Tmall Marketing Methodology White Paper

The booming development of the Internet economy has brought about tremendous changes in people's "thinking, marketing, channels, and competitive landscape." But the Internet is also a double-edged sword. While it solves the problem of timeliness of information transmission, it also brings about the widespread spread of various negative information.

Guan Qingyou believes that the Internet has not made it easier for different social groups to reach consensus. On the contrary, social stratification has become more serious. It can even be said that it is not the interests that are irreconcilable, but the values ​​and concepts that are irreconcilable, which makes it more likely to produce more irrational behaviors.

From a business perspective, although the Internet does not require expenditures on manpower, material resources, or store rental costs, further reducing transaction costs, it has also had a huge impact on the real economy.

Taking e-commerce as an example, Liu Qiangdong believes that e-commerce has created 10 million jobs, while 20 million people have lost their jobs in traditional industries. It is people who understand the Internet who are taking away the jobs of mom-and-pop shops that do not understand the Internet.

Moreover, as the "multi-platform, multi-touchpoint, low-bonus" Internet market takes shape, the disadvantages of the Internet have begun to become truly apparent. The surge in customer acquisition costs has made the differences between online and offline, and between the physical and virtual economies increasingly smaller. An Internet economy with traffic but no experience is more difficult to drive repeat purchases and build trust.

Thus, this competition has a new confrontation point. The popularity of the private domain concept means that the Internet has begun to truly treat users as customers rather than just traffic, and offline companies have also realized the value of data and traffic behind users.

Source: Tencent's "2021 Smart Retail Private Domain Growth Guide"

Private domain has brought about the comprehensive integration of online and offline, physical and virtual economies, but do you really understand the methodology of private domain operations?

Yesterday, Tmall x Deloitte released the FAST marketing methodology white paper . Due to the representative positioning of the Taobao ecosystem in the online Internet battlefield, we can also understand this methodology as a private domain layout based on the platform operator's standpoint.

Although online and offline are merging, the flow of value in business can be divided into high and low levels. For offline operators, they should find their own private domain methodology, otherwise they will fall into a situation of misaligned business stance.

The following are the main points of the report:

In recent years, with the rapid development of platform business and digital economy, the rise of various new online business scenarios, and the rise of the enterprise DTC (Direct To Customer, a marketing model that directly faces consumers) transformation trend, the scenarios for enterprises to directly reach users are becoming more and more abundant.

However, the fragmentation of scenarios has brought about a surge in marketing costs, and few companies have sufficient marketing funds to achieve public domain traffic interconnection across all platforms and scenarios. Therefore, the birth of private domains solves the cost problem of acquiring users in all scenarios in the public domain.

By implementing a series of private domain operations methods such as accumulating water before big promotions, solidifying user relationships, enhancing the attraction of private domains, and increasing the user life cycle value, companies or brands can find their own users who can use them for free, at their disposal, and who can be reached repeatedly.

Regarding the extension of private domain, Tmall believes in the report that it should include all channels, the entire user cycle and the entire value chain:

• Omni-channel: Private domain operations in a narrow sense mainly focus on operations on one-party channels that can be used for free and at your disposal. However, due to the existence of a large amount of "people, goods, and places" data in the consumer goods and retail industries, the integration of online and offline, and the connection between public and private domain data and labels will further enable business improvement and innovation.
• Full user cycle: Redefine the consumer life cycle and journey based on different consumer statuses, such as anonymous users, fan users, registered users, and member users. This includes scenario-based journey construction for the purpose of reaching and marketing, as well as long-term journey planning for the purpose of improving loyalty throughout the life cycle.
• Entire value chain: Position the private domain as an important position for enterprises to research and gain insights into consumers. Through full-chain insights into consumer behavior, use data to optimize the brand's end-to-end value chain business and carry out digital transformation of the entire business.

Based on the above thought system, in August 2018, Tmall introduced the FAST marketing methodology ( brand awareness, operational efficiency, brand loyalty, and consumer quality ) as the core indicator of consumer asset management to help brands conduct in-depth operations based on the population dimension.

Simply put, Tmall’s FAST marketing methodology is similar to OPPO’s FAST integrated marketing (First awaken cognition, Accurate understand demand, Stable stabilize conversion value, Thoughtful strengthen operation).

The basic logic of this entire set of methodologies is to move from the public domain to the private domain as the core line, through its own traffic ecological advantages and scene penetration capabilities, and using big data to achieve refined operations from user awareness to continuous repurchase.

In a sense, the FAST marketing methodology is very similar to the traditional funnel-type marketing model. It also starts with public domain traffic and gradually accumulates core fans to finally complete the harvest.

The difference lies in that the online platform accelerates the efficiency of each level of the funnel under the scenarios of big data empowerment and ecological layout.

However, the essence of private domain is to use services to increase repurchases while reducing the cost of brand full-scene marketing.

In the past, the fast marketing methodology emphasized purchasing public domain traffic and using platform tools to harvest short-term private domain people's private domain gameplay, which made it difficult to realize the long-term value of private domain traffic.

Therefore, in this iteration of fast+, Tmall made some upgrades in its mechanism to better leverage the long-term value of private domain traffic. Although the platform's dominance has not changed, merchants can get better returns on their service purchases.

Highlights:

• For the first time, a full-link operation model was proposed with private domain as the core, and linkage between the whole domain and the public domain, from relationship building to value enhancement.
• The original indicator system has been upgraded, and new efficiency and value indicators with private domain as the core have been added to make refined operations clearer and more specific. At the same time, the four micro-campaigns and eight sub-scenarios for implementing private domain operations around the four indicator systems have been elaborated in detail.
• Provides a detailed action and inspection checklist for the control and protection mechanisms involved in the brand's implementation of private domain operations
• It emphasizes the direction and necessity of upgrading ecological service providers from the perspectives of organization, technology, and operational capabilities, so as to resonate with the needs of brand private domain operations.

Four major driving forces:

• Sustainable operation of private domain relationship number (Capital):

This indicator mainly helps brands understand the total number of users they can sustainably operate. The number of private domain relationships that can be operated sustainably includes all users who have established a connection with the brand and can be repeatedly reached by the brand through the private domain.

The connection relationship includes the store’s members and fans, as well as users who follow the brand’s own live broadcast room, enter the store’s group chat, establish exclusive customer service, etc. The private domain includes a series of operating tools with Tmall flagship store as the core, such as stores, group chats, self-broadcasting, exclusive customer service, mini programs, subscriptions, etc.

• Role relationship deepening efficiency (Conversion):

In all the private domain relationships of a brand, the depth of relationship, contribution value, transaction efficiency and communication willingness of each user with the brand are different, so private domain operations require relationship stratification.

The results of private domain operations depend not only on changes in the scale of the private domain, but also on whether user relationships have deepened. The process of private domain operation is actually the process of user relationship transition. Brands need to make use of the more comprehensive labeling capabilities provided by the platform to analyze and stratify users, as well as conduct refined operations tailored to each individual to achieve a transition in relationships and thereby tap into deeper user value.

• Field gravity (Connection):

Whether the users brought by the brand in the public domain through paid or free means can be efficiently taken over in the private domain will have an important impact on the size of private domain relationships.

The platform provides brands with a variety of private domain tools, such as self-broadcasting, group chat, mini-programs, etc. Brands must not only optimize the efficiency of a single field, but also optimize the overall effect of all fields from a global perspective, such as finding the best path for relationship sedimentation, deepening and conversion, analyzing and diagnosing the entire field, and finding the optimal combination.

• Role Relationship Value (CLV):

Among brand users, there is a group of people who, in addition to bringing value to the brand themselves, can also actively produce high-quality UGC (User Generated Content) for the brand, spread brand awareness, and bring new users to the brand.

This group of people are high-value groups for the brand. They are the target groups that the brand needs to focus on cultivating, empowering, and developing into brand KOCs. Therefore, when measuring user CLV, it is necessary to measure both their transaction value and their communication value.

Many companies have realized that the current marketing trend has shifted to consumers themselves, and all products and services are beginning to be built around consumer relationships.

In the past, user relationship management was often the only way for offline business marketing. With the launch of Tmall fast+, it also marks that the core of the online platform's private domain operations has begun to shift from GMV to CLV.

It is worth mentioning that online private domain marketing has a positional assumption: that is, consumers are online 24 hours a day.

According to a Penguin Intelligence report, Generation Z is accustomed to sharing their lives and work online and are the shapers of the Internet context - "always online" is their norm.

Statistics show that 71.7% of Generation Z netizens use their mobile phones for three hours or more a day, and as for offline entertainment, 61.3% said it does not exceed one hour. They are immersed in short videos, live broadcasts and social networking, and are accustomed to watching videos.

Building customer relationships takes time and depth. As users become more and more immersed in the online world, online platforms hope to upgrade the relationship with each user through refined matching of people, goods and places, and personalized operations, thereby enhancing the sustainable operational value of each user.

For more offline brands, connecting user relationships and online platforms has become a necessity. However, in addition to embracing online platforms, the real way out may be for offline companies to rediscover marketing methods that suit the needs of Generation Z consumers based on the brand's business stance.

*Screenshot source: Tmall x Deloitte "FAST+ Methodology: Global Consumer Continuous Operation with Private Domain as the Core"

Author: Community Marketing Research Institute

Source: Community Marketing Research Institute