With advertisements all over the screen, has Luckin Coffee made a comeback through marketing?

"Did you buy a whipped coconut latte today?" If you are a coffee lover, you should be familiar with this sentence. After experiencing negative scandals such as financial fraud, stock price plummeting, suspension of trading, and delisting, Luckin Coffee returned to the public eye with a high-profile marketing approach, and its new product, raw coconut latte, was deeply loved by netizens.

"Thanks for the invitation. The product director is in Hainan. He just got off the plane and is climbing a tree."

This was the joking response from Luckin Coffee’s official Weibo account when its hit new product, Raw Coconut Latte, was sold out and netizens urged for restocking. The subtext was “We didn’t expect the new product to be so popular,” with a hint of Versailles in its helplessness.

Not long ago, Luckin Coffee just experienced a "breakout" experience: because it invited Liu Xuxiu, a contestant of "Creation Camp" who became popular for his slogan "I don't want to go to work", as the summer iced coffee recommendation officer. The "Teacher Li goes to work" joke and an advertisement featuring three contestants of "Creation Camp" quickly attracted public attention.

After experiencing financial fraud, stock price plummeting, suspension and delisting, Luckin Coffee now seems to be unaffected by previous events. Instead, it has returned to the public eye in a high-profile manner like a new internet celebrity brand. There is almost no other brand in China other than Luckin Coffee that was known as "creating many myths" in the early days and was able to make a comeback after experiencing negative events.

And the popularity must be driven by marketing. What is so unique about Luckin Coffee's marketing strategy that has enabled it to escape the shadow of negative events and make a comeback?

1. Choose the right spokesperson

Before Liu Luxiu, Luckin Coffee had always attached great importance to the role of spokespersons.

In 2017, Luckin Coffee opened its first store in Beijing, and one month later invited Zhang Zhen and Tang Wei as spokespeople. Both of them have excellent film works, and have a good reputation for their strong professional ability and low-key and generous temperament. The temperament and characteristics of the two also enabled Luckin Coffee to successfully convey its brand positioning of "high-quality commercial coffee" to the public.

In 2019, Luckin Coffee expanded its product categories, launching more than ten new products, including Xiaolu Tea, and clearly positioned its target audience as "young office workers." To match the preferences of this group of people, Luckin Coffee chose a new spokesperson - the national brother Liu Haoran. Although Liu Haoran is young, he has accumulated many acclaimed TV dramas and film works, and he is also a talented young actor.

It is not difficult to see from the image positioning of the three actors that in order to open up the "urban white-collar" market, Luckin Coffee initially preferred celebrities with works, good temperament and good public reputation as its spokespersons.

On this basis, Luckin also carried out a variety of marketing activities online and offline around these spokespersons.

Offline, Luckin Coffee has placed advertisements in subways, elevators and other places in first-tier cities, attracting consumers' attention with high-intensity exposure. Online, gift cards are designed using the spokesperson’s photos to encourage consumers to give coffee to others; on Weibo, a raffle for autographed photos or signed coffee cups is held, and the coffee cups are also differentiated according to the spokesperson’s own characteristics. For example, Tang Wei corresponds to the white professional coffee cup with outstanding temperament, and Zhang Zhen promotes the mature and stable classic black coffee cup.

If the endorsements of Tang Wei and Zhang Zhen helped Luckin Coffee increase its popularity and establish a good brand image, then after selecting Liu Haoran as the brand spokesperson, Luckin Coffee gradually began to focus on interaction and promotion with young people and fans in fan circles.

Based on the consumption characteristics of fans, Luckin has set up a series of marketing activities. For example, fans can receive a "Meet Haoran" series blind box randomly given away by the brand for free by purchasing the deer antler cup and physical gift cards promoted by Liu Haoran. With the help of fans' promotion, the discussion volume of the Weibo topic #刘昊然代容瑞幸咖啡# reached 295,000, and quickly gained a certain influence in the fan circle.

This year, when Luckin Coffee "comes back" after a period of silence, it still first sets its sights on its spokesperson.

In March this year, Luckin Coffee invited actress Tan Songyun as its brand ambassador to promote its spring cherry blossom product series. In April, Luckin Coffee reached a financing agreement with Hillhouse Capital and Joy Capital for a total of 250 million yuan, and soon after invited Liu Xuxiu, a popular student from "Creation Camp", to promote its new summer iced coffee series.

In the variety show, Liu Xuxiu gained a lot of fans by inadvertently establishing a "sad, sincere, and funny" personality. Just over three months after it became popular, the super topic #利路修LELUSH# currently has 454,000 followers and has been read 3.69 billion times. It is obvious that Luckin Coffee is targeting his popular image of "not wanting to go to work" and the fan base behind him.

Strike while the iron is hot, Luckin Coffee increased its investment and interaction with its fans, including launching splash screen ads, forwarding fan-created posters, inviting Liu Luxiu to share in the brand's live broadcast room, and holding lucky draws. In response to the upcoming launch of the new drink in the color of Lee Luxiu's support color, Luckin Coffee has also launched a series of activities to stimulate fan interaction, such as winning prizes for posting photos.

From Tang Wei, Zhang Zhen, Liu Haoran, Tan Songyun, to today's Liu Luxiu, we can see that Luckin Coffee's considerations on celebrity endorsements or promotions have shifted from the previous temperament, business, and professional tone to youth and high popularity, with the goal of gaining the favor of young consumers in a timely manner.

And the facts have proved that Luckin's change of thinking in selecting spokespersons was correct - on Weibo, the reading volume of #瑞幸冰咖啡推荐官利卢修# reached 130 million in 20 days; the playback volume of Li Luxiu's first commercial on Bilibili reached 1.844 million, ranking eighth in the entire site ranking; Luckin's Baidu Index increased by 775% month-on-month; in the week when the commercial was all over the screen, it set the second largest sales record in history.

2. Private Domain Self-help

In addition to selecting spokespersons, private domain operations are another strong card for Luckin Coffee.

Since its establishment in 2017, Luckin Coffee has been committed to building its private domain position. In the early stage, Luckin Coffee first used methods such as free first cup and issuing coupons to divert consumers from offline stores, mini-programs, official accounts, and Weibo to place orders on the official APP. It not only accumulated platform traffic, but also optimized and precisely arranged store location selection by analyzing consumer data placing orders on the APP.

After the epidemic last year, Luckin Coffee began to develop WeChat community operations.

Before building the community, Luckin Coffee had also accumulated a large amount of private traffic through expansive social fission activities such as inviting friends to get free things and coupons on multiple channels, laying a solid foundation for building the community.

For example, users can see the message "Add Luckin's Chief Welfare Officer Lucky to receive a 58% discount drink coupon" in the menu bar of Luckin's official account and in occasional tweets; in offline stores, mini-program malls and APP pages, users will also be guided to follow the official account and add the corporate WeChat of the "Welfare Officer" when receiving coupons. After adding the welfare officer’s WeChat, users will receive an entry link to join the group and will be pulled into different customer groups based on their personal location.

Officials said that these traffic-generating activities enabled Luckin to quickly accumulate more than 9,100 customer groups, more than 1.1 million social group users and more than 1.8 million corporate WeChat customers in the three months after its private domain layout. The upper capacity of each customer group is 200 people. If each group can achieve a 2% transaction volume every day, that is, sell four cups a day, the daily customer order volume of all communities can exceed 35,000 cups, and more than 1 million cups can be sold in a month.

At the same time, the effect of large coupons is also demonstrated in the private domain. For users in the community, Luckin’s group robot will send fission mini-programs at irregular intervals every day. Users can get coupons by inviting friends to join the group, effectively improving the efficiency of attracting new users. At the same time, Luckin’s corporate WeChat will also push beverage coupons every day. These coupons have a limited validity period and can stimulate users to purchase again in the short term.

Of course, in addition to continuously attracting new users, Luckin's community operations are now gradually upgrading to be more refined, with the marketing focus placed on the sedimentation of community users, promoting the retention of old users and increasing repeat purchases. For example, there are four welfare distribution times in the community every day, including poster reminders, distribution of flash sale coupons, community-exclusive discounts, occasional surprises, product push and other activities. At the same time, there are two mini-program live broadcasts by Coffee Experts every week. After users place an order once, they will receive reminder messages and large discounts to encourage them to place orders again.

The benefit of private domain operations is that marketing costs are greatly reduced, reach and conversion rates are increased, and user stickiness is enhanced. At present, "private domain + community" has become Luckin Coffee's third largest order source channel after APP and mini programs. Judging from the results, according to the "2020 Mini Program Internet Development White Paper" released by Aladdin Research Institute, the popularity index of the luckin coffee mini program ranked second in the industry among the catering mini programs in 2020, second only to Meituan Takeout. It can be seen that Luckin's layout of private domain positions after the epidemic is a wise move.

3. Discounts, co-branding, and new gameplay

In addition to spokespersons and private domain operations, Luckin Coffee also has new ideas in other areas.

First of all, it is essential to issue large subsidies to attract consumption. The difference is that judging from the transaction price after placing an order with a coupon, Luckin's subsidy has been reduced. In order to make consumers feel that they are "getting a discount", Luckin will still issue multiple coupons and mark each product with a discounted price.

The second is to do various joint ventures.

Among them, what can directly stimulate consumers is the launch of co-branded credit cards in cooperation with multiple banks. Consumers can earn points or redeem coffee coupons under certain conditions by swiping their cards, making overseas transactions, or paying in installments. For example, at the end of March 2020, Luckin Coffee launched the Minsheng·Luckin Coffee co-branded credit card. Cardholders can use the card benefits to enjoy up to 258 cups of Luckin Coffee drinks for free throughout the year. Although this joint product was quickly withdrawn due to fraud, it was soon re-issued after Luckin Coffee resumed normal operations.

At the same time, co-branding on products is also one of the ways to enhance product appeal and brand influence. For example, Luckin Coffee once teamed up with Summer Reina Ice to launch an artist-co-branded gift card, and printed the design pattern on a coffee cup sleeve; the coffee cup pattern of Luckin Coffee's new cold drink was redesigned by Craig&Karl Studio, and the highly saturated color logo is more eye-catching; and it teamed up with LINE FRIENDS to launch a cute little blue cup packaging for hot drinks, which received widespread acclaim on Weibo.

For big IPs like LINE FRIENDS, Luckin's co-branded designs are even richer, such as new blind boxes and peripheral products such as mugs. The soft and cheerful brand elements such as Brown Bear and Cony Rabbit capture the cuteness and tastes of young people. At the same time, the fun of collecting blind boxes and peripherals can also stimulate users to consume frequently in the short term.

In addition, Luckin has also launched more promotional games and small activities that emphasize interactivity and follow real-time hot spots.

For example, if you drink three cups of coffee in total, you can open a lucky Ferris wheel and participate in a lottery. The prizes include iPhone 12, lucky shake cup and drink coupons. Obviously, this activity is more popular among young consumers. When placing an order, a combination recommendation window will pop up on the mini program interface, and the page design will guide consumers to select supporting foods such as cookies and daily nuts to achieve the purpose of bundling promotions.

As the college entrance examination approaches, Luckin Coffee has also launched exam season packages, which it named "sprint buff", "full score buff", "refreshing buff" and "refueling buff", including a variety of optional combinations such as drinks and desserts. The prices of these packages are set to be more favorable than purchasing individual items, and they are also limited in quantity, which further increases their appeal to consumers.

From the popular raw coconut latte and popular spokespersons to mature private domain operations, and many new marketing methods going hand in hand, Luckin Coffee has made more explorations and attempts while continuing its previous focus on preferential subsidies.

According to the liquidation report submitted by Luckin Coffee's provisional liquidator, Luckin Coffee had achieved overall store profitability in August last year. Its revenue in the first three quarters of 2020 was 565 million, 980 million and 1.145 billion, respectively, showing a steady growth trend.

The private domain layout strategy has also specifically improved Luckin's profitability. According to the Aladdin Index, the popularity index of Luckin Coffee's mini program this month has also increased significantly compared to last month. It has to be said that Luckin Coffee has really turned the tide since the financial fraud scandal by relying on a series of new strategies.

Author: Yang Ce

Source: New Marketing Engine