January 07, 2021
E-commerce is expected to account for 50.5% of China’s total retail volume this year, (versus 17.1% worldwide). In other words, by the end of this year China is expected to become the first market in the world to sell more goods online than offline. While the country’s online retail market has evolved tremendously over the last decade, it has also become crowded and fiercely competitive. The development of local brands and the continuous inflow of international competitors has increased the demand for advertising inventories on top e-commerce platforms, this in turn has inflated the cost of acquiring and retaining new customers.
According to WPP’s content, conversation and commerce white paper, the promotional cost in leading e-commerce platforms raised over 280% between 2015 and 2018, whereas the operating cost for top e-commerce platforms doubled during the same period.
In addition to the challenges imposed by the increasing cost of acquiring and retaining Chinese consumers, brands in China are also battling to access consumer’s data. Understanding the ever-evolving consumer’s behavior of Chinese consumers has become a critical factor for brands seeking to bolster their value proposition, streamline their product development process, optimize media spend and cultivate brand loyalty.
The growing challenges faced by brands looking to thrive in China’s massive online retail market, coupled with the rising sophistication of Chinese consumers and their appetite for innovation and personalization has fueled the development of Private Domain Traffic or Private Traffic as a business-wide strategy.
Private Traffic refers to a customer’s pool that can be reached freely, without constraints in time and frequency by its owner. It allows brands to deliver personalized services, improve customer retention by developing closer customer relationships, optimize product development based on customers’ feedback, and drive repurchase.
Since emergence of Private Traffic, there has been a growing debate about how to build and operate it to yield greater and far-reaching business outcomes. Furthermore, a myriad of new terms and phrases related to Private Traffic operation has surfaced. Given the relevance of the topic and the novelty of those new expressions, at PJdaren we decided to put together a glossary of terms and phrases commonly used when referring to Private Traffic building and operation.
For your convenience, we will be releasing the glossary in weekly installments, so that we all can grasp a better understanding of each concept.
We hope you enjoy our first installment!
- Private Domain Traffic: Private traffic refers to a customer pool owned and fully managed by you. Private Domain Traffic allows an authentic and direct relationship between you and your audience, as opposed to public traffic, where you rely on the platforms to reach out to your target consumers.
- Union ID: Refers to a single identifier ID (29 letters and numbers) for each user across all WeChat touchpoints bound in your open platform account. The Union ID allows you to integrate your follower’s data from across all your WeChat touchpoints: WeChat Service account, Subscription account, Mini Programs, Web Application, etc., making it possible for you to provide your users a more personalized and seamless experience.
- Contact design: Is defined as the action of collecting user’s data from across various touch point such as your Official account, Mini Program, WeCom, WeChat groups, RED, Weibo, Douyin, etc., in order to gain a better understanding of your customers, drive organic reach and convert traffic into sales.
- Loyal users: The definition of a loyal user differs from brand to brand and it is highly related to the features of the brand’s products. For example, a coffee chain might label a user as loyal if that user makes at least 4 purchases within 30 days. Whereas, a designer’s handbag brand might label a user as loyal only if that user makes at least 1 purchase within a year.
- Member’s Persona: refers to aggregating consumers’ data from different touch points in order to create an individual profile and provide personalized experience for each member within the private traffic.
- Hyper Targeted Promotion: Refers to designing coupons and other promotional activities for different consumers’ groups by leveraging members’ persona in order to optimize interactions and conversion.
- Timed Promotion: Refers to announcing a promotion starting time in advanced to drive expectations and increase FOMO.
- Layered Operation: Consist in segmenting your consumer’s group based on the tridimensional consumer hierarchy (Recency, Frequency and Monetary), in order to create customized messages and promotion activities to target individual consumer’s groups within your private community.
- Membership Promotions on Peak Sale Days: Refers to Promoting membership cards during peak conversion periods when the engagements are high. Also, to create content intensively over this period of time aiming to occupy users mind and to trigger sequential purchases motivation.
- New Membership Rate: This ratio is defined as the proportion of converted consumers across all selling points that are members of the private community. This ratio helps evaluate the brand’s communication strategies across multiple touchpoints.
- Potential Customer’s Operation: Refers to designing and implementing various recruitment strategies in order to attract your target audience/potential clients to your community. Once the community is built the following activities are focused on driving engagement and desirability aiming to convert such potential clients into actual customers. This kind of private community operation is mostly common among low frequency industries such as automobile and real state.
- Private Asset: private assets are those touchpoints and consumer’s data bases owned and fully managed by a brand. The most common private assets are known as: personal WeChat, WeChat groups, or company applications.
About 评价达人 – PJdaren:
评价达人 – PJdaren helps some of the world’s largest brands to engage Key Opinion Consumers (KOC) with end-to-end solutions to build trust and drive sales in China. 评价达人 provides brands with a powerful engagement platform to inspire sub-segments of its community of Key Opinion Consumers to create authentic content and conversations in the places that matter most and at scale. 评价达人 leverage the power of human interaction to help brands build trust, collect valuable market insights, and boost sales.