Douyin Live Service adds "free trial", how can restaurant owners make the most of their small investment?

As the restaurant industry faces global challenges, merchants are looking for new growth points and marketing strategies. This year, "free trials" have become a growth "lever" that many restaurant merchants have passed on by word of mouth. This article will delve into the reasons behind this phenomenon, the effects, and the types of merchants that are suitable for participating.

This year is probably the year when the catering industry will take "seeking attention" to the extreme.

In terms of consumers’ perception, in addition to the increasingly frequent special coupons, there are more and more restaurants offering “free trials” on Meituan Dianping’s “free meals” and Douyin group purchases, and the types of set meals have become richer and the coverage has become wider. Taking Douyin’s life service platform as an example, since its launch in July last year, the number of cities covered by the “free trial” has expanded from 3 to 49 within a year.

As the literal meaning suggests, the essence of "free trial" is a group purchase for 0 yuan. Merchants provide free group purchase packages. Consumers selected by the platform only need to go to the store to experience it, and then write a true review of more than 100 words and 3 pictures to complete the delivery.

The catering industry was a bit difficult in the first half of this year. Many stores closed down within half a year; those that managed to survive, whether large chain brands or small and medium-sized businesses, were quietly digesting the growth pressure brought by the decline in customer unit prices and intensified competition.

In the face of industry challenges, how can restaurants reach new customers, can small and medium-sized businesses be seen by more people through the Internet, and how can word-of-mouth marketing be used to leverage growth? The "free trial" that used to have a weak presence has gradually become a growth "lever" passed on by word of mouth by many businesses.

Some small and medium-sized businesses even said frankly that in group buying to drive ROI, the "free lunch" cannot be ignored.

01 Restaurant owners hoping for new customers start researching "0 Yuan" group buying

Mr. Hou, the owner of Hong Kong-style hotpot restaurant "That's Not a Pot", lamented that catering is the most difficult business in his entrepreneurial career.

Since May last year, the restaurant's revenue curve has almost never moved upward. This store is located next to an industrial park in Xuhui District, Shanghai, and is home to many leading game companies. Since last year, surrounding companies have moved away, and many old customers have gradually disappeared. The number of game company employees and large factory team-building dinners that used to come frequently has also decreased.

The main ingredients of the restaurant include seafood, fish maw chicken, etc., which is relatively high-priced restaurant. Such restaurants face greater challenges when consumption is weak.

There are two restaurants of the same level nearby. One just opened on National Day last year and closed on May Day this year. The other was even more hastily decorated for more than two months and hired a professional designer. In the end, the store was closed after only one month of operation. "The time it took to open was not as long as the time it took to decorate."

At present, the challenges facing the catering industry are global: in the United States, the trend of people eating out less has forced the restaurant chain giant McDonald's to launch a price-driving method - a $5 meal includes hamburgers, chicken nuggets, fries and drinks, but the cost is a 12% drop in net profit in the new quarter; Starbucks in the United States is no longer reserved, with a 30% discount on coffee + bread meals...

How to increase customer flow has become a proposition for the entire industry. Old customers may be lost or their consumption frequency may decrease. Merchants hope to bring in a group of new customers through Internet marketing and promotion. However, there are multiple trade-offs between long-term and short-term effects, promotion thresholds, and customer acquisition costs. Especially for small and medium-sized merchants, who do not have a deep budget, they value ROI more.

Some businesses choose to adopt the "word-of-mouth model" - by activating the high-quality user evaluation system to accumulate higher store ratings. In theory, becoming a high-scoring restaurant will have a higher probability of being recommended to users.

At the beginning of this year, "那不是锅" signed up for the first "free trial" on Douyin's life service, and has since participated in four sessions, each of which provides twenty to thirty free meal sets, and the ingredients are very solid. For example, the 498 yuan seafood meal for four people includes geoduck, abalone, mussels, shrimp, top brain meat and other ingredients, so that customers who buy in the group for 0 yuan can also get the same product experience as other consumers in the store.

After the promotion, the hot pot restaurant not only gained nearly a hundred real user reviews and its score increased from 3.9 to 4.9, but it also became one of the most popular restaurants in the area, and more new faces appeared in the restaurant.

Chongqing Grilled Live Fish (Pingzhou Branch), located in Bao'an, Shenzhen, which has been open for seven or eight years, is also a loyal supporter of the "free trial". The owner, Mr. Zhou, likes to watch short videos himself. He knows that Douyin has many users and the browsing time is relatively high. So when he saw that Douyin Live launched the "free trial" last year, he wanted to use it to attract new customers to the store, and he treated it as a long-term project, investing an average of 2,000 to 3,000 yuan per period.

Boss Zhou is looking for natural traffic from the platform after word-of-mouth is established. He has observed another restaurant on the same food street. After the review score reached 4.8, there were still dozens of people coming to the store every day to redeem group purchase coupons without any traffic promotion.

Located in the far suburbs of Chongqing, Erloulou hotpot restaurant used to rely mainly on repeat customers. In order to encourage customers to post on Douyin or give good reviews, the owner, Mr. Zhang, sometimes gave customers a homemade tortilla. After noticing the "free trial" in October last year, he decided to give it a try. After two rounds of activities, the store began to have queues, and the overall sales for that month increased three or four times month-on-month.

The more intense the offline competition, the faster peers learn and follow up. A restaurant next to Erloulou Hotpot Restaurant did not do very well, but recently "customer traffic has obviously increased." It turned out that the owner also quietly launched a "free trial."

The rating of "Er Lou Lou" also increased from 4.0 to 4.9. "If it weren't for a free trial, he (potential consumer) might have been waiting and watching, but would not come to the store. But when he is lucky enough to be selected, he will share his real experience." Mr. Zhang did some calculations: each free trial ingredient costs thirty to forty yuan, and there are 20 samples per issue, with a cost of only seven or eight hundred yuan. The coverage and effect are better than other promotion methods he has tried before.

02 The Essence of Free Trial

However, we found in our communication that different catering businesses have different levels of participation and recognition in "free trials" products. Some have participated in five or six sessions in a row, believing that it is the marketing with the highest ROI, while others only try it briefly. For example, Mr. Zhou once recommended this product to a friend in the same industry, but the latter only tried it for one session.

Behind the disagreement lies the difference in merchants’ understanding of “free trial”.

From the perspective of the underlying logic of the product, the "free trial" helps merchants build a user evaluation system, which is essentially the "infrastructure" of the store, a cost item, and is not directly responsible for GMV growth.

The user evaluation system represents word of mouth. Going to a store is an experiential consumption, and the cost of trial and error is high, so when consumers make decisions, they often refer to the real feedback of other users to decide whether to buy something or be discouraged.

This is the value of store reputation - influencing potential consumer decisions and bringing more customers to the business. Although in many cases this influence is difficult to quantify using GMV, just like a company's brand communication, it is difficult to apply the marketing evaluation system.

Judging from the consumption trend, real reviews are becoming more and more important. Today's consumers are very smart and don't want to be "tricked". The "3.5-point restaurants" that became a hot search at the beginning of this year reflected the reverse consumption behavior of consumers after they doubted the credibility of the ratings. Of course, merchants are also helpless - in the consumption habits of most users, the motivation to write bad reviews is far greater than the motivation to write good reviews, so some marketing methods of "inducing good reviews" will appear in the industry.

The C-end users of the "free trial" are selected by the platform for experience. They are all high-level users who have the habit of writing reviews before, and the content is authentic and of relatively high quality. They are more inclined to give real reviews. This review is not necessarily "completely positive", and the platform hopes to form a healthy ecosystem in this way.

▲Merchants participating in the "free trial" cover various fields

Taking Douyin as an example, high-quality reviews with large amounts of information, multiple pictures and multiple words will be displayed first under the store, allowing more users to pay attention to them. Ideally, a good ecosystem where merchants sincerely treat customers, users give real reviews, and consumers enter the store with low decision-making costs can be circulated.

In view of this, smart merchants may be able to kill three birds with one stone by offering a "free trial":

The first is to attract new customers. Most restaurants do business within a 3-5 km radius. Due to location factors, new customers need to invest a lot of marketing methods to penetrate the target population in more distant areas. In contrast, attracting customers through real reviews is a very cost-effective way. The product design has already conducted a preliminary screening of users: people who have never been to the store to consume - regular customers do not need to refer to ratings and reviews; those with potential consumption intentions - active search methods, which means higher conversion rates.

In addition, as an "infrastructure" and "online store" review system, similar to the "shelves" of e-commerce, attracting new customers is a continuous long-tail effect, not a one-time payment and one-time delivery marketing model.

The second is higher traffic exposure. Previously, a local life service provider estimated that for every 0.5 point increase in Douyin store rating, traffic increased by more than 50%. The "free trial" process design contains multiple opportunities for traffic exposure - a "free" package of 30 will be displayed for 14 days, and thousands of people may sign up during this period. This is the first round of exposure for merchants to potential interested users; the selected users will write graphic reviews after the experience. According to the Douyin mechanism, these pictures and texts will also automatically generate videos and enter the platform recommendation flow, which is the second round of exposure; when the store enters the regional praise list and food list, it will rank high when users search, and tap into another round of platform natural traffic.

There is also a round of hidden exposure - on social media platforms, many businesses have found that some users will sync their comments on other local service platforms after commenting on Douyin to earn points and improve user level rights. This is equivalent to indirectly expanding the scope of store brand dissemination.

Third, adjust the off-season and idle time traffic at the operational level. For the catering industry, rent and labor costs always exist. When business is poor or off-season, the store still guarantees a certain amount of customer flow, which is also a basic need of the operator. Taking the Hong Kong-style hot pot business mentioned above as an example, the industrial park store generally has lower traffic on weekends and holidays, but seafood ingredients must be fresh. If there is no customer flow, it will only be wasted. The "free trial" is equivalent to a readjustment of resource allocation.

03 Which merchants are more suitable for "free trials"?

Internet product features have a target audience when they are designed. So what types of catering businesses are more suitable for "free trials"?

Based on the product logic and the observations of the interviewed merchants, we believe that there are the following points:

First, they have the will to operate for a long time and recognize the value of real customer reviews. Businesses that want to operate for a long time will pay attention to customer feedback and be more open-minded. The owner of the "Er Lou Lou" hot pot restaurant said, "We originally let people come to experience it. If it is really our own problem, we can correct it and keep improving. This will help the business. Otherwise, if you ask people to give good reviews, other customers will find that the real experience is not that good after they come to the store, which will only accelerate the closure of the store."

On the contrary, some catering businesses seem to have not figured out why they participated in the "free trial". They cut corners on the set meal, which greatly reduced the user experience. In the end, they spent money, did not retain the reputation, but received bad reviews.

▲The review rules clearly set out requirements for consumers’ true reviews

The second is chain brands or small and medium-sized stores with characteristics. Chain brands can amplify the potential of a single investment because of the store scale. Tustin participated in a round of "free trials" on Douyin's live service at the end of May this year, with statistical exposure exceeding 90 million, and users' comments per thousand views brought Tustin more than one million GMV growth. As for small and medium-sized restaurants with characteristics, they can attract more people's attention by attracting customers to give real praise through quality control or service.

The third is the cold start of a new store. According to the platform rules, new stores often do not display ratings. They will only be displayed when the number of original user reviews reaches a certain scale. At this time, it is necessary to increase customer flow and the number of reviews through a "free trial".

In the process of looking for growth, some merchants will give priority to "free trials" on the Douyin platform, mainly focusing on two points: First, Douyin Lifestyle just launched this product portal in July last year. In an immature ecosystem, there are more dividends from natural traffic and relatively less competition from catering peers. Some data show that after participating, stores with 4.0-4.4 points have a 23% increase in exposure and a 16% increase in GMV compared to stores with 3.5-3.9 points; stores with 4.5-4.7 points will have a 100% increase in traffic exposure and an average 54% increase in GMV compared to stores with 4.0-4.4 points.

▲The relationship between the rating and traffic growth shown by the official Douyin

The second is the ability to identify interested users. A Douyin user reported that she had browsed similar restaurants before but had never eaten there. After she signed up for a "free trial", she was selected twice in a row. Because she had done her homework on similar restaurants beforehand, she wrote a serious review after the experience. This type of user is exactly what businesses want to reach.

However, the new ecology also has its own awkwardness. For example, some catering merchants have reported that the coverage of local promotion needs to be strengthened. Internet companies are generally accustomed to online communication, but local life services are actually more offline. Local promotion can allow more local merchants to deeply understand the product logic and strategy iteration of the platform, and then try similar push functions. Some merchants also hope that the platform will provide a more flexible user screening mechanism to further expand the user pool participating in the event.

Behind these demands, Douyin Live needs to build the entire review ecosystem brick by brick. The more marketing tools the platform provides, the longer-term traffic support, and the more accurate the local user tags, the greater the value of helping merchants grow their operations.

After all, at this moment, there is no more exciting number than consumption growth.

Text｜Sun Jing