8 steps to teach you how to build your own closed loop of community monetization

Since 2020, many new brands and companies have begun to build private community traffic. In today's world where product homogeneity is serious and the cost of promoting brands and platforms is getting higher and higher, the refined operation of private traffic is bound to become a traffic pool for every brand and company to compete for.

1. The benefits of building your own private domain

1. Ability to reach users repeatedly

It is suitable for traditional brands and advertisers, which gain user recognition and build brands through the use of public domain traffic. However, as Internet competition becomes increasingly fierce, the cost of acquiring users and gaining their time is getting higher and higher, so the effect is bound to become worse and worse.

In this case, being able to support loyal users with a small cost and reach users repeatedly has become the best choice for many brands. Even if it is the same advertising, the effect will be completely different if it is targeted at a precise user group or at loyal fans with high awareness.

2. The transaction process is low cost and highly controllable

Because private domain traffic belongs to you, there is almost no platform cost when conducting activities and activations. You should know that for many e-commerce brands or platform e-commerce, the cost of acquiring users is quite high, and sometimes they even lose money to acquire users. In private domain traffic, users are their own, and conversion and transaction only require labor costs, platform handling fees, and activity fees. Compared with the public domain traffic in a broad sense, the cost-effectiveness is very considerable.

3. Best way to deal with growth bottlenecks

Many brands and companies will encounter growth bottlenecks when they grow to a certain stage. In order to break this growth bottleneck, in addition to spending more on promotion, we prefer to use private domain traffic to achieve growth. After acquiring customers, we guide them to private domain traffic, and through various benefits and incentives, let users repeatedly fission and share, so as to achieve user and revenue growth. We call this private domain growth.

4. Repeated monetization and amplification of brand effects

When users enter the brand's private domain, they can repeatedly convert and monetize, including live broadcasts and activities in the private domain, which can all be repeatedly converted and monetized. In this process, once a brand carries out brand activities, users in the private domain will provide a huge incremental amplification effect.

Just imagine that the brand effect and word-of-mouth effect obtained by a brand with millions of private fans and a brand that needs to re-reach users from scratch are of completely different magnitudes. The reason why Xiaomi has been able to gain industry reputation and recognition from the very beginning is also because it has a large number of loyal private domain users in its community forums who are able to speak out together. With the dual benefits of monetization and branding, building a private community is a very cost-effective option for many companies.

Therefore, it can be seen from the above that it is very important to manage your own private domain traffic well. Although most brands and companies have this awareness, due to their lack of professionalism in the research of private domain traffic, it is often difficult to achieve good results even if they spend money. In this context, many companies have emerged to provide private domain traffic services for corporate brands.

2. The closed loop of private domain community monetization

When I was providing private domain traffic services, I also summarized a closed-loop path for community building and monetization based on the characteristics of the brand and the service provider. This is the closed loop below, which you can refer to.

The closed loop of monetization of private domain community building:

Traffic-rules-activation-retention-conversion-service-repurchase-fission

Many parts of it refer to the user's growth model and system, but operation is a delicate job after all. This article will use a case I operated myself and break down each part as detailed as possible for your reference.

The case I handled was a customer acquisition case for a beauty chain store . In this case, I not only conducted detailed community training, but also carried out community process design and speech design. Using this case, we can understand the closed-loop system that connects the entire community.

1. Traffic

In fact, everyone should know that traffic is an important part of private domain communities, and it is presented in the community in the form of individual WeChat users. Where does this traffic come from? It can be through many people’s circle of friends, through posters seen in other WeChat groups, or through offline promotions, or even through promotional posters posted in stores. As long as the users are reachable by you, they are considered as your user traffic.

The number of users who visit the store or can be reached every day is limited, just like raising fish, the pond is only so big, so there can't be too many fish.

Only by spreading the users you can attract, giving users a reason to help you split old users and bring in new ones through activities, and repeatedly reaching and stimulating users through WeChat, can users see and understand your existence frequently.

During the flow process, there are two points that need attention, namely the accuracy of the flow and the size of the flow .

The first step to accurate traffic is to determine the source of your traffic and the stability of the traffic source, which plays a decisive role. It’s like a funnel. If the traffic at the front end of the funnel is insufficient or inaccurate, there will most likely be no conversion later.

For example, the packages converted after the purchase on the e-commerce platform are added with small WeChat cards, and the users who come to the store like Luckin Coffee and Miniso are given welfare discount coupons by adding WeChat to the group, which are all entrances to the source of traffic. Every day, new users enter your traffic source. Over time, such data will become huge and valuable.

2. Rules

After private domain traffic enters the group, if there is no rule to do something, then most private domain communities are likely to be messy, such as advertising, ridicule, and random adding of users.

This is because these users are not bound by the rules when they enter your private domain traffic at the beginning. After the traffic comes in, the first thing to do is to give users rules. What you can and cannot do here must first be agreed upon, so that users don’t get into a situation where they don’t know why they came in, and don’t know what they can and cannot do after coming in.

When formulating rules, the best ways are to use two methods: welcome message to the group and private chat.

Example 1 : After adding a friend, first communicate in private chat, then after pulling them into the group, give the other party a welcome message @ to let them know the rules of the group and liven up the group atmosphere. This is the role that rules can play.

Example 2 : There are red envelope grabbing activities on Mondays, discount activities on Tuesdays, discussion activities on Wednesdays, etc., but you cannot advertise or add each other as friends, otherwise you will be kicked out of the group chat. In this way, after everyone comes in, they will not only be able to get into the state quickly, but will also abide by the established rules and will not destroy the group atmosphere.

There must be a threshold for joining the group. This threshold may be having seen your poster, or knowing about your event, or it may be actively participating and being a user who hopes to interact. At this time, if you have this group of users, the first thing you must do when joining the group is to set the group rules.

For example, if you visit someone's home, knock on the door and enter, but the host doesn't respond, what would you think? Does he not welcome me? Does he have any opinion about me? What am I here for? The community scenario is actually a social scenario, and the community also requires social interaction. So think about it, after you create a group and invite others in, should you set rules and tell them what the theme and content of the group is?

The general group rules can be divided into the following parts:

[Practical Case]

Here are the fission community rules I use to expand my beauty business:

After joining the group, you will break the ice (that is, break down the social barriers among everyone so that users can communicate and socialize spontaneously). The ice-breaking session often involves introducing yourself, sending an emoticon, or taking some simple and easy-to-operate steps. This will make the group active, and everyone will have certain topic interactions because of each other's postings.

My friend created a pet community where people send pet emoticons to the group. As a result, everyone was very active and had a lot of fun fighting with pictures. Everyone had some topics to talk about with each other.

3. Promote activity

After users enter your traffic pool and WeChat group, in addition to explaining the rules, you need to promote activation. The purpose of this part is to help users quickly get into the state and actively pay attention to messages in the group.

Promoting activity and user retention are basically the same. While promoting activity, we should make sure that users stay in the group for various reasons and do not leave. For the activity part, we will use some different marketing methods to achieve it, such as preferential forms of promotion methods: red envelopes (Lucky King, released at normal times), clapping, group buying, likes and gifts, big wheel, guessing prices, rolling dice, secondary distribution, old and new members bringing in, group relay, quiz with prizes, screen swiping, and relay.

The application scenarios of each method are slightly different, but they basically serve the purpose of promoting activity. Before doing an activity, think about the purpose and reason of the activity. Only in this way can the activity be meaningful. Do not do an activity on a whim without any follow-up and results. This is not suitable for community operation . For example, an activity should have only one or two themes, and the target group should be the same group of people. Such an activity can achieve very good results. If the users themselves are not the same type of people, it is impossible to carry out precise activities and content promotion. This is just like a doctor who cannot prescribe medicine without identifying the disease.

[Practical Case]

Among the cases I have actually worked on, there was one that used answering questions as a lively way of operation. Because the purpose was to liven up the atmosphere, the entire project process was carried out in a way that rewarded people for answering questions.

4. User Retention

The most critical indicator after users become active is the retention rate, because the user's stay or departure determines the probability of conversion and transaction in the subsequent long-term operations. We once had a rough estimate of user retention data from previous event cases. After reviewing the data after the event, we found that the deviation value was very small, but each industry and attribute has different operating methods, and everyone’s retention rate may also be different.

In a previous multi-group activity, we found that the user retention rate was around 75%. The meaning of this retention is that for every 100 people joining the group, about 25 of them would leave before the transaction was completed. This data provided us with a lot of reference value for similar activities later. If the user retention rate is stable, the solution is more stable and more likely to be replicated. The increase in user retention rate can determine that the language and content used in the activity are more accurate, which can more effectively retain users and prevent them from leaving. User retention is like a reservoir. The more water left in the reservoir, the greater the possibility of conversion later.

5. Conversion and transaction stage

This link is of utmost importance. When users are active and able to stay in the community, it is time to start converting and closing deals, such as selling some high-order products or courses and letting everyone experience them through the community.

Many people do well in the beginning, but become hesitant to take action when it comes to the transaction stage. In fact, as long as sufficient preparation is done beforehand, it is very easy to close the deal.

What needs to be resolved in the transaction process is the user's questions. I think the most important points here are: the product itself, professional image, price anchor, urgency, and herd mentality .

(1) The product itself

First of all, the product itself must be excellent and recognized by users. This is the fundamental thing.

(2) Professional image

The second is the professional image, which can be summarized as the endorsement of the product itself, or the image background of an expert, so that users can have a sense of trust.

(3) Price Anchor and Sense of Urgency

Mobilizing users’ emotions is very important in the entire community transaction process. Users must feel the value of the product or service and generate the urge and desire to buy. At the same time, in the previous preparation stage, we must do a good job of price anchoring, that is, to raise the user’s sense of value to a high level. At this time, the simplest way to give the finishing touch is promotions and discounts .

When we see that a course or product that is usually worth 3999 is only 39 or 390 at the moment of transaction, will we buy it without hesitation? Cheap, favorable prices, many buyers, and trustworthiness are the key factors that can determine whether users want to buy this product or service.

If a sales customer service role is added in this link, and users are chatted with one another to follow up on sales, the effect will be even better. This is also a common method used by many online education companies, and sometimes even telemarketing is used to increase sales conversion rates.

(4) Herd mentality

The herd mentality is fully reflected in the community. When people in the group start saying that a product or thing is good, or when many people have already bought it in the group, even if you don’t know what it is, you will subconsciously want to buy one and have a look.

[Practical Case]

In the case I worked on, I used the method of store + community + mini program live broadcast + chain transaction. In this case, the transaction was made in the form of payment transfer to the store. In addition to relying on the chain transaction within the group, the store also used private chat. Throughout the entire process, the transaction atmosphere was very good.

Use the teacher as an expert to endorse the product, and then use a 59-yuan card with high product value for promotion. The sales effect is obvious after conversion.

6. After the sales transaction is completed, the service begins

The service provided to the user community who have completed the purchase may be product logistics information or course service. In short, it is a service for the product you have previously completed the purchase. If this service link is done well, it can be converted into more repeat purchases of other products or course purchases.

In the service link, we focus more on giving users a good experience and expectations. For example, if we do a K12 education training camp, we will often send private messages to users to remind them to attend classes, or solve their questions individually, etc. In the courses I took, there were even teachers who called me to ask about my opinions and experiences with the courses, etc. These can give users a good experience, make them feel respected and valued, and thus have a deeper understanding and favorability of the brand or course.

In the process of delivering a service, it is possible to combine repeat purchase and fission. Due to the ever-changing product forms, it is impossible to generalize. For example, some products do not require reminder services, but can have good after-sales services, which can also be counted as part of the services. The biggest requirement for a brand or company is the quality and adaptability of the service team, which is very useful for cultivating loyal users.

[Practical Case]

After the transaction is completed, we will start the service phase within our community. We will respond to various questions from users and help them solve their problems. When the problem is solved, the user will have a very good experience. If no one responds to the question, the user experience will be very poor.

7. Repeat purchase

Repeat purchase is the behavior of users repeatedly purchasing or purchasing other types of products of the brand after making a sale. After the user completes the transaction and the product + service is delivered, the user will enter the repeat purchase stage.

Improving users' ability to repurchase is an issue that many brands are eager to solve. In this link, Perfect Diary often uses live broadcasts and mini-program promotions to reach users multiple times. Once users have become fans of the brand, repurchase is a natural thing as long as users are given a reasonable reason. At this time, for example, the creation of scene problems (live broadcast), preferential activities (mini program promotions), and even the issuance of discount coupons, all have the opportunity to make users repurchase.

Imagine that after you buy a product and enter the brand’s service community, you discover that a series of related products are on sale and have great value for money. Does that give you another reason to make another purchase?

When your product has attributes such as multiple categories, fast-selling, and related consumption, repeat purchases will become a very good way to increase average order value. Repeat purchases will amplify the user value generated by a single user and can bring more growth profits.

8. Fission

After users make repeat purchases, you can use methods such as old customers bringing in new ones, group buying, and assistance to achieve fission and spread the business. There are already quite a few companies in the market that are good at the fission link. It has become a common practice to use various methods such as 1 yuan unlocking, group buying, free shipping, etc. to use interest bait to bring in new customers through old customers.

The fission methods I have summarized are:

The most critical factor of fission is the use of interest bait, which allows users to help you share activities or products, thereby obtaining brand activity publicity and achieving the function of low-cost customer acquisition.

On this point, for example, Chaos University recently offered a first-month card discount and an activity where sharing could generate income, and it was basically all over the circle of friends. What they do is utilize the fission of their own users. This customer acquisition method is much better than advertising.

If the fission is completed, it will return to the first step and start the community traffic link again.

In order to increase private domain traffic, in addition to using this closed-loop community operation method, it is also necessary to borrow a lot of tool platforms.

At the same time, before making a complete set of community solutions, you also need to pay attention to:

Conclusion

The closed-loop path of the above private domain traffic can be reused in many traffic operation scenarios, such as courses, products, etc. The disassembly and review of each link will bring more unexpected gains.

Managing private domain traffic is not just a simple job. It often involves the opening up of various links and detailed operations. When each link is achieved and can be optimized, the growth of the private domain will obviously enter a virtuous circle.

I hope that the above closed loop of channels can provide you with a reference in the practical operation process. I also hope that in the future, private domain traffic can play a more important and decisive role in the operation of enterprises or brands.

Author: Red Masters Association Coconut Green

Source: Red Masters Association Coconut Green