By emphasizing the high-end technology used and suggesting that it would compete with high-end brands such as the Tesla Model 3, Lei Jun took advantage of the anchoring effect.

This is a psychological phenomenon that refers to people's over-reliance on the first information they receive (anchor point) when making decisions. Here, high-end car brands and technologies have become the "anchor point" in the minds of consumers.

“Now everyone has an idea of ​​the price, right?” and “If Model 3 is priced the same, I believe everyone will buy it.” Such statements still make the public believe that the price to be announced next will be higher.

When Lei Jun finally announced a lower-than-expected price of 215,900 yuan, there was an outburst of surprise at the scene. Consumers had already been influenced by the high-end "anchor" positioning and felt that this price was far more cost-effective than expected, even though this price was already very attractive for a brand that was new to the auto market.

6. Amplify the charm of free

Any rational person knows that there is no free lunch in the world, but the reality is that most people are irrational when it comes to profit issues. The word "free" is the most attention-grabbing copy in marketing. When most people see the word "free", their eyes light up and they can't wait to get the free stuff.

The tricks of "free" marketing can be described in a book. The phrase "there is a chance to get it for free" can increase the click-through rate several times, and a "free prize draw, no money if you don't win" event can attract a large number of people.

For Xiaomi SU7, it is very important to make a good first sales shot. If some free prizes can be used to drive consumers to make orders and obtain beautiful data, it will be of great benefit both in terms of enhancing the company's confidence and influencing the industry.

At the SU7 launch conference, Lei Jun's word "free" accompanied by special sound effects gave people a passionate feeling at the scene. Free sofas, refrigerators, TVs... It makes people feel that buying a car can give them so many extra things that are worth thousands of dollars.

Many people may ask, why do you care about these free gifts when you spend more than 200,000 yuan to buy a car? In fact, consumers don’t think so. What consumers think in their hearts is, I want to buy a car anyway, and if I buy a car, I can get these things, isn’t it equivalent to making money for free?

And in the minds of consumers, the extra products or services obtained for free increase the value of the overall purchase, making the original price more reasonable or even cost-effective. Maybe some people think that the price of SU7 is not that cheap, but with these free gifts, it is more appropriate.

Here, free is certainly important, but what is more important is the line of small print below: "Free gift for large orders before April 30th". Free gift is time-limited. Once this opportunity is missed, it will never come back again. This has driven consumers to rush to Xiaomi's official website to pre-order Xiaomi SU7 as soon as the press conference ended.

Conclusion:

From the decision to build a car to the release of the new car, Lei Jun demonstrated his profound knowledge and forward-looking perspective in consumer psychology throughout the entire launch cycle of SU7.

His detailed understanding of consumer psychology and his exploration of human nature enable him to design marketing strategies that can touch the hearts of consumers and resonate with them. These strategies not only promote sales, but also establish a deep emotional connection between consumers and brands.

It has to be said that Lei Jun is indeed a master of consumer psychology.

Author: Xunkong

Source: WeChat public account "Xunkong's Marketing Revelation (ID: xunkong2005)"