A detailed explanation of the formula for live streaming sales

As traffic dividends become increasingly tight, traffic scarcity has triggered a battle among major platforms, resulting in interesting phenomena such as the contentization of e-commerce platforms, the e-commerce of content platforms, and the e-commerce of social platforms. Tencent Live has hit the general direction of social platform + content e-commerce.

Liu Shuopei, director of Tencent Live, believes that the underlying logic of live streaming and community has certain similarities, and group owners or anchors use tools to create a community or live streaming atmosphere. The better the tools are, the better the atmosphere in the live broadcast room will be.

Liu Shuopei also summarized 3 golden formulas for live streaming. One of the comparisons is very interesting. The fission rate and repurchase rate are difficult to achieve in public domain live streaming, but they are very important and easy-to-operate core logic in private domain live streaming. In addition, the three elements in the golden formula for brand private domain traffic live streaming: strategy, brand value, and organizational capabilities, determine whether a company can truly do a good job in private domain live streaming.

At the Jianshi Private Domain Traffic Live Broadcast Marathon on June 6, Tencent Live Broadcast Director Liu Shuopei gave a partial interpretation of the underlying logic and rules of live broadcasting. as follows:

Liu Shuopei, Director of Tencent Live

We have only been working on the Tencent Live product for about a year, and due to the impact of the epidemic, it has experienced explosive growth. In fact, the business we are currently doing is to explore the model of merchant live streaming in the private domain system, while also exploring ways to obtain public domain resources in different scenarios.

Another background besides the epidemic is that technology has driven the development of the live broadcast field faster than expected, especially the popularization and low cost of 5G and 4K technologies, which have enabled both the anchor and the user side to quickly adapt to changes in the new environment. Many live broadcast formats that were previously thought to be impossible have also sprung up like mushrooms after a rain. For example, the street stall economy that everyone has been discussing these days was quickly tied to live streaming.

1. Traffic scarcity triggers a battle for platforms

Now the traffic dividends of all platforms are beginning to tighten. In the third quarter of last year, a data platform released a report mentioning that China’s total national time has begun to stagnate, and even showed a slight negative growth.

Although the epidemic has brought about a short-term rebound in high growth, overall, both e-commerce platforms and content platforms have triggered a battle for traffic due to the scarcity of traffic. Therefore, e-commerce platforms started to create content, content platforms started to do e-commerce, and social platforms themselves have content attributes and e-commerce attributes. The combination of the three becomes a social e-commerce platform. This is a very interesting phenomenon. Tencent Live just happened to hit the general direction of social platform + content e-commerce.

2. What is the underlying logic of live streaming?

Our department used to mainly work with QQ groups, and last year we started working with WeChat groups. Later I discovered that if you extract the logic from the community, it actually has certain similarities with today's topic of live streaming sales .

Let me show you a picture, which may help you understand the underlying logic of live streaming.

The picture on the left introduces something called "community sacrifice". For example, the Temple of Heaven, Temple of Earth, Temple of the Moon and Temple of the Sun in Beijing are all places where the emperor and his ministers would go to sacrifice to the heaven, the earth, the moon and the sun.

The process of sacrifice can actually be easily understood by breaking down the left and right radicals of the character “社”. On the left side of “社” is a scepter, and on the right side is a piece of land. The overall meaning is the ritual sense of a scepter on the land.

In fact, when users enter the live broadcast room, the host can attract you because he is playing the role of "she". The microphone he holds is a scepter, and the live broadcast room is a piece of land. He uses the sense of ritual of the scepter to create stickiness between the live broadcast room and users.

The picture on the right is the word "group" in oracle bone script. The oracle bone script is a top-middle-bottom structure with an inconspicuous small logo in the middle . It actually means that when the "king" manages the "sheep", he needs to use the tool in the middle to achieve it. The group owner also needs management tools to manage group members. This tool is the underlying logic of live broadcast that we are going to talk about today. The better the tool is used, the better the atmosphere of the community will be.

For example, live lottery can liven up the atmosphere and increase users’ viewing time, but if the lottery rules are not set well, users will complain, affecting the atmosphere of the live broadcast.

Let's continue to disassemble:

The host of the live broadcast room is actually a very interesting group owner. The host needs to be friendly and inspiring, and cater to the audience by interacting with the barrage. Many people think that live streaming is just the interaction between the host and the users, but a successful live streaming requires many roles to assist each other to complete. These roles can be divided into: babysitters, spectators, experienced buyers, and consumers driven by the rhythm. A successful live broadcast is very similar to a stable and active high-quality group.

3. What is the rule for live streaming to become popular?

Next, let’s talk about three rules for becoming popular during live streaming.

The golden formula for live streaming of public domain traffic:

GMV = public domain traffic x room entry rate x conversion rate x customer unit price

The golden formula for live streaming of private domain traffic:

GMV = private domain traffic x fission rate x conversion rate x repurchase rate x average order value

Comparing the two formulas, you will find that there is a huge span and difference between them. There are two important variable elements in the private domain traffic live broadcast formula:

First, the fission rate. In a good private domain live broadcast, the user fission attribute can be fully utilized, which can be done by sharing to Moments, WeChat groups, or interacting through lottery draws. In short, we must find ways to allow users to spread the live broadcast room to their small private domains, allowing different private domain traffic to overlap with each other to form a new round of expansion.

Second, the repurchase rate. Repeat purchases are difficult to achieve on public platforms, but they are a very important and easy-to-operate core logic in the private domain. In the private domain, users must have purchased related products before and have a high level of brand awareness. Therefore, the average order value of repeat purchases is relatively high, and the user's LTV will increase accordingly.

The golden formula for live streaming of brand private domain traffic

GMV = strategy (depth of cognition) x brand value (hot products) x organizational capabilities (all employees)

In my opinion, if a company wants to be successful in live streaming of private domain traffic, it depends on how the three elements of strategy, brand value and organizational capabilities can be efficiently connected during the live streaming.

Let me give you a negative example. A public account of a listed company has 40 million followers, more than 500,000 communities, tens of thousands of stores, and great products. However, senior management is afraid that live streaming will affect the stock price, so they dare not try to delegate organizational capabilities or allow stores to do live streaming. Instead, they invite external anchors to do live streaming at the headquarters. Their purpose is to hope that others can first run the entire live streaming path before letting their own people do it. However, the overall development speed is much slower than that of their peers who are fully committed to developing private domains. Because if the company does not place live streaming at a certain strategic level, it will not be able to promote the opening of the store's settlement system and mobilize the enthusiasm of shopping guides.

Moreover, external anchors do not trigger the brand's private domain traffic, but consume the anchor's private domain traffic. Enterprises pay for the anchor's work station fee and CPS. At the same time, the host’s private domain users may have no knowledge of the brand at all, and it only serves the purpose of expanding the circle without truly activating its own private domain traffic.

In addition, I have seen many brands choose products with serious inventory backlogs when choosing explosive products in order to achieve the goal of quickly turning around cash flow. This is a taboo in operating private domain traffic. Because this will mislead old customers into thinking that they can buy cheap goods in the live broadcast room in the future without having to waste time going to the store. The main scenario for destocking is the expert cooperation model of content e-commerce platforms.

To summarize:

First, senior management of the company must first have a high level of strategic awareness and a unified mindset: private domain live streaming is a strategic upgrade for the company, not a transitional measure during the epidemic.

Second, in terms of brand value, private domain users must receive better services and experiences than those in the public domain, and efforts must be made to make users willing to spread the brand.

Third, in terms of organizational capabilities, it is necessary to mobilize all the available energy of the enterprise. Even for the shopping guides in terminal franchise stores, a simple and feasible profit distribution model and incentive system should be designed for them to ensure that they have enough motivation to share the live broadcast information with the shopping guides' customer base.

To give another example, a coastal listed company was affected by the epidemic, and thousands of stores were closed. It also did not plan private domain traffic in advance. The stores were franchise models and could not reach the shopping guide group. what to do? The chairman personally took action and mobilized every employee from top to bottom to gather their own private domain traffic. At the beginning, it was just an attempt with a single store, but he mobilized tens of thousands of employees in the company to spread the live broadcast preview content. Before the live broadcast, they set a very challenging OKR goal. As a result, except for two items that were not met, all other items exceeded the target.

In addition, they also conducted AB testing and set up two live broadcast rooms, one with a shopping cart and the other without a shopping cart. Because if a shopping cart is included, it means that the goods are shipped by the headquarters, and the shopping guide will not get this part of the commission. Shopping guides prefer not to have a shopping cart, but would rather users ask them directly through a small window, ultimately forming a binding of interests. The reason for conducting such a test is that the top management will consider the profit distribution mechanism between franchise stores and directly-operated stores from many aspects, so that tens of thousands of shopping guides can receive very clear feedback.

Therefore, in the process of private domain operations, in addition to considering the content and product selection of the middle platform, we must also consider details such as whether the front-line terminal personnel can make profits.

4. How is the scene map in Tencent’s private domain built?

Building a scene map in Tencent's private domain mainly consists of three paths: "people, goods and places":

First, the "goods" mainly include all the SKUs of goods from JD.com and Weidian, which are invested by Tencent, and also the goods of all WeChat mini-program merchants. Users can directly jump to the merchant's own mini-program to complete the payment in the live broadcast room.

Second, the core of the "field" is still on the WeChat scene side. You can enter directly by searching for "Kandian Live" in WeChat. In addition to WeChat, we have now also opened up some of Tencent's internal traffic platforms, including QQ Browser, which has over 100 million daily active users, QQ, Kandian Express, Weishi, etc. Tencent News and Tencent Video will also be connected soon.

Third, “people” is Tencent’s greatest advantage. On the WeChat side, there are three main types of live broadcast hosts: social media influencers who make conversions through the community; public account hosts who reach fans through pictures and texts; and retail brands who import users into their own private traffic pools to generate repeat purchase conversions.

Author: See the truth

Source: Jianshishijie

Related reading:

The underlying logic of live streaming sales

The traps of live streaming sales and the skills of live streaming sales by celebrities!