Practical tips for global operation: organic integration of e-commerce ROI and Xiaohongshu promotion under the data paradox

On e-commerce platforms, ROI has always been evaluated based on various data. But if we combine Xiaohongshu’s promotional activities with ROI, will it be better to evaluate the specific effect? ​​In this article, let’s take a look at the author’s thinking.

1. The current situation and problems of data thinking in e-commerce

1. Dominance of data evaluation indicators

In the e-commerce field, brand companies usually rely on data indicators such as conversion rate, search volume, ROI (return on investment), CPC (cost per click) to evaluate marketing effectiveness. These indicators seem to provide a clear basis for decision-making. For example, the boss expects the conversion rate to increase from 5% to 10%, or requires the ROI to reach 2-3. However, in actual operation, this data-dependent approach faces many challenges.

2. Difficulties in connecting data

1) Off-site traffic diversion and monitoring issues

• When promoting sales through off-site traffic diversion, there is often a serious mismatch between the off-site incoming traffic and the on-site monitored traffic. For example, if there is 1,000 inbound traffic from outside the site, only 100 can be monitored on the site.
• Official Weibo posts are restricted and cannot include links or mentions of official flagship stores. Otherwise, traffic will be limited, affecting the introduction and monitoring of off-site traffic.

2) Obstacles to cross-platform data flow

• Even if Unidesk is enabled for Tmall’s off-site full-link data, it is still limited to the Alibaba ecosystem.
• It is forbidden to forward Douyin to WeChat, Taobao jumps outside the site are forbidden, WeChat jumps to Taobao can only be done through Taobao passwords and the loss is huge, and there are also differences between Xiaohongshu data and Tmall data. These restrictions make it difficult to connect the full chain of data, affecting the company's comprehensive grasp of real traffic and marketing effects.

3. Data is misleading

1) The authenticity of the platform’s traffic structure is questionable

Taking the traffic data of a competitor as an example, its traffic structure shows that free visitors to Taobao account for 80.64%, and Taobao Mobile searches account for 52.42%. However, the basic rule of the platform is to only calculate the source of the last traffic node, which may lead to data deviation. For example, the traffic from the external network to Tmall will be counted as traffic brought by Tmall, making the platform traffic ROI data look better, but the actual situation may not be the case, thus misleading the company's judgment on the source and effect of traffic.

2) Complexity of anchor traffic sources

The distribution of anchors' traffic has changed a lot and is no longer based solely on the anchors' efforts. Ordinary anchors may rely on long-term live broadcasts every day to obtain residual traffic; anchors in the rising stage often have traffic brought by the slot fees paid by brands; the traffic of top anchors is also inseparable from the slot fees and the traffic brought by brand communication. This means that we cannot simply assume that the high conversion efficiency of anchors is due to their own abilities. Brands need to be more cautious in evaluating input-output when cooperating with anchors.

2. Common Misunderstandings of E-commerce Marketing under the Data Paradox

1. ROI Misconceptions

1) The truth behind high ROI

Some brands may seem to have a high ROI, such as 4-5, but when further analyzing the proportion of advertising, ROI of new and old customers, problems will be found. For example, the total ROI of a brand is 4, the through train ROI is 1.8, the total advertising volume accounts for 40% of annual sales, the new customer ROI is 1.5, and the old customer ROI is 6. This shows that the high ROI may be supported by factors such as old customer repurchase, and cannot be simply attributed to the advertising effect.

2) Low ROI and large-scale investment

When the ROI is only 1.2, the finance department may think that it is a loss and refuse to approve the budget. But in fact, the annual repurchase rate should be calculated to determine the real ROI. For example, the real ROI = the ROI of new customers in a certain campaign * the annual repurchase coefficient. If the ROI of new customers is 1.2 and the annual repurchase coefficient is 3, the real ROI is 3.6, which means that the campaign should not be abandoned just because of the short-term low ROI, but the long-term value should be comprehensively considered.

2. Limitations of Conversion Rate Improvement

1) Conditions for a jump in conversion rate

The conversion rate can usually only achieve a leap forward when there is a large influx of traffic from the anchor, a large influx of private domain traffic, or when the brand suddenly becomes a hot product. Otherwise, no matter what kind of optimization is done, the conversion rate will often only increase or decrease slightly.

2) Complexity of conversion rate changes

For example, when traffic increases tenfold, the conversion rate may drop by half; when the conversion rate drops, it is not necessarily a bad thing if profits can be maintained and repeat purchases are high; when the crowd expands, the conversion rate is likely to drop. Therefore, we cannot simply pursue the increase in conversion rate, but should consider other factors comprehensively.

3. Blurring of new and old customer data

1) Difficulty in distinguishing data

Companies often find it difficult to clearly answer questions such as the conversion rate, ROI, customer acquisition cost, and customer flow of new and old customers. They can usually only obtain combined conversion rate, ROI and other data, which makes it difficult for companies to accurately evaluate the marketing effectiveness and value of different customer groups.

2) Impact of data indiscriminateness

Failure to differentiate between new and old customers in a single month will have little impact to a certain extent, but from a long-term and precision marketing perspective, it is not conducive to companies formulating differentiated strategies for different customer groups, such as optimizing the cost of acquiring new customers or increasing the repurchase rate of old customers.

4. The pitfalls of running performance-based ads

1) Platform issues lead to poor results

Even if the audience and tags are selected correctly when delivering performance ads, the ROI may still be very low due to platform issues. For example, start-ups and emerging brands are in an unfavorable position in the traffic pool. With the same investment cost, the conversion rate is 3-5 times lower than that of the top brands. They are also prone to falling into the trap of delivering tags because the platform traffic is unevenly distributed, making it difficult to develop rapidly through pure investment.

2) Necessity of data bank analysis

After the delivery is completed, the company should use the data bank to check the actual population provided by the platform to understand the real reasons for the poor delivery effect and avoid blindly adjusting the delivery strategy without solving the fundamental problem.

3. Xiaohongshu’s advantages and value under the data paradox

1. Data and traffic algorithm advantages

1) Forwarding path and traffic distribution

Xiaohongshu can be easily forwarded to WeChat, achieving a better forwarding path. Its traffic distribution is more inclined to content rather than advertising. The overwhelming delivery of performance advertising + content has not been as fierce as Douyin, which provides brands with a relatively fair opportunity to obtain traffic.

2) Search term guidance and visualization scenarios

Xiaohongshu’s search term guidance allows users with guidance needs to see relevant content more easily. Its visual Baidu system for various life scenarios has been formed, and user needs can be directly directed to content, which helps to improve brand exposure and the accuracy of product promotion.

2. Cross-platform link monitoring and cost advantages

1) Link monitoring capability

Xiaohongshu has the cross-platform link monitoring function of Xiaohongmeng, which can help brands understand the conversion status after the introduction of off-site traffic to a certain extent, making up for the shortcomings of some full-link data.

2) Blogger cost advantage

The unit cost of bloggers is at a low threshold stage. For brands with limited budgets, it is relatively more cost-effective to cooperate with bloggers on Xiaohongshu for promotion, which can expand brand influence while controlling costs.

3. Xiaohongshu practical experience and strategy

1) Talent selection strategy

You can’t be lazy when selecting influencers. You need to consider multiple factors, such as matching degree (including blogger’s note categories, blogger’s personality, etc.), data performance (note data, fan characteristics, etc.), platform recommendations, etc., to ensure that the influencer is highly compatible with the brand and product, so as to improve the promotion effect.

2) Search term strategy

Brands need to understand the search index of their own various words (product words, efficacy words, nickname words, scene words, etc.), understand their ranking in each word, maintain and discuss the search word strategy system, so as to better optimize content and delivery strategies, and increase search exposure and traffic acquisition on Xiaohongshu.

3) KOC utilization strategy

Channel personnel (such as customer service, shopping guides, sales, private domain leaders, etc.) can be trained to become Xiaohongshu KOCs. They are authentic, understand products and user needs, and their user groups are similar to search groups. They can bring more authentic and effective promotional content and word-of-mouth communication to the brand.

4) Balance between traffic and content creation

Brands should not only be bloggers without traffic or only traffic without bloggers. Good search terms and interactive content need traffic, but also ensure that the blogger's interaction and reading data are good before traffic is invested. At the same time, the budget ratio of traffic and bloggers should be reasonably allocated. In addition, you cannot rely solely on Xiaohongshu, but also conduct marketing on other channels (such as Douyin, Tmall, etc.), and focus on branding investment to increase the total number of people and popularity.

5) Traffic observation and number selection skills

Brands can observe traffic in many ways, such as configuring Little Red Heart to monitor traffic diversion, summing up the words in the Little Red Book search terms library, comparing the search results of competing products, observing the changes in traffic and crowds on e-commerce platforms, and avoiding traffic interception by traditional e-commerce platforms. In terms of account selection, it is necessary to clarify the purpose of account selection (such as pursuing low CPE), be cautious about large accounts with more than 500,000 fans, carefully identify the batch content accounts of MCN organizations, and not rely solely on third parties. You must invest time and energy in account selection.

IV. Comprehensive strategies and development directions of e-commerce marketing

1. Keep the data in perspective

1) The two sides of data

The data itself is correct, but it is difficult to connect the entire chain of data, and the real data may be misleading due to factors such as platform rules. Enterprises cannot blindly rely on data, but must recognize the limitations of data and avoid making wrong decisions due to data misjudgment.

2) Comprehensive evaluation of marketing effectiveness

In addition to paying attention to traditional data indicators, companies should conduct more in-depth analysis of the factors behind the data, such as the authenticity of the traffic structure, the source of the anchor's traffic, the segmented data of new and old customers, etc., and combine market trends, brand positioning, consumer demand and other factors to comprehensively evaluate marketing effects and formulate more scientific and reasonable marketing strategies.

2. Multi-channel integration and brand building

1) Xiaohongshu collaborates with other platforms

Xiaohongshu can be used as an important supplementary channel for e-commerce marketing, and develop in coordination with traditional e-commerce platforms (such as Tmall, Taobao, etc.) and other social platforms (such as Douyin, etc.). By taking advantage of Xiaohongshu's content advantages and traffic algorithms, it can attract new customers, increase brand awareness, and then guide users to other platforms for purchase conversion, thus forming an omni-channel marketing closed loop.

2) Brand image building and long-term development

Brand building is a long-term process, not a one-time deal. Enterprises should use all-channel online and offline advertising and communication, including traditional media, e-commerce interactive media and other multi-touchpoint advertising, to shape brand image and enhance brand power. Focus on multi-touchpoint advertising for the right audience, cultivate repeat brand purchasers, change from traffic thinking to brand thinking, and achieve sustainable development.

3. Precision marketing and user operations

1) Accurately locate target users

Based on in-depth data analysis and market research, we can accurately locate the target user group, understand their needs, interests, consumption habits, etc., and provide a basis for formulating personalized marketing strategies. For example, based on the use and attention of different users on Xiaohongshu for search terms, we can optimize product content and promotion methods in a targeted manner.

2) User operation and word-of-mouth communication

Focus on user operations, and encourage user-generated content (UGC) such as user reviews and order sharing by providing high-quality products and services to form good word-of-mouth communication. Use resources such as Xiaohongshu KOC to guide users to participate in interaction, improve user stickiness and loyalty, and promote brand development with users as the center.

4. Adapt to market changes and innovation

1) Pay attention to market dynamics and trends

The e-commerce market is changing rapidly, and companies should pay close attention to market dynamics and trends, such as emerging consumer trends, platform policy adjustments, and changes in competitor strategies, and adjust marketing strategies in a timely manner to maintain competitiveness. For example, as consumers' demand for spiritual and emotional consumption increases, brands can launch products and marketing activities with greater emotional value.

2) Marketing innovation and differentiated competition

Continuously innovate marketing methods and means, such as combining popular IPs for cross-border marketing, using new technologies (such as virtual reality, augmented reality, etc.) to improve user experience, etc., to achieve differentiated competition. On platforms such as Xiaohongshu, attract user attention through creative content and unique promotion methods to stand out.

Under the data paradox, e-commerce marketing faces many challenges, but also opportunities. Enterprises need to correctly understand data, give full play to the advantages of platforms such as Xiaohongshu, formulate comprehensive marketing strategies, focus on brand building, precision marketing and innovation, so as to adapt to market changes and achieve sustainable development.