Let’s talk about the three common mainstream promotion methods of Taobao customers

Today I want to talk to you about the common ways of Taobao promotion. Many merchants, Taobao promoters , and even a large number of Internet practitioners do not fully understand this, so I plan to share this topic this time.

1. Taobao promotion categories

In my definition, there are two main types of Taobao discounts: one is the discount promotions within the Taobao platform, such as the common store coupons, super red envelopes, instant discounts, limited-time discounts, merchants' first order gifts, etc. This type is mainly a public discount promotion activity organized by the Taobao platform or sellers for all Taobao users.

The other is the promotional activities outside the Taobao site through Alimama (Taobao Alliance) Taobao Affiliate. Its purpose is to bring consumers from the entire network to Taobao to shop through this promotional method. Taobao Affiliate has a strong coverage capability and can almost cover the entire network. However, this type of promotion is not targeted at all online channels, but is a form of price discrimination marketing targeting specific Taobao channels or media.

In previous articles, I have introduced what is price discrimination strategy in retail. I will introduce it again here. Price discrimination strategy, also known as price differentiation, refers to the behavior of manufacturers charging different prices for the same product in the same period. Price discrimination can be charging different prices to different buyers, or charging different prices to the same buyer for different purchase quantities. For example, the common Taobao coupons, as well as the coupons issued by KFC and McDonald's, are all distributed through some specific channels, which falls within the scope of price discrimination. Through coupons, Taobao, McDonald's and KFC have successfully distinguished between the "rich" and "poor" customers.

For the "rich" - those who do not hold coupons, the goods provided by merchants to them are more expensive (no discounts), and for the "poor" - those who hold coupons, the goods provided to them by merchants are cheaper (discounts). The goods are the same, but the prices are different. This is a typical example of price discrimination. This price discrimination strategy allows businesses to extract more value from consumers, allowing every consumer to consume at the highest price they can afford, thereby maximizing profits.

I think everyone should understand this explanation. The promotional offers on the Taobao platform are for users across the entire network, while the promotional offers on the Taobao customer channel are for specific users of specific channels.

The benefits of doing so are obvious, but it will also bring some unexpected problems. Because of the existence of these two forms of promotion, if many merchants are not experienced enough or have chaotic internal management, it is often the case that a product participates in the promotion of the Taobao platform and has set up promotions on the Taobao channel. This leads to this situation being discovered by some savvy online shopping users. By combining the discounts of the Taobao channel with the promotional discounts on the Taobao site, they can eventually purchase the target product at a very low price or even for 0 yuan, causing very painful losses to the merchants, and they are also fleeced by the wool party to the point of crying. Therefore, most of the loopholes we see in the market are caused by the superposition of this two-way discount.

Next, I will systematically talk about the various discount promotions and promotions of Alimama (Taobao Alliance) Taobao customer channel.

2. Rebate Promotion

All kinds of promotional offers in the form of rebates that we see on the market belong to this category, including but not limited to cash back, points back, Alipay Jifenbao back, phone bill back, shopping voucher back, game coin back, digital currency back, etc.

There are also a lot of such apps. The rebate-type apps include Fanli.com, Yitao, Taofenba, and Save Money Express, etc. The agency-type apps with rebate function as the core include Huasheng Diary, Haosheng, Fenxiang Life, Miyuan, Meiguang, Fudai Life, and many others.

The promotional offers in the rebate model can be divided into three types based on their intensity: small rebates, high rebates and super high rebates. As for the distinction between these three types, I think the commission ratio of 20% and 50% of sales can be used as a dividing line.

Rebates within 20% can be defined as small rebates, those between 20%-50% are called high rebates, and those exceeding 50% can be directly called super high special sale rebates, which are basically no different from direct discount sales.

If the merchant sets the commission rate to 90% and the platform provides appropriate subsidies, purchases can be made for free through rebates. This is the logic behind many rebate-centric platforms today, which offer a large number of products for free purchases in the form of rebates for new user conversions.

In the past few years, merchants often cooperated with rebate platforms like us to carry out special sales promotions with super high rebates. The best in this regard is Fanli.com. They once had a BD team of more than 200 people responsible for communicating and negotiating such super rebate activities with major merchants on Tmall and Taobao, helping merchants use rebate channels to do special sales promotions. At the peak, they had super high rebate commission income of more than 2 billion yuan a year.

The source of the rebate amount is that we promoters take out a certain percentage of the promotion commission paid by the merchants and return it to the shopping users. On the one hand, it can bring more shopping discounts to users; on the other hand, it can also help our promotion platform better retain users and form user stickiness.

Here I would like to mention again the difference between commission and rebate. The money that merchants directly pay to our promotion platform is called original promotion commission, and the money that our promotion platform pays to promoters is called rebate, so everyone must understand this definition.

For example, if a product costs 100 yuan, and the merchant sets a promotion commission plan of 20%, then the 20 yuan corresponding to this 20% is called the promotion commission.

If the rebate ratio given by our rebate platform to users is 80%, then the 16 yuan corresponding to this ratio is called rebate.

If it is a social Taobao agent APP, this part of the rebate is also called commission. Everyone just needs to know that this commission is rebate, because commission is easier to understand for promoters, and it also feels like a reward. In essence, it is just a part of the rebate taken out from the original commission.

A long time ago, shopping rebates were only available on major B2C platforms, such as JD.com, Dangdang, Amazon, Vipshop, Vancl and other large independent e-commerce platforms. Because if we want to realize the shopping rebate function, we need to establish an interface between our shopping guide promotion platform and these e-commerce websites, and the other party’s website must be able to support our data transmission and return, so that the shopping rebate function can be realized.

Taobao was not able to offer shopping rebates before 2010 because the interface did not support it. It was not until 2010 that the Taobao Open Platform was established, opening up a series of interface functions. Only in this way could the Taobao shopping rebate function be implemented in our market. Today, this interface function has a commission distribution capacity of tens of billions a year, and it is also the backbone of the entire Taobao customer ecosystem.

I mentioned in my previous articles that I resigned from Taobao in 2011 to start my own business because I saw the huge power behind the opening of the Taobao interface. Of course, in the following years, Taobao Alliance adjusted the rebate interface several times, and once it almost led to the demise of our entire rebate industry. However, our smart product managers and technical developers tried every possible way to compete with Taobao Alliance, and finally did their best to ensure the sustainability of this business model and uninterrupted user services.

Regarding this, I will find time later to write about the product technology implementation and evolution of the rebate model for everyone to understand in detail. I guess product managers and technical developers will be very interested in this. Just follow me and I will write it.

In fact, rebate-type promotions also face some challenges. I think the following three points will affect user trust:

1. Postponement of discounts affects the trust of new users: Rebates are a promotional strategy of paying first and then giving profits, which is a postponing of discounts. Because the rebate requires users to pay the full purchase amount first, and then confirm receipt after a period of time, the rebate will be given to users. This experience is not timely enough for new users, and it is not easy to establish a trusting relationship. It takes a long time to build trust. New users don’t know whether the rebate will be successful, so they may be worried and dare not try it easily, which makes conversion more difficult and leads to high loss of new users.

2. Frequent changes in rebates affect user trust: Because the rebate amount is calculated based on the sales commission ratio set by the merchant, there will be some factors that affect the final product price, resulting in inconsistencies between the rebate amount received by the user and the amount inquired, leading to trust issues. Let's take an example to make it clear:

For example, if a product is priced at 100 yuan and the promotion commission rate is 20%, then the corresponding original commission is 20 yuan. If a rebate platform gives users a rebate rate of 16%, then the corresponding rebate amount is 16 yuan. This 16 yuan is the rebate that users can get when they actually pay 100 yuan under normal circumstances.

However, if the user uses red envelopes, coupons, points, etc. to offset part of the amount when paying, then the rebate amount will also change when the final rebate is received. All you need to know is that the rebate amount is calculated based on the user's actual final payment multiplied by the rebate ratio.

There is another situation that will cause the queried ratio and the final rebate ratio to be inconsistent. That is, the product has multiple models. If the user queries the price corresponding to one of the models, the rebate is also calculated based on this price. However, the user finally bought other models of the same product when placing an order on Taobao, resulting in the final payment price being different from the query price, which will also cause the rebate amount to become higher or lower.

Therefore, the above situations will lead to inaccurate rebate amounts, which will also bring a sense of distrust to users. I think old users who have used rebate or commission APPs will understand this situation.

3. Lost orders affect user trust: This situation is the most complicated and is the biggest obstacle to user distrust, because every time we jump from our shopping guide platform to Taobao, there will be various factors that affect Taobao's failure to fully receive the parameter information we transmit, and ultimately when the feedback data comes back, the order is not followed up, so users cannot get rebates, which will cause a very bad user experience for users. They will think that our shopping guide rebate platforms are cheating people. In fact, regular large platforms really won't cheat people, but the order is lost because of data transmission problems.

Of course, there are some small platforms that are really unscrupulous. They use shady tricks. The platform will actively set some probabilities of losing orders. For example, if a user buys 10 orders, there will always be one order whose user ID will be replaced by the platform and become the platform's own copy account. In this way, the platform can earn commission profits from this part of the orders and will not give rebates to users. This is the platform's order-stealing behavior, which is very bad. This kind of small platform is the black fly in the ointment of our rebate shopping guide industry, making the entire industry have a bad reputation and being called a liar.

There is another situation that may lead to lost orders, that is, being hijacked by telecom operators or other APPs. When users jump to Taobao, some people often hijack the parameter information transmission, which eventually leads to users completing the purchase and not receiving the commission rebate after confirming receipt. In fact, they were hijacked by some backdoor programs in the mobile phone during the jump process.

Hijacking happened more frequently in the PC era, including browser hijacking, telecommunications DNS hijacking, virus and Trojan hijacking, etc. Now it is all done on the mobile APP side, which is much better. In addition, Taobao requires users to authorize and bind their Taobao accounts when using rebates or agent APPs. By binding the corresponding channel ID and member ID, it is also a better way to solve the hijacking problem.

I know that many people who engaged in hijacking made a lot of money secretly in those years. They are the natural enemies of our platform that provides regular rebates, but there is nothing we can do. It makes me cry just thinking about it.

Having talked about the rebate promotion method here, I think I have basically explained it thoroughly, because the rebate promotion method is quite complicated. I have been working in the rebate Taobao affiliate field for 11 years, so I know more about the various situations involved and can talk about it in relatively depth.

3. Coupon Promotions

Next, let’s talk about the second promotional method in Taobao’s field, which is coupons. Coupons are divided into two types: store general coupons and single product coupons.

Before 2016, Taobao sellers mainly issued store coupons, which were similar to the full-discount coupons issued by major B2Cs. However, store coupons had many problems. For example, they could only be used to set full-discount coupons, which are the common ones such as 20 yuan off for purchases over 100 yuan or 30 yuan off for purchases over 200 yuan. Store coupons have three disadvantages.

1. Because it is available to all users, there is no sense of scarcity. On the other hand, the coupon cannot be associated with a single product. It is more often used in combination in the shopping cart. Users do not perceive the discount clearly enough. For example, if the price of a single product is less than 100 yuan, you need to buy several items to reach the threshold of 100 yuan before you can use it.

2. The profits of various products in the store are different, so it is very troublesome to control the standard of the discount. Too much discount will lead to losses, while too little discount will increase the threshold for users and make them unattractive.

3. Receiving coupons and using Taobao promotion links are two separate steps. Users need to receive coupons first, and then make purchases through Taobao promotion links to receive commissions and rebates.

This makes many users find it troublesome and they directly purchase the products after receiving the coupons without going through Taobao channels. As a result, Taobao agents do not feel motivated to promote the products. A large number of users purchase the products directly after receiving the coupons but do not take the second step to purchase through Taobao links, and therefore cannot earn any commission income.

Therefore, store coupons never took off in those years and developed at a lukewarm pace. It was not until the second half of 2016 that Taobao invented the method of hiding coupons for single products, which immediately ignited the entire market.

Hidden coupons for individual products are coupons set by sellers for Taobao customer channels. These coupons are bound to individual products and can achieve instant discounts on individual products. However, they are not publicly released on the market and can only be obtained through inquiries through specific Taobao customer channels.

This way of playing is very cool. It artificially creates a gap in discount information. Users see that the product is priced at 100 yuan in the Taobao seller's store, but through Taobao's shopping guide and rebate APP, they can find that this product has a hidden coupon. After receiving the coupon, they can buy it on Taobao for 60 yuan. This direct discount of 40 yuan is more exciting and timely than giving users a 40 yuan rebate, and then the entire market is out of control.

At that time, various Taobao internal employee welfare groups began to appear in society. All promoters used the slogans of Taobao employee relative welfare and Taobao employee internal welfare to go to the market to develop users into groups, and then recommend some products with hidden coupons in the group, with a very high conversion rate.

Many people have also started to combine red envelope fission. As long as you join a group, you can send red envelopes. It is very easy to make hundreds or thousands of groups in batches. Then, you can make a lot of money by throwing red envelopes and sending products with hidden coupons in the group every day.

It was a bonus period at that time, and Taobao users had never used such cool hidden instant discount coupons. Every time they shopped on Taobao, they had to ask in the group whether there were any coupons for a certain product. People are loss-averse and are afraid of being ripped off by paying too high a price.

In fact, the hidden coupons for a single product were originally collected in two steps. The first step was to click on the coupon link, and the second step was to click on the Taobao promotion link to purchase the product. In this case, the operation was also extremely cumbersome.

Later, a product manager of Taobao Alliance named "Yi Ming" invented a two-in-one coupon page "Fans Welfare Purchase" that combines the two steps of coupon collection and Taobao promotion link. This is a great invention. I always call it the father of “two-in-one”, hahaha.

Don’t underestimate this small invention of the two-in-one coupon page. This seemingly insignificant micro-innovation optimizes the promotion and conversion steps of hidden coupons and increases Taobao agents’ enthusiasm for promotion. This will allow the subsequent promotion of hidden coupons for individual products to truly usher in an explosive development moment.

This is the two-in-one coupon page for fan welfare purchases

Until today, this type of hidden coupon for a single product is still the main form of Taobao's channel promotion of single product shopping guides. Compared with rebates, hidden coupons have two obvious advantages:

1. Strong user certainty: Because the coupon has a certain denomination, such as a 40-yuan coupon, no matter what type of SKU the user buys, 40 yuan will be directly deducted, unlike the rebate amount which may be different;

2. The instant discount effect is great: Compared with rebates, coupons can be deducted immediately when making payments. There is no need to wait for a while to get it back like rebates. Rebates are post-discounts, while coupons are pre-discounts.

So we can see that rebate websites have also focused on coupons. Rebates are no longer the biggest focus. Moreover, after 2016, Save Money Express has relied purely on coupons to provide instant discounts as a shopping guide and has achieved a large scale. In essence, it is still a tool for users to find hidden coupons. Even the commission does not need to be distributed to users, and all the profits are made by the platform itself.

However, the emergence of social agent apps broke this situation. They not only provided users with instant discounts with coupons, but also provided users with rebate commissions. At the same time, they combined the direct sales agent system, allowing users to enjoy the double benefits of coupons + commission rebates.

In addition, users can promote the APP of this model to realize team-based and systematic long-term commission sharing. This social agent Taobao model is more attractive to users than the model of saving money express and rebate network that only provides coupons + rebates. There is an in-depth interpretation of this in my previous article. If you haven’t read it, you can take a look at the most powerful Taobao customer wealth-making model, an in-depth comparison of rebate robots and agent APPs!

So we can see that starting from 2019, Save Money Express began to transform and adopted the coupon + rebate model. It was forced to do so because not doing rebates would easily lead to user loss, because hiding coupons in single products is no longer a new thing today.

However, for users, the dual-discount model of coupons + rebate commissions still cannot avoid the several shortcomings of the above-mentioned rebate model. This itself is still a model that combines pre-discounts and post-discounts.

4. Taobao Gift Bonus Promotion

Three-in-one coupon page for coupons + Taobao bonus + Taobao promotion

Next, let’s talk about Taobao Lijin promotions. Taobao Lijin is a new marketing promotion launched by Taobao Alliance during the Double 11 period in 2018. The biggest innovation of this promotion is that “ the marketing end also has the pricing power of the goods .”

You must remember that this innovation is amazing. In the past, discounts on goods were either the power of Taobao platforms or store sellers. However, the emergence of Taobao bonuses has given Taobao marketers the power to set promotional prices for goods. We can set the price of a product by setting up Taobao bonus red envelopes.

The essence of Taobao Lijin is that our marketing department can set up single-product red envelopes for Taobao products that need to be promoted. This red envelope can be used as an immediate deduction when the user pays, and can be used at the same time as single-product hidden coupons, allowing users to enjoy double upfront discounts and a very pleasant experience.

Moreover, the biggest advantage of Taobao bonus promotion is that its settlement priority is very high, which is higher than the PID jump such as Taobao password that we usually see.

That is, if a user uses a Taobao gift red envelope sent by someone to buy a product, then the promotion commission corresponding to this product will be 100% tracked to the Taobao gift red envelope issuer, and will not be hijacked by others or owned by the Taobao password promoter. This is a very good tool for all Taobao promoters, especially those who place orders in the community. Moreover, according to my research, Taobao Lijin has a wide range of application scenarios. If Taobao Lijin is combined with bank credit card channels, it will be an even more powerful way to play. I will not analyze it in detail here. If you are interested, you can conduct in-depth research based on your own business scenarios.

If you have difficulty understanding the advantages of Taobao Gift Bonus, I will use an example to give you an in-depth analysis:

For example, the selling price of a product is 100 yuan, and the seller has opened a hidden coupon of 30 yuan. At the same time, the seller has set a 20% promotion commission. Different Taobao customer promotion methods can be packaged in different forms.

1. The rebate model (including social agent APP) is packaged as follows: provide users with a 30 yuan coupon, and then take out a part of the 20% commission ratio (assuming 15%) and return it to the user, so that users can enjoy a 30 yuan coupon and a 10.5 yuan rebate (the 10.5 yuan is based on the actual payment amount of 70 yuan after the coupon multiplied by the 15% rebate ratio). The coupon can be deducted immediately at the time of payment, but the 10.5 yuan commission rebate will need to wait a few days after confirmation of receipt to reach the account, and it may take some time to withdraw it.

2. The promotional packaging of the coupon model is to simply provide users with a 30-yuan coupon. Since there is no need to share commissions or issue rebates to users, the 14 yuan corresponding to the 20% commission is earned by the platform or shopping guide, and users can only enjoy the instant payment discount of this 30-yuan coupon.

3. The promotional packaging of the Taobao Lijin model is to provide users with a 30-yuan coupon, and then set up a 10.5-yuan Taobao Lijin red packet (the 10.5 yuan is also based on the actual payment amount of 70 yuan after the coupon multiplied by the 15% rebate ratio). In this way, users will use a 30-yuan coupon + a 10.5-yuan Taobao Lijin red packet when paying. The two discounts combined have a total discount of 40.5 yuan. A 100-yuan product can be purchased for only 59.5 yuan. Isn’t this exciting?

By comparing the above three models, you can see how awesome Taobao bonus + coupons are from a user perspective. However, Taobao bonus still has certain restrictions for Taobao customers, and the number of products created each day is limited.

Last year, Taobao Alliance opened a very powerful Taobao gift money permission test for me (probably the only one in the country), and we should be one of the teams in the country that has done the most in-depth research on this gameplay. I have recharged a total of several million to play this thing.

So what kind of awesome permissions are granted to us? To put it simply, we can create Taobao bonuses for all Taobao commission products, and directly convert a certain percentage of the commission into Taobao bonuses for users. With such a capability, we can completely change the previous coupon + rebate model to a coupon + Taobao bonus model, and realize double discounts for users in advance.

It would be quite impressive if this transformation could be successful. In fact, it can greatly improve the efficiency of apps that mainly earn rebates through search (non-agent model).

However, due to some special reasons, we took it offline later. Otherwise, I think this model will definitely be a qualitative leap for user experience. I won’t elaborate here on why it was taken offline. I’ll have the chance to talk to you privately later. There’s still a lot to learn here.

Although the Taobao gift money + coupon model is awesome, there are still some problems in applying this model to the agent APP. It is not very suitable for the agent channel. However, for agent team leaders, this function can be used to attract fans and split the fans. Capable agent team leaders can study this magic tool carefully.

By the way, let me tell you a secret, this Taobao gift money artifact was also created by the father of the “two-in-one” Taobao Alliance product manager "Yi Ming" that I mentioned above. This guy is really 666, he is very creative in marketing products, but such an awesome product manager is usually very low-key and humble.

Once I went to a conference to share my experience, and he asked me to be my assistant and take him to the conference. He then sat in the audience and listened to my speech slowly to understand the voice of Taobao agents. I introduce him to everyone I meet as my younger brother, and claim to be my assistant to participate in conversations between Taobao agents. In the future, when you see someone calling himself my younger brother around me, be careful to identify him, because he might be some big shot, hahaha.

Of course, the Taobao Lijin model also has a disadvantage, which is that the pressure of advance payment of funds is relatively high. Using coupons + Taobao Lijin instead of coupons + rebate model changes the flow of funds, because Taobao Lijin is a part of the commission we take out to use as red envelopes for users.

For example, if the promotion commission for a product is 10 yuan, we used to give users a rebate of 8 yuan. The rebate will be given to users only after they confirm receipt of the goods. Moreover, not all users will withdraw the money immediately, so there is an account period. Moreover, agency apps pay out the previous month's commission after the 20th of each month, which is even more problem-free. In this way, our cash flow is a positive cycle. I receive the promotion commission from Taobao and then pay it to the users. Although rebate apps have the practice of advance payment of rebates, it is not a big problem generally speaking.

However, after switching to the Taobao bonus + coupon model, we need to prepay the Taobao bonus red envelope for each order. As long as the user receives the Taobao bonus red envelope, we need to pay the money from Taobao Alliance first regardless of whether the purchase is finally completed, and there is no account period advantage of the rebate model.

Because Taobao Alliance settles the promotion commission for the 1st to 31st of the previous month on the 20th of each month, we need to advance payment for a maximum of 50 days and a minimum of 20 days. Although we can set the effective cycle of Taobao gift money, the cost of advance payment of funds is still very high for us. If this model can work, the future will be a game of Taobao shopping guide + finance. Hahahaha, Taobao customers who have worked on rebate platforms will understand this logic.

To sum up, the commission rebate model is a post-discount model; the coupon + commission rebate model is one pre-discount model and one post-discount model; and the coupon + Taobao gift money model is a two-way pre-discount model , and its power is still very strong.

Of course, in actual operations, different Taobao business scenarios can effectively combine and utilize these three promotional methods, which will produce a magical chemical reaction.

Author: Lao Hudipan

Source: Lao Hudipan (laohudipan88)