A case lesson from the O2O market: How startups balance branding and operations!

Recycling, a familiar yet unfamiliar term, is an image of hawkers driving tricycles and shouting on the streets. But now, it is a multi-billion-dollar market that is being pursued by other entrepreneurs . In the money-burning O2O service, we try our best to get consumers to pay for the service; in the recycling market, we provide services that allow users to happily cash in their old items. What is worth discussing is how to operate with different ideas in such a reverse market.

In the operating system of the recycling market, we must first understand the structure and interest distribution of the industrial chain in order to better balance operating costs and build a partnership system. Each major category in the recycling market has a corresponding back-end manufacturer, as well as multiple levels of recyclers between users and back-end manufacturers. Back-end manufacturers will classify and process the recycled items. Some of them will become raw materials, some will be sold in the secondary market, or donated. After the emergence of online Internet recycling companies, they acted as middle-level multi-level recyclers, with the front end directly facing users and the back end directly corresponding to cooperative manufacturers, reducing intermediate links and costs.

This is similar to the roles in many startups. The discount rate for most recycled items is very low, such as clothes, newspapers, etc., which are sold by kilogram or ton. There is only one type of item, mobile phones and some digital products, which have a very high discount rate and considerable profit margins.

Currently, the most popular websites in the capital market are mobile phone recycling websites, such as Aihuishou and Huishoubao, which attract users through transparent discount evaluations and cooperate with mobile phone manufacturers on the back end to earn considerable price differences. The operation strategy of mobile phone recycling websites is not complicated. It mainly focuses on user acquisition and operation. Users are acquired through methods such as backflow from mobile phone manufacturers’ official websites, online advertising and offline stores, and users’ willingness to recycle is stimulated through marketing activities.

Let us look at the new operating method of the "alternative" recycling market through another product. "9 Shells" is a mobile Internet APP focusing on "door-to-door recycling + old items management".

In terms of model positioning, 9Shell focuses on recycling old items of multiple categories. It does not use the difference in recycling prices as its profit target, but instead uses data from the recycling process to shape users’ consumption models and explore new consumption upgrade opportunities. Unlike all other recycling organizations, except for some digital products such as mobile phones that are recycled with cash, all other old items are recycled by exchanging 9 Shells’ points “Hai Dou”.

In terms of operational philosophy, in the words of 9 Beike, traditional recycling, including mobile phone recycling websites, are all one-time recycling transactions, and 9 Beike hopes to create a continuous user interactive experience and turn recycling of old items into a lifestyle habit. Analysis of operation strategy In such a front-end operation system, we break it down into three steps: brand marketing - traffic distribution - online operation. (In fact, the recycling backend, including logistics, warehousing, manufacturer docking and recycling costs, is the decisive link.)

1. The floating and reality of brand marketing

For a new brand that wants to define "recycling" as a new way of consumption and experience, brand marketing is the first priority. 9Shell gradually carries out brand promotion through brand display, event marketing , scene experience and public welfare ethics concepts.

1. Offline product promotion cooperation

By holding on-site theme events with large offline traffic venues, exhibitions, etc., partners provide venues and publicity resources, and 9beike provides event concepts, event organization, reward support, venue fees, etc., thereby obtaining a large amount of brand exposure, on-site experience and user conversion.

From August 8 to August 9, 2015, 9 Shell cooperated with Hangzhou Chengxi Yintai City and built a blue Shell City covering an area of ​​about 300 square meters in the first floor lobby, and held a large-scale second-hand item recycling experience event. Through staff explanations, promotional materials, and electronic screen promotional videos, the "9 Shells" recycling and environmental protection concept and specific recycling process are promoted and demonstrated to users.

Download the 9 Shell APP on site and receive different coupons. You can exchange old batteries for new ones and empty bottles for new drinks within about 1 month. On August 9, a children's hand-painted eco-friendly cloth bag competition was held on site. The shortlisted works won prizes by voting through the official account. 2015.08.28-08.31, the Second Parent-Child Expo of Zhejiang Province, 9 Shells was an exhibitor. They promoted the recycling concept and converted users through methods such as exchanging old items for new ones, environmental signatures, and giving gifts.

On March 26, 2016, 9 Shell and Youlin APP jointly launched old items recycling and idle trading activities in three communities in Binjiang District, Hangzhou.

Looking back at these three events, whether as organizers or exhibitors, the format of the on-site activities is basically similar. The brand image of the former is more prominent, especially for an event of this scale in the case, which is accompanied by high event costs (for good event content and concepts, venue fees can be negotiated for reduction), and the areas and populations covered are very limited. We call this not replicable on a large scale. When it comes to this type of brand promotion activity, due to the geographical limitations of the business and low-frequency demand, brand promotion activities need to delve deeper into users' life scenarios. Through more frequent activities in living areas, the preparation, manpower, time and venue costs of a single event can be reduced.

2. First experience in event marketing

The definition of this type of activity is: through cross-border business cooperation, it brings users a business experience with great benefits, and the brand promotion effect is greater than the actual user conversion. Why is product promotion more important than user conversion? Because the cost of the activity is too high to be a way to continuously acquire users. Let’s look at a typical case.

From September 11 to 13, 2015, 9 Shell officially cooperated with Hangzhou Chengxi Yintai City and joined hands with a number of brand clothing stores in Yintai, including H&M, UNIQLO, GAP, etc., to launch the "Old Clothes for New Clothes" campaign. Users can take their unused old clothes to the 9 Shells concept experience store in Yintai City. If they meet certain quantity requirements, they can exchange them for Yintai's universal cash card, which can be used for consumption in the user's co-branded stores. Promotional notices for the event are posted at the entrances of Intime official stores and various brand stores. The idea of ​​the activity is to let users experience the joy of exchanging old items for new ones. Intime provides brand resources and publicity resources, 9beike provides cash card costs, and brand stores obtain real user consumption. The discounted cost of recycling old clothes is far from covering the cost of the cash card, and these consumer users are actually not the target users of the brand, they are just driven by profit.

3. Sentiment and charity go hand in hand

Another "trump card" of recycling old items is charity. On the one hand, it can gain brand recognition from users, and on the other hand, it can gain brand exposure with the help of the power of charity organizations. On September 20, 2015, 9 Shells, together with comic masters Murong Yindao and Tango, held a charity book signing event at Yintai in the west of Hangzhou. During the period from 09.15 to 09.20, users can initiate the recycling of three old books through the password on the APP, and then go to Yintai to pick up the signed comic books. After selected disinfection and cleaning, the recycled old books were sent to the "9 Shells" library established at the Xiangda Town Central Boarding School in Nangqian County, Qinghai Province. The two masters also used their own Weibo accounts to promote the event.

On October 15, 2015, 9 Shells and the "Shunyi Online" public account donated winter clothes to the Sun Village in Shunyi District, Beijing. Before the event, users can send their old winter clothes to specific recycling locations.

On January 15, 2016, 9 Shells selected 200 winter clothes from recycled old clothes, disinfected and cleaned them together, and then gave them away for free on the roadside in Hangzhou. Many sanitation workers and homeless people received the donations.

On February 4, 2016, 9 Shells and Zhejiang News Client launched a charity event for recycling old newspapers. Users can initiate the recycling of old newspapers through the Zhejiang News client or by registering on 9 Shell with an invitation password. Both parties will contribute to the public welfare fund and recycling points of equal value. The raised funds will be used by the Jinlin Foundation for its public welfare project of "Safety Little Schoolbags" in poor mountainous areas.

We summarize the strategies of these public welfare cases. One of the commercial purposes of doing public welfare activities is to gain publicity, so it is necessary to cooperate with partners who have communication resources or can attract each other, such as "Shunyi Online" and Zhejiang News Client in the case, or public welfare organizations or foundations that have their own influence.

The concept of public welfare is very good, and users who participate or watch will applaud. However, there is no single public welfare activity with a sustained rhythm, and there is no large-scale "battle". The base still cannot be connected.

In this series of traceable brand activities, the offline activity scenes are actually single, the activity themes and rhythms are scattered, and there is a lack of instant scene experience (in such a fashionable and casual place like Intime, would users carry old batteries with them?). It neither achieved the linkage effect of brand effect nor directly acquired large-scale users. In addition to large-scale product promotion displays, more activities should rhythmically penetrate into users' life scenarios, and be able to quickly and directly stimulate users' feelings and actions.

2. Where traffic is located, there should be distribution points

Brand marketing allows users to hear about, recognize and experience the product. To gain more real users, you must have a presence in all scenarios of users’ lives. That’s where the traffic is and that’s where the presence points are. Let’s take a look at how to deploy points in different life scenarios.

1. Backend Feedback to Frontend

Many mobile phone recycling websites like Aihuishou are supported by mobile phone terminal manufacturers. Mobile phone manufacturers open recycling service entrances in their stores and recycling channel entrances on their official websites. For example, the mobile phone recycling website "HuiShouBao" is a recycling business partner of Huawei Mall's official website. This is the win-win cooperation in the industrial chain.

On December 29, 2015, at the launch of Smartisan T2, Luo Yonghao announced that he would cooperate with 9beike to provide old mobile phone recycling services. The official website of Hammer provides a drainage entrance. Users can complete the recycling of specific models through this entrance and obtain a cash redemption code, and an additional subsidy of 200 yuan for the Hammer phone. The redemption code and subsidy can only be used to deduct when purchasing the Hammer T2.

9Shell obtains Hammer’s brand endorsement and traffic entrance. Hammer can activate old users and convert new users of other models. The recycled mobile phones can also generate profits.

2. Fixed physical inlet traffic

There are different approaches depending on the scenario and entity type.

1. Self-operated experience store. 9Shell has its first experience store in Intime in the west of Hangzhou. It is both a fixed entrance and can also cooperate with Intime’s overall marketing activities. Mobile phone recycling websites also widely operate their own offline stores, which serve as brand entrances. Mobile phone recycling itself has considerable profits, and the business can even bear its own profits and losses. However, as a front-end recycling company for all categories of products, it is obvious that store operations will not be able to make ends meet and it will be difficult to implement it widely.
2. Store cooperation. Mobile phone store chains and operator chain stores have settled in for cooperation. This type of store is a full-category mobile phone store that meets the needs of all types of users. The stores provide service promotion venues, and 9beike undertakes the old-for-new business to help stores sell new phones. Currently, much of 9beike’s online marketing is also based on such collaborations and themes. From March 30 to April 5, 2016, users can go to the designated Hangzhou Unicom Yan'an Road Business Hall to have their old phones evaluated on site, and then pay the difference to purchase a new phone.
3. Cooperation between schools, enterprises and government departments. These types of organizations are collective in form and have a unified leader. Through the promotion of class leaders or dormitory managers, corporate administrative departments, and government environmental protection and people's livelihood departments, we can unify the recycling of daily waste items and meet some public welfare cooperation needs. Then, we will launch replacement activities targeting specific enterprises, schools or government areas, and gradually penetrate users at each level.

In November 2015, 9 Shell joined hands with Hangzhou Kaiyuan Vocational College of Commerce to set up recycling bins on campus and used the proceeds as class fees. There are many organizational relationships on campus, including clubs, teacher organizations, work-study departments, media, classes, etc. Their interests and influences are different, which means there are more breakthroughs, opportunities and possibilities. 3. In-depth penetration into life scenes. To put it simply, they are places like residential areas, supermarkets, surrounding parks and squares. The basic idea is to carry out in-depth ground promotion, point-of-sale activities, community cooperation activities, etc. according to location conditions, so as to continuously deepen cognition and interactive experience. Weekends are the golden time for handling idle items. Whether it is self-initiated activities or joint participation through partners, it is necessary to appear around the community more frequently.

4. Local Advertising

Elevator advertising in buildings, light box advertising at bus stops, local media advertising, local forum advertising or entrances, and combined with ground promotion plans, work together in terms of time, region and form.

3. Online Marketing

From the perspective of practical interests, there are two types of idle old items. One is high-value, such as mobile phones and digital products, which will not be thrown away easily even if they are not used; the second is low-value, such as daily necessities, which may be discarded directly if there is no convenient recycling channel. Different marketing points can be extended around these two types. From November 4 to 11, 2015, 9 Shell users initiated mobile phone recycling through the password "Flash Exchange". Recycling personnel came to the site for service, and by paying the difference after the discount, they could directly get a rose gold iPhone 6s.

During the screening of Lost in Hong Kong from September 22 to 28, 2015, users can enter the password "囧囧囧" in the APP and initiate a recycling process. After completing the order, they will be given 2 movie redemption coupons.

From October 27 to November 1, 2015, users can enter the password "energy" in the APP and initiate recycling. After completing the order, they will be given a 30-yuan coupon for Beaver Home/a 50-yuan coupon for Easy Camping (camping equipment)/a 68-yuan coupon for Juruntang (massage and physiotherapy). The above three cases reflect 9Shell’s important online marketing ideas: recycling itself is a behavior that is beneficial to users, but low-frequency demand and the discount of virtual points require more interest incentives. Through self-built costs or cooperation, we introduce rich prizes and exchanges, and through limited-time rewards, we stimulate users to quickly initiate recycling and feel the value of the benefits of recycling.

4. Basic Operation System

Let’s sort out the structure and problems of the basic operating system.

The basic operating system revolves around developing user habits, improving user stickiness, and maintaining user relationships. Let’s look at the problems faced by 9Shell’s online operations separately.

1. Lack of content and guidance

There are many useless product recommendation articles on the APP homepage, and the product selection lacks novelty. The APP needs to provide guidance on recycling prices and cases, as well as display of theme content, offline event promotion and publicity.

2. Guide users

Set a recycling cycle (double the points for orders placed during the recycling cycle, etc.), and notify and confirm via phone, text message or WeChat service account when it expires.

3. The more points are redeemed, the higher the value and activity of the points will be.

Currently, the points redemption products promoted by the APP are ordinary daily necessities, which are dispensable for many people and do not really play their core value. For example, virtual items with stronger immediacy demands can be promoted as the main items, more redemption prizes and services can be introduced, and the redemption difference and recycling combinations can be calculated.

4. WeChat service account operations are disrupted

Apart from cooperating with event promotions, there is no stable content system and output, and no WeChat activities, and there has even been no update for 2 months. Product Brief Here let’s take a look at the product system of the entire 9Shell APP.

• First, the entry points to each level of the product are very confusing;
• Second, the content system is single and rough.

The entire APP has 4 first-level channels, of which the "Recycling" and "Mall" channels are completely repeated with the two buttons on the homepage. In the "My" channel, "Address Management" serves as a secondary entrance, and it duplicates the address management function in the "Recycling" process. “Haidou”, the most important points in the recycling business, is not prominently displayed in “My” and is only displayed in a very small position in “Mall”.

Half of the content on the homepage is a display of the mall’s product recommendations. It is divided into two sections. One section uses a whole article to introduce content such as electric mosquito swatters and skipping ropes, and then guides the redemption. Whether it is the value of the section, the level of product selection or the editing level, there seems to be something lacking. The entire APP seems to have only the recycling entrance and product redemption. The content and guidance seem a bit simple, and the product selection does not seem to be driving enough. This results in meaningless overlap of entrances for the sake of design balance. Going back to the original intention of cultivating user habits and carefully setting up guidance at every link seems more worthy of study. How to strike a balance between brand marketing and operational details, from making a big splash to deepening your efforts? For an actor who has just debuted, while performing brilliantly on the stage, he must ensure that the venue and services are proper and thoughtful, and he must constantly lobby and interact with his audience. Compared with the applause of a single game, bringing operations to the users makes you look more like a real player.

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