In 2021, do brands still need to engage in private domain business?

Today, when traffic is not easy to acquire and retain, private domain traffic seems to be a good choice, and many companies have begun to build their own private domain traffic. In 2021, do brands still need to continue to engage in private domain business? What methods should be used for traffic operations?

Recently, because I was looking for opportunities, I came into contact with some bigwigs in the maternal and child, fast-moving consumer goods, and content payment industries. Among them are new domestic products and beauty products with long-established brands.

In exchanges with many senior executives in the maternal and infant and fast-moving consumer goods industries, I found that in 2021, everyone unanimously took the private domain as a new growth point for their brands and tried out various operating models.

01 Where are the value and opportunities of private domain in 2021?

With the changes in the overall environment, the price of traffic is getting more and more expensive. When ZZ started advertising in 2015, it only cost 0.2 yuan to have a follower for a beauty public account. Now it has risen to 10-20 yuan. The cost of having a follower for a beauty Douyin blogger has also risen from less than 1 yuan per follower to more than 5 yuan.

Faced with soaring marketing costs, brands are more cautious in their market budgets and pursue product and effect integration, such as the live streaming sales that everyone is doing. It is sought after because it can bring direct, immediate and visible benefits to brand growth.

In ZZ's opinion, the value and opportunities for brand owners to engage in private domain in 2021 are as follows:

1. Huge traffic pool, potential growth point

During the operation process, ZZ found that there were obvious differences between users who placed orders in private domains and users who placed orders on e-commerce platforms. In other words, private domain users are a potential customer base that has yet to be tapped by brands. As a carrier of private domains, WeChat has a super traffic pool of over 1 billion daily active users, which can provide strong traffic support for brand growth.

2. The commercial closed loop of private domain transactions

In the private domain of WeChat, it has its own business closed loop. Through mini-programs (transaction platform) + official accounts/video accounts (content output) + communities (user services), it can efficiently reach users, greatly shorten the transaction path, improve conversion efficiency, and complete the closed loop from customer acquisition to user education to conversion and transaction.

Dingdong Maicai has long been using mini programs to build transaction scenarios, with transactions through mini programs accounting for more than 50% of the entire platform's transactions each month; Nian Gao Mama, which gathered a large number of fans through its official account in the early days, has a user base of nearly 10 million, and its mini program e-commerce (educational products + children's daily necessities) business has long been booming, building a business empire of its own.

3. Many business models need to rely on private domains

Private domain is also a service scenario. For example, in online education and content payment industries, WeChat communities are important places for users to attend classes, and many courses rely on private domain communities to complete.

After purchasing the product, users will complete their learning through videos, live broadcasts, etc., and consolidate their review through signing in and other methods; at the same time, user feedback and comments will form product dissemination content, bringing more attention and new users.

For example, the middle-aged and elderly people who are not so sensitive to the Internet need to be provided with one-on-one guidance by the brand in the private domain in order to complete the service and experience the product.

The private domain is an important place for brands to build trust with users, and trust is also an important factor in stimulating users to place orders. These are conditions that other e-commerce platforms do not have.

Compared with traditional e-commerce platforms, WeChat’s advantage lies in: self-circulation of traffic

1) WeChat’s content and social interaction can bring about a self-circulating flow of traffic through dissemination. In the private domain, products are both commodities and content.

Users can be reached multiple times in the private domain through official accounts, video accounts, and Moments ads; however, e-commerce often requires continuous import of other public domain traffic to create a closed business loop. Users leave after making a purchase, and to recall the brand's own users, a large number of advertisements need to be placed on the e-commerce platform.

Private domain users will be attracted by content, experience products, and then spread new content through product experience, thus forming a new round of attraction and conversion, thus creating a self-circulating traffic model.

2) On e-commerce platforms, the common Diamond Exhibition Through Train is more of an act of buying traffic, and you get what you invest. In the private domain of WeChat, by promoting products through public accounts and using big bloggers with distinctive personal IPs, you can both plant seeds for content and harvest a wave of user conversions and transactions, taking into account both product and effect integration.

3) Private domain (official account + circle of friends) seeding + (mini program) conversion, after finding the target population and delivery channels, a business model with a balanced input-output ratio has been developed. The subsequent growth is exponential. It can be said that one point of investment will get ten times the return, which is very tempting.

A certain Western bakery relied on a 19.9 yuan new customer attraction to guide new users to follow its official account and gained more than 10 million users. Users can place orders directly through the mini program on the official account.

After new users complete their purchase, we guide them to add their accounts and reach them through the social network + friend circle matrix to increase their repurchase rate, with monthly GMV reaching one million.

This is also the core reason why many people regard private domain as a brand incubation and new growth point.

02 The value and gameplay of private domain

The operation of private domains has a long history. The earliest successful WeChat business teams have already obtained Harmony Number. Which brand owner would not be tempted?

So now the question is: what kind of model is most suitable for your own brand?

When I contacted the bigwigs of various brands, I was often asked: "What do you think is the value of private domain?" and "Do you think private domain can be successful?"

First of all, there must be value in doing private domain business. As mentioned above, there is such a huge traffic pool on the market, and it is also a self-circulating platform with a closed transaction loop. WeChat is the only one in the market, and such a large traffic position should not be abandoned.

Secondly, whether private domain business can be successful depends on what goals the brand wants to achieve and what kind of private domain model it wants to adopt. From the perspective of the user's life cycle, the best solution for the private domain is to adopt different operating models, realize different values, and find the optimal growth and conversion path suitable for one's own brand.

How brands can find the optimal growth and conversion path for their own products in the private domain may refer to the following methods.

1. Initial stage: Acquisition of seed users

For start-up brands, private domains are a good place to acquire seed users.

The first step is to build your own user base on WeChat: official account + mini program , so that traffic in the private domain can find the brand, and gather to the brand’s own base through investment, cooperation and diversion.

Step 2: Filter out target users through brand population portraits to obtain traffic and seed users . In the early stage, it is recommended to cooperate with suitable public account bloggers, supplemented by some information flow advertising. Taking beauty brands as an example, when choosing a public account, it is recommended to look for public account bloggers with more obvious personal IP labels to cooperate with, as their fan stickiness can improve the brand's conversion efficiency.

Basically, after three rounds of coverage, the brand's target audience has basically received a brand baptism, while also taking into account product conversion. In the initial stage of acquiring seed users, users can be converted into customers.

▲HFP makes extensive use of public account KOLs to conduct comprehensive user education and acquire users from them, diverting e-commerce traffic, and generating a 1 billion growth per year

Step 3: Be well prepared to take over the mini program, and use content + marketing methods to promptly convert the users who are directed to it into your own customers.

Brands that have been relatively successful in this regard include: shampoo brand Zhiguan, Dingdong Maicai mini program, etc.

Through user portraits, we can accurately identify the target group, cooperate with public accounts and KOLs to fully cover the user group and achieve conversion at multiple levels.

Through methods such as buy one get one free and 0.1 yuan snap up, we import a steady stream of users from WeChat into the official account as a follow-up, directly convert orders through the mini-programs, complete the acquisition and conversion of seed users, and achieve the integration of product and effect in brand promotion.

Of course, many brand owners will say, who doesn’t know the logic of spending money on advertising?

It needs to be made clear that private domain traffic does not mean free traffic. If you want to obtain traffic and conversions without spending money and be able to reach a certain scale and level, Jack Ma would be tempted.

Every operator may have been asked by the boss: a hundred thousand+ spread, a hundred thousand+ fission, a million+ growth...

Behind these cases, there are two overlooked points: What is the user base of 100,000+ that causes the fission spread? What is the ROI of a million+ growth conversion?

We often hear that brand xx is doing very well in the private domain, but we are not clear about what is good about it and whether it can be copied. In the final analysis, there is still a long way to go from a successful fission to a sustained and effective conversion model, and it is nonsense to talk about profitability without considering the scale.

What are the advantages of starting with the private domain and incubating new brands?

Private domain delivery also requires strategy. The cost of pure information flow delivery is bound to be high, so the traffic delivery method of comprehensive strategy (large KOL industry communities) is worth learning.

Because current short video platforms, e-commerce live streaming, etc. have attracted the budgets of most brand owners to a certain extent, the traffic value of their platforms has naturally risen, and the price of WeChat public accounts has fallen accordingly.

At this time, some pioneers are making a fortune quietly by using the private domain. For example, some teams on the market are specifically acquiring high-quality public accounts and directing their fans to their own platforms for conversion. The cost per user is 20-30 yuan, the ROI is quite good, and it has already achieved a certain scale, which is worth trying and referring to by brand owners.

The essence of user conversion is: revenue = traffic * conversion rate * average order value * repurchase rate. They all buy traffic, and the "kingly way" is to go where the traffic has the highest cost-effectiveness and the best conversion rate.

2. Mid-term: Exploring user value

There are three common business models for private domain strategies: relying on private domains to acquire traffic and new users for conversion (new brand incubation, social e-commerce/micro-business models), relying on brand offline stores + shopping guides to acquire users (O to O) and retain them in private domains for conversion, and relying on e-commerce platform users (B to C) to direct traffic to private domains for repeat purchases.

For brand owners who already have a certain brand accumulation and reputation, are in a relatively mature stage and have not yet started to do private domain, the value of private domain is still beyond imagination.

On the one hand, the private domain will become a new potential growth point for the brand, leveraging the huge traffic of the WeChat platform to increase the brand's growth (how to increase brand growth can be started from traffic delivery, joint cooperation, etc.); on the other hand, through private domain operations, the user value can be effectively tapped, which is what we often call the user LTV value (user lifetime value: which can be understood as the total value that can be generated from user acquisition to loss).

How do mature brands develop private domains? First of all, they need to build a complete set of user service paths, that is, the matrix model of official accounts + mini programs + personal accounts/circles of friends. It is a traffic receiving platform, a user conversion window, and a position for user reach.

Secondly, determine the North Star indicator for private domain conversion, that is, what goals the brand hopes to achieve through the private domain.

During the process of understanding, ZZ found that most brand owners in the mature stage hope to increase the LTV value of users. As for how to improve the user's LTV value, we can start with two key data: user repurchase frequency and user order value.

In the private domain, how to increase the frequency of users’ repurchase and the value of single customer orders requires grasping three points:

(1) Users can place orders on their first visit

Currently, the best way is to encourage users to place orders through low-priced products. A certain beauty brand offers an eyebrow pencil for 9.9 yuan as a benefit for new customers, attracting users to follow its official account and place orders.

The advantages are: the 9.9 yuan eyebrow pencil basically covers the product cost; after users follow-visit-place an order, users with low intention can be screened out, and high-value users can be retained for continuous conversion; through the ordering behavior, users will develop a sense of trust in the brand, which is more conducive to subsequent repurchase conversions.

(2) Provide good user services

That is, solving users' problems and providing benefits to users.

For example, Luckin Coffee’s private domain focuses less on communication and more on welfare, establishes complete marketing content, and distributes coupons in the morning, noon and evening through the community built based on the store. Reach users from time to time through WeChat Moments and private chats, push new products and benefits to users, wake up users and encourage them to place orders.

For example, as a high-order automobile category, the touchpoint for user conversion in the private domain is to solve the problems users encounter in the car-buying process through services, provide professional and efficient solutions, create user stickiness and trust, and thus make users willing to place orders.

(3) Build a membership system

The core of the membership system is to highlight the special services enjoyed by users and the sense of honor given to members.

When a brand's users reach a certain level (only with a certain level of users can the membership system play its value), the brand's private domain is no longer just a platform for traffic acquisition and product conversion, but develops in the direction of brand ecology and maintains long-term retention through a sound membership system.

For example, PDD lets you play Candy Crush every day, and Meituan lets you water the fruit trees every day. Through games and activities, users can stay on the platform more often. Users can exchange certain rewards for the time they spend on the platform, and in turn place orders again.

For example, points are generated through behaviors such as signing in and making purchases, which can be exchanged for high-value coupons and exclusive gifts for members of different levels, allowing brand stores to continue to grow during big sales.

3. Later stage: Brand ecology that connects private and public domains

ZZ believes that the way of shopping in the future may become that brands provide services and purchasing methods in places where there are users, which requires brands to have a global layout.

On e-commerce platforms, there are carriers for traffic reception and conversion, and in private domain ecosystems, there are also carriers for traffic reception and conversion, which can meet the needs of users on multiple platforms and broaden brand growth points.

This platform is not limited to e-commerce platforms, but also includes social platforms, short video platforms, game platforms, etc. They may all become an entry point for brand conversion.

In fact, there is already a logic for information flow delivery that connects the traffic of various platforms.

The difference is that the information flow can only be delivered to a certain carrier, and the traffic of the ABC platforms will flow back to the D platform for conversion, while the global layout will convert the users of platform A on platform A, and the users of platform B on platform B, turning it into a cross-growth trend. For brands, the coverage dimension and reach are greatly deepened.

So, looking back at the private domain as a platform that integrates the triple attributes of content, social networking and e-commerce conversion, the value of running a complete business model for the brand is self-evident. It is a touchstone and a traffic pool.

03 Conclusion

For brand owners, it is not difficult to find ways to play in the private domain. The difficult part is to choose the most suitable path based on the current situation of the brand. In the process of doing private domain, you need to remember the following principles:

1. We must have a holistic view, from private to public domains, from point to surface, and form a certain scale to discuss models and increase profits;
2. During the process, a reasonable ROI is the core indicator for assessing whether the operating model is successful. A sustained and effective input-output ratio is the core indicator for evaluating the private domain business model;
3. Broaden your horizons and change your business monetization thinking. With traffic in hand, there are more ways to convert. When the brand has a certain size and scale in its own private domain, you become that traffic pool.

For example, a certain flower brand has nearly 10 million traffic and a high-net-worth female user base. Is it possible for it to not just think about how to sell flowers? Making brand derivatives, cooperating with other well-known brands, and delivering traffic can all bring profits and growth to the team, and conversely the volume of voice brought about will help the brand continue to grow.

For brands with a high degree of substitutability (beauty, maternal and child care, skin care, etc.), not everyone can dominate a certain field like Alibaba and Tencent, and enjoy the industry effect brought by "monopoly". Why not cash in on the traffic as soon as possible?

Perhaps in this process, through the migration and conversion of traffic, a new path for brand growth will be discovered.

Author: ZS__Fang

Source: ZS__Fang