How do K12 online education companies build their own distribution systems?

The current situation of online education companies is that traffic costs are becoming more and more expensive, especially the cost of delivery. The fission of Taskbao is not only not very accurate but also difficult to convert, and community fission is easily intercepted. Currently, more and more education companies are beginning to carry out refined operations. In addition to normal delivery and fission, they are beginning to rely on referral systems, try distribution by mothers, and conduct content fission (group buying, 1 yuan unlocking, and free group buying, etc.).

1. Why do online education companies need to engage in distribution?

The current situation of online education companies is that traffic costs are becoming more and more expensive, especially the cost of delivery. The fission of Taskbao is not only not very accurate but also difficult to convert, and community fission is easily intercepted. Currently, more and more education companies are beginning to carry out refined operations. In addition to normal delivery and fission, they are beginning to rely on referral systems, try distribution by mothers, and conduct content fission (group buying, 1 yuan unlocking, and free group buying, etc.). The customer acquisition cost of Baoma distribution is relatively low and the data is accurate, which can be regarded as a growth method for current refined operations.

Recently, I have also seen that many companies have begun to try to build their own distribution systems, including Walnut Programming, Xiaomawang, Meishubao, AiKe, Gubi Art, Youdao Children, Zhangmen Xiaoli, Banyu Children's English, etc.

Why did the above companies start to engage in distribution? There are the following points:

1. The company's products are in the development stage and have a certain scale in the market.

2. After a period of cooperation with social course promotion platforms, the company has accumulated a large number of channel promoters, and the channel effect is declining.

3. The cost of delivery is getting higher and higher due to the competition from big manufacturers. Distribution is a good choice in refined operation.

2. Which companies are suitable for distribution?

Distribution is not easy to do. Many companies have tried distribution, but not many have been successful. There are many factors to consider when doing distribution. I personally think the following points should be considered:

1. Age stage of the company's business positioning

Personally, I think that early childhood (0-7) online education companies are the most suitable for distribution, followed by K12 (5-12 years old) online education companies. Junior and senior high schools are basically not suitable for large-scale distribution, and it is recommended to focus on referrals.

2. Does your own traffic pool have a certain scale?

Personally, I think it is not recommended for small startups to engage in distribution. The traffic pool is not large enough, and there are not enough seed users distributed by mothers, so it is basically difficult to get started. If the company is already in the development stage and has a number of loyal users of its own, the seed user base for the distribution by mothers that can be initiated is sufficient and you can still give it a try.

3. Whether the product has a brand on the market and has been recognized and praised by many users

If the product already has a certain brand and good reputation in the market, and after the user base has reached a certain scale, the conditions for distribution are basically mature, which will boost the efficiency of distribution for mothers. If there is no brand and the reputation is poor, it is difficult for mothers to promote the product

4. The company's other businesses do not affect the distribution business

The company already has a mainstream growth method, and the results are good. Doing distribution may affect its mainstream growth method. It is not recommended to do distribution at this time. For example, since 2018, cooperating with social course promotion platforms to obtain courses has become a major growth method for many companies. Social course promotion platforms have many promoters and large traffic, and customers can be acquired through the platform for a long time. At this time, distribution should not be done in the end, because the two are basically conflicting with each other, and it is difficult to balance the interests of both parties. This is also the reason why many companies fail in distribution.

It is recommended to wait until you have cooperated with these channels for a long time and acquired many customers before you start distribution. This is also the reason why many online education companies are currently starting to do distribution.

3. How to build your own distribution system

1. What preparations should be made to build a distribution system?

(1) Preparation of operators

It is recommended to recruit a professional with distribution experience to manage the operation, usually someone who has worked in distribution in the education industry or from a social e-commerce platform. If you rely on your own company's operations, it is recommended that you study more about how your competitors do it? How do educational companies in the same industry do it? Follow the same pattern and optimize it to make it your own.

Regarding team building, it is recommended that the operator be the main person in the initial stage, with 1-2 people to do it, and cooperate with community operation partners to coordinate the entire project department regarding technology, copywriting and design.

(2) Inventory of sources of Baoma distribution experts

Which public accounts, apps, WeChat groups and personal accounts can be used? How big is the scale? How many people are expected to be recruited? Can other projects of the company be supported?

(3) Preparation of distribution system

A: Should we build our own system or choose a more mature one on the market?

Building your own system requires technical development, with an estimated development cycle of more than a week (depending on the simplicity of the distribution system) and requires manpower. The advantage is that some special needs can be met, such as a detailed promotion data background, where promotion experts can see how many students are recruited, how many people have tried the class, and how many people have converted; for example, commissions are distributed according to different refund periods; for example, after purchase, users can directly enter the enrollment system to assign a teacher, and the teacher can track their own data in real time.

Take Spark Thinking as an example:

Spark Thinking’s data records are more detailed, allowing partners to track their customers based on user status. In addition, it can also generate personalized posters.

B: Choose more mature ones on the market, such as Youzan, Zero One Fission

Let’s first analyze Youzan. Youzan can realize product sales and product distribution. The distribution system can recruit promoters, generate posters and promotion links for promoters, sell promoter data, receive promoter commissions and withdraw commissions, which can basically meet the basic demands of distribution. All social course promotion platforms on the market rely on Youzan. There are also many educational companies, but they basically build their own systems.

The disadvantage is that the system has been formed and it is difficult to meet personalized needs. For example, how to connect with teachers after users make a purchase (telephone contact is convenient, but adding teachers on WeChat requires auxiliary means, and the current course promotion platform uses means to pop up redemption codes on official accounts); the commission setting needs to be paid according to Youzan’s system; it is difficult to achieve more detailed clues.

The backstage of Youzan's distribution expert

Youzan's system settings

Zero-one fission is more suitable for simple distribution activities, especially distribution fission, which has the following advantages, such as commissions can be credited in a timely manner, students can add teachers or join groups in a timely manner, posters can be set up, etc. But it seems that the background data records of Distribution Expert are not as good as Youzan, and the background data of Distribution Expert are not as detailed as Youzan.

C: Is it based on a mini program or a public account?

If an education company engages in distribution, should it consider developing a distribution mini program? The current distribution of Baby Play English relies on mini programs. However, most companies currently rely on WeChat public accounts and have their own public accounts, placing the sharing system in the public account menu bar.

To sum up, for the distribution system, I personally suggest that if the company finds it troublesome to build a system, it can try using Youzan first. Youzan is relatively suitable for medium-scale distribution. Of course, you can also use companies like Zero One Fission to do some simple distribution fission activities. If the company intends to get serious about distribution and has the technical development capabilities, it is recommended to build a system directly. A self-built system can meet personalized demands.

(4) Preparation of the distribution expert promotion system

A: The promoter system includes the following aspects:

A: Pusher Management Manual, mainly describes the overall pusher management

B: Community management system, mainly involves how to manage and operate the community

C: Talent training system, mainly involving novice training, on-the-job training, on-the-job training, and other major training: project product introduction, promotion policy, distribution platform introduction, etc.

B: Dingdaren distribution strategy includes the following aspects:

A: Commission policy: trial classes and large classes

B: Distribution red lines: involving random pricing, cashback, excessive promises, etc.

C: Distribution Product Policy

D: Promoter Welfare Policy

E: Promotion Assessment Policy

F: Powder lock policy

(5) Preparation of specific materials

A: Distribution Process Preparation

The preparation for the distribution process mainly involves outputting the system operation procedures and user training for distribution experts.

B: Preparation of distribution materials

Including: introduction of the company's courses; WeChat Moments and WeChat group materials for promoting the courses; landing pages and posters for the courses; posters and articles for recruiting promoters, etc.

C: Preparation of training content

It is mainly used for training promoters within the community, so as to drive the experts by explaining things more clearly to them.

(6) Selection of distribution type

Distribution types include full-staff distribution and promoter distribution. Full-staff distribution means that everyone can distribute, and promoter distribution means specifically recruiting promoters to carry out refined management and distribution.

Full-staff distribution is suitable for larger organizations, which stimulate user distribution through distribution activities, such as Zebra English’s previous 9.9 yuan distribution.

Promoter distribution is suitable for specialized institutions that have the energy and team to do this, and can drive mothers to do distribution through a perfect system. For example, the current art education mother of Artbao.

Which one to choose specifically? It depends on the company's current business development.

2. How to drive mothers to engage in distribution?

(1) Reasonable commission mechanism

The first factor that drives mothers to engage in distribution is commission. After all, profit comes first. How should the commission be set? It depends on the packaging of the courses, the overall profit margin and the level of industry content.

According to my observation of the level of industry content, the commission setting for trial classes is generally between 30-100%. If the trial class commission is set relatively low, it is generally because the hard cost of teaching aids may be too high. The commission for trial classes is set high because, after all, trial classes are for attracting traffic, and high commissions are more attractive to promoters. There are many factors to consider for the commission of large classes, mainly two major profit margins and course models. Live classes are generally around 10%; AI classes and recorded classes are generally between 20%-30% because their production costs are relatively low.

(2) Appropriate incentives

As time goes by, the distribution of Baoma tends to decline. In order to promote better distribution of Baoma, some short-term incentives are often set up. The incentives have two aspects:

A: Incentives for distribution experts

Some bonuses and in-kind incentives can be set up for distribution experts. Several common mechanisms:

Order Rewards: You can receive a red packet of N yuan for placing an order; You can receive XX physical items for placing an order

Place an order to participate in the lucky draw or share the red envelope: place an order to participate in the lucky draw

Tiered reward for placing an order: 1 order can be redeemed for XX reward, 2 orders can be redeemed for XX reward, 3 orders can be redeemed for XX reward

Phased incentives: important nodes, reading promotion incentives, performance ladder rewards, ranking awards or dark horse awards, etc.

Newcomer order award: generally used to activate newcomers

Level upgrade: Direct upgrade, upgrade after reaching a certain performance

For example, let’s take a look at a specific example of a stepped incentive:

B: User-side incentives

In order to encourage distribution experts to place more orders, in addition to providing incentives to promoters, incentives should also be provided to users to promote products better. The specific methods are as follows:

Limited time flash sale: Normal price is 9.9 yuan, 6.1 yuan flash sale for Children's Day (special price)

Group purchase for multiple people: Normal mobile phone is 9.9 yuan, now 3 people group purchase 6.66 yuan

Limited time gift: Only for 3 days, you can get 1 picture book by purchasing through the promoter

Course incentives: rewards for completing the course, gifts for checking in, cash back for checking in

Full gift: 1 order, each person will receive 1 error book

(3) Complete upgrade system

In order to better motivate mothers to promote the company's products with greater motivation and sustainability, many companies often set up a hierarchy system to incentivize and retain distribution experts to continuously promote the company's products.

Social e-commerce is relatively good at using the level mechanism. Social e-commerce generally has a three-level mechanism. For example, big V points have ordinary members, peacock mothers and phoenix mothers. The commissions and rewards for different levels will be different, allowing mothers to constantly upgrade and fight monsters.

Online education companies generally have two levels. Taking Spark Education as an example, the ordinary promotion of Mom Spark live class for 60 lessons is 6,280 yuan, and the distribution commission is N00 yuan/order, while the group leader commission is N00 yuan + 200 yuan/order, and there will be two levels of commission. Of course, there are also organizations that provide level upgrades in the name of internships in order to promote new employees.

(4) Adequate promotion support

A: Complete distribution system

A perfect distribution system can make distributors feel more comfortable and motivated to help you distribute. A perfect distribution system mainly includes the following aspects

Can generate personalized posters

Commission withdrawal is smooth and immediate

The withdrawal process is convenient, try not to use bank cards

Can record student data in detail

Able to invite subordinates, etc.

B: Provision of materials

Material materials are crucial, especially materials that can facilitate promotion for promoters. The materials here include social media materials and WeChat Moments materials. The key points of material provision are:

First, the materials should be diverse and changeable. The materials should include pictures, texts and short videos, and new materials should be provided continuously.

Second, videos are more penetrating, and the materials provided should show more videos, especially videos of students witnessed by users.

Third, the material provided should be in line with the mother's tone, avoiding absolute officialism, and the copywriting can be done in the mother's tone.

Fourth, the copy provided by the material should be brief, whether it is a copy for the circle of friends or a social network copy.

In addition, it would be even better if mothers could be sent to provide materials. Some rewards can be used appropriately to collect some texts made by users. After all, they represent the users. For example, recruiting experience officers to try out courses and teaching aids for free, but their obligation is to provide class materials for children and write copy.

C: Dedicated service of operators

The dedicated service of the operators will make mothers more willing to promote the product, which requires the operators to promptly answer user questions, help users solve problems, and provide promotional materials in a timely manner.

D: Complete training

Training is not only for new employees, but also for on-the-job training on a daily basis

Training should include not only product training (especially new product promotion), but also sales skills training.

(5) Product optimization and upgrading

Product optimization and upgrading can not only enhance user recognition, but also enhance the confidence of distribution experts in promotion. In terms of product optimization and upgrading, it is necessary to improve the effect of the course, especially the externalization effect of the experience class is very important for enrollment. The externalization of the effect is not only the dataization of the packaging, but also the ability to demonstrate the course effect through homework and user videos.

3. What should we pay special attention to in distribution?

(1) Remember not to touch distribution above level 2

We all know that the national policy is to crack down on pyramid schemes. Distribution levels above level 2 are easily defined as pyramid schemes and banned by WeChat. It is recommended to have a maximum of level 2 and not be too obvious, just as Sparks uses the two levels of ordinary and group leader.

(2) When distributing, remember to pay the commission to the distributor promptly.

Many education companies have very slow payment speeds due to company systems and processes, and many of them will take 1 to 2 months. This will undermine the confidence of promoters, who will then constantly give feedback on commission payment issues and not promote the business well. Now that the company has decided to engage in distribution, it must make payments as quickly as possible to increase the promoters’ motivation to promote the product.

(3) Regarding the issue of tax deduction on commissions

Regarding the issue of tax deduction from commissions, I have seen feedback in many promoter groups, and there is general dissatisfaction with tax deductions. Regarding the issue of tax deductions, I personally recommend not deducting taxes as much as possible. If taxes must be deducted, it is recommended to deduct less or explain the tax deduction issue in advance. Try not to wait until after the tax deduction, otherwise the promoter group will explode, which will seriously affect the promoter's motivation.

(4) Issues regarding the promotion of red lines

According to my observation, every company pays more attention to the promotion red line when managing distributors, because the promotion red line will limit some bad behaviors, such as: random pricing, false orders, excessive promises and order grabbing. These behaviors will destroy the distributor atmosphere and seriously affect the promotion motivation of the distributor.

Walnut Programming's Distribution Red Line

(5) Do not fight a battle without preparation

Whether the preparation is sufficient will determine the effect of distribution. This is the lesson I have learned from several years of distribution. Some people may say to launch quickly and then iterate and upgrade. I personally think that is wrong, because if it is repeated, it will eventually fail. If I am not ready for the preparations I mentioned above, I suggest not to do it first, and wait. If you really do it, the result may be bleak. For example, if your system is not perfect, the binding relationships are messed up, the student data cannot be recorded well, or the distribution posters cannot be used, basically the distribution effect will not be good and it will not have a good impact on word of mouth.

(6) Entry barriers for distribution

We all know the famous 80/20 theory, 20% of users contribute 80% of revenue, the same is true for distribution, 20% of distributors contribute 80% of turnover. The distribution threshold affects the distribution effect, and the presence or absence of a threshold may determine the quality of distribution. Let me briefly analyze it here:

The advantage of having no threshold is that you can recruit more distributors on a large scale, which will lead to larger sales in the short term.

The disadvantage of having no threshold is that everyone can do distribution. If the operation is refined, the pressure of operation will increase. Due to the large management scope, the service of the operation staff will not be in place, and it is also possible to ignore 20% of the effect in order to consider the opinions of the majority. Therefore, for full-staff distribution without a threshold system, there must be enough manpower to operate.

Although there may not be that many distributors recruited due to the threshold, we can concentrate our superior resources and energy to motivate the KOLs of Baoma, constantly stimulate their energy, and produce an effect of more than 80%.

In addition, from my observation, most of the institutions currently adopt a threshold system, requiring certain qualifications for distribution experts, such as having a group of 100 mothers, 1,000 WeChat friends, experience in social course promotion platforms, and how many performance achievements have been made.

In addition to the threshold system, I suggest that targeted referrals can be made for all students. Combining the two methods can give full play to their respective advantages.

IV. Conclusion

Distribution is much more difficult than you think. It is a huge system, similar to the management of employees by a company. The management of distributors is an art. Art requires practice and you will become familiar with it the more you do it. I hope everyone can acquire customers on a large scale through distribution!

Author: Terracotta Warriors Still Waiting for You

Source: Terracotta Horses Still Waiting for You