I received a consultation request:
“I want to increase the CVR from 2% to 5% to increase new inquiries. I am considering trying the ○○ strategy, what do you think?”
My response was:
“It might be better to increase the advertising budget rather than implement a new strategy.”
Why did I suggest increasing the advertising budget instead of focusing on the strategy? Because, after objectively evaluating the information provided and the market response, I realized that pushing for higher numbers wouldn’t yield significant improvement.
If there were a defect that could be improved, it would be a thing to work on, but the current numbers aren’t bad, and the product itself isn’t bad either.
In this case, investing time and money in a new strategy would be less rational than simply increasing the advertising budget to boost CVR, which would yield a more certain return.
Aiming to raise the CVR to 5% is subjective and overly optimistic. Viewing the market subjectively leads to distorted perspectives, causing valuable time and money to be wasted by pursuing unattainable goals.
Today, I want to talk about how to engage with the market properly.
Do Not Bring Personal Feelings into the Market
We form various hypotheses and implement strategies, but the answer always lies in the market.
As previsouly discussed above, the CVR of 2% is the market’s answer. Anything beyond that doesn’t align with the market, so trying to force a strategy would be no value.
If you cannot accept the market’s answer, it’s likely because your evaluation in the PDCA cycle (Plan-Do-Check-Act) is not appropriate.
PDCA involves evaluating the results and making improvements based on some rationale or hypothesis. Personal emotions should not be involved.
However, those who view the market subjectively tend to see things through distorted lenses, driven by speculations and desires, like “I want it to be this way” or “It should be this way.”
This prevents you from utilizing the results obtained from the market effectively. It’s crucial to view results and numbers objectively, without emotion or speculation, and derive the next step logically.
Why Do People Become Subjective?
I mentioned that those who distort the market with their subjectivity do not evaluate results properly. But why does this happen? It’s because they lack a benchmark for measuring the market.
In other words, they haven’t conducted enough research. By analyzing the market size, trading area, competitors, and various aspects, you can estimate approximate figures. This helps determine whether there is room for further improvement by comparing the obtained results with these estimates. You understand the endpoint or acceptable range.
People without a benchmark cannot evaluate the market results and end up interpreting things based on their convenience, seeking more than is reasonable.
Research the market, assess the product’s value, and aim to bridge that gap. This way, you can grasp your current position and naturally derive the next step.
Make Judgments from an Objective Perspective
Many people continue to chase after unattainable results or hold excessive expectations because they don’t realize their views are distorted.
While the intent to improve is important, it’s necessary to objectively analyze the market and set a target range first. Otherwise, you’ll mistakenly believe the product can grow indefinitely.
Rather than aiming for infinite growth, understand that there is a high probability of growth up to a certain point and implement strategies to bridge that gap.
Engaging with the market involves bridging the gap between the market and the product’s value. This is the mindset to adopt.
