Social marketing: commercial fringe or mainstream?

Whether there is a community because of social interaction, or whether there is social interaction after building a community, determines the value attributes of the community. Whether the community is a battlefield for business in the Internet era or a weapon for mainstream business determines whether community business will be on the fringe or enter the mainstream.

1. Community is the amplification of social relationships

The commercial value of a community depends on how we correctly recognize and understand the community. Communities are a standard social feature for normal people and are a necessity for normal work and life in the Internet society, but they are not necessary for business.

An individual's social relationships are reflected online as community relationships. However, compared with offline social relationships, communities have the following characteristics:

1. Community does not change social status

People who have social status offline also have social status in the community. Some people stand out because of community operations, but it is definitely not the credit of the community. As long as you have the ability, you can stand out with the help of any social tool.

2. The community moderately amplifies social relationships

Traditional offline social scenarios take up both time and space, so the frequency of social interaction is not high. Social interaction allows more people to interact at the same time and in different spaces, and the frequency of social interaction can be very high.

At the same time, in addition to familiar friends, the community also includes friends of friends and friends with multiple relationships. Therefore, the community moderately amplifies social relationships. In some commercial communities, the social relationships are so complex and busy that they have to rely on robots to chat. Such social relationships are no longer valuable.

3. Communities are naturally distributed

What determines the value of a community is the strength of relationships, not the number of relationships. All attempts to establish centralized communities will find it difficult to succeed.

Because there are limited group members based on strong relationships, purely community-based businesses (such as WeChat business) must establish multi-level communities, or build an IP first and then build multi-level communities around the IP.

4. Social networks increase the frequency of interactions, but it is difficult to change the strength of relationships

It’s better to have a drink offline than to chat about March online. The more we move into the social age, the more valuable offline communication becomes. The more high-end the communication, the more importance is attached to offline scenes. Frequent interactions in the community have created a group of “strange acquaintances”. Although community communication is frequent, offline relationships are still unfamiliar.

5. Social networking with strong relationships makes the community more valuable

Strong ties are the value of relationships. The community is just an amplifier of relationships. If the relationships are not strong, the amplification will not be strong either.

6. The ability to use a community is different from building and operating a community yourself.

With the ability to utilize communities, other communities can also be used by me. This is the open community operation capability. Only by building your own community can you utilize it. This is the closed community operation capability.

2. Only when there is a taste of life can there be a taste of business

Communities exist because of socializing. Therefore, the community must have a sense of life. A community without the flavor of life is an alienated community. As long as there is a community, media attributes can be derived. Media attributes, namely, communication functions. The communication function has already acquired commercial attributes.

Life cannot avoid business topics, and strong relationships endorsing business has always been a Chinese characteristic. Tie strength can influence business perceptions and transactions. Therefore, the community has hidden commercial attributes, and transactions are explicit business, not implicit business.

A community that uses the community as a universal medium of exchange is an alienated community.

The value attributes of a community: social attributes > communication attributes > transaction attributes. A normal community has a sense of life, because of the relationship between work and life, there is a community. People need to communicate efficiently with all kinds of people, so everyone has various communities, otherwise there will be obstacles to communication in life and work in the Internet age.

In an era without community, there is also alienated social interaction. For example, MLM training, because it is an alienated social interaction, requires continuous reinforcement to maintain the existence of the group. The more life there is, the easier it is to establish strong relationships; the stronger the relationship, the easier it is to convert it into business.

There are also many alienated communities nowadays. Because they have no sense of life and are purely for business purposes, they require continuous community activity, such as various red envelopes and sharing. Although the means of staying active are constantly being updated, obstacles will soon be encountered. This type of community is the one that evolves the fastest.

Attract new customers → Convert → Retain → Attract more new customers. This is a community that exists because of business. Normal life and work, forming strong relationships. Communities that need to continue to be active in order to maintain their existence will definitely disband at the appropriate time.

Therefore, there are two logics in the process of community commercialization: one is to establish communities for commercial purposes; the other is to make moderate commercial use of communities with a sense of life and reduce the commercial flavor as much as possible.

3. Community Commercialization Model

The characteristic of Chinese business is that social relationships are used as endorsement to heavily participate in business. Agricultural society is a small circle of life, in which relationships, cognition and transactions are a trinity. As industrial society entered the functional society, mass media became the main battlefield of commercial cognition (such as advertising).

In the Internet society, since people can switch freely between various apps and mini-programs on their smartphones, business has once again entered the trinity of cognition, transaction and relationship.

At present, there are roughly three types of business models formed around communities, as shown in the figure.

1. Natural business model based on community

If there is any business activity or information, just post it on your Moments or share photos. This is a natural business expression. Although it sometimes works, it is better than nothing. Most companies' commercial use of their customer base is in this state.

In social interactions, even people without commercial intentions can create commercial value. For example, when people see interesting and resonate content, they will forward it, and this process may inadvertently create commercial value.

Because people forwarded the messages spontaneously, empathy, resonance, and eventual commercial wave was formed. This is how many IPs are created. The reason why I call it a community-natural business model is that commercialization has been completed without the group members realizing it.

2. Alienated business model

A typical example is a copy of direct sales, now called micro-business and social e-commerce. It is evolving very quickly, with always new concepts and new logic. Some people have indeed succeeded in "cheating leeks".

Of course, as long as it complies with the law, I have no objection. The sustainability of this marginalized business activity is questionable. Although it has repeatedly sparked heated discussions in society, its market share has always been low.

3. Organized community business model, typically community group buying

Now, among the established business organization systems, the channel system of Chinese brands is the most complete. The channels in Europe and the United States have become third-party, and the brand owners’ relationship tentacles are not as penetrating as those in China.

It is difficult to organize communities on a large scale because the characteristic of communities is that they are distributed, and centralized communities are not valid. Communities are born for social interaction, not for business.

China's traditional offline business organizations, including enterprises and channels, are highly organized. The combination of highly organized business and community is the organized community business model.

4. Combine with the mainstream and become the mainstream

Where is the mainstream business? In traditional channels. Offline channels account for about 3/4 of the total retail sales of goods, and are of course the mainstream. During the epidemic in 2020, I explored the marketing model of "deep channels + community + live broadcast", which was very effective.

However, what really broke the window paper and attracted social attention was Dong Mingzhu's "6.18 Channel Live Broadcast" in 2020, with a transaction volume of 10.2 billion yuan, and Wu Xiaobo's second "Channel Live Broadcast" in cooperation with TATA Wooden Door Industry, with a transaction volume of 392 million yuan in 3 hours.

The combination of community and channels not only activates the channel community, but also activates traditional channels. Both the B-end and the C-end benefit.

I attach so much importance to "channel + community" for the following reasons:

• Channels are the most complete business organization system for brand owners, with stable relationships. China’s channels are human chains, and customer relationships are very important. Long-term stable transactions and continuous visits are helpful in strengthening channel relationships.
• Channel members and communities are standard. Channel members interact frequently, and social networks are one of the main means of communication. What the brand owner needs to do is to get channel members to be willing to transfer their strong relationships to the brand owner.
• With the help of cloud stores (mini programs), brands can empower terminals, and the push path of cloud stores (mini programs) must be the community. The limit of traditional channels is deep distribution, where “the terminal is the end point”. The power of the Internet platform lies in its ability to go beyond the B-end and reach the C-end.
• The community is combined with the mainstream, that is, with traditional channels. Traditional channels can still reach the C-end with the help of KOC communities.
• The relationship between the network and the C-end is a centralized weak relationship, because traditional channels are strong relationships and KOC communities are also strong relationships. Traditional channels + communities have built a new BC integrated system. The strong relationship between the B-end and the KOC can be transferred as long as it is used well.

Therefore, the combination of community and mainstream business is an amplification of mainstream business.

The core of combining social media with traditional channels is to utilize the store owner group. In the eyes of small terminal stores, the group of shop owners is private traffic, that is, traffic that the shop owners can influence. However, in the eyes of brands and dealers, the store owner group is public domain traffic, which can be diverted.

5. Relationship transfer is the key

The core of utilizing the shop owner group is the transfer of relationships within the shop owner group. That is, the relationship between the store owner and the user, which can be used by brands and distributors.

• Relationship transfer means using other people’s social relationships for my own benefit. Without the transfer of relationships, you can only rely entirely on building your own community. Expanding the scale of self-built communities is not only technically limited (no more than 3 levels), but also management-wise the strength of relationships weakens as the number of management levels increases.
• The transfer of relationships does not depend on how many groups you have, but on how many groups can be "used by you".
• The transfer of relationships is not a business transaction, it is just the transfer of relationships. For example, when a friend introduces a friend, it is a transfer of relationship. But whether a friend of a friend can become a friend is another matter.

The key to the transfer of community relations is voluntary, free or nearly free. Wu Sheng called it "negative cost connection" in "Super IP", otherwise it cannot be promoted on a large scale. There are three prerequisites for voluntary and free transfer of relationships.

1. Content empathy: This is the relationship transfer of content communication. As long as you empathize, you will automatically forward it. If many people forward it together, it will cause resonance. Content empathy, not requiring high relationship strength;
2. Have strong cognition: Strong cognition means true recognition and willingness to endorse. In recent years, we have been advocating scene experience, that is, experience is the strongest cognition;
3. Extending from the terminal to KOC: Deep distribution has established a strong relationship with the terminal, but it is difficult to establish a universal relationship with the C-end.

The intersection of mainstream business and community is KOC. KOC has a strong relationship with community members. As long as KOC has strong cognition, relationship transfer becomes possible.

The combination of mainstream business and community, the original channel relationship is still valuable, and the organizational system is still useful. We just need to do a good job in scene experience and content distribution on the basis of deep distribution, and find KOCs along the channel.

6. Community density is traffic

The commercial value of the community is reflected in two aspects:

1. Social media amplifies traffic

For example, the offline channels mentioned earlier already have traffic, but through the enhanced connections of the community, the traffic is amplified.

Pinduoduo's group buying is first of all because someone initiates the group buying. The reason for initiating the group buying is that there is basic traffic, which can amplify the traffic during the group buying process. The process of group buying is actually the process of transferring relationships.

2. Community creates traffic

Traffic must be the result of cognition. Communities create traffic because they become a vehicle for discussing business topics, i.e., social currency. The community is distributed. In distributed self-media, everyone has a voice, but these voices may be drowned out.

Therefore, the value of self-media voice depends on the density of the voice. The traffic generated by a community is determined by the density of the community and the commercialization process. Density means awareness, density means brand, density means IP, and density means traffic. In distributed commerce, without density there is nothing.

Why does density have such great commercial value? Because density creates cross coverage.

For example, in a county, if 10,000 people post on WeChat Moments at the same time, information dissemination will become dense, because one person will receive information from multiple WeChat Moments at the same time, which will increase their attention to the information. However, if 10,000 people post on WeChat Moments across the country at the same time, the density is very low and it lacks commercial value.

7. Social networking connects B-end and C-end

The density of community commercialization can be roughly expressed in three forms:

1. Density of social e-commerce

Although we have been discussing that social e-commerce lacks strong relationships. It is undeniable that the social interaction of social e-commerce is often highly concentrated among a certain group of people. However, the reason why social e-commerce has always been on the margins is that the community density of social e-commerce is only within a small range.

2. The density of content through the dissemination chain

In the process of IP creation, people have witnessed the phenomenon of "content going viral". A piece of content that evokes empathy and resonance is forwarded crazily by the social network because of empathy, and finally forms a resonance.

Resonance is the result of high-density propagation. The formation of IP and internet celebrities, who become popular overnight, means that their content goes viral.

3. Rely on the density of other business organizations to form community density

In traditional commercial organizations, the terminal density is the highest. In a county town with a population of 500,000, there can be thousands of small terminal stores. According to statistics from a certain data platform, there are more than 10 million terminal stores of various types across the country.

The density of traditional business organizations + community density together constitute the user coverage density. High-density communication can form high-intensity cognition in a short period of time. Although a county-level city has thousands of terminals, the community density may only need 500 to 1,000 to form a high density, because the number of WeChat friends in the average citizen's circle is 100 to 500 people.

"Cognition equals traffic": Among the three business densities mentioned above, the density formed by the communication chain is uncontrollable, while the density formed by social e-commerce and traditional channels is controllable. At present, pure social e-commerce lacks nationwide, highly-penetrated community organizations, and the community organizations themselves lack stability. Therefore, social e-commerce is always marginalized.

The combination of traditional channels and communities can strengthen the density of the B-end and the C-end. There are two ways:

1) Companies with advantages in traditional channels use their advantages on the B-end to drive their advantages on the C-end

In recent years, Green Industry Yuan Group, a company that has been called a legend in the agricultural supplies industry, has used its control over traditional channels (B-end) to influence farmers (C-end) through B-end communities. Green Yuan’s employees hold an average of 200 “farmers’ meetings” each year—an approach known as BC integration.

Where does the efficient mobilization power of the Green Industry Yuan “Farmers’ Association” come from? It is to use B-side communities to achieve high coverage and realize rapid and high-density mobilization.

2) Companies that lack advantages in traditional channels use C-end communities to force B-end

For example, it is difficult for new liquor products to enter tobacco and alcohol shops. However, if the C-end is mobilized through the community density of KOC, then the B-end (tobacco and alcohol shops) can be forced to move in. This approach is called CB integration.

Of the two methods mentioned above, BC integration is to consolidate the advantages of the C end through the advantages of the B end; CB integration is to build the B end system through the short-term advantages of the C end, as shown in the figure.

An organization that integrates the B-end and C-end is a highly stable business organization.

8. Community e-commerce is on the edge, while community group buying is the mainstream

Community e-commerce and community group buying are a good set of marginal and mainstream participants. Both are business systems that utilize communities, gathering popularity through communities and pushing products through mini-programs.

Although community e-commerce was popular during the 2020 epidemic, it soon became silent, even for social e-commerce of leading brands. Some even failed at the beginning.

The difference between community e-commerce and community group buying lies in whether the community is utilized in an organized manner. The so-called organization includes two aspects: one is to utilize the original traditional channel organization; the other is to establish an independent ground promotion team.

Community e-commerce was recruited through the Internet during the epidemic. It was basically pure online recruitment, with low correlation with offline channels, and no use of dealer organizations.

Therefore, community e-commerce basically has no store delivery, only central warehouse delivery or forward warehouse delivery. The regional density of community e-commerce is even smaller, and except for a very few that are still in operation, most brands have given up.

Community group buying is currently gaining good momentum. The expansion of community group buying basically relies on strong regional distributors as platform agents. Distributors have teams and end customer groups. Because community group buying is integrated with mainstream channels, it can develop rapidly in one place.

We have seen that when distributors act as platform agents, they basically use the original retail store as the “group leader” because the two parties already have a cooperative relationship. When the field sales team is developing "team leaders", there are more mothers among them. Although most mothers have experience in micro-business, in terms of organizational system, small terminal stores are more organized.

Author: Liu Chunxiong

Source: Liu's New Marketing (ID: liuchunxiong1964)