No KOC, no community

KOC , or key opinion consumer, generally refers to consumers who can influence their friends, fans and generate consumption behaviors. When operating private domain traffic, a key to community operation is KOC, who plays a vital role in the commercialization of the community.

No KOC, no community, actually means no KOC and no community commercialization.

Communities exist naturally; as long as people engage in social activities, communities will be formed. Community commercialization is the act of using social relationships to conduct commercial activities. KOC plays a vital role in the process of community commercialization.

Xiaomi is a brand, Pinduoduo is a platform, and Fan Deng Reading Club is a self-media. The commercial success of the three companies can be seen in the huge effect of the community, but what is the fulcrum that really allows the three companies to leverage the community?

This article will start from the three cases of Xiaomi, Pinduoduo, and Fan Deng Reading Club to analyze how brands, platforms, and self-media can connect the three dimensions through the community, and how to use KOC as a tool to penetrate the community and achieve three-dimensional connection.

1. Xiaomi: Sponsor of 100 Dreams

Xiaomi is an Internet company with mobile phones, smart hardware and IoT platforms at its core, and has always been committed to building brand communities. Founded in 2010, Xiaomi ranked third in global sales in 2019, behind Huawei and Apple, and its revenue reached 103.24 billion yuan in the first half of 2020.

Xiaomi’s rapid rise is absolutely inseparable from social marketing. Lei Jun is known as the originator of social media marketing. Social media enabled Xiaomi to "sell 1 million units in the first year without spending a penny on advertising."

There are many brands that engage in community building, but very few are as successful as Xiaomi. What is the primary driving force behind Xiaomi Community? Why can Xiaomi’s community form such strong cohesion in a short period of time? What operations enable Xiaomi’s social network to spread rapidly?

In my opinion, the answers to all questions are in KOC.

When Xiaomi first established the community in 2010, it was not in a rush to sell its mobile phones. Instead, it found 100 mobile phone enthusiasts to experience the MIUI system which was still under development. These 100 enthusiasts were recruited from various Android forums, and some of them were even invited by Lei Jun himself. They played a crucial role in Xiaomi's early development. To express gratitude, Xiaomi wrote the forum IDs of these 100 KOCs on the boot page, which was later made into a micro-film, and Xiaomi called them "sponsors of 100 dreams."

How important are these 100 KOCs?

They helped Xiaomi complete new product testing, provide feedback and assist in fixing bugs; they helped the Xiaomi community achieve the first round of communication fission, and the first batch of Xiaomi's true "Mi fans" were converted from their channels; they ensured the activity and cohesion of the community; they helped Xiaomi complete the transformation of the community from 0 to 1.

“Sponsors of 100 Dreams” does not mean Xiaomi is selling emotions. It can be said that without these 100 KOCs, there would be no Xiaomi community.

1. “Geeks” are KOCs

Xiaomi makes great use of "geeks". The 100 mobile phone enthusiasts invited in the early stage of creating the community are "geek" type KOCs .

The word "geek" comes from the transliteration of the American slang "geek". It originally meant a scholar or intellectual who was extremely intelligent, good at studying but not sociable. Later, it was often used to describe people who had a fanatical interest in computer and network technology and devoted a lot of time to studying and doing something to the extreme.

With the evolution of the times, "geek" no longer refers specifically to a certain type of technical genius or technical prodigy. They are no longer self-enclosed and isolated from the mainstream population. Instead, they use technical means, innovative capabilities and endless imagination to continuously push newer and better lifestyles and entertainment methods to a climax and peak.

Why should brands make good use of "geeks"? Especially when new products are released? Because "geeks" are the group of people who are most willing to try new things. They naturally love to explore and are good at hunting for novelty. The only difference is that you find them and they find you.

2. “Geek” is “Chief Experience Officer”

"Geeks" are the highest quality "Chief Experience Officers" of brands, and the "geek" experience is an in-depth experience.

"Geeks" believe in "you don't have to play, but if you do, you have to play to the best of your ability", so they can best dig into the core spirit of a company, they can best experience the core value of a product, and they can best understand the core idea of ​​a company's communication.

The 100 mobile phone enthusiasts invited by Xiaomi in the early stage of creating the community were Xiaomi's "Chief Experience Officers". It is precisely because of these people who are willing to deeply explore the core values ​​of the company, products, and concepts that they are willing to spread it through their own influence and channels after experiencing and recognizing Xiaomi.

The "geek" experience is conducive to spreading the brand's all-round awareness. When ordinary users use a product, they can only focus on the functionality, practicality, and aesthetics of the product. The in-depth experience of "geeks" tends to be more about all-round cognition, and the overall perception of brand culture, product raw materials, technology, design, etc.

Although the influence of “geek” KOCs is limited, their advantages lie in strong relationships, love of sharing, self-consumption, and professionalism. Strong ties are the most important determinant.

3. “Geek” is “Chief Evangelist”

"Geeks" are also the best "chief communications officers" of brands, and the content they spread is often fatally tempting.

"Geeks" are often labeled as crazy and extreme. They are extremely intelligent and good at research. They are good at communicating the value of products through their unique understanding of product aesthetics, technology, and usage methods. Precisely because of our pursuit of "extreme", we worship "geeks" and think they are "cool people" and the content they spread is more tempting and attractive.

The 100 mobile phone enthusiasts that Xiaomi recruited in the early days helped Xiaomi do three things in terms of communication:

1. Report problems to customer service and fix bugs;
2. Recommend MIUI and pre-sale engineering machines to hardcore fans;
3. Post orders and promote in advance through WeChat, Weibo, and forums.

"Geeks" helped Xiaomi achieve the transformation of its community from 0 to 1.

When a brand makes good use of the word "geek", it is actually identifying with the "geek spirit". Recognize that a group of people who regard innovation, technology and fashion as the meaning of life can become world changers and leaders.

To let the most extreme people in the world become the brand's "Chief Experience Officer" and "Chief Communications Officer" is to find ways to make the most extreme and serious people in the world become loyal fans of the brand. It is a huge challenge for brands, but it also brings huge rewards.

2. Pinduoduo: From “3-person group” to “600 million users”

Founded in 2015, Pinduoduo took only 2 years and 11 months from its inception to its listing, setting a new record for the fastest listing of a Chinese Internet company. From the initial "3-person group" to the scale of 600 million active users in 2020, it took Pinduoduo only 5 years, Alibaba took 19 years, and JD.com has not yet reached it.

Pinduoduo has been able to grow at an unprecedented rate thanks to the huge social traffic brought by the rise of WeChat. In 2015, WeChat’s monthly active users reached 700 million, which is an important business signal that changes in media will bring new opportunities. A huge amount of traffic accounting for half of China’s total population emerged, and founder Huang Zheng seized this opportunity.

The core of Pinduoduo's rapid fission based on social networks is "sharing", and the key to sharing is KOC.

To explore the core of Pinduoduo’s group-buying marketing model, we must start from Pinduoduo’s predecessor, Pinhaohuo. In April 2015, Huang Zheng founded Pinhaohuo, an e-commerce company based on WeChat traffic. The first category that Pinhaohuo entered was fresh food, because fresh food is a business that relies heavily on word-of-mouth, and Huang Zheng was very aware of this.

Pinhaohuo changed the original "Buy Now" button to "Start Group Buying", creating a new social e-commerce model.

Pinhaohuo started out as a WeChat service account. Its initial model was very simple. It divided a box of fruit into three parts and set a "three-person group" ordering rule. Users could either buy a whole box or not buy anything. The group-buying model not only avoids warehouse waste but also encourages users to forward, recommend and spread products through WeChat.

There is an essential difference between sharing mode and search mode:

• Taobao focuses on "traffic in search scenarios": users go to the platform with clear goals to search for products, compare prices and make choices.
• Pinhaohuo and Pinduoduo focus on "traffic in social scenarios": the behaviors stimulated by users in the process of sharing and recommending.

The "sharing mechanism" is an effective weapon for the rapid development of the platform. The most important thing in the sharing mechanism is not the operating method, but the top-level idea. The core logic of group buying is to convert the cost of attracting new users (usually invested in SEO/SEM, advertising, and local promotion) into discount subsidies, allowing users to help the platform attract new users within their social relationship chain. This creative model achieves a win-win situation for e-commerce companies and consumers.

Seizing users' attention time, leveraging users' relationships, developing users' channels, tapping into users' communication power, and making users willing to pay with their own time, relationships, channels, and communication to take advantage of the benefits - this is the key to Pinduoduo's social communication.

1. Users are KOCs

Every user who shares a successful group purchase is a KOC. Pinhaohuo users can share the link to the WeChat scene and form a group with friends, classmates, relatives, etc. within 24 hours, and the group formation is successful. For Pinhaohuo, the process of users placing orders together is equivalent to free promotion for the platform.

Unactivated users are not KOCs, but activated sharing users are. In traditional marketing, it is very difficult to get users to actively share product links, but through the platform's human-friendly "design", sharing becomes a controllable thing. Huang Zheng has been exploring the patterns therein.

In Huang Zheng’s “design”, consumers have to do something if they want to buy cheap goods.

Huang Zheng said: "If consumers do nothing and just buy cheap goods, it is impossible to have a cost advantage. 30% of Pinhaohuo's cost advantage comes from consumers doing something to help Pinhaohuo save costs."

The human chain behind every KOC hides infinite possibilities. The human chain is the channel chain. The human chain reduces cognitive costs, saves relationship expenses, and amplifies the communication effect. The sharing mechanism takes human connection as its starting point, operates every user of the platform as a KOC, and stimulates the user's potential to become a KOC (channel).

2. User relationship is platform relationship

Relationships play a vital role in the social Internet business system. Expanding platform relationships through user relationships is the fundamental reason why the group-buying model can spread virally.

User relationships are users’ sunk costs, but they are the platform’s net incremental revenue. For users, relationships are "sunk costs" that have been paid in the past and cannot be calculated. In order to obtain the rewards given by group buying (discounts, withdrawals, exemptions, red envelopes, etc.), users will appropriately use their user relationships in exchange and realize them through the platform. This behavior does not incur additional costs for users, but for the platform, the user relationships provided by users as rewards are net incremental revenue for the platform. The platform can achieve extremely high user conversion rates at extremely low costs.

Relationships are communication scenarios. Pinduoduo's management believes that "some people in society don't know what they want. They may be very rich and subconsciously rely on others to recommend or hint to them. They know what their relatives like to buy, so that's the best. In the past, relationships lacked communication scenarios, while the 'timely' communication scenarios built on WeChat play to the advantages of relationships, which can not only attract new users, but also stimulate consumption among old users."

Understanding human nature is the key to exploring user relationship chains. For example, the many gameplays designed by Pinduoduo, such as "Reduce Prices", "Share and Withdraw", and "Bargaining", have grasped human nature very well.

Take "Cut a Knife" as an example:

First of all, once the user starts bargaining, if he does not find someone to bargain down the price to 0 within 24 hours, he will lose the opportunity to get the product for free.

Secondly, the same friend can only help you bargain for a product once.

Finally, the same user can only help three friends bargain every day to prevent a small circle of people from helping to bargain back and forth.

This series of operations, using "benefits" as bait, manipulates users to complete various tasks and actions, and then spreads the platform's influence to the user's entire relationship chain.

3. User community is the platform community

The user community is an extension of maximizing the interests of the platform community. The platform’s self-built communities will never be big. It must effectively utilize user communities for communication fission and break down the barriers between commercial domain traffic and private domain traffic to achieve the effect of viral fission communication that breaks through circles.

The advantage of the user community is that it has the trust endorsement of the "KOC relationship" and has strong social attributes. Whether a community has strong communication and transaction value depends on whether it has social value. Pinduoduo has been able to grow to its current scale precisely because it has found group buying initiators (KOCs) among its users. They use their own relationships as credit endorsements and recommend what they believe to be high-quality products in the community. Such communities have real commercial value.

Communities are hubs for viral fission. User (KOC) spreads the word, completing the first level of fission; family and friends spread the word, completing the second level or above of fission; and community spreads the word, completing the N level of fission. Only communities can maximize dissemination.

The user community is the platform community, user relationships are platform relationships, and user connections are platform connections. When a platform truly maximizes user connections, relationships, and communities, it has truly grasped the core of sharing.

After connecting the online and KOC communities, Pinduoduo will focus on offline operations in the second half of 2020, and will expand its fresh food business to community stores. Although the three major e-commerce giants Alibaba, JD.com, and Pinduoduo have all set their sights on community stores for their offline layout, Alibaba and JD.com are taking the "online-offline" path. Without community connections, the e-commerce giants' offline new retail path in recent years has been slow and difficult; Pinduoduo is taking the three-dimensional "online-community-offline" path and has grasped the key role of KOC in the community.

3. Fan Deng Reading Club: From 500 people to 36 million users

Fan Deng Reading Club was founded in 2013 and is currently the leading company in the commercialization of paid knowledge in China. The online reading club is dominated by Fan Deng’s personal IP, which rapidly expands the community through in-depth KOC analysis, and provides user services through offline agents. It seems to be from online to offline, but in fact it is a typical case of connecting three dimensions from offline to online. By June 2020, Fan Deng Reading Club had grown to 36 million users.

Fan Deng Reading Club started offline, developed in the community, and gradually expanded its influence online. The development of Fan Deng Reading Club started from offline. After leaving CCTV, Fan Deng has been teaching MBA and EMBA in universities. During the teaching process, he found that students have the problem of "strong desire to read, but no time to read". Therefore, the first community created by Fan Deng Reading Club is composed of Fan Deng's offline students, and offline students have strong relationships.

In 2013, Fan Deng tried to build a paid audiobook community. Unexpectedly, 500 people came on the first day, and the community split into two groups on the second day. Therefore, Fan Deng and his two partners created a public account to push information and operated it in a "membership-based" manner. Strong offline relationships, social media to amplify influence, and online public accounts to create momentum, this is the prototype of Fan Deng Reading Club.

It is worth noting that the first batch of users of Fan Deng Reading Community are “paying users”, and “paying users” have the greatest potential to become KOCs. According to the data from “Insights into Consumption of Paid Members in China’s Retail Industry”, the vast majority of paid members are loyal users. In addition, in the survey data on willingness to recommend, 37.3% of users clearly stated that they were willing to recommend others to join the paid membership plan, and another 35.8% of users stated that they might recommend it. Overall, paid members are more willing to recommend others to join paid plans.

Fan Deng Reading Club’s official account and community operations have opened up the second dimension (online + community), but what really allowed Fan Deng Reading Club to grow and expand nationwide was its return to offline. At the end of 2014, Fan Deng’s team began to operate offline book clubs, thus connecting the three dimensions of Fan Deng’s book clubs (online + community + offline). Community is the only way for Fan Deng Reading Club to move from offline to online and then from online to offline. The community always plays the role of connecting and amplifying.

1. “Leader” is KOC

Why is Fan Deng Reading Club able to rapidly expand its offline channels? Because of KOC.

In March 2014, Fan Deng Reading Club held its first offline book sharing event at the Shanghai Greenland Conference Center and established its first branch in Xiamen, which has continued to grow. The earliest "helmsmen" of Fan Deng Reading Club were paying users who listened to books in the first group of 500 people in the community.

The offline branches of Fan Deng Reading Club mainly adopt the authorized franchise model, and the "helmsman" of each branch is a KOC.

The book club branch is operated on a crowdfunding model. On the one hand, this group of "helmsmen" deeply recognize the original intention, concept and business model of Fan Deng Reading Club; on the other hand, the "helmsmen" have regional resources and offline relationships and channels.

Developing regional agents enables an online self-media brand to have the ability to organize and mobilize offline channels. Local branches played an important role in converting new customers to the product, while Fan Deng's core team focused on polishing the book-telling and app products with zero marginal cost.

2. “KOC deep score” means “community deep score”

Why can Fan Deng Reading Club directly connect with C-end users? Because of the community.

How can Fan Deng Reading Club connect with more C-end users? The community is deeply divided.

Fan Deng Reading Club can expand local branches to the county level (1,089 county-level authorized points), which is unimaginable for many traditional brands.

The key to deep distribution is that information and policies should reach users as close as possible.

Fan Deng Reading Club empowers KOC through brand influence. The WeChat community matrix and App community composed of KOCs in various regions are connectors between enterprises and users. The deep division of the community enables the information and policies that enterprises want to convey to reach the C-end quickly, directly and accurately.

4. “Community” + and “+Community”

Pinduoduo is a “platform + KOC community”. The platform is the basic organizational form, and the KOC community is a model for attracting and expanding new customers. Pinduoduo is able to stand out when Alibaba is extremely powerful. The main difference is that Alibaba only has a platform, while Pinduoduo is a "platform + community". Communities are enhanced connections based on platforms and have stronger capabilities for attracting new members.

In the early days, Xiaomi used social networks to build up a fan base and accumulate communication potential. "Sense of Participation" by Xiaomi co-founder Li Wanqiang talks about this.

In the development process of Fan Deng Reading Club, "Community +" and "+ Community" were used alternately. “Community+” is used to accumulate potential for entrepreneurship and consolidate offline organizations; “+Community” is used to quickly expand users. Fan Deng Reading Club cleverly utilized KOC, from offline to online "community +", and then from online to offline "+ community", accumulating its own fans over and over again.

5. KOC opens up social channels

There is an essential difference between social communities and business groups - in social communities, relationships are established first and then the group is created, while in business communities, the group is established first and then the relationships are built. The relationship between KOCs is accumulated over a long period of time and is backed by trust; business groups are quickly established and require trust to be established through short-term activity. The real KOC community is an inactive high-net-worth group; the business group mainly uses highly active methods such as sharing and red envelopes to quickly strengthen relationships and enhance cognition.

Community commercialization does not mean completely transforming a social community into a commercial community, but rather the act of using the relationships in the social community to endorse some commercial activities, such as posting pictures, recommending products, sharing links, etc. Therefore, the commercialization of communities does not mean that communities are for "transactions". The greatest value of community business is "connection".

Communities that do not use commercial purposes as social activities are most conducive to community commercialization. A real community has three main functions: social interaction, communication, and transaction. Socializing is a prerequisite, and it is mainly socializing that is not for commercial purposes. As long as there are strong offline relationships, there will inevitably be strong interactions among the customer base. Strong interaction will inevitably lead to information dissemination, and information dissemination is the basis for the commercialization of communities.

KOC is the newest form of channel in China. They are willing to participate, discuss and spread their knowledge of products, and play an important role in the decision-making process of potential users. In the information society, KOC represents a new channel ecology.

• Traditional channel ecology: brand owners - dealers at all levels (offline) - retail terminals (offline) - consumers.
• E-commerce channel ecology: brand owners - consumers; or brand owners - dealers at all levels (online) - consumers.
• Micro-business channel ecology: brand owners——KOC (community)——consumers.
• New marketing channel ecology: brand owners - KOC (offline + community + online) - consumers.
• In the new marketing model: the retail terminal store owners in traditional channels are KOCs, and their communities are the online reflection of offline relationships.

The main influencers in e-commerce channels are KOCs, and their communities are built on trust relationships through long-term recommendations.

The group owners of the community and users who are willing to share are all KOCs, and KOCs can activate the commercial attributes of the community. With KOC, the community can open up three dimensions and realize offline experience, community promotion, and online transactions.

Author: Liu Xinyi

Source: Mr. Liu's New Digital Marketing