How to successfully transform online and achieve growth during the epidemic?

The sudden outbreak of the new coronavirus caught everyone off guard. People are staying at home, which is a huge test for those companies that rely on offline operations to complete the entire business cycle. Especially for industries such as catering, hotels, aviation, tourism, education and training, this epidemic is a test of life and death. Many companies are facing cash flow challenges, and the epidemic has slammed the brakes on high-turnover companies. Of course, this epidemic has also led to the rapid growth of "contactless industries", such as online education, remote office, e-commerce and other industries.

The lesson we learned from this epidemic is that we must improve the ability of businesses to resist risks under extreme circumstances. In fact, we not only need to improve our ability to resist risks, but also need to develop better after the epidemic ends.

How should we transform during the epidemic? How to find suitable traffic for your products when transforming online? How to improve traffic conversion rate and achieve scale growth after reaching a certain scale? These three aspects are of particular concern to enterprises nowadays.

1. Do companies need to transform during the epidemic and how to transform

As a founder of a company, you should stay calm and don’t panic. You should change your way of thinking from “Why am I so unlucky to encounter an epidemic” to “What has this epidemic taught me?”

The epidemic has come, but it does not mean that all companies must transform. I think the criteria for judging whether to transform are relatively simple, that is: with 0 income, can the company's own funds + loans support the company's operation for 6 months or more? If so, it is not necessary to transform. If it cannot last for more than 6 months, then it must undergo a small or large transformation.

So, how should small transformation be done? How to achieve a major transformation?

1. [Small transformation] Develop products/services suitable for online marketing or delivery in this industry

Based on the industry, consider whether you can develop products that are related to the industry and can be marketed or delivered online.

01. The catering industry develops dishes suitable for takeout

For example, Xibei. On February 6, the founder of Xibei published "A Letter to All Xibei Partners" on its official public account, "We are gradually opening up the takeaway business, and now nearly 200 stores are gradually operating, and the performance of takeaway is also constantly improving." Previously, for many traditional restaurants, takeaway was just a way to maximize profits, but during the recent epidemic, takeaway has become the majority of revenue for many restaurants.

One suggestion is that some catering companies’ dishes are not suitable for takeout. We can collect statistics from Meituan and Ele.me on which dishes are more popular with consumers, and then develop dishes suitable for takeout.

02. The supermarket industry has launched door-to-door delivery services

For example, Hema Fresh and some large supermarkets are actively developing door-to-door delivery services, which not only can generate income but also increase the activity of the APP. If consumers develop the habit of shopping in online supermarkets, the labor costs of supermarkets will decrease.

03. Develop live and recorded courses in the education and training industry

In the past, the education and training industry mainly relied on offline face-to-face teaching. They also considered online teaching methods such as live streaming and recorded broadcasts. However, since offline revenue accounted for the majority of revenue, there was insufficient motivation to change. This epidemic forced the education and training industry to transform into live streaming and recorded classes, so much so that teachers in public schools have become "live streaming influencers."

From Xueersi's financial report, we can know that its main profits come from offline courses, but their senior management attaches great importance to online teaching. They invested resources very early to start Xueersi Online School, and it is getting better and better. Xueersi is preparing for a rainy day, but for many education and training companies, this transformation is a passive response, so they have to act quickly to do online live and recorded classes to obtain new sources of income.

04. The film and television industry opens up online distribution channels

Over the years, many film and television companies have released New Year films, and the revenue is good. However, due to the epidemic, the release of Lunar New Year films was cancelled one after another and almost no revenue was achieved. However, the movie "Lost in Russia" directed by Xu Zheng took a different approach and cooperated with ByteDance to be released on Douyin. This is also the first time that a Spring Festival movie has been premiered online, and this cross-border cooperation has received a lot of praise.

If you don't think about the future, you will have immediate worries. The above are all passive coping methods. Let's see what companies that plan ahead with long-term considerations do.

05. Traditional industries open up e-commerce channels to achieve exponential growth

If a company that previously used offline dealer channels has laid out e-commerce sales channels in advance (such as Tmall, JD.com, Taobao, Suning and other e-commerce platforms), then congratulations, you will achieve exponential growth during this epidemic.

I provided marketing consulting services to Little Freddie (British baby food) in April 2018 and Manting in July 2019, respectively, to help them improve the payment conversion rate of their Tmall flagship stores. These two companies used to sell their products through traditional offline dealer channels, but the rise of e-commerce allowed them to see future trends, so they began to develop online sales channels. During the marketing consulting project for them, we provided their e-commerce staff with professional training in consumer psychology, conversion rate, and data analysis, and guided planners and designers to create product detail pages that are more in line with consumers' online shopping habits, which increased the payment conversion rates of the two companies' Tmall stores by 113% and 187% respectively. Due to the early layout of the two companies, the demand for this epidemic has always existed, especially for products such as baby food and personal care. Because of the epidemic, consumers cannot buy offline, so they turn to online purchases. Therefore, their performance has not only not declined, but has doubled.

2. [Big Transformation] Develop products that are not suitable for online marketing and delivery in the industry

The tourism industry is the hardest hit area in this epidemic. In addition, the labor cost of the tourism industry is relatively high. Many practitioners in the tourism industry self-deprecatingly say that they are passively unemployed. However, Tongcheng International Travel has actively saved itself in the epidemic crisis and has entered a new world.

They use a combination of "Taobao Affiliate + private domain traffic" to sell daily necessities. They import offline terminal personnel into the SaaS system and connect them to the distribution systems of major e-commerce companies. Finally, they let the terminal personnel use this system to sell daily necessities with high repurchase rates in the circle of friends, thereby obtaining distribution income. In this way, Tongcheng International Travel temporarily transformed from a travel company to a distribution company closely related to e-commerce, and the distribution income of some terminal personnel exceeded the income brought by normal travel services.

Now you will find that transformation is inseparable from online. But many traditional companies don’t even know how to obtain accurate traffic online. Let’s take a look at how to find the traffic that suits them online.

2. How to find traffic suitable for your products when transitioning online

Before obtaining online traffic, you need to understand what large traffic there is (the ceiling of small traffic is too low and cannot be replicated on a large scale, so it will not be discussed here).

Here we introduce a concept called traffic body. The characteristics of traffic body are that the traffic is continuous (at least in the billions) and relatively easy to convert. For most industries, the traffic bodies that can be used are mainly the following:

Information flow traffic bodies, such as Toutiao, WeChat Moments, TikTok, Weibo, etc.

E-commerce traffic bodies, such as Tmall, JD.com, Taobao, etc.

Search traffic bodies include Baidu, 360, Sogou, etc.

There are so many traffic sources, so which traffic sources are suitable for your product to obtain accurate traffic?

How to find accurate traffic: advertise where customers are looking for such products/services.

For example, if you are a power bank merchant and don’t know where to find accurate online traffic, you should think about where most consumers will buy power banks. The answer is obvious. Most people will choose to buy power banks on e-commerce platforms, so you should open a store on JD.com or Tmall to sell power banks. This method relies on life experience to know where consumers buy such products, but not everyone has rich life experience, so a more scientific and replicable method is needed to solve this problem. There are several more scientific ways to find customer purchasing channels:

01. Use big data for analysis

For example, Baidu's Keyword Planner, Taobao's Business Advisor, etc., these big data tools provide billions of data in the background. By analyzing these data, we can know whether consumers will look for such products/services from the corresponding platforms.

02. Survey Questionnaire

Find this type of consumers and do a questionnaire. Then, you can find out where consumers usually look for this type of product/service by doing statistics.

03. Check the placement of peers

Check whether there are many peers advertising on various traffic platforms. If so, it means they have acquired customers on this platform, so you can also acquire customers on this platform.

The above is a method to obtain accurate traffic. After all, accurate traffic is limited, so we also need to expand secondary accurate traffic. The method to find sub-precise traffic is also very simple: advertise where your customers often appear.

Once I was on a business trip from Shenzhen to Hangzhou to coach the marketing work of a project. I looked for flights from Shenzhen to Hangzhou on Ctrip, and then sent the flight number to the liaison person on the project side. But later when I opened the news app to read the aggregated news, there was an advertisement for Ctrip's flight information from Shenzhen to Hangzhou. This type of advertising is relatively accurate.

There are many other ways to find online traffic suitable for your own products. For details, please see the introduction and section 4.2 of the book "Super Conversion Rate: How to Get Customers to Order Quickly". After finding the online traffic suitable for your product, you need to start the particularly important point in business - conversion (i.e. commercial monetization).

3. How to improve traffic conversion rate and achieve scale growth after initial scale is achieved

I will use a project I served on in 2014 that has passed the confidentiality period to explain how to improve conversion rate and achieve scale growth, and connect the previous content to help everyone understand.

Before March 2014, Zhenpu Go was a traditional offline children's Go training institution, mainly teaching Go to children aged 4-6. Therefore, the main method of recruiting students was to go to the vicinity of kindergartens to obtain the contact information of potential parents, and then invite them to the campus to attend trial classes, and finally make a deal.

Their path to closing a deal is: a group of people pass by the kindergarten -> some of them stop to listen to you introduce Go training -> they are interested and leave their number to arrange for a trial class -> they make an appointment for the trial class by phone -> family and children arrive for the trial class -> they pay and sign up after they are satisfied. This involves four levels of conversion rate, interest rate, reservation rate, attendance rate, and on-site transaction rate. The data are as follows:

Although Zhenpu Go has become the leading company in domestic Go training in 2014, with 13 campuses in Beijing alone, if it wants to continue to grow, it will have to rely on online marketing. At that time, I saw that many of my peers were running Baidu SEM ads, so I thought Baidu should be an accurate channel, but more data was needed to support the final decision on whether to run on Baidu. So I opened the keyword planner tool in the Baidu promotion backend and found the following data:

(Data from Baidu backend search for "Beijing Go training")

(Data from Baidu backend search for "Beijing Go Introduction")

From these data, we can see that there are indeed many parents who use Baidu to find Go training schools, so they start to set up promotion accounts to obtain accurate traffic, plan SEM landing pages that are easier to convert, and then use appointment boxes, online consultations or consultation hotlines on the landing pages. After these operations, they can import accurate traffic into the target landing page to convert it into sales leads, and then invite trial classes by phone to finally close the deal.

The data before and after optimization are as follows:

By obtaining accurate traffic + corresponding types of landing pages, the interest rate can be increased from 5% to 33%. By optimizing the sales talk, the appointment rate can be increased from 33% to 74%. By optimizing the SOP, the attendance rate can be increased from 33% to 80%. The final attendance conversion rate is determined by the level of the offline trial class teacher. After the improvement of conversion rate in the previous steps, the final conversion rate increased by more than 30 times. This is why the number of students enrolled in a year by the three people in the Zhenpu Go Online Marketing Department can exceed the number of students enrolled by more than 100 offline teachers.

Seeing this, you may be curious about how to optimize to improve the conversion rate at all levels. In fact, there are three steps from seeing the product to the final transaction (stimulating interest -> building trust -> placing an order immediately). These three steps are controlled by the six elements of conversion rate (reciprocity, commitment and fulfillment, credentials, best-selling reviews, pain point stimulation, and scarcity). Due to space limitations, please refer to Chapter 3 of "Super Conversion Rate" for the definition, usage, function, examples, and extensions of the three-step ordering method and the six elements of conversion.

During the epidemic, we compiled these contents in the hope that they can help everyone overcome the difficulties. Achieve scale growth through scientific transformation + scientific acquisition of accurate online traffic suitable for yourself + improving conversion rate.

Author: Chen Yong

Source: Chen Yong Marketing Column