“Why is Perfect Diary so popular?” DTC model practice behind the analysis

The emergence of DTC as a new business form has brought about an incomparable development process in various industries. It has become widely popular in the B2C field, and some successful practical cases have given many B2C brands the determination to carry out drastic marketing reforms. However, in the B2B marketing field, it is rarely taken seriously.

I believe that in the next five years, with the advent of artificial intelligence, big data algorithms, and the 5G era, the business landscape will continue to be updated and iterated, which will lead to fundamental changes. Marketing methods will also usher in fundamental innovations, one of the most prominent manifestations of which is the popularity and practice of the DTC model.

Today we will focus on analyzing how to solve these challenges and what issues should be paid attention to when formulating and implementing effective DTC marketing strategies? What steps to follow?

Take B2B industrial product marketing as an example:

Traditional view 1: The purpose of industrial product marketing is mainly to empower corporate sales and channels, and directly facing end customers is not important.

Traditional view 2: B2B functional demands far outweigh spiritual needs. Brand is not important, and facing customers directly is not important either.

Traditional view three: From the time a B2B customer is reached by a brand to the final conversion, a lot of manpower and channel communication are required, which cannot form an immediate business opportunity conversion. Therefore, channels are more important and brands do not need to face customers directly.

Is this really the case?

Based on the above arguments, how do we view the importance and feasibility of the DTC model in the B2B field? To put it simply, DTC means eliminating the middleman and not making a profit from the price difference . DTC shortens the intermediate links, eliminates the need to rely on traditional wholesalers and intermediary channels, interacts directly with consumers, and keeps abreast of consumers' shopping behaviors and user portraits.

So, apart from the benefits to end customers and not making a profit from the price difference, what are the advantages of DTC for brands?

DTC advantages:

New viewpoint 1: By stimulating end-customer demand, we can push channel demand in reverse, avoid price pressure and monopoly by channels, and greatly improve the brand's control over product flow.

New viewpoint 2: The future is a data-driven era. Mastering end-customer data assets and establishing a data science system can greatly improve marketing efficiency and predict marketing results.

New perspective three: Accurately grasp supply chain demand forecasts, improve customer service efficiency, and thereby increase profit margins.

Since the DTC concept in the B2B field is still in its very early stages, we use the " Perfect Diary " brand as an example to illustrate how the DTC marketing model can help business success, for reference by all marketers. (Including B2B and B2C marketers)

“Smaller DTC companies that have built strong connections with consumers are a bigger threat than traditional rivals like Unilever or Procter & Gamble.”

——Brand Director of a Fortune 500 Cosmeceutical Company

At present, DTC brands have created a huge wave in the mainland cosmetics market and threatened the development of traditional brands. However, compared with the US market, they still have a long way to go.

Perfect Diary, a beauty brand that has only been established for three years, has surpassed its domestic peers in sales and even surpassed international brands. Is its success due to its products or its marketing? The marketing was undoubtedly a huge success, and it is an excellent example of the growth of the DTC model in recent years.

01

Marketing and promotion have abandoned the huge investment in traditional TV advertising, print advertising, etc., and turned to a marketing method dominated by the social media platform Xiaohongshu and personal WeChat accounts, so that brand awareness can reach social users directly and achieve the most direct two-way interaction.

According to conservative estimates, Perfect Diary has hundreds of personal accounts, all of which are uniformly identified by the character “Xiao Wanzi”. According to the standard of 3,000 people/account, the number of fans in the "private domain" should be close to one million.

02

The overall operation of private domain traffic: its core lies in the refined operation of users.

These hundreds of personal WeChat accounts not only have automated processes such as keyword replies and group creation, but there are also real customer service staff behind them who manually respond. The combination of the two can not only ensure efficiency, but also ensure service quality.

"Private domain" is a popular marketing concept in 2020, and the epidemic has further stimulated brands' demand for "private domain traffic".

I have also seen many entrepreneurs in the private domain doing very well. Some are engaged in strategic consulting, and some are developing SAAS software. In the next two years, the prospects for private domain are still promising. The fundamental point is that "private domain traffic" is part of brand assets. Your customer information, customer interactions with the brand, purchasing behaviors, etc. are all stored in the brand data center. No matter how the digital marketing environment changes or how quickly the social platform gameplay iterates, the brand’s roots and competitiveness are there.

First is the WeChat group.

After adding "Xiao Wanzi" in the first step, users will receive an invitation to join a group, which will be uniformly named "Xiao Wanzi Playful Research Institute" - thus generating thousands of WeChat groups.

The second step is operation. The operation of its WeChat group is actually carried out around multiple mini-programs. Through the character of "Xiao Wanzi", high-quality beauty content is created, posted on the mini program every day, and then forwarded to the group, attracting continuous attention and discussion from users. Live broadcasts, lucky draws and other activities will also be continuously posted to the group.

The second is the circle of friends.

Everyone must be curious, why Perfect Diary uses "Xiao Wanzi" to unify all WeChat accounts? The reason is simple, which is to build user trust by creating a personal image. Regardless of whether it is a mini program or a circle of friends, "Xiao Wanzi" appears as a real person, allowing everyone to see a flesh-and-blood girl, your "personal beauty consultant."

So, first of all, this is not an ordinary customer service. "Xiao Wanzi" is an IP, and then this is an IP represented by a real person, a character that best fits the daily life of an ordinary girl.

The third step is that Perfect Diary has the ability to segment users within private domain traffic, that is, to establish a label system based on user interests and display content in a differentiated manner. This refined operational approach generates all-round benefits in the following areas.

User Segmentation

1. The tag system based on user grouping can help brands expand the population with similar portraits more accurately, namely Lookalike, and achieve full-area reach.

2. The tag system based on user grouping helps brands to reach out again after a first reach fails to convert, i.e., retargeting, and effectively convert users at different stages of the decision-making funnel by using differentiated content.

3. The tagging system based on user grouping helps brands categorize sales leads, set priorities for lead processing and follow-up, and then develop differentiated follow-up strategies.

4. The tag system based on user segmentation helps brands classify converted and transacted customers, establish loyalty programs, enhance stickiness, increase repeat purchases, and maximize customer lifetime value.

Finally, after conducting community operations for users, the last step is to make a purchase. There are three main ways to convert the purchase :

Flash sale ads in Moments, pushed to WeChat groups, and pushed to personal accounts.

Since WeChat and Tmall cannot communicate with each other, the purchasing channel is completed through Youzan Mall.

Therefore, what we see in "Perfect Diary" is a sales model that directly faces customers, integrating various methods such as KOL, social fission, differentiated content, data stratification and insights, and public and private domain traffic complement each other to achieve the goal of improving conversion and customer retention.

There is no problem in applying this logic and principle to the B2B business model. However, compared with B2C brands such as beauty products, B2B has more complex application scenarios, technical barriers, customer groups, and decision-making systems.

Truths and principles are universal. So, how can brands develop an effective DTC strategy?

1. Drain traffic through multiple channels, establish a private traffic pool, directly face customer websites, e-commerce platforms, and return data.

2. Build brand authority and improve reputation through content marketing, SEO, etc.

3. Use marketing automation, emails, text messages, etc. to establish continuous and accurate connections with users. The key is to continue, maintain a certain frequency, convey content in a timely manner, make the content highly relevant, and hit the pain points directly.

4. Establish a CRM membership management system to provide customer support, retention, and enhance customer loyalty.

5. Track customer behavior throughout the entire chain, analyze and understand profitability factors, and provide guidance for ongoing marketing interactions.

Each of the above steps is a profound subject, and each profession has its own expertise. It requires a professional team to operate, including media purchasing talents, data science talents, content marketing talents, customer relationship management talents, community operation talents, and e-commerce talents. Only by investing, establishing a professional organizational structure, and putting the right talents in the right positions, can the practice of DTC be systematized, standardized, and replicable.

In the end, DTC is definitely not a simple marketing strategy, it is more of a strategic innovation. To successfully implement the DTC model, there must be investment in technology, sales, marketing, data and operations, none of which can be missing. However, in China, the opportunities that the DTC model brings to Chinese brands are accompanied by considerable challenges. To successfully break through, we must make every effort in every aspect of the brand strategy, both internally and externally.

Author: Zhu Jingyu

Source: Jade Digital Marketing (Jade_Digital)