Deconstruction of the formula for converting private domain traffic into transactions

Many friends have always had a misunderstanding that " private domain traffic " is available at any time without spending any money. Indeed, private domain traffic saves a lot of promotion and customer acquisition costs compared to public domain traffic, but do not ignore the cost of attracting new customers, continuous operating costs, and recall costs of private domain traffic. These still require investment, of course, but the maintenance cost of private domain traffic is lower, more efficient, and more controllable than the cost of each full public domain delivery.

1. Why does the concept of "private domain traffic" come into being?

As early as the era of Taobao e-commerce in 2015, many Taobao brand merchants would place small traffic-attracting cards in the logistics boxes when shipping. For example, there was an activity where you could scan the code to add WeChat and get cash back for positive reviews. This was the process of Taobao merchants privatizing their traffic.

In 2017 and 2018, many Internet companies felt that their growth had reached its ceiling. There were only two ways to maintain the company's growth momentum, resolve development bottlenecks, and maintain profit levels: either open up a second growth curve, or optimize the organizational structure and reduce operating costs. In the long run, the development of a second growth curve will definitely be valued by the company, and the value of private domain traffic will gradually be discovered by everyone.

For enterprises, there are basically two ways to increase revenue: either acquire new users or maximize the value of old users. Now that the traffic dividend has been exhausted, tapping the maximum value of old users has become a consensus among all companies, and the concept of private domain traffic has become popular.

Therefore, in fact, private domain traffic has always been there, and the essence of private domain traffic operation has not changed. It is just more concentrated on new platforms. Moreover, with the upgrading and changes of transaction scenarios, private domain traffic has also evolved the following characteristics:

1) Owned: User traffic belongs to the brand

2) Free: No extra cost for purchasing traffic

3) Direct access: No matter the past text messages, emails, or social tools, you can directly reach

4) Sustainability: We can continue to operate the existing user base and reach them repeatedly

After reading these four points, almost all companies will be excited, because this is exactly the traffic treasure that companies are paying attention to and craving for now. Private domain traffic only requires the cost of attracting new users once, and the secondary maintenance cost is often much lower than the cost of attracting new users each time through the public domain. What's more important is that with the improvement of the service capabilities of WeChat for Business since 2020, companies can do more digital operations, such as user portraits, tag management, Moments, etc. Moreover, the powerful penetration ability of WeChat for Business makes it more convenient for companies to maintain the value of users throughout their life cycle, and can also recall more new users by bringing in old users.

2. How to make private domain traffic truly effective?

Private domain traffic has many benefits, so how should it be operated to maximize the value of private domain and truly bring benefits to the enterprise?

First of all, we need to make one thing clear:

Creating private domain traffic is only an intermediate process, not the ultimate indicator. "Conversion sales" is the ultimate indicator, and it is valuable only if it brings revenue.

So if we want to do a good job of private domain traffic, we can borrow a universal conversion formula of e-commerce to help us do the decomposition:

GMV = [traffic × conversion rate × average order value] × repurchase frequency

If we want to achieve the ultimate goal of growth, we need to optimize and improve every link in the entire chain.

1) Traffic sources:

Private domain traffic can be roughly divided into three sources: public domain traffic, private domain stock and fission increment. Only when the traffic is large enough and the coverage is wide enough, will it be possible to optimize the subsequent links. Therefore, the first step in the private domain is to continuously expand the traffic opening and accumulate more traffic into the private domain. So at this time we need to think about:

a. Which public domain platforms should be used to attract traffic (such as Xiaohongshu, Douyin, Weibo, video websites, etc.), what are the characteristics of these platforms, and how to attract traffic?

b. How to design the process, words and bait to divert traffic from the public domain to the private domain? Make the user experience smoother and avoid being blocked by public domain platforms.

c. When users enter the private domain, can we carry out fission activities and design fission bait to further expand the attracted private domain traffic?

2) Conversion rate:

Each link of private domain operation involves conversion rate. For example, in the process of converting from public domain to private domain, the optimization of each link of public domain exposure, clicks, traffic, and activation will greatly improve the final conversion effect. Even the fission poster activities spread in the circle of friends need to optimize the path and content. Whether each link is attractive and smooth enough will directly affect the improvement of conversion rate.

3) Average order value:

In order to get customers to pay, in addition to continuously iterating to increase the expectations and interest of Hanpai and its own users in the purchased goods/services, the routine of using promotional activities and tools as catalysts to get customers to pay has always been effective. From Taobao and Tmall's Double Eleven to some brands' unrestricted coupons and group buying, they have stimulated our loss aversion countless times and made us place orders impulsively. Moreover, with the improvement of payment capabilities such as mini-programs and WeChat payment cards and coupons in the WeChat ecosystem, users can pay more smoothly.

4) Repurchase frequency:

The operation of private domain traffic is to establish a long-term and stable relationship with users. Brands need to continue to pay operating costs to activate private domain users through public accounts, communities, corporate WeChat, mini programs and other carriers. However, if you want to achieve multiple repeat purchases, repeated promotional activities will inevitably make users feel tired, so the establishment of a membership system or a stored value system will often help brands achieve twice the result with half the effort. Of course, the continuous output of creative content and practical information can also allow users to feel the brand’s personality and warmth. Perfect Diary is a benchmark in the beauty sector in terms of private domain traffic operations.

Finally, to make good use of private domain traffic, we not only need to continuously increase user growth and retention, improve conversion rates in all links, and increase average order value through product innovation, promotional activities, etc., but also personalization, grass-planting, and service-oriented content are indispensable. These are the ammunition for private domain operations, helping us to continue to establish long-term and stable relationships with users.

Customer-centric

We are all talking about "private domain traffic". The concept of traffic is more like a lifeless number, but every customer is an independent individual, representing independent thinking, personalized needs and different life scenarios. There are not only product needs, but also emotional needs and social needs. Therefore, the essence of private domain marketing is to take customers as the starting point, understand customer psychology, and design everything around customer needs.

Author: Coke with ice

Source: Coke on the rocks