Behind Li Jiaqi’s sudden popularity: Is KOC in fashion?

As the Internet traffic dividend disappears, products begin to enter the inventory era, customer acquisition becomes increasingly difficult, traditional advertising gradually becomes ineffective, and customer acquisition costs rise significantly. Internet users' anxiety about traffic acquisition is also spreading, and the battle for traffic hegemony is destined to intensify and escalate.

Li Jiaqi, the lipstick king, has gained countless fans on Douyin and has now become the most professional and popular personal IP in the lipstick industry. He has recently started shooting commercials.

(Li Jiaqi shoots an advertisement for the domestic cosmetics brand Huaxizi)

Li Jiaqi’s rise to fame has forced us to think about the issue of traffic acquisition.

As the Internet traffic dividend disappears, products begin to enter the inventory era, customer acquisition becomes increasingly difficult, traditional advertising gradually becomes ineffective, and customer acquisition costs rise significantly. Internet users' anxiety about traffic acquisition is also spreading, and the battle for traffic hegemony is destined to intensify and escalate.

The way traffic hegemony has changed

In my opinion, the way of fighting in this battle for traffic has begun to change: the model that used to be mainly based on investment will gradually shift to a model that mainly focuses on captive cultivation in the future.

I believe that everyone can easily understand the concept of advertising. Search engine SEO, APP ASO in app stores, and the release of traditional advertisements are all advertising behaviors. Advertising aims at exposure, and relies on strong exposure to attract traffic to achieve the purpose of conversion and monetization.

As for captive breeding, it includes two parts: captive and raising. The captive part is the part of attracting fans, and raising is the part of nurturing. To give an example that you can understand immediately, Li Jiaqi, the lipstick king, is very popular on the entire network and has countless fans. He has become a national Internet celebrity. He has accumulated a large number of loyal fans, built a lipstick fan circle, and formed his own private traffic pool. Therefore, he constantly recommends various good products to users, and finally achieved the goal of cashing in on the goods.

Obviously, the captive approach makes it easier for users to accept products, forms a good emotional and cognitive connection, enhances trust in products, and better helps product sales.

The highly sought-after KOC and the trend of traffic privatization are verifying the shift in the traffic competition model and also providing a new outlet for Internet people’s anxiety about traffic acquisition.

KOC is on the rise. What changes does it bring?

From KOL to KOC, although there is only one word difference, there is a world of difference between them.

• From the perspective of traffic attribution , KOL belongs to public domain traffic, while KOC belongs to private domain traffic;
• From the perspective of traffic level , KOL is the top traffic, while KOC is the middle traffic;
• From the perspective of traffic effect , KOL has significant influence and KOC has outstanding authenticity;
• From the perspective of traffic roles , KOL is an opinion leader and KOC is an acquaintance or friend.

1. With the rise of KOC, users’ trust in products has shifted

The emergence of KOC is closely related to the increasingly rich media. In the past, users first came into contact with information from advertisements, then from opinion leaders such as KOLs, and now from acquaintances and friends around them. The way users obtain information is changing, which is a manifestation of information decentralization.

However, compared with advertisements and opinion leaders, acquaintances and friends are more likely to gain the trust of users. Moreover, with the continuous development of the Internet, media forms are becoming more and more diverse, and communication efficiency is rapidly improving. It is more convenient for users to receive information, which helps them make good purchasing decisions.

For example, let’s say a relative of yours recently bought a new rice cooker and posted it on the family group, saying he was very satisfied with the quality of the rice cooker and was full of praise for it. Then this rice cooker would leave a deep impression on you, and you might even be persuaded to buy one.

This is the marketing effect of KOC, which makes you have more trust in the product , recognize the product from the bottom of your heart, and even become a buyer of the product. To a certain extent, it is comparable to the marketing effect of advertising and KOL.

2. The rise of KOCs has led to a shift in operational thinking: from traffic operations to user operations

Since KOC can cause users to transfer their trust in products, if we want to continuously maintain this trust and deepen user recognition, we need to manage users seriously, rather than treating them as pure traffic, otherwise users will easily leave.

Looking further, from traffic operation to user management, there is a very thought-provoking idea: from acquiring more users to creating more for users.

This means that we need to operate users in a refined manner, fully combine data to analyze user needs, provide highly targeted content and services, and push them to users accurately. In this process, we must pay attention to changes in user data, continuously optimize user strategies, and improve user retention and conversion, and even repeat purchases.

3. The rise of KOC has accelerated the growth and monetization efficiency of products

Usually, we use two major data indicators, LTV and CAC, to measure growth monetization. Among them, LTV represents the value brought by users, that is, the total value contributed by users to the product, generally expressed as per capita value; CAC represents the cost of acquiring users, that is, the cost of acquiring a single user.

Obviously, LTV>CAC (or LTV/CAC close to 3) is the embodiment of growth, and the difference between the two can be understood as the "profit" brought by growth (in fact, the calculation of profit is far more complicated than this, it is only used as an example here).

Since KOC is based on the trust of acquaintances in social interactions, it is easier for them to acquire users in the process of transmitting information and can effectively reduce CAC. Therefore, under the condition that the user value remains unchanged, KOC can accelerate the efficiency of product growth and monetization.

It is worth mentioning that if social fission is done based on KOC, the LTV will increase, which will ultimately accelerate the efficiency of product growth and monetization.

It can be seen that the combination of KOC and social fission can become two important engines for product growth and quickly promote product monetization.

KOC and private domain e-commerce

It is not difficult to find that KOC is always associated with private domain e-commerce . Based on KOC’s social relationships, users’ trust in products has increased, and the way to monetize through e-commerce has emerged.

Private domain e-commerce can be understood as an e-commerce model that gets rid of dependence on platform traffic, communicates with users through social tools and completes the transaction loop. Next, we will discuss and analyze the characteristics of private domain e-commerce to better understand how KOC is monetized in e-commerce.

1. Dismantle the elements of private domain e-commerce

Private domain e-commerce is composed of two parts: "private domain" and "e-commerce", neither of which is indispensable.

Private domain, as the name implies, is the position of KOC's own traffic, which is not affected by the platform traffic. The transaction is completed through communication within the KOC's own traffic pool.

E-commerce, by using marketing tools based on the social characteristics of KOCs, such as group buying, bargaining, and distribution, can improve the efficiency of commodity trading and accelerate the transaction cycle.

2. Attributes of private domain e-commerce

Based on actual experience, we found that private domain e-commerce has its own unique attributes, which are specifically reflected in social attributes, IP attributes, role attributes, service attributes and circle attributes.

• Social attribute: This is obviously a strong attribute given by KOC. Relying on the social relationship chain of acquaintances, users have stronger stickiness and can promote dissemination and sharing with the help of social media;
• IP attributes: Users will have a deeper sense of trust in KOCs because of their personality, knowledge, and skills, and will recognize and be willing to share and spread KOC content. This is the process of IPization of private domain e-commerce;
• Role attributes: This is easy to understand. In the transaction process, users are not just consumers, but may also become communicators and distributors, and transform into KOCs.
• Service attributes: Throughout the entire transaction process, KOCs also need to provide necessary Q&A services and share product usage experiences to enhance user trust and help with payment and repeat purchases;
• Circle attributes: Due to the private domain of KOC, it is easy to form a circle, gathering a group of users with the same values ​​and consumption patterns, and the user group has stronger stickiness.

3. Private domain e-commerce and traditional e-commerce

Private domain e-commerce is an e-commerce model formed with the help of private domain traffic, while traditional e-commerce is an e-commerce platform built on the basis of public domain traffic . Due to the different ways of obtaining traffic, the two will also be different in the entire transaction closed loop process.

(1) Trading environment

Private domain e-commerce completes transactions in a "hot environment" among acquaintances and friends, while traditional e-commerce does not have this characteristic and often conducts transactions in a "cold environment" among strangers.

(2) Product type

It is not difficult to find that the user groups that private domain e-commerce targets all have circle attributes, so there are specific choices in product types. Generally, beauty, health care, maternal and child care, and knowledge courses are common products. Traditional e-commerce targets the general public and covers all types of product choices.

(3) Reach channels

Obviously, private e-commerce’s channels for reaching users include communities, official accounts, mini-programs, apps, etc., while traditional e-commerce relies on major platforms, so this also determines that consumer decisions and marketing models are also different.

(4) Consumption Decisions

Private domain e-commerce is based on social relationships among acquaintances, so consumer decisions tend to be driven by trust, and purchasing decisions are made based on trust in word-of-mouth recommendations from acquaintances and friends; traditional e-commerce encourages users to consume through product brand and pricing strategies, so consumer decisions tend to be driven by brand and price.

It can be seen that there are obvious differences between the factors that influence user consumption between private domain e-commerce and traditional e-commerce. Private domain e-commerce drives users' consumption decisions through recommendations from acquaintances and word of mouth, while traditional e-commerce uses market strategies such as brand and price to impress users.

(5) Marketing model

Precisely because user consumption decisions in private domain e-commerce and traditional e-commerce are different, the marketing models are destined to be different.

Private domain e-commerce, driven by a sense of trust, often reflects a "goods find people" marketing model . For example, when your friend recommends a product to you, you have completed the "goods find people" marketing model in the process of being attracted to the product. In fact, you had no demand or plan to buy the product before being recommended by your friends, but after word-of-mouth recommendations from friends, you will make a consumption decision on the product.

Traditional e-commerce belongs to the marketing model of "people looking for goods", which is easy to understand. You have the need and plan to buy a certain product, and then you will search on various e-commerce platforms. After comparing brands and prices, you will finally make a consumption decision.

4. The core of private domain e-commerce

Obviously, KOC plays an indispensable and important role in the entire closed-loop transaction process of private domain e-commerce. However, the core of private domain e-commerce is not just the KOC itself, but also product supply and user payment.

From the perspective of supply and demand, KOC plays a connecting role and is a bridge between products and users; supply refers to product supply and the KOC product selection process; demand refers to the process in which KOC gains user trust and completes transactions to meet user needs.

Therefore, in addition to KOC itself, both the supply and demand sides are also worthy of attention and consideration.

(1) Product supply: select products based on user profiles

In terms of types, the most common products suitable for private domain e-commerce are beauty, health care, maternal and child care, and knowledge course products . However, if we break it down into specific categories, KOCs still need to select products based on the user group portrait of their own traffic pool. The more precise the user group, the higher the interest in the product, and the products that are more in line with user consumption habits are easier to sell.

For example: If the users of your traffic pool are all working people who have the need to learn and improve themselves, but they come from different industries and have different years of work experience, some have become parents, and some are still single.

As a KOC, the most suitable courses for you to promote should be general courses such as emotional communication and financial education, because they will not be affected by factors such as work industry, experience and marital status.

If you still want to promote parenting courses, then the most accurate user group is married moms and dads with children. Although there are also users such as parents in the traffic pool of working professionals, parenting courses are obviously more suitable for users such as dads and moms to learn.

In addition, KOCs must not only choose products that match their user profiles, but also need to choose products with brand and quality assurance. Such endorsements are more likely to make users trust them . However, if brand and quality issues are not considered, then the product may be difficult to impress users and may even damage users' trust in KOCs.

(2) Empowering KOCs: Incentive mechanisms enable more people to become KOCs

KOC connects products and users in private domain e-commerce, which means that the more KOCs there are, the more they can promote private domain e-commerce and better help products find users to consume. Therefore, when a good incentive mechanism is established, more and more acquaintances and friends can become KOCs to promote products.

Distribution is a common KOC incentive mechanism . On this basis, KOCs will also be allowed to distribute by forming teams, and finally the team with outstanding sales will share the bonus pool. This will fully mobilize the enthusiasm of KOCs and promote the spread of goods.

How to set up a specific and feasible incentive mechanism to attract more KOCs to participate is an important issue in empowering KOCs in private domain e-commerce. It is inseparable from a series of marketing tools to provide necessary support. This should be closely integrated with business scenarios and centered on the needs of KOCs. The ultimate goal is to enhance the operational capabilities of the entire private domain e-commerce.

(3) User payment: Trust-driven maximization

In private domain e-commerce, users’ consumption decisions are driven by trust. Therefore, to encourage users to pay, we must maximize trust-driven decisions. We can then enhance user trust in terms of product value, brand endorsement, user reviews, and KOC reviews.

To present the value of a product , KOCs need to professionally share product-related knowledge and establish a convincing professional image. This is an important first step.

Brand endorsement can make it easier for users to trust KOC’s professional sharing. KOC can use the product’s own brand reports, behind-the-scenes stories, etc. to make users aware of the product and enhance their liking for the product.

User reviews will be a key factor that directly affects user payment. Usually users will pay attention to the good and bad reviews of products, so KOCs need to convey objective user reviews and emphasize the advantages of the products to better help users make purchasing decisions.

KOC evaluation : if the KOC itself is also a loyal user of the product, then if it tells the user its true feelings, the user will also find it easy to understand. This is the role of empathy.

KOC’s private traffic operation in the WeChat ecosystem

As mentioned earlier, KOC can realize monetization through private domain e-commerce, which means that KOC needs to operate private domain traffic through some effective methods in order to have good monetization capabilities.

KOC's private domain traffic operation can be mainly carried out from the aspects of traffic diversion, activation and conversion.

1. Drainage

To make users become part of the KOC's private traffic pool, you can start from the following two points:

1. Designing reasonable and necessary scenarios to guide users to add KOC as WeChat friends is more effective;
2. Users can obtain it from the KOC’s past historical orders, or they can add it from communities of similar products, but there must be reasonable and necessary scenarios and guidance in terms of words, otherwise it will easily fail to add.

Common scenarios for traffic generation include but are not limited to pre-sales consultation, coupon giving, after-sales service, etc. The specific means of traffic generation should be combined with one's own business needs. In addition, if the KOC's nickname, avatar and greeting words can be carefully designed, it will greatly enhance users' trust and make them more willing to add them as friends.

2. Promote vitality

After the KOC adds the user as a friend, he needs to activate the user. He can output content that is valuable to the user through Moments, communities, official accounts, etc., to better gain the user's favor and enhance trust. This process can usually be understood as the stage of establishing and strengthening personal image.

In this process, if KOC cannot provide useful content to users through continuous content output, users will tend to leave easily, and once they leave, the cost of recalling them will be higher.

In terms of establishing and strengthening personal image, it is generally recommended that KOCs do the following:

• KOC should focus on the product and do a good job of character positioning, thereby deriving personal IP;
• The KOC’s personality must be authentic (real person, real scene, real feelings), so that users can feel that this is a real person, not a robot. Trust is also built on the basis of reality.
• When outputting content, KOCs should pay attention to the unified style and highly relevant content, so that users can perceive your personal positioning. If the positioning is messy, it will be difficult to convey value to users.
• When KOCs share their opinions, they must consider professionalism and understandability, so that users can better understand, and then identify and trust the KOCs;
• Excessive screen swiping will cause users to be disgusted. KOCs should exercise restraint to avoid being misunderstood as a marketing account, which will damage trust.

3. Conversion

To convert users to pay, we still need to return to the issue of maximizing trust-driven development. We need to enhance user trust in terms of product value, brand endorsement, user reviews, and KOC reviews. At the same time, we also need to combine specific user tags, find appropriate words, carry out targeted conversions, and follow up with one-on-one communication.

In the process of conversion, it is inseparable from the means of event promotion. The event itself needs to be designed according to user portraits and needs, and the atmosphere of promoting orders should be enhanced through activities. At this time, KOC should clearly present the value of the event to users.

Conclusion

KOC targets private domain traffic and has a fixed circle of fans. When the private domain traffic pool becomes larger and larger, KOC will naturally become a well-known KOL.

When the influence of a KOL is great enough to become synonymous with a certain category, a huge personal IP will be formed and there will be a broader space for commercial monetization.

Without taking small steps, you cannot reach a thousand miles. If KOC can gain a foothold in the battle for traffic, then it is only a matter of time before they develop into KOL or even a huge personal IP.

Author: Mr. Dark Horse

Source: Mr. Dark Horse