The traffic cost remains high. What is the way out for traditional e-commerce?

In recent years, public domain traffic has shown a downward trend, promotion costs have increased, conversion rates have not increased but decreased, and traffic dividends have disappeared.

Nowadays, e-commerce people generally face the situation of increasing costs, poor efficiency, greater competition, and basically no orders if they don’t buy traffic.

In the early years, only sensitive businesses would find another way out. Most businesses only began to gradually move to Douyin in the past two years, or switch to other places, but no matter what, they found at least one direction and would not face the pressure of losses.

So what is the fundamental reason for the high traffic cost?

It’s because the traffic is not in my own hands!

And what is the way out for traditional e-commerce?

Not anywhere else, it is to immediately build a bridge of information communication between yourself and consumers based on existing customer resources, form a chain of trust relationships, and open up the next growth curve for the company.

1. How can private domains help enterprises grow?

First of all, all companies want to do private domains must currently be for the purpose of final profit growth or long-term stable profit growth.

Many people mention the nature of business. It is actually a math game that can make your LTV larger than your CAC. (LTV is how much money your users can spend for you in their lifetime, and CAC is the cost you need to acquire users. Among them, LTV minus CAC is the gross profit you earn.)

And doing private domains is nothing more than to improve our LTV and reduce our CAC.

Obviously, as long as the user is in your private domain pool, there is naturally no need to spend extra money to reach the reach conversion or the like.

If you want LTV, the most direct thing is to let users buy higher order-of-customer prices and buy more products, from the original purchase of products only once to twice, or purchase more, or even purchase other products.

If you have many of these high-quality LTV users, the growth of your company will naturally rise.

Of course, these growth conditions are not so easy to achieve. Compared with the public domain, we do not have so many massive users, and accumulating private domain users can bring constant benefits to merchants.

When you already have a certain number of private domain users, such as members, customers who need to focus on future operations, if you still sell the same product, the average customer price will actually be difficult to change, and it will even be reduced. After all, if you go to the public domain platform to buy, you will also have platform coupons.

Therefore, for private domains, our core growth strategy comes from the number of customer products, including the membership system.

What is the number of customer products? It is to use multiple items to increase the overall customer unit price from the original single items sold to the number of sets or multiple items to achieve the final growth, so it is called the full category.

This is the underlying logic that can truly achieve growth in a private domain. Not all companies are suitable for private domains, and different companies and different product categories and private domains are also different.

Many e-commerce bosses think that I only have one product, but it sells very well, so we recommend you to fight for hot products instead of private domains, because you only have one product.

2. 4 ways to play in private domains of enterprises

Usually, the consumption characteristics of the product category will determine the user's consumption behavior. The consumption behavior of users in the private domain also determines the strategy of private domain operation, which means that different industries and different consumer product categories are also different in the private domain.

We can divide products with low cognition and high cognition based on the user's perception of the category; then use the consumption frequency to divide consumer products with high frequency consumption and low frequency consumption, and we can draw 4 characteristics-

(1) High frequency and high cognition

Such as daily necessities, food, catering, etc.

The standard products used in daily life are high-frequency and high-cognitive products, which means that they do not need to educate customers, and they also know how to use them. The core is to achieve conversion through a large number of activities and promotions, as long as you conduct targeted pushes.

Therefore, in terms of private domain operation strategies, we focus on providing light services. Due to high cognition, we don’t need to educate our customers anymore. We just need to reach more information, remind more to buy, and use one-to-many private chats, or community.

(2) Low frequency and low cognition

Such as luxury goods, real estate, wedding dresses, automobiles and other products, that is, products that provide in-depth services and require long-term communication services until customers truly recognize them.

(3) High frequency and low cognition

For example, maternal and infant, dietary health care, etc., this type of product focuses on education and content. As long as the customers you win can have enough trust in you, the subsequent high consumption frequency will also be generated by you.

This type of gameplay can be maintained and managed for a long time by establishing private domain communities.

(4) Low frequency and high cognition

For example, personal care, beauty, etc., everyone knows the category awareness. It may take a long time to buy it once. This kind of activity promotion is done more frequently, and it can be maintained in one-on-one form or it is often used to "explode" red envelopes in the community.

Send a red envelope of 100 people, and those with the best luck can get products recommended by the merchant. When promoting rules in the group, you are also constantly promoting your products. Interested users will definitely judge whether they want it based on your promotion.

But only 1 out of 100 people can get it, and we can't waste the remaining 99 people.

You can arrange for customer service to send a coupon to these intended customers in private and inform them to place an order before 12 o'clock tonight, otherwise it will be invalid tomorrow.

Small actions that seem inconspicuous will actually transform a large number of people.

There is a core logic here-

To solve cognitive problems, we need to do a lot of content and services, educate them to trust you. High consumption frequency, a large number of activities and promotions should be carried out to facilitate consumption and stimulate multiple repurchase.

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