Doudian Closed Loop Strategy (Doudian Brand Edition)

After writing about the three axes of Douyin, many friends felt that they were not satisfied enough, and they also asked me a lot of questions about Douyin stores , self-broadcasting, and Qianchuan. I did not talk specifically about self-broadcasting before, and the article on Qianchuan was relatively short. One reason is that the three axes are focused, and the other is that there are trade-offs in value.

Today I will write a special chapter about my experience in operating Douyin stores, self-broadcasting, Qianchuan, etc., as well as some thoughts on the future landscape, Douyin account and store integration, and Douyin brands.

This year, I consulted on a case in the form of a "Douyin brand". Within three months, with "almost no investment", the monthly sales of Douyin "grew from 0 to 10 million", and expanded to online channels to build a private domain closed loop. The changes in these three months have also given me a lot of inspiration, and I will share this case in depth with you today.

01Thoughts on the future pattern

Recently, some brand founders of traditional enterprises have communicated with me. On the one hand, they are grateful that through my articles, they have sorted out their growth ideas and hope to promote it step by step. On the other hand, they are anxious about the uncertainty of the future. The team is still working hard to make up for the shortcomings of e-commerce, but the times have changed again. They have many similarities with the cases shared today, and the content shared in this article may be another way of thinking about branding.

Let me first share a few views on the future landscape:

First, Tmall is no longer the only main battlefield.

If Tmall has not succeeded today, or has declined, it would be N times more difficult to regain its momentum and return to the top positions in its category. If you want to rely on off-site traffic to "extend your life", its value is nothing more than continuing to support the category's position. If you don't have this strength, or the general trend is over, from a strategic perspective, the first thing you have to do is to "make choices". You will "get" something only if you "give up" something.

Second, Douyin brands may be the new future.

The "Douyin brand" I am talking about does not refer to the operational layer of DP or Douyin's delivery, but the brand that has "natively" grown in the Douyin ecosystem in the coming algorithm era. It has content genes, ALL IN Douyin closed loop, category private domain attributes and other characteristics. On the surface, it seems to have benefited from the Douyin dividend, but its essence is the characteristics that are suitable for the content ecosystem. Douyin brands, without exception, are all “content brands”.

Third, DP is a transition to the content era.

DP can indeed be compared with TP. In the past, the core was in the store, but today the core is broadcasting. It’s just that the form has changed. Whether it is live broadcast or self-broadcasting, the essence is to reap the dividends of "brand potential". Adidas can sell 100 million in a month without investing in traffic. Can it be done by changing to another sports brand? DP did not contribute to brand building, but rather switched the ecology, harvested quickly, and accelerated the overdraft of brand potential. DP will eventually become a basic service like TP.

02 The next brand era: Douyin brand

If we divide brands into eras, we are currently at the intersection of the Tmall and Douyin eras. Starting from the second half of 2021, we are likely to enter the next brand era.

The core reason is that the logic of brand building has undergone a fundamental change. Today, consumers' perception of brands comes more from short videos that have been promoted. The relationship of brand building has changed from top-down to bottom-up from the consumer's perspective. Then start from the end in mind, and once you make strategic choices, the growth path will become extremely clear.

In particular, many brands do not have any advantages on Tmall, and even many traditional brands are still working hard to make up for the shortcomings of e-commerce. I think at this point in time, they can basically give up. Because everyone may be facing a new opportunity, starting from the Douyin closed loop, skipping the Tmall era and directly entering the Douyin brand era, achieving overtaking on the curve.

Several key factors that can make a Douyin brand successful:

First, the brand has content genes.

Today, the newcomers who can rise in the era of algorithms, in addition to spending money, are essentially content. Content is the leverage of the brand, and it can leverage the dividends of traffic. The content gene means that the brand has a lot of room for maneuver in terms of communication and creation. It also means that the probability of consumers being inspired is greatly increased, and the efficiency of natural growth can be greatly improved.

The content genes of Huaxizi's "style aesthetics", the content genes of Neiwai's "value proposition", the content genes of Yuanqi Forest's "Internet celebrity temperament", and the content genes of Adopt a Cow's "brand story".

Second, the closed loop of Douyin and WeChat store.

Without Douyin’s self-broadcasting, the Douyin brand would not be established, the closed loop would be incomplete, and it would only be able to attract new customers but not repeat purchases. However, self-broadcasting has already taken off, and the most important thing is that self-broadcasting is cultivating the purchasing habits of the next generation of consumers. It is only a matter of time before Douyin stores have independent malls, so Douyin has completed the entire e-commerce closed-loop environment.

Douyin has been talking about the integration of accounts and stores, but from the perspective of implementation, it is very difficult. The bigger the brand, the more difficult it is to achieve the integration of accounts and stores, because many mature brands have not figured out the positioning of accounts. Even if they think they have figured it out, the ones who implement it are the kids at the lowest level of the company, and there is a high probability that they will go astray.

But it is different from the perspective of a new brand. The dissemination of the entire brand must first rely on the content of the account to achieve a native closed-loop MVP. There is nothing wrong with considering yourself as a KOL. This is a very important basic ability of the Douyin brand and also a self-generating ability. Rely on content rather than traffic investment. Content leads to self-broadcasting, and the sales from self-broadcasting feed back to the account. The account increases followers, and the core assets of the brand are accumulated, thus realizing a positive cycle of value closed loop of integrated account and store.

Third, Douyin’s closed-loop combination punch.

Because I did a Douyin live broadcast today and there were sales, does that mean the brand doesn’t need to invest in KOLs anymore? Obviously not. In addition to the self-generation of Blue V, the core significance of KOL co-creation of content lies in brand potential. Today, consumers are wary of what brands say, but the KOLs they trust are open to accepting. Brands need to leverage KOLs, leverage KOLs’ personalities, leverage KOLs’ trust, and leverage KOLs’ fan stickiness. Without the process of jumping to Tmall, there will be no loss in the link, so the ROI of KOL seeding and traffic investment will be increased by 50%.

Blue V content is the brand’s content gene and self-generating ability. Self-broadcasting realizes a complete closed loop for consumers from purchase to repeat purchase. KOL truly amplifies brand potential and enhances brand influence. Qianchuan Investment, by supporting Blue V, self-broadcasting and KOL, amplifies the ROI harvesting efficiency and achieves the integration of product and effect.

Douyin closed loop formula = (Blue V + KOL + self-broadcast) x Qianchuan investment flow

Today, in Douyin's closed-loop ecosystem, efficiency can be significantly improved compared to jumping between two ecosystems, and there is almost no loss in the middle. Blue V, KOL, and self-broadcasting are also influencing consumers from different angles.

Fourth, the impact of Douyin’s potential on all channels.

In the past, we have invested in many hot-selling products, and the brand has achieved rapid growth due to the hot-selling effect. Not only Tmall, but all channels are growing. In the past, it was difficult to calculate this account, and it was ultimately difficult to quantify the impact of Douyin on all channels, but judging from the results, this impact is very obvious.

In the case I shared today, I spent three months to basically quantify this value, and my conclusion is that it is about 1:1, that is, the sales volume of Douyin's closed loop corresponds to the sales volume of all channels, which is exactly one to one. As time goes by, I believe this data will change. For example, the biggest change is the private domain. At least in the first month, the private domain accounted for 20% of Douyin. So in the future, the sales structure of the Douyin brand is likely to be like this.

Douyin brand sales structure = Douyin: omnichannel: private domain = 1:1:1

The potential of Douyin and its feedback to the channel are 100% certain. Not only is it certain, but it is also a year-on-year relationship.

03From 0 to 10 million monthly sales: Start

In mid-May this year, a friend I have known for many years asked me to help him look at his brand in TP, a Xinjiang milk brand called "Ximu Tianshan". Due to the slow growth on Tmall, he tried to do Douyin live broadcast. As a result, without much live broadcast experience, after more than 10 Douyin self-broadcasts, the sales exceeded 10,000 yuan, which was a surprise, and there was a trend of continuous increase. He came to me as soon as possible, hoping that I could give some advice.

At that time, I asked for a lot of their data, observed several of their live broadcasts, and later went to their live broadcast room in person. After doing a lot of analysis and thinking, I decided to help their company with "growth consulting" for 3 months. It was during these 3 months that I got a lot of surprises and saw the possible future of the Douyin brand.

Let me first explain why I took this case:

First, Xinjiang milk has a strong regional attribute. The "Xinjiang Cotton" incident just made Xinjiang a hot topic in the first half of the year. Based on Xinjiang, I think this niche brand has very good content attributes, such as the Xinjiang Production and Construction Corps, Tianshan Ranch, regional sentiments, etc. There is a lot of room for extensible content creation and dissemination.

Second, the product quality is very good. The brand gave me a box of milk, and as a result, my whole family only drinks this brand of milk from now on. We all drink this brand of milk, including Australia, New Zealand, Mengniu and Yili. Of course, this can also be supported by the data. In a not-so-large data sample, the repurchase rate indicator is extremely high, which is a prerequisite for opening up the private domain.

Third, with the dividends of Douyin’s self-broadcasting and Qianchuan’s investment, the food industry is not heavily dependent on Tmall. If new brands enter at this point in time, they have the opportunity to overtake others.

Fourth, the founder is very reliable. He is a very experienced e-commerce operator. We have worked together in the past and we have a foundation of trust. The team fundamentals are also good. The company is transforming from TP to DP, and I am willing to help.

04From 0 to 10 million monthly sales: Content

We started planning in late May. The first thing we did was to determine the growth path. This path must be short, flat, fast and straight to the point. The more complex the growth path, the more links required, and the greater the investment. The most important thing is that it requires higher team capabilities. The shorter the path, the more "single point breakthrough" it is. All resources are concentrated on one point, and a breakthrough is achieved by hitting it.

The growth path I have determined is: content-driven brand, self-broadcasting to achieve sales, and integration of Douyin, WeChat and store to complete the self-cycle from planting grass to harvesting.

The goal I set for the team is to concentrate our efforts within three months, break through a point, and achieve scale growth. In this growth path, there are two most important things: one is content, and the other is self-broadcasting.

Let’s talk about the positioning of the content first:

First, the live broadcast room itself is the content.

Since it is Xinjiang milk, the content positioning is not milk. There is no need to talk about milk itself. What needs to be talked about is the regional customs of Xinjiang, what kind of region, what kind of grass is produced, what kind of cows are raised, what kind of Corps enterprises are there, and what kind of emotional products are made.

Since we are talking about the regional customs of Xinjiang, the background of the live broadcast room must be the prairie. Can the host be a Xinjiang anchor, wear Xinjiang national costumes, and occasionally perform a Xinjiang dance with a neck twist? Should we go to Xinjiang to trace the origins, broadcast live on the prairie, and broadcast live in the Corps workshop? The content space that can be imagined is quite large.

Later, during the three months of implementation, except for the Xinjiang anchor whose language expression ability was too difficult, everything else was basically achieved.

Second, short videos are the core of brand content.

In fact, we discussed a lot during the process about whether or not to make short videos, whether we can do it, or whether to invest in KOLs, or find big anchors to promote products. Finally, we decided to invest all the limited budget in short video shooting. This is difficult, but it is the path we must take.

My judgment on this decision comes from: one is that for a brand with content attributes, this may be the most cost-effective approach. The difficulty of short videos does not lie in shooting, but depends on whether you can tell a good story. Also, because I have studied such cases, the food industry has already seen niche brands that have achieved content-driven growth, and this path has been verified.

We have planned several main lines of content:

Regional customs series: The logic behind this type of content is that good mountains and good waters make good cattle. We seldom say directly that milk is good, but we use the regional characteristics to attack it, so much so that some video users have left comments saying that cows live better than humans, and many people want to come and herd cows.

Brand traceability series: The logic behind this type of content is a reliable milk company. There was a time when the team went to Xinjiang to shoot a large number of traceability videos, from the Tianshan Ranch, to the Corps workshop, to the cattle shed. Later, an uncle in the workshop who looked like Zhu Shimao became popular in short videos. Whenever the uncle appeared, the short video would become popular.

Corporate sentiment series: The logic behind this type of content is to make niche milk respected and arouse empathy. Consumers all have a characteristic, which is sympathy for the weak. When a small brand is having a hard time but still talks about feelings, it is often very touching. The Corporate Feelings series has produced many popular videos, ranging from comments by industry leaders, to the chairman’s entrepreneurial reflections, to Henan’s immediate disaster relief. Many of them were not planned, but grew naturally after the main content line was determined.

This team is also quite touching. They don't have a particularly large budget and no filming experience. The content they produce is not at all high-end, but it is down-to-earth enough. They will quickly shoot new videos based on users' short video comments and live broadcast messages. One user said, "You released a video today about the issue I mentioned yesterday."

At least this team has proved that it’s not about whether you have the “ability” to do it, but whether you have the “heart” to do it.

05From 0 to 10 million monthly sales: self-broadcasting

Before talking about self-broadcasting, let’s first talk about the traffic logic of Douyin’s self-broadcasting.

First, there will be a one-month support period for Douyin self-broadcasting. From the date of broadcasting, there will be natural traffic push, so any brand can get free traffic as long as it starts broadcasting.

Second, the algorithm for pushing traffic on Douyin is mainly related to several indicators, such as interaction in the live broadcast room, transaction conversion, user stay time, etc. The push algorithm will push the next traffic based on the effective feedback group, and the same is true for Qianchuan.

Third, Douyin provides an opportunity for cold start, but not all brands can succeed. One is whether the product itself is suitable for the live broadcast ecosystem. The second is comprehensive operational capabilities, such as hosting, field control, and operations. Once the cold start phase is over, those with good performance will enter a positive cycle, while those with poor performance will enter a vicious cycle.

Fourth, whether the traffic structure is healthy or not, short videos, natural traffic, attention, investment, etc. A relatively balanced traffic structure will determine the results of the brand's long-term self-broadcasting. For example, Ximu Tianshan almost does not invest in traffic, but its self-broadcasting can achieve monthly sales of 5 million. Streaming is not the core factor that affects the results of self-broadcasting.

Let me share the process of Ximu Tianshan’s self-seeding growth.

Phase 1: Cold Start

After we made the new plan in late May, we started to try shooting short videos, and we improved a lot of details in the self-broadcasting operation. This stage also benefited from the bonus period of Douyin's self-broadcasting. There was traffic push every time we started broadcasting. After many stable self-broadcasts, the traffic also entered a stable state. By the beginning of June, we improved the decoration of the live broadcast room and the anchor's Xinjiang clothing, and sales increased steadily, with the peak sales reaching 50,000 in one day.

During this period, I also conducted a test of traffic investment, and the ROI was about 2+, but I stopped it soon because the traffic investment affected the decline of the core indicators of self-broadcasting, which may cause the model of the live broadcast room to deviate. Therefore, at this stage, everyone should grit their teeth, not take quick-acting drugs, and continue to practice internal skills.

Phase 2: Optimization

Starting from June, we started to release short videos. The performance was average in the beginning. Everyone was trying and exploring, until one video went viral. This video had nearly 10 million views and 23,000 likes on the same day. The content was a series on corporate sentiment. We recorded a comment from an industry insider on the channel of Xinjiang milk, "Why doesn't Xinjiang milk have a particularly big brand?" "Because the mainstream channels have been monopolized by those two big brands, your products can't be put up there at all, and you are not qualified to do so."

This video is really touching. So far, it has received 90,000 likes and 18,000 comments. What a ratio! It is equivalent to one in five consumers saying something. The like rate of this content is 20%, which shows that it really touches the hearts of consumers.

This video became popular and sales reached 850,000 on the same day. All the goods that could be sold were sold out. For this reason, the team had to take a break for a while, because the warehouse explosion exposed many problems in the supply chain, and they could only focus on continuing to practice their internal skills.

Phase 3: Amplification

The meaning behind this video and the logic of content-driven growth have gradually begun to be realized, and the team has gained confidence. The team then made many improvements.

First, the richness and diversity of short video content. From being unsure in the past to being able to handle it with ease now, we even dare to seize hot spots and use consumers' feedback to do secondary creation, but the general direction of the content is still based on the three major series planned in the early stage. Short videos have become the largest source of traffic for live broadcast rooms, accounting for more than 60%.

Second, the self-broadcasting operation capabilities have been improved, and the self-broadcasting time has been increased, from the initial 4 hours, gradually to 8 hours, and now to 12 hours. The increase in live broadcast time is conducive to the acceptance of short video traffic. Due to the increase in duration, sales have also seen a steady increase year-on-year, and users’ purchasing habits and self-broadcasting user portraits have gradually stabilized. The final user stay time is 1 minute and 20 seconds, the payment conversion rate is 8%+, the repurchase rate is 30%+, the UV value is 5 yuan, and all core indicators are far higher than the industry standards.

Third, as a trial marketing activity, the live broadcast of the Xinjiang traceability series was well received and ushered in a small peak in periodic sales. The cross-border cooperation with Sumida River Coffee has also achieved good results, with the live broadcast rooms of two brands of similar size cross-directing traffic.

Fourth, seize several key points to achieve steady sales growth. The first node was 618. Driven by the huge success of the first video, we caught up with the tail end of 618 and finally achieved sales of nearly 2 million. The second node is very special. It was the disaster relief in Henan in July. This was not planned but mission-driven. As soon as Henan was hit by the disaster, a convoy of donated milk drove out from Xinjiang. The team also participated in the whole process and shot a large number of short videos. These videos were very touching. Ximu Tianshan was also the first Xinjiang enterprise to participate in disaster relief in Xinjiang. Influenced by the corporate sentiment, consumers also "bought wildly" and self-broadcasting reached the second level of sales. The third node was 818. There was nothing special about it. It was just a head-on collision. Thanks to the content potential accumulated in the past, the self-broadcasting operation capabilities, and sufficient preparation, the sales volume exceeded the 5 million monthly sales mark.

06From 0 to 10 million monthly sales: Channels

With the viral video on TikTok in June, sales continued to rise. Ximu Tianshan has become the absolute No. 1 milk in Xinjiang. Even in the dairy industry dominated by strong competitors, it has always been in the top ten and is often the daily sales champion. As the brand's momentum on Douyin continues to grow, Douyin's influence begins to feed back into channel sales.

From May to August, sales of Tmall flagship store increased by 3 times, and JD Supermarket increased by 6 times. The channels began to invite brands to settle in, and gradually entered channels such as Hema, Tmall Supermarket, and DaV Store.

By the end of August, monthly sales through non-TikTok channels reached nearly 5 million, which was exactly the same as TikTok’s own live broadcasts.

During the process, I have been paying attention to core data indicators. One of the indicators is that the average repurchase rate of self-broadcasting is 30%+ (it has been as high as 40% per month). I think the time has come to enter the private domain. When designing the private domain path, we considered two questions:

The first question: Why do consumers buy in private domains?

If the mainstream channels are consistent, there is obviously no reason for private domains to exist. Finally, we found that convenience is very important for repurchase of milk. She bought this type of milk for the first time, and she will buy the same type next time, but in larger quantities than the first time. At this time, if I send a message and place an order quickly, you can send it to me as soon as possible. The user demand for immediacy is very high.

The second question: What do consumers want to buy in the private domain?

The live broadcast room is often a first-time experience. People buy a small amount to try it out. If it’s good, they will buy more and larger specifications at a more cost-effective price next time. We found that milk is a consumable, with a stable amount consumed every month, quarter, and even year. If we design quarterly cards, annual cards, and long-term membership products, it will save you the trouble of booking in the private domain, and it will be more cost-effective. The public and private domains can achieve staggered product operations, and the public, private, and consumers will ultimately win-win.

07 Conclusion

After three months of growth consulting, I was fortunate to witness a team with strong execution capabilities achieve a monthly sales of 10 million from scratch. Recently, I also reviewed with the Ximu operation team and discussed the feasibility of the Douyin brand. Some views can be shared with you:

The first is: potential energy

The essence of channel sales growth is the continuous improvement of the brand's potential on Douyin and the accumulation of Douyin content volume. Ximu Tianshan will subsequently support it through more dimensions, including cooperation with KOLs and Douyin's top anchors. The greater the brand's influence on Douyin, the greater the feedback to channel sales will be.

The second is: casting flow

The recent test ROI of traffic investment is about 1:4. The stability of the live broadcast room model is already ideal. I don’t think it is necessary to aggressively boost sales. If it can develop in a healthier and more benign way, I would rather invest more in content and private domains, which are all assets. If the growth has not reached its limit, then let the bullet fly for a while. If it has reached the ceiling, we will do the math and fight to the end.

The third is: private domain

The August data MVP has been preliminarily verified that this effort is a long-term, steady stream and a core asset. If there is investment in traffic one day, the profitability of the private domain will be the biggest support for the investment in the public domain.

The fourth is: shaking the brand

Whether this model is replicable, if the brand has content attributes, private domain attributes, and high repurchase demand, then we believe it is feasible. Recently, I have also been thinking about how a native Douyin brand should start based on the Douyin ecosystem. At least Ximu Tianshan has verified a lot to a certain extent.

There are many restrictions on the operation of Ximu Tianshan, and it has to be said that it is a bit regrettable: the operator is the DP role and it is impossible to invest more in the brand. With a limited budget, investment must take priority over business growth. The lack of KOL investment has, to a certain extent, failed to enhance the brand’s potential. The same goes for traffic investment, which cannot compete with several large companies.

Indeed, under limited conditions, in three months, with almost no investment, we created a record of monthly sales from 0 to 10 million, and embarked on a different growth path. Even today, when self-broadcasting is very popular and investment is soaring, we can still achieve 60% of the traffic coming from short videos, and "content is king" still holds true.

I hope this article can provide some thoughts and references for those new start-ups and those companies that are still in the process of traditional transformation. Since they have missed the last era, they might as well go ALL IN to the next era.

Douyin brand, I'll wait for you in the next era.

END

Author: Growth on the road

Source: Growth on the way