Haidilao makes a fortune through marketing

Haidilao has always won by serving customers, and has opened up a service involution track. After the black swan incident, how did Haidilao survive and rebound? Recommended for friends who are interested in marketing~

I am more curious about the company Haidilao.

At first, it was inspired by Huang Tieying's book "You Can't Learn Haidilao". After reading it, I found that everything written in it was right, and it is indeed impossible to learn it. They sell services, and the services are sublimated to a group of people and become cultural concepts. How can you learn concepts from a book? Later, I was curious about this company . After the black swan event in the past two years, when everyone was unable to go out and dealt a severe blow to offline catering, this brand has shown strong resilience.

Let's look at a set of data: According to Haidilao's official six-year interim report data, from 2018 to 2023, the net profit in the first half of the year (including Tehai International business) was 646 million, 911 million, -965 million, 94.53 million, -267 million, and 2.2 billion.

In other words, the money earned by strength before was lost, and in the first half of the sixth year, it turned against the wind and earned 2.2 billion in one go. There is no doubt that Haidilao has stood up in 2023. There are many success factors behind this, such as: benefiting from the optimization of gross profit margin and labor costs, bringing stable efficiency improvement to the company. However, in addition to these macro-operating factors, I think there is another place that cannot be ignored, that is, the service variable "marketing".

1. Efficient service

In the 1960s, Professor Jerome McCarthy of Michigan State University summarized marketing as the Marketing Theory of 4Ps in his book Basic Marketing.

Let’s start with that.

Think about it, when a restaurant group has standardized stores, products, and prices, how can it improve its profit efficiency? The answer is to rely on "table turnover rate and customer flow."

What is table turnover rate?

The number of times each table is used (customers finish their meals and leave) in a day or a meal period. In other words, it measures how many groups of customers a restaurant can serve in a specific period of time.

For example:

If a restaurant has 10 dining tables, and during dinner time (assuming 4 hours), each table is occupied by an average of two groups of people, then the table turnover rate is 2.

A high turnover rate means that the restaurant can serve more customers more efficiently, thereby increasing revenue; so, what was Haidilao's turnover rate in the past few years? Let's make a less rigorous but very interesting comparison:

Assuming that we compare Haidilao’s table turnover rate in a certain fiscal year with its stock price in the following year, it is not difficult to find that the table turnover rate can, to a certain extent, be regarded as an "important indicator" of its stock price.

Taking 2018 as an example, the turnover rate reached 5 , and then in 2019, Haidilao's stock price rose by about 83% . In 2019, the turnover rate dropped slightly to 4.8 , but the stock price rose by 93% in 2020.

However, by 2020, the turnover rate dropped to 3.5 , followed by a more than 70% drop in the stock price in 2021. The turnover rate further dropped to 3.1 in 2021 , and the stock price rose by about 26% in 2022.

By 2022, the turnover rate remained at 3.0 , but in the last two months of the year, Haidilao's stock price rose sharply by 92% . Until the beginning of 2023, the turnover rate in the first half of the year rebounded to 3.3 , and it is still rising.

The comparison of figures clearly shows that only when the turnover rate is increased can the money be earned back. In 2018, the turnover rate reached 5, and the company made 600 million yuan in the middle of that year. This leads to a key question: How to increase the turnover rate?

You might say that the waiters are faster, and ordering and paying can be completed quickly; the tables and chairs are properly arranged, so both adults and children can sit comfortably; guests can make reservations online and avoid waiting on site; and even the food is prepared quickly.

However, to sum up these ideas, there are basically two key points:

1. Attract more customers
2. Let them eat efficiently without dragging their feet, forming a cycle. Only in this way can the restaurant's table turnover rate go up.

After the black swan event in 2022, people began to go out more and relax, but it is still a big problem to get everyone to flock into restaurants at this time.

Zhang Yong once said that when eating hot pot, people quickly lose the ability to tell whether the food tastes good or not, but they can clearly tell whether the service is good or not. Therefore, if you want to attract customers, you must provide good service.

What if we only think about service but no one is there?

In the first half of 2023, they saw an opportunity. Concerts were being held one after another across the country, and fans wanted to continue the fun as soon as the concerts were over. After the concerts, there was a large demand for dinner and taxis after the evening.

Moreover, data from the China Performing Arts Association also pointed out that the number of commercial performances in the first half of the year increased fivefold compared to the same period last year; the number of audiences increased tenfold, with more than 500 large-scale concerts and music festivals attracting more than 5.5 million audiences.

This must be seized.

Therefore, after the star's concert, Haidilao arranged dozens of buses to play the star's songs to help fans maintain their emotional value. While waiting for the fans to arrive at the restaurant, the restaurant prepared speakers, microphones, banners, posters, and even prepared a carnival area for the fans.

In this way, fans can enjoy hotpot and have a party at the same time, and they can also make money, killing three birds with one stone.

2. Entertainment Services

After piloting the "Win Ma" service in one city, Haidilao realized that providing diversified derivative services could increase customer satisfaction and significantly boost sales. Therefore, it decided to do whatever it takes to be popular, and starting from the Dragon Boat Festival, it launched all the services that could be provided to fans.

for example:

In the past, when people went to eat hotpot, they would just watch ramen performances and listen to Happy Birthday songs. Now, influenced by celebrity fan culture, some new entertainment elements are gradually being introduced, such as K-POP, window cleaning, and the recently popular Subject Three.

Even though iQiyi, Youku, and Tencent Video have not yet successfully created an entertainment music stage in the mainland, Haidilao has begun to try.

In Xi'an, they noticed that almost all tourists who came here went to the Tang Dynasty City that Never Sleeps to cosplay, put on Hanfu, experience the ancient culture, take photos and have fun; to make it convenient for everyone, Haidilao started the Hanfu rental business directly online, and for 99 yuan, it covers all the work of the photo studio, from shampooing, makeup, DIY bracelets, to manicures. Except for taking the photos, everything else can be done.

In Wuxi, Haidilao found that many customers were busy at work during the day and had no time to wash their hair, so they simply introduced a shampooing service in the store. The products are also not inferior, with Dyson hair dryers and reclining chairs with massage functions.

There are also more detailed services, such as the "Frozen Roses" launched on Valentine's Day. Consumers can bring their own roses, and the store will provide transparent cups and ice cubes to seal the flowers.

Later, the game got bigger and bigger.

According to public information, they simply established an internal incentive mechanism, committed to meeting the various needs of customers, and also invited some KOLs, anchors, and celebrities to check in at the store.

These innovative services have made Haidilao frequently appear on hot searches on the Internet and become the center of various hot topics, such as "It's not that male models can't afford it, but Haidilao is more cost-effective", "What is the secret code for Haidilao gifts?" and more than 50 other topics.

Netizens have commented that the way Haidilao is trying so hard to make money makes office workers feel ashamed; this money should be earned by Haidilao.

On the other hand, the service transformation has also made Haidilao realize that abandoning the traditional single service model and instead adopting an entertaining approach combined with fan culture to serve customers can actually touch people's hearts.

This strategy is similar to how an amusement park uses the appearance and talents of NPCs to attract customers.

Perhaps, they didn't think too much at first, just wanted customers to have fun and come to the store for a meal. But in the end, this kind of coupon is very useful. Some analysts pointed out that in the second half of this year, the turnover rate of some Haidilao stores reached more than 5 times.

The question is, is this kind of business appropriate?

Now more and more service industries are beginning to tap into the personal potential of their employees, and services are becoming more and more innovative, but this has also caused some controversy because there are always "i" type people who cannot accept this high profile.

One time I went out to dinner with a friend, and when the food was served, my friend jokingly said, "Aren't you staying for two days for your birthday?" The waiter heard it, and I got really angry.

At first, I was really pleased when they served me a bowl of clear soup noodles with egg. But not long after, a group of people came forward to sing, which was a bit too much . Although I am not so socially anxious, it was really a socially dead scene to have a group of people standing in front of you and you couldn't pick up your chopsticks and had to listen to them finish singing awkwardly.

Another time, I went to "Oriental Haircut" to get a haircut.

It was just in time for their 10th anniversary celebration, a "Thank You" event. At 2pm, all the staff suddenly stopped what they were doing and started singing around the customers.

I was halfway through my haircut and couldn't stand up when my hairstylist went to sing. A group of people sang "Thank You" around me. It was really intoxicating. I don't know how others feel about this sudden style of painting, but at least, it seems to me like a distraction.

3. Value-added Services

From a business strategy perspective, Haidilao's commitment to service and its continued commitment to it are indeed of great significance in promoting innovation and development of industry services. Moreover, value-added services actually extend the business scope vertically, helping to increase brand awareness and competitiveness.

for example:

Manicures, birthday celebrations, shoe polishing, and live dance performances are all based on an in-depth understanding of consumer needs, enriching the experience while increasing sales and traffic.

If a company provides good service, it will definitely have an impact on the industry, just like the "Shuang" hotpot under the Jiu Mao Jiu Group, which many other companies are scrambling to imitate.

When you go out for a meal, you can see slogans like “Who cares how old he is? Long live happiness. Who dares to eat with normal people?” everywhere. There are also 2D waiters who rap, dance and dance in unison. The little brother who was serving you food in the last second will turn into a Dancing King next to you in the next second.

This is not being cowardly, this is social savagery.

If a person over 35 years old goes to eat there, it would be simply a life-changing experience. The most important thing is that dance has become a unique and recognizable cultural label of their hotpot, like a super symbol that distinguishes it from other brands.

But have you ever thought that such high demands on service industry employees, especially in an environment like Haidilao, may conflict with certain company values?

On the one hand, the company emphasizes teamwork and personal development of employees, but on the other hand, the ever-increasing pressure to perform and showcase talents will squeeze out those employees with average abilities but who work diligently.

In the service industry, employees have different cultural and educational backgrounds, and their main task is to provide good service rather than show their talents. If too much emphasis is placed on performance and entertainment elements, those employees who have solid work ability but are not good at performance will inevitably feel marginalized, and experience pressure and psychological burden.

From a customer's perspective, I have a different view.

When I visited Hainan before, I found that the restaurants and barbershops there never offered value-added services. What did they offer? The answer is "professionalism".

It's like, if you want a haircut, the shop won't do anything fancy, they'll just give you a 40-minute head and neck massage, free of charge, with no sales pitch. If you go to eat and are satisfied, they'll give you a dish directly, and if you can't finish it, they'll make a membership record, and you'll have a dish in your name, so you can eat it for free next time you come.

I guess these are what people need.

The reason why Haidilao founder Zhang Yong emphasizes service is that he treats people as human beings, gives them trust and respect, and first improves employee satisfaction, which will naturally lead to customer satisfaction.

Zuo Hui of Shell once studied Haidilao’s high-quality replication capabilities. Later, he formulated Shell’s own mission as “a dignified service provider and a better living environment.” I think he was probably inspired by this.

In my opinion, these so-called services are nothing more than marketing in disguise.

It is also a marketing strategy centered on emotions. In any case, the fact that Haidilao has achieved the best mid-term net profit since its listing within one year and continued growth in the second half of the year undoubtedly proves that its approach is desirable.

IV. How to do it

So, what should we learn? I think there are three points:

1. Don’t create momentum, just take advantage of it

Creating momentum and leveraging momentum are two different methods. Creating momentum means that the brand itself creates marketing activities, topics or events to attract public attention, which usually requires a large amount of advertising money and TVC promotional videos, which is relatively risky.

Leverage existing hot spots, events, and popular culture to promote your products. This strategy does not require a completely new concept, but rather relies on something that is key to the public, and through association with such phenomena, the brand is exposed.

An example is:

I remember that Baidu shot a brainwashing advertisement called "What Did You Say" a few years ago. The content in it was all about the issues that the elderly were concerned about, such as, what is a foot artist, what is PUA, what are U1S1 and so on?

What is NetEase Cloud Music for? What is the purpose of hiking? What is the light yellow long skirt? I thought green tea was drinkable tea, but what kind of tea is the green tea you are talking about?

These are relatively popular keywords that are still fresh in people's memory. However, Mixue Ice City is playing a deeper level. From the IP leveraging the snowman at the beginning to the theme song leveraging the children's song "Oh, Susanna", consumers have formed an infinite loop of memory codes.

This year, Haidilao also took advantage of celebrity concerts and the social momentum behind them to closely link its brand with hot topics.

2. Use topics of interest

Why should we use interest culture instead of single fan culture? Because I think that fan culture, although valuable, is not as influential as it used to be. Although there are indeed some loyal fans who will follow a star for a long time, such examples are few after all.

Interest culture covers a wider range, involving lifestyle, hobbies, entertainment, emotions, food, sports and many other fields. These interests can be quickly transformed, bringing people together and forming a resonance among large groups.

If you often watch short videos, you will find that many topics can quickly trigger widespread resonance. For example: What did I lose this year? Life without pilaf is meaningless, Princess, please get in the car...

I remember that there was a period of time when Oriental Leaves was very popular. After careful research, I found that it was because many people felt depressed during that period. The copywriting it provided just happened to touch on this emotional need and provided people with psychological compensation, which is why it became popular.

3. Provide a venue

Many brands know that capitalizing on trending topics is part of buzz marketing.

But have you ever thought about why, despite the countless topics emerging on major platforms every day, many brands find it difficult to seize these hot topics? Or why some KOLs or ordinary people can become famous with just one sentence?

The key lies in the “closed loop” of marketing.

From leveraging momentum to utilizing topics, the ultimate goal is to form an instruction, which is like, we have to complete a certain task or check in at a certain place.

KOLs and ordinary people can complete a certain instruction on the platform in the first time, so they can get more than 100,000, but what about brands? Generally, there is a lack of instructions after participation, making people unclear about what to do next, so it is difficult to trigger actual actions.

If you don't believe it, think about it. Is the dance instruction of "Subject 3" from Haidilao? Of course not. It is popular on short video platforms, but now many people eat out and think of Subject 3. Why go to Haidilao?

Because Haidilao has successfully transformed this online hot spot into an offline experience, allowing customers to experience this popular culture in the physical store. Therefore, people are willing to experience and interact.

Just like Mixue Bingcheng, every action on the Internet is guiding you to participate, or to buy in offline stores.

These three points have become standard actions of Haidilao. Perhaps in the future, there will be more popular dances, topics, and memes that will become the secret code for eating hot pot and the password for traffic. Think about it, right?

V. Conclusion

Haidilao marketing, you can learn it. Compared with the series of memes such as Subject 3, Princess, Please Get In, Every Cause Has Its Effect, and It's Too Hard for Me, perhaps brands should stop and think about whether the current users have really changed?

Author: Wang Zhiyuan

WeChat public account: Wang Zhiyuan (ID: Z201440)