Old tricks don’t work anymore. Brands’ advertising ROI in China has been tumbling down to subzero levels in the past few years. What was once the El Dorado for marketers is becoming a blood red ocean. New channels pop up every day for the pleasure of the new Chinese consumer and the headaches of brands trying to reach them. For each channel in the West, 20 can be found in China.
Chinese consumers are maturing faster than in any other market in the world. A study by McKinsey reveals that by 2020, discretionary spending will nearly double compared to 2000. Differentiation, particularly in first-tier cities, is becoming a major consumption drive. Chinese consumers are also at the forefront of technology, leading the global market of mobile payments, among others.
For marketers, this means only the most creative and engaging initiatives will hit home. Here are three lessons learned in the field by experts who have managed to attract consumers’ attention for the better, and received a great return on investment as a result.
1. Use AI to segment your customers.
Wyoming Xu, CEO and founder of marketing agency OCheng, has been working with Sephora and LVMH for several months and explains how they managed a growth of fivefold 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 a brand’s WeChat followers and thus adapt strategies for each segment,” says Xu.
Depending on the area where a customer lives, how long they’ve followed the account, which channel they entered the account, if they are already a member, and other factors, they 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 the the online book club, You Shu’s (有书) WeChat store proves us wrong.
This official WeChat account is a monthly reading list and book recommendation platform with 7 million WeChat followers, according to Walk the Chat. 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 on them in the group, and once a week, the account will recommend a book and of course, a link showing where to purchase it on JD.com. This month, the shop sold more than 3,000 books within a week, the amount the publisher would have sold in two months had there not been a boost from social media.
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 (who boasts 1.8 million followers on Weibo) strongly recommends product giveaways or special discounts for any Weibo marketing. Giveaway campaigns score on average results that are twice as good compared to campaigns with no clear benefits for brand followers.