Old tricks don’t work anymore. Brands’ advertising ROI in China have been tumbling down to subzero levels in the past years. What was once the El Dorado of marketers is becoming a blood red ocean. New channels pop up every day for the pleasure of Chinese consumers and the headaches of brands trying to reach them. For each channel in the West, twenty can be found in China.
Chinese consumers are maturing faster than in any other markets in the world. Differentiation, particularly in first-tier cities, is becoming a major consumption drive. A study by McKinsey reveals that by 2020 discretionary spending will nearly double compared to 2000.
Also, Chinese consumers are at the forefront of technology, leading the global market of mobile payment among others. That means marketers cannot use the same old tricks that they were before.
Only the most creative and engaging initiatives will hit home. Here are 3 lessons learned in the field from experts who have managed to attract consumers’ attention for the better, and got a great return on investment as a result.
1. Use AI to segment your customers
Wyoming Xu, CEO & Founder at OCheng, has been working with Sephora and LVMH for several months and explains how they managed 5x growth in social commerce sales of these retail giants thanks to intelligent customer segmentation.
“Thanks to AI, we can send personalized messages to millions of customers within seconds. Our deep learning algorithm can target very precisely brand’s WeChat followers and thus adapt strategies for each segment,” says Xu.
Depending on the area where you live, how long you’ve followed the account, which channel you entered the account if you are already a member and other factors, you will receive a highly personalized message including recommendations or coupons. Adapting the brand’s promotional message to each customer highly increases the likelihood of purchase.
2. Generate sales through social media content marketing
We have a tendency to consider content marketing as a waste of time and budget without clear visibility on return on investment. A case study of 有书 WeChat store shared by WalkTheChat proves us wrong. This official WeChat account is a monthly reading list and book recommendation with 7 million WeChat followers. They have successfully applied content marketing strategies with direct effects on sales. They use WeChat groups as their main way to engage with followers. Anyone can talk about books they read and comment. Once a week, the account will recommend a book and of course, a link where to purchase it on JD.com.
Results were astonishing.
“For instance, a book called Chinese Philology History sold 917 books in one day after You Shu listed it in their Reading List of May. It sold more than 3,000 books within a week, that’s the amount the publisher would have sold in 2 whole months without the promotion,” says Chen Tingyi in this case study.
3. Engage customers with games and giveaways
Having consumers test your product for themselves will ensure they will remember it and actually experience its benefits. Combining it with a fun challenge makes consumers feel unique and exceptional: only the best will get rewarded.
Lihaoma (礼好吗), a Shanghai-based company using gamification to increase advertising ROI, has made games and rewards the cornerstone of their value proposition to brands. For example, they were able to increase the WeChat post engagement rate of Feiyue 5x through a branded trivia game where winners could enjoy a free pair of collector Feiyue shoes. Having a clear call to action and incentive to engage was a key success factor for this campaign.
The famous KOL Melilim FU (1.8M followers on Weibo) strongly recommends product giveaways or special discounts for any Weibo marketing. Giveaway campaigns score on average twice better results than campaigns with no clear benefits for brand followers.