How to increase followers through Luckin Coffee’s coupon event!

Will Luckin Coffee become the next ofo?
Luckin Coffee is a capitalist liar!
I am not optimistic about Luckin Coffee’s layout at all, as it sells both coffee and fruit tea.
…

I just finished a round of interviews. During the communication with the interviewers, I found that almost all of them were not optimistic about Luckin's development model. The two words I heard most were liar and lunatic.

Next, I would like to analyze why I am optimistic about luckin from three dimensions.

1. Background

The Chinese coffee market has been around for ten years since 2008.

• During the past decade, CAR has maintained a fleet of 100,000 vehicles, and the company's debt ratio has dropped from as high as 99% to a healthy level today.
• In the past decade, UCAR has successfully carved out a niche in the online ride-hailing market and has become China's first profitable online ride-hailing platform.
• In the past decade, Shenzhou acquired Borgward, the last closed loop of the human-vehicle ecosystem.

Just when everyone was fantasizing about how Shenzhou would develop rapidly in the travel industry or the automobile industry, Luckin went public!

In 450 days, the market value soared to 6 billion US dollars.

Of course, there is no sudden legend in this world. As early as the establishment of Luckin, the UCAR team began a one-and-a-half-year-long layout.

2. Operation

1. How did Shenzhou Zhuanche become the first profitable online car-hailing platform?

At the beginning, luckin’s target users were almost the same as those of UCAR. In simple terms, they are uncles and aunts who have money to spend and work, so it is natural for Tang Wei and Zhang Zhen to become the first generation spokespersons.

UCAR has marketing strategies such as free airport pick-up and drop-off and Golden Friday.

In 2015, the average cost of acquiring a customer on the Internet was approximately RMB 20-30, but UCAR offered a subsidy of RMB 100 to attract new users.

According to the profit model of the private car service, after deducting the revenue and adding the advertising and endorsements, the average customer acquisition cost is about 60-80 yuan.

Such crazy publicity and subsidies can simply be described as crazy, but many people around me don’t know about this activity. Then there is a situation. First, you are not the target user of Shenzhou Special Car.

When it comes to subsidies for attracting new users, people are most concerned about three points: quantity, retention, and user health. The accuracy of this subsidy can be described as terrifying. The repeat consumption rate of new users is as high as 60%. We also know what kind of users are those who want airport pick-up and drop-off ideas, so we will not describe them in detail.

In other words, Shenzhou has used two to three times the money to retain two to three times the healthiest users with higher spending power, and obtained two to three times or even more profits from them. So is this subsidy worth it?

2. Luckin’s three magic weapons to attract new customers: coupons, endorsements, and fission

Luckin’s strategy for attracting new customers is very direct: you get a cup, I get a cup, and it’s free for everyone. HOW DOES IT PERFORM? Our data speaks.

Here, Analysys Data’s industry report on Luckin Coffee’s operations can be clearly seen.

Let’s take a look at luckin’s customer acquisition cost:

Against the backdrop of rising Internet traffic costs, Luckin's customer acquisition costs have been declining. In 2019, when it was difficult to find a valid user for 100 yuan, Luckin Coffee was able to acquire one with just 17 yuan, and we have already talked about the quality of its users.

Why is this happening?

1) Coupon opens the brand

The average Chinese person drinks less than one cup of coffee a day, which is why many people are pessimistic about Luckin Coffee.

Countless pessimists are fantasizing that when Luckin Coffee stops issuing coupons and people can no longer buy a cup of coffee for 20-30 yuan, they will finally laugh out loud in front of the screen when they see the news that Luckin Coffee goes bankrupt.

I think this day will never come, because Luckin will never stop using coupons.

Most people believe that coupons have two main purposes: to acquire users to enrich themselves and to burn competitors to open up the market. That’s right!

But they forget that Luckin is meticulous in brand building and store management: from the logo, to the coffee machines and coffee beans, and even the copywriting for each promotion, everything is carefully crafted.

Every lucky purchase is a psychological shock to consumers. I heard many people say, I never drank coffee until I drank my first free cup of luckin...Luckin is using coupons to cultivate user habits, and its brand effect has reached its extreme.

2) Coupon strategy

I was also fortunate enough to participate in the layout of luckin's coupons. When calling up data from various aspects, I found that the average daily turnover of luckin's stores is approximately between 100,000 and 800,000 yuan, some of which are as high as more than 1 million yuan, and of course more are less than 100,000 yuan.

The uneven regional consumption capacity has led to this phenomenon. What is more interesting is that in stores with less than 100,000 stores, the majority of consumers offer discounts below 50%. In the context of an industry where a 20% discount is enough to make a profit, I proposed a new coupon model.

In fact, the unified pricing of goods across the country is extremely anti-human (the emergence of e-commerce has led to this phenomenon. The labor costs and resource costs in different places are already very different, not to mention China, where the gap between the rich and the poor is huge).

From a branding perspective, we will not set different prices for different regions and then be labeled as racist - but we can have different coupons for different regions. The Internet's business model came from traditional business and should return to traditional business. Users who spend more in stores with lower profits may get more 32% off coffee coupons in the future (OK, I revealed too much).

3. Luckin's three-stage rocket

The three-stage rocket of Internet marketing has become a topic that cannot be more common. So what is the third stage of luckin like?

First level

Luckin Coffee Shop occupies the mainstream user scenarios of first- and second-tier cities and acquires high-quality consumer users.

Xiaolu Tea franchise stores, from downtown to fourth- and fifth-tier cities and even township-level markets, are creating a national brand.

Those who were not optimistic about Luckin were closely watching Luckin's first-stage rocket, but little did they know that the amount of fuel in the rocket was astonishing.

Level 2

Co-branded peripherals, 69 small blue cup, 139 deer antler cup, blind box, meteorite bag. The next new product? Well, let me tell you, Deer Shirt!

Further promote the lucky brand by relying on popular stars and hot topics. Celebrities will no longer be popular, topics will no longer be fresh, but luckin’s new products will only become more and more incredible.

Level 3

EMMM, there is really nothing more to say about this, which is the scene consumption that has become extremely popular recently: selling coffee machines? Selling coffee beans? In fact, it is also possible to enter the fields of education and sports. Have you noticed the recent collaboration between Luckin and NBA?

Someone will ask again, aren’t there three dimensions? What about the other one? See you next time!

All in all

Go luckin!

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