Private-Domain Commerce Is Not About Contact, but Relationship
The core of private-domain commerce is not possessing contact details, but building durable customer relationships.
This article is part of a series. Before reading, we recommend you first read: Series Article 1: Why Is There No Spread Without “Making Waves”?**Series Article 2: Why, in the Digital Age, Is a Good Ad No Match for a Good Story?**Series Article 3: For a Product to Sell Well, Why Does It Need to Be Gossiped About?
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Fans Must Not Be Freeloaded
“Fans” originally meant enthusiasts of sports or movies. In the context of marketing, the people who follow you, and the people who support and like you, can all be collectively called fans. Words that go hand in hand with fans include community, private-domain traffic, as well as official WeChat accounts, Weibo, and so on. The value of fans lies in their willingness to form some kind of relationship with you — a relationship that can be unilateral, bilateral, or multilateral. Unilateral: for example, users subscribe to your media, follow your topics, and are willing to receive your push notifications.
Bilateral: they actively participate in the activities you organize, such as fan meet-ups and tasting events, and are willing to help you share and recommend you to more friends around them.
Multilateral: users take the initiative to organize activities, topics, and even related transactions connected to you together with other users. For example, we see the fans of many top-traffic celebrities spontaneously organizing all kinds of communities and mobilizing all kinds of support for the stars they love. The relationship between you and your users constitutes the exchange of interests between you and them. Of course, having a relationship does not necessarily mean commercial value. For instance, the people who talk the most about Porsche are not necessarily the ones who buy Porsches — but that does not mean Porsche has no relationship with these people.
Private-domain traffic has been extremely hot these past two years, and many people assume that users who have followed the company’s official WeChat account, Weibo, or other official channels count as their own private-domain traffic. Yet to this day, I have never seen a single FMCG brand run its official-account fans well. Why?
Because the relationship between the user and you inside an official account is called a “subscription,” which cannot be considered fandom in the strict sense.
The core of private-domain commerce is building a relationship with users, not merely a connection.
Let me ask you a question: to whom would you say, “Let’s keep in touch”? Isn’t it someone you could just as easily never contact again? And with whom would you build a relationship? It has to be someone whose interests are bound up with yours.
Establishing a connection is easy; building a relationship is not. So never fall into tool-driven thinking — “I’ll use all sorts of friend-adding tricks to add people, and then I can sell things in my Moments feed.”
Anyone with even a shred of marketing sense should think about it: if you create no value for users — if you just spam ads in your official account and Moments every day, freeloading off users for nothing — who is the fool, the consumer, or the person blasting out ads?
-02-
The Prerequisite for Building Relationships Is Creating User Value
The starting point of a relationship is that you can create value for the user. Put in marketing terms, so-called value means satisfying the user’s needs. User needs, in essence, arise from some material or emotional lack. So the core of building a relationship with users is being able to offer an achievable solution targeted at that sense of lack. Trump’s trade war against China and his crackdown on Huawei reminded people everywhere of a China that was weak for a century and bullied by the great powers. At that moment, national self-confidence and the mindset of the strong became an attitude everyone craved. We need a strong China, and we need a strong company — this is the classic mindset of the strong. So while Huawei’s posters seemed not to express its own interests, the values those posters conveyed satisfied the public’s craving — their sense of lack — for the strong and for leaders. During the pandemic, everyone knew business was hard and everyone was anxious. At that moment, the boss of Laoxiang Ji stood up and told everyone: not only will I not lay anyone off, I won’t cut salaries either! Wouldn’t a leader like that inspire a strong sense of identification in you? Providing users with a sense of scarcity is getting harder and harder today. The internet has eliminated material shortage and information asymmetry, and can offer you every good thing in the world, both the ones you know about and the ones you don’t. People’s lives are steadily improving, and with the rise of a middle class of 300–500 million, value for money is no longer so important. But that doesn’t necessarily mean expensive goods — it means possessing a certain scarcity, something that can express a person’s character and taste, so that through the scarcity you provide, they gain a sense of pleasure, satisfaction, achievement, and security within the relationship.
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Why Are Relationships So Important?
In the past, the focal point of marketing competition was control over channels. In the future, it will be control over your relationship with users. As Professor Liu Chunxiong says, the relationship is the channel; relationships are the core of business today. Why are almost all the internet giants piling into community group buying? At its core, it’s because community store owners are close to consumers not only physically, but even closer in terms of relationship. The semi-acquaintance relationship between store owners and community residents allows communication without getting in the way of selling. The community groups within a neighborhood are the perfect vehicle for new retail.
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How Do Relationships Get Monetized?
Professor Dingding has spoken of three steps for monetizing private-domain traffic: turning users into fans, turning fans into channels, and turning channels into communities. In my view, these “three transformations” are, in essence, a process in which you and the user move from no relationship to a unilateral relationship, then from a unilateral relationship to a bilateral one, and finally into a multilateral relationship. Of course, transactions can occur at every level; having no relationship with you doesn’t mean someone can’t transact with you. You can sell things on Taobao, but the problem is that the user trusts Taobao, not you — so you have to pay extra traffic costs to win that transaction. So you see, generating transactions without building relationships with users is getting harder and harder today, which is also why traffic keeps getting more expensive. Therefore, for brand owners, the core of marketing is how to establish, with users — offline, online, and within communities — a relationship that allows interaction and exchange at any time, with a certain emotional and value connection. This relationship can be emotional or material, but whatever form it takes, it must be a product or service that can satisfy the user’s sense of lack. Of course, beyond building relationships with users directly, you can also do business by leveraging other people’s relationships with users. The first way is to turn relationships into channels: using some benefit-distribution mechanism, you turn people with a certain relationship capital into human resources within your organization, and conduct transactions through their relationship networks. A representative brand here is Sishijiu Fang (49 Fang). Their model can be described in one sentence: “Born of crowdfunding, built on co-creation, flourishing through alliance, achieved through fission.”
Sishijiu Fang started with 49 crowdfunding shareholders and co-founders. They adopted a wuxia (martial-arts) playbook: the company they founded was called the “Head Lodge” (zongduo), and each person founded a branch lodge (fenduo), ran another round of crowdfunding, and one after another they founded 108 branch lodges. The first core circle: the 49 crowdfunding shareholders, the co-founders. This is the innermost core; founder Zhang Chuanzong is one of these 49. It’s the highest unit, and they named it the Head Lodge. Suppose each of these 49 crowdfunding shareholders had to put in 100,000 yuan. But if it were merely an investment, that would be a mistake — the venture couldn’t continue. What was being raised was money, and also channels. With a capital base of 4.9 million yuan, the money problem was solved, and they set about solving the co-creation problem.
It wasn’t just about putting in money — they had to work too. Then each of the 49 shareholders was asked to found a branch lodge. That’s at least 49 branch lodges, and some people could develop additional ones; in this way, bit by bit, they built up 108 branch lodges, each one comparable to a sales company. Each branch lodge then ran another round of crowdfunding. The first core circle: 49 people, the Head Lodge. The second core circle: the branch lodges, 108 people. Then comes the third circle: the retail outlets. For example, 30 people in a community invest in a 100-square-meter store, each putting in 10,000 yuan. In return, each gets a clubhouse where they can eat, drink, and entertain friends, and at the same time gains 30 shareholder-level partners — which is itself a social circle. For one store, 30 people coming in through crowdfunding means 300,000 yuan — again raising money. And how does the co-creation work? Each shareholder is required to build at least one group of 100 or more people: 30 people × 100 is 3,000 people, and it’s quite possible that through the groups built by these 30 shareholders, the population covered by this one store will exceed 10,000. Once this traffic pool is built, do you still need to wait for customers to walk in the door? In this business model, there’s a store out front, social interaction inside the store, and a community behind it. Setting up the store is an excellent reason for crowdfunding. It sits within the neighborhood and carries great credibility. The 30 people who come in through crowdfunding are themselves a social circle, and the store gives them a venue for entertaining their own friends. So “social interaction inside the store” carries two meanings: first, the socializing among these 30 people; and second, the store as an outward-facing social venue for those 30 people. Sishijiu Fang has attracted KOLs from many industries: for example, Liu Jun, President of Lenovo China, serves as chairman; Professor Yu Shiwei, the foremost figure in Chinese-language corporate training worldwide, serves as Chief Culture Officer; and the world-class dance artist Yang Liping serves as Chief Art Officer. It has also assembled a large number of channel operators in need of transformation — IT channel operators, telecom channel operators, home-appliance channel operators, and bosses from all walks of life — along with professional managers from Fortune 500 companies and retirees looking to put their remaining energy to good use, to serve as lodge masters or hall masters. It has now set up 108 sales companies across the country, every one of them crowdfunded, with roughly 20,000 shareholder-level partners nationwide and 1 million members. The sales model is shareholders plus members.
The core of this model is not merely crowdfunding. In essence, it uses equity-based interest binding to pull people with a certain relationship capital into the organization, and then, through the participants’ personal networks, turns them into distribution channels. Relationships can also become retail/experience/promotion outlets, a means of providing the endorsement that solves the trust problem. For example, Six Walnuts, leveraging the semi-acquaintance relationships of small community stores, ran 1-yuan flash sales via mini-programs within the store owners’ community groups, achieving large-scale consumer trial. We will discuss the specific details in a later article. **-05-
**How Do You Build a Long-Term, Stable Relationship with Users? The prerequisite for building a lasting, long-term, and stable relationship with users is that you must continuously provide value to them and form a stable symbiotic relationship. This symbiotic relationship is, in essence, a continuous, stable system of exchanging benefits. The connection a brand owner builds with users must continuously create, beyond the product itself, interactive value, learning value, social value, and emotional value — only then will people have any desire to interact and engage with you. The purpose of cultivating this kind of relationship is to achieve mutually beneficial, mutually supportive, symbiotic growth with users. So what is interactive value beyond the product? 1. Being able to accompany users as they grow. Like Niangao Mama: yes, I sell products, but what I’m really doing is teaching you how to become a good mother, and my products will make your baby smarter. To become a good mother, you need to take my courses and use my tools — the courses are free, the tools are paid.
Lululemon, which has been especially hot these past two years, relies on expert users (KOLs) and communities to continuously build a lifestyle people aspire to. 2. Unique, scarce brand value. I buy Air Jordans to show off, but if everyone has them, then I’ll wear a limited edition nobody else has. But to be able to buy limited-edition AJs, I have to continuously follow all kinds of AJ news and discuss and interact within the community. 3. Becoming a kind of cultural faith. I simply love One Piece, I simply love Jay Chou, I simply love Hua Chenyu — and beyond their works, I’m willing to follow everything peripheral to them.
4. Continuously providing users with a sense of novelty. For consumer goods, sustaining repeat consumption while providing users with novelty is actually very hard, but I think there are a few models worth referencing. One is Pop Mart, which through its blind-box model keeps manufacturing surprises (familiarity + the unexpected), ultimately keeping participants hooked and coming back for more. Another is Coca-Cola. Although it has sold one flavor for a hundred years, its 70/20/10 content investment rule — 70% practical content, 20% innovative content, 10% brand-new ideas — lets people in different circles each experience what their ideal Coca-Cola looks like.
The third is Red Bull, which through its brand positioning of “Your energy, beyond your imagination” (“Red Bull gives you wings”) has shaped a spirit of extreme sports. This can generate an unlimited supply of Red Bull brand stories: through the sports it sponsors and the stories of the extreme athletes it sponsors, the narrative can go on indefinitely. To achieve this goal, Red Bull even established Red Bull Media House. This studio owns magazines, websites, radio stations, TV stations, a record label, and a film production company, providing Red Bull with promotion in every form — print and television advertising, online and offline. It has also signed a large roster of sports stars and has planned and sponsored a whole series of extreme sports projects: parkour, skydiving, skateboarding, drifting, surfing, freeride mountain biking, and more.
Red Bull has documented these projects in photos and videos, producing awe-inspiring brand stories that have captivated countless consumers. 5. Sincerely making friends with users. I sell insurance, but as I keep selling, we end up becoming friends — and because the relationship has been cultivated so well, you not only buy yourself, you also refer your family, relatives, and friends to buy. 6. Being able to offer extreme value for money. Your products/services are pretty good; I’ll top up and get a membership hoping for some discounts — enticed by the benefits, I’m willing to build a long-term relationship with you.
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**How to Keep Users Recommending You Creating value for fans is, in essence, still the logic of retention. But fans have another, even more important value: helping the enterprise solve social-media propagation and gain continuous traffic. We must use mechanisms to complete the entire process of users going from producing content themselves to distributing it. For this process, I see several approaches: 1. Continuous recommendations from professional KOLs. In fact, many enterprises today are experimenting with influencers, content creators, and ordinary people, using all kinds of communities and account matrices to monetize dispersed traffic. But as I see it, this kind of monetization is essentially still a sort of shopping-guide-style hawking, not genuine recommendation by professional KOLs. I often buy things through an official account called “Aige Chi Bao Le” (Aige Is Full), whose founder Wen Jia has also appeared in New Distribution’s livestream to share her insights. The reason I like buying from this account is that its food recommendations are exceptionally good. I’ve gone to try many of the snacks it recommended and have never once been disappointed, which has given me deep confidence in the account’s professional competence. In my view, this is what a true KOL is: sufficiently professional in one field. Only recommendations that professional can win genuine recognition from users and fans. 2. Bring 100 KOCs in each city into your own system. Professor Liu Chunxiong has expressed this view: KOLs are media; KOCs are channels. Why are KOCs channels? Because they sit between KOLs and ordinary consumers, possessing both the professional influence of a KOL and closeness to consumers. So the B-C integration Professor Liu Chunxiong keeps talking about is, at its core, using KOCs to bridge online and offline and to connect with communities. Of course, many enterprises are already practicing this model — for example, Taishan Beer’s direct-operated stores, Lidu Liquor’s city partners, and Jiangxiaobai’s brand ambassadors. In essence, they take high-quality local network nodes with a certain capacity for socializing and sharing, and, by binding their interests, turn them into the brand’s spokespeople in the local social network. Judging by today’s results, this model remains highly effective. 3. A million-fan experience program. Continuously invite users to tour your factory and to interact and co-create products and activities with you. For example, Lidu Liquor offers an immersive experience: users learn about how the liquor is brewed, participate in product co-creation, and learn about the blending process, coming to understand how an exceptional product is made. Through this process of experience and co-creation, users switch roles and collect social currency. Jiangxiaobai has also persisted with factory-return tours these past two years, and Tsingtao Beer’s factory tour has become a must-visit attraction in Qingdao. As long as you keep at this, it will gradually accumulate into astonishing explosive power. 4. Make sure consumers remember your product’s selling point and can explain it in one sentence. Pop Mart’s mini-program sales exceed those of its Tmall store, which shows that most of Pop Mart’s product sales are triggered through social interaction rather than by seeing ads. This means the social currency you give users must be simple, clear, and plain, so that a user can tell a friend your value in a single sentence.
Never ramble on and on. Taishan Beer’s own distilled selling points: contains yeast, all-malt, unfiltered. But the selling point consumers actually remember — the one I’ve heard consumers use to introduce it to others on countless occasions — is a single sentence: this beer has only a 7-day shelf life! Let me give another example. When someone mentions the crosstalk performer Yu Qian, what’s your first reaction? He’s the man from Guo Degang’s routines: smokes, drinks, perms his hair. Is Yu Qian really like that? What is this? It’s a persona. But why did the audience remember these traits rather than the real Yu Qian? Because these traits best match the audience’s expectations within the relationship. It’s people symbolizing something complex for the sake of easy memory. With a good product, getting users to remember you is easy; but getting others to recommend you requires that you give them a reason and a selling point that are easy to spread. Otherwise, no matter how good the product, it will struggle to spread by consumer word of mouth. Conclusion: Professor Liu Chunxiong has said that many people overlook the generational-gap problem brought about by technology. From face-to-face slaughter between men in the cold-weapons era, to the volley-fire tactics of smoothbore muskets before World War I, to the large-scale use of Mauser rifles in World War I, to the mass slaughter of human beings by automatic rifles and machine guns in World War II — all of this shows how improvements in tools created generational gaps in warfare, producing lopsided victories. If decision-makers continue to fight higher-efficiency tools with an outdated system of tactical knowledge, the result will inevitably be crushing defeat and elimination. The same will be true of enterprises in the future: what defeats you is not your competitor’s weapons, but your own outdated knowledge and mindset and your stubborn defense of vested interests. Looking at things today, every enterprise that markets well is, in essence, one that exploits new technology to the fullest. Those that do poorly do so not because they lack methods, but because they have not deeply understood the impact new technology has on marketing. So enterprise digitalization is not about making enterprises walk the old road in new shoes; it is about genuinely starting from the underlying logic of value and using new digital tools to complete the reconstruction of the marketing model.
But this reconstruction, I believe, must start with user value. Only after retention is done well should you talk about traffic. If retention isn’t done well, then no matter how much traffic you have, it’s sand in your hand — you can’t grasp it, and you can’t keep it.