Alibaba's three major marketing models: AIPL, FAST, and GROW

This article will use relatively colloquial language and cases to explain these three models clearly, so that e-commerce professionals, marketers in traditional marketing departments, etc. can understand the "dashboard" for refined operations of these three groups.

"Consumer-centric refined operations " seems to have become the most politically correct phrase in the marketing industry.

Because the Internet's demographic dividend has been exhausted and the era of stock has arrived, the growth of enterprises must be achieved through refined operations on consumers. But for most companies, "knowing but doing is inconsistent": the investment in marketing expenses is still in an extensive model, with no visible growth effect and no breakthrough point to be found, so they can only invest again, which eventually forms a vicious circle.

The promised "consumer-oriented operations" has become nothing more than empty talk. However, marketers working in traditional marketing departments still cannot get rid of the stereotype of "only spending money but not producing anything".

Why do we all know that we should carry out "consumer-oriented operations" but are unable to do anything about it?

There is actually a very important "dashboard" missing behind this to guide how marketing should be targeted . For example: to achieve growth goals, what are the most important decision-making factors, and marketing expenses can be focused on these factors; after calculating the distance from this GMV, how much population gap there is, the expenses should be focused on the operations of these groups.

When it comes to the "dashboard" for refined operations, we have to mention Alibaba. As the current benchmark in the field of refined consumer operations, Alibaba has proposed three major marketing models to date. They are:

• AIPL model: the first quantification and chain operation of brand crowd assets
• FAST model: a model to measure the health of consumer operations in terms of quantity and quality
• GROW model: a growth model that guides the targeted growth of categories in the fast-moving consumer goods industry

But judging from the name and the official explanations above, does it sound a bit confusing? This article will use relatively colloquial language and cases to explain these three models, hoping to allow more marketers, whether in e-commerce or traditional marketing departments, to understand the "dashboard" for refined operations of these three groups.

1. AIPL Model

(The first time to realize the quantification and chain operation of brand crowd assets)

Everyone knows that "brand crowd assets" are important. For example, Robert Woodruff, the legendary president of Coca-Cola, said: Even if all the Coca-Cola factories were burned down, give me three months and I can rebuild the entire Coca-Cola.

Why does this president dare to make such a bold statement?

The most important thing is that the Coca-Cola brand has strong consumer equity, including those who have heard of Coca-Cola, those who have drunk it, and those who buy it many times a year.

In the past, "crowd assets" was a concept that was difficult to quantify. We can only qualitatively say that Coca-Cola's crowd assets must be greater than that of Master Kong, but we don't know the exact amount.

Therefore, Alibaba launched a model that can quantify the brand’s crowd assets in the Alibaba system . This is also a key link in supporting the implementation of its omni-channel marketing concept. This model is called: AIPL.

• A (Awareness), people who are aware of the brand. Includes people who are reached by brand ads and search by category terms;
• I (Interest), people interested in the brand. This includes people who click on ads, browse brand/store homepages, participate in brand interactions, browse product detail pages, search for brand terms, receive trials, subscribe/follow/join, and add to cart collections;
• P (Purchase), brand purchasing population, refers to people who have purchased brand products;
• L (Loyalty), brand loyal people, including those who repurchase, comment and share.

All AIPL asset data of a brand can be stored in the Data Bank, relying on the user's common identity (UNI-ID) in the Alibaba system.

One more thing needs to be added here: What does the Alibaba system include?

This can be described by three rings:

The innermost ring is of course the well-known channels such as Tmall, Taobao, Juhuasuan, and Maochao;

The second link is some overseas media or platforms acquired or invested by Alibaba, such as Youku, UC Browser, Amap, Ele.me, Hema, etc., and even includes some offline resources, such as Interactive Bar Sample Machine and Intime Commercial Large Screen.

But this is not enough. Alimama is now also working hard to expand its cooperation to more media platforms outside the domain, such as Weibo, Douyin, Xiaohongshu, Bilibili, etc. Through the Ali Uni Desk delivery workstation, the AIPL crowd assets harvested on these media can also flow back to the data bank.

Okay, after introducing the AIPL model and the general operating mechanism behind it, let’s talk about the most important role of this “dashboard” for refined operations: linking brand and population assets.

In short, for people at different positions in the chain, the brand uses corresponding communication content and channels. The ultimate goal is to accumulate crowd assets and achieve efficient circulation of the chain: let the "A crowd" be transformed into the "I crowd" as quickly as possible, and so on. Imagine that your brand has countless "L" people, you should no longer have to worry about doing business badly.

So, how to implement it specifically?

First, we need to analyze the data bank account: What problems exist with the brand’s current “AIPL” crowd assets?

For example, the number of "A crowd" is too small compared to competitors, or the turnover rate from "I crowd" to "P crowd" is too low, or the proportion of "AIPL" crowd in the brand flagship store itself is too small compared to other C stores and dealerships...

Then, you can adopt the appropriate solution strategy for the specific problem in the link .

For example: To address the problem of too small number of "Crowd A", in addition to placing brand advertisements on the site through "overnight screen domination" resources, you can also integrate the resources of the brand marketing department to attract new users. In traditional media placement, after the media placement is completed, the media company will provide the client with some communication data, such as the number of exposures and clicks. However, if these media use Uni Desk for placement, the user data reached can also be matched with Alibaba's Uni ID and deposited in the data bank, becoming a new "A population".

For another example: Regarding the problem of too low turnover rate from "I population" to "P population" in the link, it means that the store currently lacks a sales conversion mechanism. The approach is to first divide the "I population" into different groups according to labels. Some of them may be sensitive to promotional discounts, so you can use Diamond Ads to push store discount information to them for harvesting; some are pulled in through celebrity activities, so perhaps you can use some celebrity-related products to attract them to make the next purchase.

2. FAST Model

(Model for measuring the health of consumer operations in terms of quantity and quality)

If AIPL helps merchants understand the total amount of brand crowd assets and the number of people in each link, then FAST is a model that measures whether the brand's crowd asset operation is healthy from the two dimensions of quantity and quality based on this.

This indicator mainly helps brands understand their total number of operational consumers. First, the GMV prediction algorithm is used to estimate the total number of brand consumers. Then, based on the gap, the marketing budget is optimized, and multiple channels inside and outside the site are used to attract new customers, so as to expand the brand's consumer assets. It also guides the brand in future product planning and market expansion, and expands consumers in multiple ways.

• A (Advancing) refers to the AIPL population conversion rate. Improve consumer activity in multiple scenarios and promote positive flow of crowd links; After the multi-channel seeding crowd is accumulated, further screen high-quality crowds and reach them through advertising channels; accumulate crowd segmentation within the brand, conduct tiered operations on consumers, differentiate marketing, and promote the overall flow and conversion of consumers;

• S (Superiority), total number of high-value people minus total number of members. Members/fans are of great value to brands and can provide amazing explosive power for brand promotions. Through online and offline linkage, joint brand marketing, and the use of new retail scenarios such as Tmall U-first, Taobao Easter eggs, and smart mother and baby rooms, the brand's membership/fan base can be expanded, laying the foundation for subsequent membership/fan operations.

• T (Thriving), high-value population activity rate - member activity rate. Take advantage of the big promotion to increase the activity of members/fans, stimulate the potential value of members/fans, and provide support for the completion of brand GMV goals; carry out tiered operations for members/fans according to RFM indicators, optimize activation efficiency, reach and punish thousands of people with thousands of rights, combine public and private domains, and empower member/fan operations;

At the quantitative indicator level , the FAST system provides the total number of consumers on the entire network (Fertility) and the total number of high-value people - members (Superiority); at the quality indicator level , it provides the population conversion rate (Advancing) and member activity rate (Thriving).

So, what is the specific use of the FAST model? We can understand this through some cases.

Application Case 1:

A brand deconstructed the Double 11 GMV target and deduced the volume demand of different groups of people.

The idea is to first break down the total GMV target into new customer sales targets and old customer sales targets, and then break down the new customer sales target into sales of A and sales of I. Based on the sales conversion rate and average order value of A in previous promotional activities of the same magnitude, the volume demand of the A population needed this time can be inferred. By the same token, we can also infer the population size requirements of I, P, and L respectively. The specific disassembly ideas are as follows:

After estimating according to the above steps, it was found that there was a certain gap in the cognitive interest (A, I) link. Subsequently, by optimizing the marketing budget and adding a certain amount of marketing expenses, the transaction volume of new and old customers during the Double 11 period was exceeded, and the GMV increased by more than 2 times compared with last year's Double 11.

Application Case 2:

Wyeth integrates people, goods and venues to efficiently gather consumer assets

In 2018, Wyeth, as a benchmark for digital transformation in the maternal and infant industry, focused on people, goods and venues to comprehensively improve the operational efficiency of FAST population. Under the guidance of the FAST system, we can more objectively measure the efficiency of brand marketing operations and ensure the healthy and long-term maintenance of brand value.

F, A strategy - multiple "fields" to promote consumption conversion

In order to increase the overall scale of the operational population and improve the conversion rate of the population, Wyeth uses decentralized fragmented scenarios at the F level, including off-site UD coverage and offline new retail, combined with the centralized CRM model of the "Wyeth Mom Club" to conduct panoramic consumer insights, thereby accumulating high-potential populations to the greatest extent. To further catalyze population conversion, Wyeth optimizes through continuous testing and iteration.

On the one hand, we fully utilize the content marketing matrix within Alibaba Taobao, including Weitao, Youhaohuo, live streaming and other channels, to efficiently establish close ties with consumers through soft advertising methods; on the other hand, we combine traditional advertising methods such as UD outside Taobao and Diamond Exhibition within Taobao to further occupy the minds of consumers. We use a multi-pronged approach across content, advertising, consumption, and CRM fields to decode the consumer life cycle.

Taking content as an example, in response to the needs of different mothers and infants, Wyeth selects influential public figures in different fields to endorse the brand, customizes content, and promotes it in a targeted manner, including the Hot Mom Advanced Officer, Newborn Pampering Officer, Palace Parenting Officer, etc., and targets different groups of new mothers with corresponding materials, triggering approximately 7.67 million readings of the Weibo topic. At the same time, the number of views of the sponsored variety show reached 300 million, fully covering the minds of consumers.

S, T strategy - Membership benefits, accumulation of super users

The number of member users (S) and the member user activity (T) are evaluation indicators for consumers with high net worth, high value and high influence on the brand. Therefore, they are also the areas that Wyeth attaches great importance to. For this purpose, a plan for global fan operations has been formulated.

The first is to gather a large number of fans through content and interaction. The most unique idea is to team up with Tmall Genie, a mobile intelligent breastfeeding expert. If users encounter doubts during the feeding process, they can interact with Tmall Genie at any time to get corresponding answers. This allows Wyeth's service breadth to be further expanded to consumers' actual use through interactive communication, thereby promoting fan conversion. Other interactions include KOL communication in various fields and reaching out to thousands of people in different ways.

Secondly, it is to gather fans through scenarios, that is, to make consumption scenarios community-based through online and offline activities and complete the process of fan fission , including the online "Baby Tree" vertical community to increase user stickiness, offline pop-up stores/smart mother and baby stores to create community scenarios, and CRM Wyeth Mom Club for continuous interaction. These three lines enable users to not only become fans through interaction with brands, but also to generate fan fission during the interaction, helping brands to accumulate super users efficiently.

Finally, as for fan monetization, Wyeth further strengthens membership advantages by binding new members to cards, granting new customers purchasing rights, event invitations, exclusive coupons, etc., so that brand fans can monetize immediately and in the long term.

As super users have extraordinary value to the brand, Wyeth established the Breast Milk Research Institute based on the needs analysis of 139 million mothers, and more than 20 experts from the Breast Milk Research Institute provided parenting encyclopedia and breastfeeding knowledge. It also teamed up with Tmall Genie to cover more than 5 million Tmall Genie users with an activeness rate of up to 95%, and entered more than 1,000 Tmall smart maternal and child stores and more than 220 Kids King stores across the country, focusing on innovative online and offline scenarios, providing high-quality products and service experiences, and cultivating high-value groups.

Under the FAST system, we refined our customization of population operation goals, accurately positioned segmented populations, and improved population conversion rates. During Double 11, Wyeth Aptacare achieved a grand slam in all four FAST indicators, achieving an overall improvement in the health of population operations and an excellent increase in consumer assets of ~50%. The total number of operational populations and the number of super users both increased by 20% compared to before the event, and the positive turnover rate of the population and member activity also doubled. Within the integrated digital ecosystem, we can truly achieve personalized consumer management for each individual and conduct in-depth research on the entire end-to-end consumer journey.

3. GROW Model

(A growth model that guides the targeted growth of categories in the FMCG industry)

Growth should be the eternal topic for marketers. Especially in the stock era when the Internet traffic dividend has peaked, growth has become increasingly "difficult". The difficulties usually lie in three areas: failure to find a direction to help the category grow, lack of clear drivers for category growth, and low efficiency of category growth.

Therefore, Alibaba, which is now positioned as a business operating system, has proposed a growth "dashboard" for the FMCG industry, the GROW model, which is applicable to several major first-level categories such as maternal and child care, food, household cleaning, beauty, medical care, and personal care. The four words in GROW represent the “decision factors” that affect category growth:

• Gain: refers to the contribution of consumers buying more categories/products to the brand’s total growth opportunities;
• Retain: refers to the contribution of consumers’ more frequent/repeated purchases of products to the brand’s total growth opportunities;
• Price power (bOOst): refers to the contribution of consumers’ purchase of price-upgraded products to the brand’s total growth opportunity;
• Widen: refers to the total growth opportunities that a brand can contribute by providing other related types of products outside of its existing categories.

Different categories have corresponding GROW indexes, that is, the respective G/R/O values ​​are calculated based on the contribution of (G), (R) and (O) to their respective GMV. This is to guide the growth direction of the corresponding categories.

for example:

• The category penetration (G) of the maternal and infant industry is significantly higher than other factors
• The repurchase power (R) opportunities in the food and household cleaning industries are outstanding
• The beauty and pharmaceutical and healthcare industries have the greatest opportunities in terms of price power (O)
• The personal care industry has even growth opportunities in all aspects, with slightly higher penetration (G) opportunities

In addition to the GROW index of each primary category, brands can also query the growth direction of each secondary category through the category map, as shown below:

For example: What are the top 10 secondary categories in the food category that are most suitable for improving penetration? Which are the most suitable for improving price power? Which are the most suitable for improving penetration in the beauty industry?

This category map is very helpful, especially for brands that have various categories under their umbrella. They can follow the map to find the growth points of each category.

Next, let’s talk about how to improve the implementation strategy of each index in GROW.

Gain:

• G1: Extend the target population to drive category penetration. Target the core groups in the industry (top 30%), penetrate the sinking market, and segment the long-tail groups (small town youth, Generation Z, etc.).
• G2: Cross-category penetration. Identify highly relevant categories, combine them with on-site joint marketing, and penetrate by creating related categories/brands (CP); strengthen the integration of online and offline omni-channel consumer data to enhance penetration.
• G3: Multi-channel linkage penetration. The brand directs consumers from different channels to each other, achieving omni-channel reach and penetration of consumers.

Retain:

• R1: Product consumption life cycle is extended. Prevent the loss of purchasing groups. For example, in consumer communications about sunscreen, emphasize year-round sun protection and push daily anti-aging information.
• R2: Expansion of product usage scenarios. Increase the frequency of repeat purchases by exploring the needs of segmented scenarios and cultivating new consumption habits.
• R3: Trigger for high-frequency repurchase. By matching high-repeat purchase groups with high-repeat purchase products and combining marketing methods, we can stimulate repeat purchases.
• R4: Awakening and recalling old customers. Increase purchase frequency and number of orders by strengthening communication with consumers.

Price power (bOOst):

• O1: Repurchase and upgrade of old customers. Upgrade repurchase of old customers with low order value and increase order value of old customers with high value.
• O2: Product packaging upgrade. Leverage price upgrades through packaging upgrades.
• O3: Achieve premium based on emotional appeal. Marketing support increases product premium and focuses on creating product selling points.
• O4: Function/attribute upgrade. Redefine the price band/range of industry products through product upgrades.

Widen:

• W1: Analyze industry trends to identify new category opportunities. Analyze and capture better market opportunities, analyze the characteristics of the category life cycle, combine market attractiveness and brand self-establishment capabilities, and formulate strategies for entering new industries/category businesses.
• W2: Identifying crowd needs helps expand product categories. Gain insights into crowd needs, incubate and innovate new categories in the industry, and fill in the category gaps that are not met by existing purchasing groups.
• W3: Discover new categories by deriving from the product value chain. Combine the brand's own industrial value chain capabilities and identify and enter new product category markets based on the value chain's derivative direction.

Finally, we will use several cases to understand the practical application of the GROW model.

Application Case 1

A dairy brand analyzed category trends, identified new category opportunities, incubated new products, and successfully enhanced brand extension.

The dairy category operated by this dairy brand is the top-ranked development category in the food industry's scalability (W). In addition to the decision-making factor penetration, the brand also chose to analyze industry trends and identify the landing scenarios of new category opportunities (W1) to focus on developing scalability.

The brand first leveraged its strategy center to accurately grasp category trends and discovered that the snack market has broad potential and is rapidly growing in size. The population behind it is huge and has a clear trend toward younger people. White-collar workers with higher spending power are becoming the main force in the market. The brand then quickly seized this market opportunity, targeted two potential customer groups: children and people who want to eat but are afraid of getting fat, and launched the brand's first solid yogurt product. This new product combines snacks and yogurt, and is popular for its burden-free, casual snack attributes.

In addition, the brand also conducts precision marketing of new products for segmented customer groups. Based on the population data provided by the data bank and strategy center, the brand established a consumer matrix, segmenting consumers into multiple levels such as potential customers, new customers, old customers, fans, and members. Customize scenario-based store pages for different consumers, adopt different communication themes, and provide corresponding product rights.

This series of implementation measures of the dairy brand have achieved remarkable results. The new product sold over 10,000 units within one month of its launch, and over 60% of the buyers were new customers, effectively enhancing the brand's product extension potential. From the perspective of the core indicators of scalability, in fiscal year 2019, new categories contributed 1% to the brand's new customers, and the average consumption amount ARPU increased by 2% year-on-year. The brand's continued product scalability has brought sustained and healthy growth to the brand, and the growth rate of average ARPU during the 618 period was higher than the industry average.

Application Case 2

A coffee brand upgraded its scene gift boxes and launched limited edition gift boxes in collaboration with sports brands, achieving a double increase in customer unit price and sales.

The coffee brand launched afternoon tea gift boxes to create scene packaging, and the co-branded IP packaging expanded the cross-border consumer audience and successfully increased the premium space.

In terms of results, the price power of afternoon tea gift boxes increased by 15%, achieving a sales growth rate of 50%; the brand collaborated with a sports brand to produce limited edition gift boxes, which increased the price power by 50%. The boxes were sold out immediately after they were launched on the day of Juhuasuan, and the sales of the high-end coffee series increased by nearly two times.

Application Case 3

A baby and child brand successfully penetrated across categories and increased the penetration of purchasing groups

A certain baby and child brand operates multiple categories including diapers, among which the diaper category ranks first in the "decision-making factor" penetration (G) in the maternal and infant industry. The brand chose a cross-category penetration scenario (G2), focusing on improving product penetration and successfully penetrated the purchasing population across categories during the 618 period.

In terms of specific operations, the brand connects consumers of different categories through cross-category penetration.

First, the brand used the Tmall platform’s data bank and strategy center to analyze the purchase overlap between categories around core products, focusing on core products with high purchase overlap such as waist-belt stools, water cups, wet wipes, and trolleys to carry out cross-category penetration.

Afterwards, the brand locked in matching category products and carried out targeted marketing to potential groups in related categories, using multiple category linkage operations, such as multiple discounts for multiple items, half-price for the second item, buy-one-get-one-free packages, brand redemption cards for old customers, etc., to promote cross-penetration between groups of people in different categories.

In the diaper category, the brand focused on penetrating the diaper category in various forms for the 0-3 year old group with urgent need for diapers, and launched multi-dimensional scenarios such as diaper and wet wipes combination purchase scenario modules and pregnant mothers urging stockpiling modules to achieve rapid growth in diaper sales.

During the 618 promotion, the return on investment (ROI) of the brand’s complementary categories was above 3, with the highest reaching 21.

From the perspective of the core penetration index, in terms of the brand's contribution to new customers during the 618 shopping festival, wet wipes sales increased by more than 100% year-on-year, shopping carts increased by more than 40% month-on-month, and water cups increased by more than 20% month-on-month, which maximized the brand's acquisition of new consumer groups and accumulated brand asset pools;

From the perspective of overall industry penetration, during the 618 period, the penetration rate of water cups increased by about 6% month-on-month, wet wipes increased by more than 10% month-on-month, the shoulder strap category increased by about 1% month-on-month, and the trolley category increased by about 1% month-on-month.

Ultimately, with the mutual penetration of multiple categories, the number of sub-categories purchased per capita increased by 20+% year-on-year (25% more than the same level in the industry), and the average consumption amount ARPU increased by 35.29% year-on-year (28% more than the same level in the industry), achieving the coordinated penetration and development of multiple categories of the brand.

Author: JS Planner

Source public account: JS planner (ID: powerpluspoint)