Interpretation from 6 perspectives, the marketing ideas behind luckin coffee!

Judging from the data, Luckin Coffee has been very popular in the past year. This article will analyze and interpret the brand's marketing strategies from six perspectives.

It’s been a long time since I wrote such a long marketing case analysis.

In the past year, Luckin Coffee has become popular both online and offline. Advertisements featuring spokespersons Tang Wei and Zhang Zhen have been everywhere in office buildings and residential elevators. Backed by the Shenzhou Group, it is said that it will invest 1 billion yuan to open up the market. With its deep pockets, how popular is it? Just look at the data:

1. In just over half a year since the internal beta test began on October 5 last year, more than 400 self-operated stores have been launched nationwide, and the number of stores nationwide will reach 525 by the end of May (Starbucks has opened more than 2,800 stores in China in 19 years);
2. Covering 13 cities including Beijing, Shanghai, Guangzhou, Shenzhen, Hangzhou, and Chengdu;
3. The company has accumulated 1.3 million users, generated more than 3 million transactions, and sold more than 5 million cups of coffee.
4. No.1 in the App Store's Food and Drink Rankings in April 2018...

My knowledge of Luckin Coffee came from the brand introductions from various industry accounts I followed and the introduction by CMO Yang Fei. Secondly, I saw the overwhelming Luckin Coffee advertisements in the community elevator, and then my friends circle started to see all kinds of information about Luckin Coffee. Today, let’s study how this emerging brand, which has been established for more than half a year, has made itself popular.

This article will analyze the marketing ideas behind the popularity of luckin coffee from 6 perspectives :

1. Emphasize coffee quality and visually unify output

Technology: When promoting the coffee making process, we promote the production team to highlight its high quality and famous origin.

In terms of producers, the publicity period is a careful match of a multinational team of masters.

Ingredients: In the introduction of the ingredients, the company highlights the high-quality Arabica beans from Ethiopia (for someone who doesn’t know much about coffee, I don’t know what the coffee beans are called or where they come from, but when I see the word “high-quality”, I feel that the quality is good!)

Freshness: For Chinese consumers, new things are an irresistible temptation. They want to eat fresh fruits and seafood. Basically, they require that food is fresh. Even coffee, of course, they hope it is fresh coffee made from fresh coffee beans that are within the best tasting period.

Visually, Luckin Coffee tries to be simple and direct. Blue is chosen as the main color. The deer in the logo is blue, and the cup body and posters are very simple blue and white. It is very easy for users to remember this touch of blue, so that the little blue cup has now become popular.

2. Opponent Selection

The choice of competitors is also very important. Depending on the user's brand awareness of your competitors, it is easy for them to associate the same label with you. Strategically, luckin coffee has achieved two things:

On the one hand, it targets "fake opponents", and on the other hand, it suppresses "real competitors".

Regarding pseudo-rival, Luckin Coffee chose Starbucks. They are called "pseudo-rivals" because what Starbucks sells is not coffee, but the third space; and what Luckin Coffee sells is not coffee, but coffee social interaction, so they cannot be direct rivals at all.

As an emerging brand, Luckin Coffee chose Starbucks because Starbucks is famous enough. Directly competing with Starbucks will give users a brand perception that your brand has similar quality and style to Starbucks. Moreover, such a choice of opponent is enough to make the media excited. Whether it is positive comments or negative and presumptuous comments, it will give Luckin Coffee free exposure.

As for real competitors, they are products like "Lian Coffee". However, not many people know about "Lian Coffee", so Luckin is too lazy to even mention it externally, but in terms of strategy and tactics, there will definitely be targeted responses.

The reason why Lian Coffee is considered a real competitor of Luckin Coffee is that they also want to "turn coffee into a social tool." It can be said that Lian Coffee has become a pioneer and trial-and-error player in luckin coffee.

Lian Coffee was founded in 2014. At the beginning, it was worried that its influence was not enough. In addition to selling its own coffee, it also mainly helped Starbucks deliver coffee. Reservations were mainly made through WeChat public accounts, which was simple and convenient. Later, Lian Coffee began to seriously engage in coffee social networking and launched various coffee coupons that could be given as gifts, such as "universal coffee" and "order 20 cups of coffee and deliver at any time". Its model is the sentimental model of the poor. It does not have large-scale capital, but it makes products and content steadily and steadily. By last year, Lian Coffee had established a foothold in Shanghai and gained a group of loyal users.

For capital, the biggest risk is finding that there is no market after investing a lot. The coffee social networking model has proven its feasibility due to Lian Coffee's attempts. In this case, Luckin Coffee directly invested heavily in Lian Coffee's successful model, which saved the cost of trial and error and was extremely smart.

3. Free first order, low-cost customer acquisition

Nowadays, whether online or offline, it is becoming increasingly difficult to acquire customers, and the cost is getting higher and higher. In fact, this method was first used very well offline. Many new stores opened with various discounts and promotions, and the discounts were very large, so that customers flocked to the stores, and less marketing expenses were invested in providing real feedback to consumers. This seemingly loss-making practice is actually a very good way to acquire customers.

In online product promotion, this trick is used even more thoroughly. When Uber was in China, it relied on the first order to be free and quickly occupied the market in a short period of time:

Then the once very popular startup E-bag Wash also used it:

Only with the first batch of users can other subsequent actions be completed. Especially fission marketing, its essence is to use old users to bring new users, so the first batch of users are very critical and are the foundation of marketing.

Luckin Coffee also implemented this strategy very thoroughly. All new users who downloaded the app could enjoy their first order of coffee for free.

A cup of luckin coffee is sold for more than 20 yuan, and the cost price should be less than 10 yuan. With a cost of less than 10 yuan, you can download an app + activate it + place an order, which is very cost-effective. Now in the entire Internet industry, the download cost of many apps is more than this price, not to mention activation + downloading, so consumers get benefits and luckin gets users.

4. User fission and continuous acquisition of new users

You can get free users through free coffee, but after all, your market exposure is limited, the number of users who receive the information is limited, and users can only get their first order for free. So how can you expand and strengthen this potential?

At a time when traffic dividends are exhausted, the most important way to acquire customers is to let your users become your own media and actively split and attract new customers for you. One gives birth to two, two gives birth to three, and three gives birth to all things. This is the ultimate trick to attract new customers!

And this is also used to the extreme in luckin coffee:

Of course, before the fission, we have to say that their choice of position was not a WeChat subscription account or service account, nor a WeChat mini-program, but they developed their own app, which can not only effectively avoid WeChat’s various induced sharing bans, but also derive more functions, such as visualization of the coffee making process.

This method is not new and is already widely used in the home improvement industry. However, for users, it adds a sense of trust in luckin!

The title of the video was forwarded to WeChat Moments through the app and was very simple and crude:

Today is Sunday, I will give you a free cup of Master Coffee, XXXXXX!

Then you know that when you click the link, the following page will appear:

The left picture shows the top half of the page;

The picture on the right shows the lower half of the page.

This page design obviously has a lot of effort:

1. At the top of the page, you are reminded again that you can get a free cup of coffee;
2. Users only need to fill in their mobile phone number to get coffee. It seems very simple with just one step. (In fact, this is a trick. It just puts the account verification at the end. This can effectively reduce the churn rate. In Internet products, every additional step will cause 20% of users to churn.)
3. In the lower part of the page, you can see the coffee your friends have drunk, satisfying human curiosity;
4. Finally, don’t forget to add the WeChat QR code to attract fans;

After filling in your phone number:

It will tell you that you have received free coffee, so hurry up and download it. At this point, most people will not miss this free opportunity, so they will click "Download the app to enjoy it"

Then, of course, I came to the download page:

Only if you download it can you get the coffee for free. If you don’t download it, there will be no loss for luckin coffee. Instead, it will give you a brand impression.

How is this sharing in the circle of friends achieved?

In social communication, especially in commercial fission communication, incentives are very important (commercial communication focuses on interests rather than content), so Luckin Coffee has fully considered this. In the app, as long as users buy coffee, they will come to a sharing page, similar to the sharing red envelopes of Ele.me and Meituan Takeout. It will tell you that as long as you share it, your friends can get a free cup of coffee, and you can also get a free cup of coffee.

This is really amazing. From the user's perspective, he will feel that this is doing good for his friends. Compared with micro-businesses, he has a stronger self-persuasiveness. So driven by this, he will forward it to his friends circle and WeChat groups, and maybe even add a few words to create an atmosphere.

This screenshot comes from a friend. It can be clearly seen that 51 friends got free coffee through him, and he also got 51 free drinks. By acquiring 1 user, we brought in 51 users who placed orders. This is a very cost-effective way to attract new users!

In an era when social media is not fully developed, the most important way for companies to gain market share is to advertise.

The cost of advertising has two parts:

First, the creative production cost;

Second, the cost of media placement.

In most cases, companies still rely on the experience of the marketing team when formulating creative and delivery strategies.

This reliance on team experience means that creativity and delivery may be one-off deals, with poor trial and error capabilities and high costs of failure, which creates huge uncertainty in the company's customer acquisition growth.

Compared with traditional marketing, fission marketing is different in two ways:

First, emphasize sharing. That is, new users must be brought in through the sharing behavior of old users. This way, the cost is the lowest and the customer base is the widest.

After the birth of social apps such as WeChat and Weibo and their becoming mainstream applications, sharing platforms and technical means are no longer obstacles. The key is how to get users to share, and welfare design and fission creativity are the main solutions.

Second, post-payment rewards . The original advertising costs for attracting new customers in advance are decomposed into the reward fees for old users' recommendations and the reward fees for new users' registrations, that is:

Advertising cost = Rewards for attracting new users + Rewards for registering new users

These rewards are basically paid in a post-payment model, and users can only receive rewards after registering or completing actions, thereby reducing the advertising risks of enterprises.

This revolutionary marketing thinking has many advantages:

Continuously update, quickly try and error, find out the key points of user activity, and increase sharing rate;

Use technical means to reduce creative costs and advertising costs;

Reward customers with advertising fees to stimulate users to share more widely.

In short, fission growth achieved through technology is a very cost-effective means of attracting new customers for many high-frequency, low-unit-price industries. If combined with precise fission channels, the cost of attracting new customers will be much lower than the traditional cost. Moreover, this kind of new customer traffic is based on social trust relationships, and its conversion rate and retention rate are much higher than traditional new customer channels.

On January 5, 2018, when the new customer giveaway activity was launched, the number of new user registrations doubled month-on-month, and orders increased by 40% month-on-month. Calculated based on the price of 24 yuan for a cup of latte, considering the high gross profit of the coffee category, the actual cost will of course be much lower than the price of 24 yuan. This cost of attracting new customers is almost equivalent to the additional cost in the era of mobile Internet dividends in 2014.

5. Celebrity Spokesperson

The influence of celebrity spokespersons on brands is very important, as they can make people form impressions of the brand through associations with the celebrity’s fame, image, personality, and character. The mechanism by which brand spokespersons play their role is emotional transplantation. The role of a brand spokesperson is to evoke brand image associations, reflect brand personality, create brand recognition, and increase brand equity.

Now that the new store has attracted enough popularity, the next problem to be solved is how to get users to make repeat purchases and generate stickiness. Luckin Coffee hopes to solve this problem by creating a brand image that users love and trust. A celebrity spokesperson was born.

The two spokespersons chosen by Luckin Coffee are really accurate - they are not only stars with good looks, popularity, acting skills and works, but also very literary . It is also because the professionalism they embody is highly consistent with the essence of the luckin coffee brand: whether it is Zhang Zhen's dedication when filming a movie, or Tang Wei's concentration when studying abroad, they are consistent with the luckin coffee brand's pursuit of coffee quality.

In January 2018, a hot advertising film starring the two spokespersons was released and carried out a large-scale promotion with the help of WeChat Moments.

In the advertisement, Tang Wei and Zhang Zhen hold Luckin Coffee's iconic "little blue cup" in their hands, and jointly perform a fashion blockbuster that combines coffee and fantasy. Looking from the outside of the advertisement, the azure hue forms a sharp contrast with the white-based circle of friends. Coupled with the key highlight words in the copy "Tang Wei", "Zhang Zhen", and "WBC Champion Match", the advertisement becomes more eye-catching; high-quality short videos bring longer advertising retention time, hot air balloons surrounding Tang Wei create a romantic atmosphere, and the fresh and elegant feel overflows from the mobile phone, making people feel like they are on the scene. Data shows that the average retention time of the native page is 29 seconds - these 29 seconds are enough to make the new brand concept deeply rooted in the hearts of the people, and the "Little Blue Cup" began to prevail in the circle!

At the same time, luckin coffee also produced static posters with the images of the two people (posted above), and carried out continuous promotion in combination with the luckin coffee brand story. On the ad landing page, you can learn about the brand, the charity, and see multiple buttons for claiming discounts, which greatly increases the number of conversions.

That year, Xiaomi started to use celebrity spokespersons when it expanded from online to offline and from first- and second-tier cities to third- and fourth-tier cities. It invited Kris Wu to be the spokesperson for the Xiaomi brand. As a competitor, OPPO formed its own celebrity family, including Yang Mi, Yang Yang, and TFBOYS' Wang Junkai and Li Yifeng as its brand spokespersons. Of course, the effect is also very good.

When a brand invites a spokesperson, it must be consistent with its own tone. When some companies implement brand image spokesperson communication, they invite spokespersons in the form of celebrities. As a result, after hiring a celebrity at a high price, the effect was not achieved, so a new celebrity was hired. Repeat this process over and over again.

When some companies need to re-hire celebrities for various reasons, the difference in style before and after is too great, which is actually harmful to the brand. Especially when the celebrity has negative things happen, not only will the endorsement fee be wasted, but it will also seriously affect the brand's overall promotion strategy.

Last year, Gionee invited Xue Zhiqian to be its brand spokesperson. At the beginning, advertisements were everywhere and the star cooperated wholeheartedly. However, who could have expected the star’s personal relationship problems? Xue Zhiqian stayed away from the public eye, and Gionee rarely made a voice in the market. Now it is almost bankrupt.

6. LBS-based promotion: Tencent Guangdiantong

In November 2017, with the opening of a new luckin coffee store in Beijing, luckin coffee tried local promotion advertising on WeChat Moments for the first time, screening people of the right age within 1.5km of the store and in the CBD area for massive exposure. The final effect was very impressive: in just two days of advertising, it brought nearly 2,000 APP downloads and tripled the store traffic.

Such results also strengthened Luckin Coffee’s confidence in continuing to place WeChat Moments advertisements, and almost every new store opening thereafter was accompanied by local WeChat Moments promotions.

Summarize

The essence of marketing is the product. The product is always 1. No matter how widely it is spread or how fast it is promoted, it is just the 0 behind 1. Without the product, it is nothing. Behind the rapid expansion of Luckin Coffee, we also see many people complaining and expressing dissatisfaction with the coffee taste, delivery speed, customer service attitude, and store service.

This is the inevitable consequence of rapid expansion. When the service cannot keep up with the speed of your expansion, you must either slow down or improve the service. I really don’t want Luckin Coffee to repeat Huang Taiji’s old path, with first-rate marketing but second-rate products.

But no matter what, as a marketer, the case of lucky coffee is enough.

Source: Marketing Lao Wang