If you understand these 5 points, your live broadcast will sell out!

For a hundred years, there has been a famous "Goldbach Conjecture" circulating in the advertising industry: I know that half of my advertising budget is wasted, but unfortunately, I don’t know which half. The live broadcast era is no exception. A merchant once spent 600,000 yuan in slot fees to put a type of milk powder on Wu Xiaobo's live broadcast room, but with a total of more than 8.7 million views, only 15 cans of milk powder were sold and 3 cans were returned.

With the end of the demographic dividend, more and more business people are feeling the high cost of traffic and the difficulty of monetization. Phenomena such as "the star effect doesn't work" and "products are unsalable right after being aired" have almost become the norm.

Traffic is a "skill", and it should be supported by the brand's "Tao" behind it. In the era of live streaming and short video marketing, every time a product appears in front of the camera, its essence is the realization of brand potential. The celebrity effect is just a daydream. The scale of the benefits generated by traffic does not lie with the anchor, but more from consumers' awareness of the brand.

As a business owner or product marketer, how can you spend every penny in the right place in the live streaming era? How to allocate traffic advertising and brand advertising? What kind of marketing strategy is most effective in selling products?

This article tells you how to make traffic release greater value and turn it into a "money printing machine" for the brand in an era when live streaming and short videos occupy the traffic entrance.

1. The product is not selling right after it goes live. How to get out of this vicious circle?

Some people claim that traffic is the essence of all business, which is putting the cart before the horse. The foundation of business is for a brand to win people’s hearts, and traffic is only the result of a brand winning people’s hearts.

Many companies like to spend money to attract traffic, using short videos, live broadcasts, and internet celebrity recommendations. Each live broadcast has the lowest price on the entire network, but after the live broadcast ends, they will face longer periods of difficulty in promoting sales. Attracting traffic and conducting sales promotions are only short-term solutions and cannot solve long-term business development.

People usually like things that produce immediate results. How can business produce immediate results? Either do promotion or attract traffic. Therefore, many people, during the course of their business, start promotions as soon as sales are not good, but later on, they cannot sell anything without promotions. As the number of promotions increases, the marginal effect of stimulating consumers becomes lower and lower, consumers become less and less sensitive, and corporate profits become lower and lower, falling into a vicious cycle.

Attracting traffic and conducting sales promotions are both short-term solutions that can be used occasionally, but they cannot solve long-term business development.

The more you pursue short-term results, the easier it is to give up long-term brand building. Is traffic important? Of course it is important. Traffic operation capabilities and digital transformation capabilities are extremely important. However, what is more important than traffic is people's hearts. When companies talk about digital drive and performance marketing, if there is no brand building in the front, the subsequent effects are just working for the traffic platform.

Some people claim that traffic is the essence of all business, which is a completely wrong view. "Brand wins people's hearts" is the foundation of business, and traffic is only the result of a brand winning people's hearts. Companies should avoid putting the cart before the horse.

Why does Taobao have traffic? Because consumers think it is the "all-powerful Taobao"; why does Tmall have traffic? Because consumers think that brand flagship stores are all on Tmall; why does JD.com have traffic? Because consumers hope that orders placed in the morning will be delivered in the afternoon; why does Suning have traffic? Because consumers think of Suning when buying home appliances, it is convenient both online and offline, and it has 100,000 after-sales service engineers.

If you want to buy a car that reflects your noble status, look for Mercedes-Benz; if you want to buy a car that provides driving pleasure, look for BMW; if you want to buy a safe car, look for Volvo; who should you look for when buying or selling a used car? Guazi used cars, because there are no middlemen to make a profit from the price difference - this is the conditioned reflex in the consumer's mind.

A good brand will become a standard, common sense, and an unthinking choice for consumers. Only when a brand is deeply rooted in people's hearts can it generate continuous free traffic, only brand power can improve the conversion rate of traffic, and only brand potential can bring premium to products.

Summary: Attracting traffic and conducting promotions can only produce short-term results. Winning people's hearts and minds is the foundation of business. A good brand will make consumers choose it without hesitation.

2. Break through the bottleneck of "technique" and build brand power

In essence, live streaming with goods is a concentrated realization of the brand potential of big brands, and it is a concentrated promotion with the lowest price of brand potential on the entire network. Once a brand wins people's hearts, traffic is the result.

Xiaohongshu, Douyin, and Taobao video live streaming have become important traffic entrances today. These have become the normal standard for every brand, just as almost all brands are doing e-commerce.

But these are all "skills", not "Tao". "Skill" is just a method, "Tao" is the essence. Brand is the "Tao" of a market, while internet celebrity recommendations and live video streaming are just "skills", which are methods and ways.

Today, brands need to create content, topics, and product placements in order to create content that can be spread, but all of these “skills” have certain bottlenecks. Many companies started out by relying on Internet celebrities to promote their products. Their products are indeed high-quality and have ingenious qualities, but it is difficult to break through sales once they reach a certain level.

In this case, the company needs to use its brand power to support itself. Once the brand power is strong, traffic will come naturally. Below we use the case of Xiaoxiandun to further illustrate this.

First of all, Xiaoxiandun Fresh Bird’s Nest has created a very good category.

The first to market the "instant bird's nest" category was Yanziwu's "Bowl Bird's Nest", but the shelf life of bowl bird's nest was only 6 months, while Xiaoxiandun pioneered the fresh stewed bird's nest with a short shelf life of 15 days. In the food industry, healthier "short-shelf-life" products in the minds of consumers will definitely be an important direction for the future. Xiaoxiandun's innovation is very consistent with the general trend of consumption upgrading in China.

After Xiaoxiandun’s fresh bird’s nest product was launched, it quickly gained a group of fans due to its excellent quality and great taste. Xiaoxiandun keenly seized the traffic dividend of Xiaohongshu at the beginning, and by inviting celebrities and influencers who liked it to write diaries and share online, its sales increased from zero to 200 million to 300 million yuan.

However, after the traffic dividend ends, brand sales often enter a bottleneck period. Xiaoxiandun is already a very outstanding company among those companies that have successfully reaped the benefits of traffic dividends. How can it break through the bottleneck and leapfrog into a larger company? Xiaoxiandun aims to achieve a leap to the level of a public brand and a celebrity brand.

In 2019, Xiaoxiandun placed brand advertisements on elevator media, first in three cities: Beijing, Shanghai, and Hangzhou. It quickly became a hit, with sales jumping from more than 200 million yuan to about 800 million yuan. Take Beijing as an example. On the day of "38 Queen's Day", Xiaoxiandun launched a "red gift box" on the elevator advertising poster. The gift box contained real bird's nests. The brand quickly became popular, and the sales of bird's nests on the day of the event increased by 465% year-on-year. Its sales reached 100 million yuan on "Double 11" in 2019 alone.

Next, Xiaoxiandun invited first-tier female stars such as Zhang Ziyi and Chen Shu to be brand spokespersons, and simultaneously launched brand advertisements in first-tier cities across the country through elevator media - "Selected Malaysian and Indonesian bird's nests, with a shelf life of 15 days, delivered freshly refrigerated every week, leading the country in sales for three consecutive years."

During the "6.18" period in 2020, Xiaoxiandun's sales reached 240 million yuan, surpassing By-Health and becoming the number one in the health products category.

In the past, companies built their brands by first building awareness, then recognition, encouraging consumers to buy, and then building loyalty.

Today’s brands have reversed the order by taking advantage of traffic dividends: they often first accumulate a group of loyal fans and form a small-scale loyalty; these fans then share very good word-of-mouth on the platform - at this point it is equivalent to the “fire” having been lit, but because the scope is still small, so there is only a small flame. Elevator advertisements at this time are like barrels of oil. Once poured on, the flames instantly burn into a raging fire all over the mountains. Xiaoxiandun uses this implementation path.

Summary of golden sentences: In essence, live streaming with goods is the concentrated realization of brand potential, so live streaming is a "skill", just a method and a way, which needs the support of the brand's "Tao" behind it. If you only have the "technique", you will soon encounter certain bottlenecks.

3. How to improve the monetization rate of live streaming?

Live streaming is only at the level of "technique". These are just methods and ways. Brand is the "Tao" of a market, because people's hearts are more important than traffic.

Different business development processes have different bonus periods, which may be 3 months, 6 months... But after a period of time, the traffic bonus period ends, and the traffic bonus becomes traffic cost, and this traffic cost will become higher and higher.

On the other hand, traffic depends on brands to increase conversion rates. Everyone likes live broadcast hosts such as Li Jiaqi and Wei Ya, who can easily sell products worth tens of billions of yuan a year. But they are the leading brand in the live streaming industry. The sales of the third and fourth ranked brands have decreased drastically, and the sales of other anchors behind them are even smaller.

Therefore, live streaming with goods is a concentrated realization of the brand potential of big brands, and it is a Juhuasuan promotion with the lowest price on the entire network. For brands with strong brand power, the monetization rate of live streaming is very high; if it is a less well-known brand, even if Li Jiaqi or Viya promotes it, the effect may not be good.

Golden sentence summary: When the traffic dividend period ends, the traffic dividend becomes traffic cost and will become more and more expensive.

4. How to scientifically combine brand advertising and traffic advertising?

No one can say that a company will win as long as it advertises. In addition to basic premises such as the differentiated value of its own products, the success of a company must be the result of the coordination of both the "air force" and the "army".

"Air Force" refers to brand advertising, and "Army" refers to traffic, ground promotion, etc. The correct way to enhance brand potential is to find media platforms that are part of consumers’ daily life scenes, disseminate brand value propositions, establish broad awareness and trust, and at the same time reach target users in multiple dimensions through precise digital marketing tools, field promotions, and stores, and interact and communicate with target users. Only in this way can we combine life scenario media with digital marketing to achieve product and effect synergy.

Once user awareness is established, it will be effective in the long run. Traffic advertising is temporary. After the traffic advertising, the customer acquisition stage is over. Only by launching brand advertising and traffic advertising at the same time can we obtain comprehensive value: lower customer acquisition costs and higher efficiency. The same marketing budget, through reasonable allocation, can not only achieve efficient traffic acquisition, but also gain long-term brand value. This is the correct "brand war".

Therefore, it is not difficult to see that the goal of "Air Force" (brand advertising) is to blow up the consumer's mental defenses, that is, to promote the brand and make it easier for consumers to accept it. The goal of the "Army" (traffic advertising) is to quickly occupy the position, that is, to generate traffic and do ground promotion. The main work is to quickly occupy the position and win the victory with faster speed and less damage after it blows up the consumer's mental defense line under the cover of the "Air Force". Of course, if the "Air Force" fails to successfully blow up the mental defense line, even if the "Army" barely attacks it, it will pay a huge price and spend a lot of costs, and in the end it will not make any money.

For example. If you have an advertising budget, 40% of it should be used to increase brand awareness and recognition, and 60% should be spent on channels, traffic, and local promotion. By promoting these 40% of advertisements, brand awareness and recognition will increase, which is likely to increase the conversion rate of 60% of traffic by more than three or four times.

Summary of golden sentences: The goal of brand advertising (air force) is to blow up the minds of consumers and form awareness. Under the cover of the former, traffic advertising (army) quickly occupies the position and achieves the final result at a faster speed and with less cost. This is the correct and efficient brand war.

On this topic, let’s break down the revenue formula.

5. Is traffic just one part of revenue?

Revenue = traffic × conversion rate × average order value × repurchase rate.

In 2019, an article that went viral in the advertising circle was titled "Adidas: We Overinvested in Digital Marketing." According to a media article, this article is considered a "milestone" report both at home and abroad, and is seen as an important warning that must be heeded by brand owners who are increasingly pursuing "visible results" in digital marketing as their core brand pursuit. More and more brands are becoming short-sighted, pursuing short-term visible marketing "results" and the KPI growth that it brings, causing people to lose grasp of the core value of the brand.

There is a formula in the e-commerce Internet: Revenue = Traffic × Conversion Rate × Average Order Value × Repurchase Rate. Most of the time, everyone pays attention to traffic, but there are three more words behind this formula: conversion rate, average order value, and repurchase rate.

Where does conversion rate come from? In terms of traffic, whether it is Viya, Li Jiaqi, Juhuasuan, Douyin, or Kuaishou, the most important thing is the subsequent conversion rate. Brands with high popularity and recognition have high conversion rates, which is an obvious feature.

The final transaction rate will vary many times depending on brand awareness and trust. The same is true for field marketing: the higher the brand awareness, the greater the chance of reaching users; the higher the brand influence and trust, the higher the transaction rate.

Next is the average order value. Brand potential determines the brand's ability to command a premium. Even though Estee Lauder's little brown bottle is much more expensive than other brands, consumers are willing to buy it because the brand power is strong enough.

The last one is the repurchase rate. It is also obvious that products with strong brand potential have higher consumer loyalty and repurchase rates.

Summary: More and more brands are becoming short-sighted, blindly pursuing short-term sales data performance and ignoring the establishment of brand core values.

This article is compiled from "The Dividend of People's Hearts: Enterprise Growth Methodology under Stock Game", written by Jiang Nanchun, published by CITIC Publishing Group in January 2021. The copyright belongs to the author and this book. Please be sure to indicate the author and the source of the work when reprinting.

Author: Businessperson

Source: Business Insider