How does a good brand drive big business? The key lies in the "user behavior path"

There are various differences between "building a brand" and "not building a brand". Branding is the process of giving brand power to products and services. This article explains in detail what branding is and how to build a brand. It is recommended for students who want to understand brand operations.

At the beginning, I would like to share with you three short but true stories.

Story 1: The "second generation" anxiety of manufacturing factories

"A computer case manufacturing company with a GMV of 100 million yuan a quarter and OEM business for overseas big brands has already achieved top-tier OEM business, with a gross profit margin of 10%-15%, which is the ceiling of gross profit margin in the OEM field. However, overall, running a factory is tiring and hard, and not very profitable... But this model was already very impressive in my dad's time," said Tina, the factory manager, during a visit to a factory in Huizhou near Shenzhen.

But now the times have changed, and this model is not favored at present.

She hopes to build a "brand" and do long-term, healthy business with a higher premium.

But she didn't know where to start when it came to "brand".

Story 2: The dilemma of the new consumer brand in the hesitant stage

"When the mobile traffic dividend was there, we just had to put in effective advertising, but now it's not possible. After the traffic dividend faded, it was obvious that there was a lack of stamina, which was mainly reflected in the fact that ROAS (return on advertising expenditure) was difficult to be positive when putting in advertising in the market. Therefore, the advertising could not be sustained, and the business declined. Or, because there was no reserve pool of cognitive population, there was even no population to invest in for conversion-oriented advertising," complained the founder of a new consumer brand. However, even though they realize that brand building is important, they still dare not invest more in the brand and are hesitant when facing huge short-term business challenges.

Story 3: The confidence of international brands to grow against the trend

On the evening of February 14, 2023, Coca-Cola Company released its fourth quarter and full-year financial report for 2022. The financial report data showed that Coca-Cola Company's total revenue in 2022 was US$43.004 billion, an increase of 11% year-on-year. From the perspective of full-year performance, even in 2022, which was affected by the epidemic, Coca-Cola Company still achieved strong growth. During the 2022 Qatar World Cup, Coca-Cola Company successfully held the "Believe is Magic" global event, developed the "Coca-Cola Fan Zone" digital platform, and interacted with more than 5 million consumers in 41 markets around the world.

In the financial report, Coca-Cola also stated that "the company will use newer and more unique digital interactive methods to connect consumption scenarios with consumers' passions, establish deeper connections with consumers, and bring consumers classic and fresh experiences." Looking at the big picture, these three stories are a microcosm of the current situation of three different types of companies in the market.

In essence, it reflects one thing: "to build a brand"!

Because there are various gaps between "building a brand" and "not building a brand". After three years of black swans, the biggest resonance in the market is the "return of branding". What is branding? In Philip Kotler's book "Marketing Management", it is described as follows: "Branding is the process of giving brand power to products and services, aiming to create differences between products." However, most people are confused about how to build a brand? How to deal with the relationship between brand and business? And how to solve the problem of surviving in the short term and living well in the long term?

1. Good brand = big business

Before answering these questions, I would like to first put forward the core point I want to express: Only by building a good brand can you do big business, which means “good brand = big business”.

For mature brands that have experienced N economic cycles, the new brand confusion in Story 2 may have already had a clear answer.

"In essence, long-term development means a 'good brand'. Brand is the basis of a good profit model. Because a good brand needs to have good product quality, good spiritual satisfaction, and good premium ability. Good premium ability means that it can help the brand further develop better products, cover a wider range of consumers, and do more consumer-related category education, thus forming a positive cycle. This has led to a mutually reinforcing relationship between 'good brands and meaningful business'," Franny, vice president of men's grooming category management at P&G Greater China, shared with Morketing at Braun's new product launch in July.

At the same time, she added: "If a brand, as a business, does not have a good profit model, it will not be able to last. The profit model does not necessarily have to be a super big brand. It may only serve a small group of people, but the profit is enough to support long-term development."

Regarding this point of view, Yang Zhen, head of user development at Jidu, said: "Market share is brand, and sales volume is status."

At the beginning, the case of Coca-Cola also confirmed this point. During the epidemic, Coca-Cola did not shrink its brand activities. Instead, it continued to strengthen the classic experience that the brand gave to consumers and renewed new experiences, thereby continuing to build Coca-Cola's irreplaceable position in the minds of consumers. Therefore, Coca-Cola has firmly established itself as the top 1 in the cola category.

On July 5, at the first Pinchuang Global Brand Festival, Xu Jia, general manager of the commercial market of ByteDance, echoed the theme of "Good Brands Make Big Business", sparking heated discussions in the industry. His content was more down-to-earth in answering the confusion of some brands and how to make the relationship between brand and business more direct.

Before sharing his views, I would like to analyze with you the dilemma of the brand building process in detail.

2. The brand building dilemma of “small brands”

In the past, brand and business have long been regarded as a dilemma. Everyone knows that branding is necessary, but how to open up the path from brand to business seems to be a question. In fact, the HBG theory in the globally popular book How Brands Grow has already provided the basic logic of brand growth in a fragmented media environment. It answers the essential truth of brand growth - brand growth is driven by penetration . How to promote brand growth? It requires brands to continuously carry out marketing penetration and channel penetration. The two prerequisites for marketing penetration and channel penetration are brand uniqueness assets and continuous brand investment.

One of HBG's core points is that the most important thing for brand growth is to find more users. Because the more users you have, the higher your loyalty will be. The essence of this theory is that he clearly points out that "loyalty is actually just a result of penetration."

As a small brand, you not only have fewer users, but your users' loyalty will also be lower. So small brands are doubly hurt. This is a mathematical law called Double Jeopardy. This is a law that has been proven in all categories. We can see that the range of change in loyalty is very small. Therefore, for small brands, in order to expand new customers as much as possible, accelerate user purchase conversion, and increase penetration, they also need to continuously accumulate consumer word of mouth.

Of course, big brands also face continuous brand challenges. They cannot stick to the existing crowd pool, but need to constantly break through the circle to accelerate the introduction of new customers and the repurchase of old customers. It's just that they have established their own brand barriers, and have enough funds to carry out long-term brand building and resist various risks under uncertainty. In a survey by Kantar Brand Z, the top 100 Chinese brands and the China Stock Weighted Index in the past decade were compared and found that strong brands performed better in resisting risks and long-term returns. For small brands, knowing that brand building is important and expanding users is critical, but what is the path from brand to business is not clear. "In the eyes of many small brand entrepreneurs, they naturally feel that the return path of brand building is relatively long and the waiting time is relatively long. If a large amount of budget is moved to brand building, it is estimated that they will not survive before they build their own brand."

This is the real dilemma faced by many brands that need to build their brands but dare not start.

3. “Behavior-driven” brand building is closer to business

So, how can we continue to break through the circle and promote business in a fragmented screen environment? "In terms of reach, after so many years of development of programmatic precision advertising, marketing has actually become lazy. It is based on a mathematical law, which is actually the number of users multiplied by mental availability multiplied by physical availability (lingering in the mind, within reach) . It mainly eliminates the reasons why you don't buy. Therefore, marketing is almost an industrialized, regular assembly line operation," He Yabin, former CGO of P&G China, once shared this view.

After solving the problem of reach, we still come back to the anxiety of brand marketing: how to make the connection with business more progressive?

Looking back, the previous brand marketing logic was a big exposure on CCTV and widespread perception... Therefore, when the brand was exposed, it could not be immediately converted into sales performance, and it was even impossible to perceive whether consumers liked, were indifferent, or were disgusted with such brand communication... However, in today's mature social media, any action of the brand will have various immediate feedback after consumers perceive it, and consumers will take action themselves, such as liking, following, purchasing, and even helping multiple word-of-mouth spreads, as well as giving product suggestions...

Therefore, to better measure the effectiveness of brand marketing, the new stage should be advanced from 'exposure and cognition driven' to 'behavior driven'," said Xu Jia, general manager of Bytedance Marketing, a core point.

Why is it “behavior driven”?

In the past, brand marketing was guided by consumer awareness and focused on the scale of exposure. Whether it was the logo, product, or service that consumers could see, or the brand/positioning/values ​​they experienced, brand building was aimed at achieving larger-scale consumer awareness, with the main logic being "more people will buy if more people see it." This was reflected in the focus on brand awareness, loyalty, and other measures of brand image in terms of measurement indicators. This approach has proven the value of the brand in the long run, but its problem is that the cycle is too long and it is relatively indirect, making it difficult to guide companies to optimize their marketing and business strategies.

Now, how can brand marketing be more closely linked to business indicators and in line with the current fragmented and pulverized Internet environment? Analyzing the entire consumer online environment, users and content are now a two-way process of being recommended and actively choosing.

Therefore, companies are thinking about whether their brands are recognized. They cannot just rely on hard-pushing logic. Babycare's CMO Iris shared a view: "Nowadays, the relationship between consumers and brands should be two-way", which also confirms the "behavior promotion" mentioned in Xu Jia's view. Therefore, the huge engine in the Douyin system will be divided into O opportunity groups, A1 understanding groups, A2 attraction groups, A3 seeding groups, A4 transaction groups, and A5 repurchase groups according to the progressive relationship between brand and user behavior, which is called the O-5A group asset model.

Therefore, under the principle of mass penetration, the total size of crowd assets is actually the total size of the crowd with multi-layered relationships. So, when building a brand, the efficiency of large-scale user acquisition and the flow of user relationships from shallow to deep become key indicators.

From a measurement perspective, the measurement of brand power can be more qualitative through the measurement method of fitting two types of labels: behavior + cognition , so that the connection between brand and business is more direct. A survey by Juliang Cloud Map found that in the period from March to June, high brand power and low brand power showed obvious differences in final business results, number of transactions and efficiency, which could be as high as 5-11 times.

4. Core ideas and three major paths

Based on the shift from "cognition-driven" to "behavior-driven", the logic of brand building must also change. "The core idea of ​​brand building should be wide coverage + high-quality influence, thus forming a brand," Xu Jia summarized. In terms of the relationship between brands and "people", it means: "Scale up to deepen the behavioral relationship between brands and users. "

So, how to do it specifically? The three paths that Xu Jia shared at the Pinchuang Global Brand Festival are very inspiring.

First, continue to expand the brand population, break the circle and attract new customers. Take AKF as an example. AKF is a start-up beauty brand located in Qingdao. In 2021, it was distributed in shelf e-commerce, with low customer orders and weak awareness, making it difficult to break through in the red ocean of competition in the cosmetics track. In 2022, AKF began to deploy Douyin, adopting a branding approach, locking in year-round node marketing, such as 520, 921, and Double Days, etc. Through a series of approaches such as interactive testing (Xiaofei Box)-experts planting grass-live push-search acceptance (product special), it quickly established users' large-scale cognition and planting behavior on Douyin.

In just one year, the AKF brand has accumulated nearly 200 million crowd assets on Douyin. Of course, after scaling up the crowd, its loyalty can also be seen from the transaction volume on Douyin. AKF has grown from 0 to 190 million annual GMV, becoming the No. 1 brand in the growth rate of the cosmetics track in 2022.

Of course, on the massive engine platform of the Douyin system, the tools for breaking the circle and attracting new users include not only the interactive testing and influencer recommendation mentioned above, but also the opening screen/TopView with very strong brand effect, as well as various creative and interactive information flow advertisements, and 400+ marketing IPs that penetrate into various vertical categories, etc., which can achieve full-area investment and ultimate circle expansion.

Second, accelerate the flow of people, from awareness to conversion. The higher the flow rate, the faster the path from brand awareness to business. The first is the ability to plant grass with A3 as the core.

"In the process of improving the efficiency of population circulation, we must focus on the grass-roots population, which we call the A3 population," Xu Jia emphasized, and as an intermediate indicator of A3, a positive cycle of "planting and harvesting" should be established.

Here is an explanation of the A3 population, which includes behaviors such as deep reach, high-frequency interaction, active search and high purchase intention. They are people with a strong mindset for the brand. It can be said that the A3 population is the golden indicator of business certainty. The following is a specific interpretation through Gaofan in the apparel industry. Everyone knows that the down jacket sinking market is seriously involuted. When Gaofan entered Douyin in 21 years, although the sales volume was acceptable, it was difficult to increase the average order value. How to improve the brand positioning and create a premium based on scale? Gaofan and Yuntu products have pulled the opportunity range and trend styles of the average order value of down jackets, anchored the market population pointed to by the price segment, and developed styles in a targeted manner, and finally launched the black and gold goose down jacket with the main " quality-price ratio" .

Gaofan's marketing director mentioned: "In the early stage of product research and development, they targeted the crowd's demand for down jackets with a high 'quality-price ratio', and then continued to expand the circle with the A3 crowd, popularize the single product, and use the content of Star Map experts to heat up and drive brand search volume, causing its search volume to surge 15 times month-on-month, and the average customer unit price also increased by more than 4 times, with annual GMV exceeding 1 billion."

The massive engine marketing product used by Gaofan to "expand the circle of grass-planting people" is the "grass-planting pass" released in 2022, which is also the industry's first brand product with A3 as the optimization goal. It is understood that there are now more than 32 industries and 3,500+ head brands using it at high frequency. After talking about grass-planting among people, at the level of grass-planting for goods, brands use "commodity heating" products to identify the key behaviors of users' goods (such as collections and purchases) to find more people with strong purchasing intentions for the goods. The "goods find people" model is used for precise heating, which is very suitable for promoting new products and hot products. The higher the number of effective heating times for a product, the greater the GMV of long-term conversion.

Finally, how to define "seeding" in the live broadcast field, how to introduce more high-quality viewers to the live broadcast room, and improve the effective viewing of the live broadcast room? To this end, ByteDance has set a comprehensive indicator, namely the trueview (effective viewing) of the live broadcast room, which includes 3 minutes of effective viewing, product clicks, etc. The system will dynamically optimize to bring large-scale users who are truly willing to consume to the live broadcast room. It can be said to be a combination of multiple high-value behaviors. The "live broadcast heating" product is a brand advertising product launched based on the comprehensive definition of the above behavioral indicators. It can help brands use a more flexible and lower-cost bidding method to quickly increase the popularity of the live broadcast room, and can also effectively leverage natural traffic to assist the growth of the entire live broadcast business.

In addition, in order to deepen user relationships on a large scale, it is also necessary to build a "perfect conversion link of A1-A4", that is, to build a brand where business happens. The general behavior journey of Douyin users is "swipe-search-purchase", covering the content of short videos, searching after interest, and finally going to the product details page or mall to make purchases. Under such a user behavior path, what companies need to do is to capture users and effectively reach them where they stay. For example, when users open the APP for the first time, through the Douyin e-commerce opening screen, they will directly jump to the mall purchase page after exposure; when users search, the conversion behavior of users is accelerated through e-commerce products; when shopping in the mall, the "Guess you like" product card is used to attract users' attention, forming an A1-A4 fast conversion link, so that every brand exposure helps conversion.

Third , after having the scale of the crowd and the efficiency of circulation, the brand needs to improve the comprehensive measurement capabilities of the crowd, content, and products, which is also the infrastructure and guarantee for using data to directly see the business and make good decisions. At present, the essence of attracting users' attention is the value of attention, and "attention value = attention scale ✖️ attention quality", so returning to a clear measurement value is critical.

Of course, in terms of measurement, there should be not only measurement of the advertising itself, but also measurement of the brand as a whole. It is understood that in terms of brand advertising measurement, Bytedance covers the indicator system of brand awareness, seeding and conversion; in terms of overall brand measurement, it covers brand scale (such as 5A asset scale) , efficiency (5A crowd flow efficiency and content efficiency) and brand image (i.e. the mental influence of the brand on consumers).

V. Conclusion

From the cases of AKF and Gaofan, we can see two points: the continuous expansion of the population size, that is, large penetration, and the breakthrough in sales volume, that is, the completion of sales conversion in large channels (TikTok e-commerce). Both echo the logic of "returning to a good brand - product power, channel power, marketing power, the three in one, to achieve big business" . However, the point of no anxiety for the brand is to transform the thinking and progress "brand building and business relationship", that is, to carry out "behavior-driven" brand building under fragmented media, to live well and to live well continuously.

Author: Morketing, WeChat public account: Morketing