Enumerating the 5 Major Values of Private Domain Traffic, More Than Half Are Overlooked!

Running private domain traffic operations is very similar to the stages of a romantic relationship, roughly divided into the initial stage (getting to know each other), the trust stage (honeymoon), and the decline stage (boredom). Real value is generated during the trust stage, so figuring out how to extend this trust period is the key to growth in private domain operations!

--Webpower

Nowadays, private domain traffic operations are no longer a novelty. With everyone entering the fray, the competitive landscape is becoming increasingly intense. At the core, this is because of the enormous potential for rapid GMV (Gross Merchandise Value) growth that private domain operations can bring. Consequently, many brands are jumping on the bandwagon, hoping for an overnight surge in sales. 

But let us be blunt: the purpose of private domain traffic has never been solely about boosting sales. Its potential value is much broader and long-term. Short-termism and the pursuit of quick wins could very well lead to disappointing results. Thinking rationally and choosing a private domain strategy that aligns with the characteristics of your own brand is the only way to avoid becoming collateral damage in this fierce competition.

Webpower believes that private domain traffic operations can bring at least the following five key values:

• 1. Extend the User Lifecycle: Leveraging existing users to drive new user acquisition

• 2. Increase Customer Lifetime Value (CLV): Boosting GMV growth

• 3. Empower Brand Building: Strengthening brand influence and perception

• 4. Private Domain Feedback: Driving product innovation

• 5. Optimize the Brand Operation Chain: Streamlining processes to enhance efficiency and effectiveness

1. Extend the User Lifecycle: Leveraging existing users to drive new user acquisition

For traditional retail and e-commerce industries, acquiring traffic is vital to maintaining performance. The rise of private domain traffic is due to the high cost of public domain traffic, which poses challenges in attracting and acquiring customers. The approach to private domain traffic is not about acquiring new traffic, but about revitalizing existing traffic. When we implement SCRM, we use the concept of the "user lifecycle," and the same applies to private domain traffic. Webpower believes that the user lifecycle is very similar to the stages of a romantic relationship, roughly divided into the initial stage (getting to know each other), the trust stage (honeymoon), and the decline stage (boredom).

• Initial Stage (Getting to Know Each Other): Users know very little about the brand and are in the trial phase, potentially placing occasional orders.

• Trust Stage (Honeymoon): Users develop trust and loyalty towards the brand, not only making repeat purchases but also actively attracting new customers through referrals.

• Decline Stage (Boredom): Users' interest in the brand diminishes, leading to reduced order frequency and decreased engagement.

The foundation of private domain traffic is user trust. When users are loyal to a brand, it motivates both initial and repeat purchases. Therefore, in the entire user lifecycle, the period that truly generates value is the trust stage.

However, nothing can escape the natural law of rising and falling, including users' interest in a brand. One of the significant problems that private domain traffic can solve is extending the user lifecycle, specifically prolonging the trust stage.

Only by extending the user lifecycle can we ensure the volume and frequency of user orders. It is evident that by effectively managing existing users in private domain operations, we can leverage the existing user base to drive new growth.

2. Increase Customer Lifetime Value (CLV): Boosting GMV growth

E-commerce has a concept called "customer average order value" (AOV). The traditional definition of AOV tends to focus on calculating the transaction amount of a consumer's single purchase and has always been committed to increasing this value to achieve total sales growth. 

However, under the mindset of private domain traffic operations, the focus should not be on "average order value" (AOV), but rather on "customer lifetime value" (CLV), which is the total amount of sales a consumer contributes over time. 

This shift in perspective also signifies a transition from traffic-oriented thinking to user-oriented thinking. When you start treating users as "individuals" in your operations, you'll realize that high-quality customers contribute far more than just one-time purchases. Their purchasing behavior will accompany the entire trust-related lifecycle.

Therefore, focusing on products and services to enhance customer lifetime value (CLV) is the true key to driving GMV growth in private domain operations.

03 Empower Brand Building

Many small and medium-sized brands operate under a misconception, believing that brand building is something only large brands should consider. 

In Webpower's view, as private domain traffic operations continue to improve and the operational media channels mature, you will find that engaging in private domain operations is essentially building your brand.

 

From content marketing to community operations, whether it's soft articles, video live streaming, or crafting WeChat Moments posts and customer service scripts, all activities centered around "people" are processes of brand value output. Whether intentional or unintentional, effectively leveraging these output channels and formats can significantly impact the establishment and maintenance of brand image.

At the same time, in the process of private domain operations, the initial seed users successfully evolving into Key Opinion Consumers (KOCs) and spontaneously attracting new users and driving word-of-mouth for the brand is also deeply tied to their profound recognition of brand value. This strong trust relationship, built on a deep alignment with brand values, is exactly a reflection of successful brand building.

Therefore, looking at companies that have successfully expanded their private domains, whether it's Genki Forest or Pagoda, their brand awareness and image are also highly notable. Brand building and private domain traffic operations have a symbiotic relationship where they grow together and complement each other. Engaging in private domain operations can enhance a company's brand strength, and in turn, strong brand equity will later contribute back to the success of the private domain.

4. Private Domain Feedback: Driving product innovation

Generally, when we first venture into private domain operations, the initial batches of seed users are extremely important. Their numbers may not necessarily be large, but the quality of their operation must be high. The quality of these initial users significantly influences the future scale and quality of the private domain traffic pool.

However, in addition to driving word-of-mouth, attracting new users, and facilitating viral growth for the company, these seed users have another hidden function: contributing to product innovation.

Xiaomi, well-versed in this approach, should have deep insights. When Xiaomi first started, they had little to nothing. However, in 2016, they carefully selected 100 seed users. At that time, even without the concept of private domain, they operated these 100 individuals as premium fans, greatly considering their opinions in product design and performance development.

Because Xiaomi's products have always prioritized user experience, their products have continually improved. This year, their sales even surpassed Apple, ranking second in the world, just behind Samsung. The deep engagement with seed users, including creating a micro-movie to honor these 100 Mi fans, has also significantly expanded Xiaomi's fan base. Whenever a new product is launched, Mi fans are at the forefront, voluntarily promoting and purchasing, often leading to high demand exceeding supply.

05 Brand Management Path Optimization

This concept may sound a bit abstract when stated directly. In fact, it parallels the idea that private domain operations facilitate product optimization. ``

Let me give an example: A retail brand has hundreds of offline stores in City A. Traditionally, these stores have either sold products directly or handled online orders with in-store packaging and delivery. However, after implementing private domain community operations, users frequently provide feedback about logistics issues.

Upon investigation, they realized that the offline stores were operating independently of one another. When a user placed an order, an individual store employee had to personally handle the packaging, which not only wasted time but also failed to ensure reliable logistics.

As a result, the company upgraded its distribution system. Now, regardless of which store's online shop the user orders from, a nearby warehouse handles the standardized packaging and delivery. This not only freed up store employees but also enhanced the user's logistics experience. 

This is a typical case of how private domain operations can optimize a brand's management path. As we can see, feedback from private domain users plays a crucial role in upgrading a company's products and operational processes.

Conclusion: Warren Buffett once said, "Be fearful when others are greedy." It's true that private domain traffic operations have become highly sought after. While it's crucial to get on board and seize the last of the opportunities, I urge you to stay clear-headed. Only by building on a foundation of thorough understanding and reasonable expectations can you maintain a stable mindset and avoid becoming cannon fodder.

To learn more about private domain operations and digital marketing, stay tuned to Webpower!

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