3 counter-common sense points in channel cooperation

Recently, I met with several newly appointed presidents and directors of the platforms. During the communication, I found that they always had some unrealistic ideas about channel cooperation. I wrote them down to share with you. Maybe your old directors and presidents will also make such mistakes.

If it is a basic mistake, I will not write it down. For example, many directors want to ensure both investment effects and natural volume, they want to quickly increase natural volume and also define the target release deadline, etc. I will write about three very common mistakes that people usually think are fine, but are actually problematic and counterintuitive.

Channel cooperation counter-common sense point 1: Don’t bargain with your second-party, let the second-party bargain with each other

Don't bargain with your contractor. This may sound treacherous, but veterans in the Internet industry will all smile knowingly at this. If you directly negotiate the price with Party B, you won’t know to what extent the price is appropriate.

In fact, a mature channel promotion director should not bargain or haggle with the other party. There are three reasons:

1. Buying is not as good as selling

Party B is always smarter than you, and the benefits you gain from bargaining will definitely be returned during the implementation process.

I remember when I first entered the industry, our policy towards channels was to keep prices as low as possible. Therefore, every time I sign a contract, no matter what price the other party offers, I will first lower the price and then execute it. Each time the contract is renewed, the price is lowered a little bit.

The advantage of doing this is that the company's costs are gradually reduced, but the disadvantage is that the number of users brought by the channel is getting smaller and smaller, and eventually to zero.

I remember there was a channel that charged 1% of the annualized investment amount, which was already a very low price, and it contributed a fixed investment of tens of millions every month. Later, our awesome boss reduced the fees a little bit at the end of each month, and deducted more fees each time. Finally, it reached an outrageous level, and he charged 0.5% of the annualized investment amount. And then there was no later.

This is a true case and has now become a running joke among our former colleagues.

2. “The essence of the market is competition”

I fully agree with what Liu Qiangdong said. There are many channels and many Party A units in the market. This is a process of mutual selection. If Party A keeps lowering the price, the channel party will also switch to cooperate with Party A.

If you raise the price afterwards, it will be too late. The market is in chaos and Party B has changed his mind.

The biggest problem with price reduction is that many times the channel brings real users to Party A, but due to constant price reduction, or some newly hired directors always get the bargain price and ask the channel party: Why is the customer acquisition cost of my channel more than 150 yuan, but it costs 800 on your side? Can you do it for 150 yuan? So they had to dig deeper into the channels to make money.

Therefore, when we cooperate with channels, we cannot just look at the cooperation price, but also need to look at comprehensive data such as retention rate and reinvestment rate.

3. Baidu Principle - Let the demand side bid

In the game between Party A and Party B, Baidu is the smartest one. As a giant Party B, Baidu has never asked Party A to invest more in advertising, nor has it ever asked Party A to pay a high price. Baidu made the smartest decision by letting the parties bid against each other. The market will always negotiate the best (close to the highest) price.

So what I said about not bargaining with the channel parties is also based on this logic. Let the channel parties compete and bid with each other.

If I decide to place a certain type of advertisement, I usually find channel A and tell him that I currently have three channels, BCD, to screen. I set a unified standard and ask all parties to quote. In this case, the various channel parties usually will not quote an outrageous price, because they are not facing you, the only party A, but a large number of BCD channel parties, and everyone has dealt with them many times. The safest way to get a deal is to keep the price low (or even rock-bottom).

Of course, in general, I choose the one with the second lowest price. The reason is also based on the above theory: sellers are always smarter than buyers. In a multi-party bidding situation, the price is usually not high.

The risk of choosing the lowest price is that there may be deviations in the later execution process, leading to various problems. Choose the second-lowest channel and tell him clearly that the price is not the lowest, so you hope he can be better in service or execution. Leaving some room for profit to the other party is conducive to long-term cooperation between the two parties.

On the contrary, those who try their best to lower the price and take advantage of the situation will never go far.

Here is another situation: What if you want to place an advertisement in an office building elevator? Focus Media is the only company that dominates the market, occupying 80% of elevator advertising resources in office buildings. How can you compare prices among three companies? There is still a way.

Counter-common sense point 2 in channel cooperation: You should pursue the channels that ignore you relentlessly, and be wary of the channels that pamper you in every way!

According to normal thinking, cooperation should be mutual, and Party A who pays the money should have a slight advantage. Therefore, it is natural to find a party B with better cooperation. This kind of thinking is particularly evident among directors who come from traditional industries.

In traditional industries, such as real estate companies, I am the party A who pays the money, so I should be arrogant and it is only natural that I owe the party B, the builder, the project payment. But in the Internet industry, Party B is the boss. This is the sad reality that all Party A units have to admit. Party B, who controls the traffic , holds the lifeline of Party A in the Internet industry, and those who give money are all grandsons.

Look at Baidu, the Party B, and then look at us, the Party A who pays the money. It is clear who is the boss and who is the grandson.

So here comes the counterintuitive point in channel cooperation: a channel that ignores you may very well be an awesome high-quality channel, and you should pursue it relentlessly.

Channels that have just started commercialization or have a large amount of high-quality traffic are considered high-quality channels. The channels have just started to be commercialized, and the business system has not yet been established, so the cooperation is not so smooth. However, the channels that control high-quality traffic, even if they are equipped with business services, will ignore Party A. The reason is simple: there are too many client companies looking for them.

A few days ago, I came across a long-tail traffic resource based on the WAP side, which was charged according to CPM. The CEO of this resource happened to be my childhood friend. I approached him for cooperation and he recommended the business director to me. Logically speaking, under this kind of relationship, their business director should be responsive to every request.

But no, ask him if he can bill CPM or CPC? "no" . Asked if he could give me a backstage view of the effect, he said, “No.” Why? Because dozens of Internet game companies and blockchain companies are vying for this kind of long-tail traffic resources, they have no shortage of advertisers at all.

On the contrary, channels with a high degree of cooperation are generally not high-quality channels. For example, a certain high-speed rail wifi channel resource provider will often have beautiful women visit you, explain the facts and reason, and provide all the data on competing products. They will also return visits from time to time, invite you to dinner and meetings, and help you return to the throne of glory as Party A. The quality of this type of channel is generally not very good because they focus all their energy on business invitations.

Good resource providers tend to ignore you, and you almost have to "beg" Party B to cooperate.

Channel cooperation counterintuitive point 3: Channels with too high conversion rates often have poorer user quality

I remember that in 2013 we invested in a rebate channel with an investment registration rate of 80%. The director was quite happy to get the data and praised the channel for bringing in very accurate users and having compound P2P attributes.

The higher the investment registration conversion rate, the more accurate the users coming from the channel are. Why do we say that the user quality is poor? But the reality is: the retention rate of these users is almost 0. In other words, those who come here are all freeloaders .

Now, it is very worthy of caution to invest in channels with a registration rate above 5%. Dear directors, take a look at your landing pages and consider your background and strength. How can you require a high conversion rate without a solid foundation?

The above are three counterintuitive mistakes that are easy to make during channel cooperation: bargaining with the other party, preferring channels with high cooperation, and focusing on channel conversion rates.

Check yourself and see if you make the same mistake.

The author of this article @callan compiled and published by (Qinggua Media). Please indicate the author information and source when reprinting!

Product promotion services: APP promotion services, advertising platform, Longyou Games