Two perspectives to help you understand Luckin's private domain operations

The "Jiangxiang Latte" became popular as soon as it was launched, and the huge number of orders once again proved the success of Luckin's private domain operations. How did Luckin manage to play with private domain traffic? This article provides a different perspective from two aspects: front-end private domain operation and back-end private domain management. Recommended for those who are interested in private domain traffic~

Recently, Luckin Coffee has become popular again!

We launched the "Soy Sauce Latte" in collaboration with Moutai. Within one day of its launch, its sales exceeded 100 million and broke the circle.

Coincidentally, someone sent me a disassembly report on Luckin Coffee’s private domain operations.

I opened it and found that the analysis was very detailed and well-reasoned. It also calculated the order conversion rate of the Luckin community in detail, how many cups of coffee can it contribute in a day? There are detailed calculation formulas for the proportion of daily orders.

Image source: Fenxi Consulting

In addition, there are also a few posts every day in the community. How was it before and how is it now? What are the adjustments?

It can be said that the people who did the disassembly were very attentive and uncovered all the visible secrets of Luckin Coffee’s private domain.

However, I guess many people will have two reactions after reading this:

First, it is just like that, nothing new, just coupons, discounts, and promotions;

Second, I did the same thing, why didn’t it work (sales results).

Well, that's exactly the point.

I have also studied Luckin Coffee before. Its private domain operations are really simple. Whether it is a social network, 1V1 private message, or questions in the circle of friends, there are not so many tricks and routines. It focuses on simplicity and directness.

I talked to their people, and even their own people said that it’s just issuing and collecting coupons, there really isn’t that many tricks involved.

But it's strange, it's very successful, everyone uses it as an industry benchmark. What can we learn from it?

1. Prerequisites for Luckin Coffee’s Private Domain Success

Come, today I will give you a different perspective from the two aspects of [private domain operation] on the front end and [private domain management] on the back end.

Let me first state the conclusion: Luckin’s front-end private domain operations seem simple because its back-end private domain management is complex, heavy, and industry-leading.

Many companies often fail to see this point. If you fail to see its two sides, you cannot copy it. So where is the "weight"? I will talk about it later.

From the perspective of private domain skills, Luckin's success is not magical. But in the private domain, their investment determination, persistence and ability to optimize and iterate are extraordinary.

In addition, we need to think about whether you have the same prerequisites as him if you want to learn it? If not, can you copy it?

So what are the prerequisites for Luckin Coffee’s private domain success?

1. Far surpassing the popularity and trust of peers

Luckin Coffee started to develop its private domain business in 2020. At that time, it already had wide popularity and had invited many celebrities to endorse its products, which increased the brand's credibility among the public.

Although Luckin Coffee later encountered problems with its financial explosion, there was no problem with its products, and its brand did not mean it was bullying customers. In other words, it did not affect consumers' trust in its products.

So in terms of brand and product awareness and trust alone, it is already far stronger than many companies. This is the first premise.

2. Rich and convenient purchasing channels

Luckin Coffee has digital genes. It was born as a digital channel company. It has long realized offline store and home delivery purchase channels (app + mini program), so users can easily buy its products. This purchasing experience is also ahead of many companies.

3. High-quality products and high cost performance

In addition, Luckin's products have repeatedly emphasized that they are made by masters and use high-quality coffee beans, so the high-quality products and high cost-effectiveness have been deeply rooted in people's hearts. In addition to freshly brewed coffee, there are also e-commerce extension products. Product richness is also an important prerequisite for Luckin's success.

Therefore, with the brand's trust, a very convenient shopping channel, and a rich variety of high-quality, cost-effective products, we have basically covered the three things that customers care about most: brand, product, and purchasing channel.

2. Three strategies for private domain operations

With these premises, you can see what kind of users are in Luckin's private domain. From its adding path, we can analyze that more than 95% should be old users of Luckin, that is, users who have purchased more than 2 times. Otherwise, who would add them and receive advertisements every day.

You can see that its private domain entrances are mainly official accounts, apps, mini programs, and stores. All the leads to the private domain are welfare discounts. Who would enter the private domain if they don’t want to drink its products?

If you have never drunk Luckin Coffee and you are not its user, how can you download its app? How can you enter its mini program?

Luckin Coffee doesn't provide any important services, experiences, or interesting jokes. The impression it has always given is low prices, discounts, good products, and faster pickup services. Nothing wrong with that.

For Luckin, it only needs to consider whether there are promotions, whether there are stimulating activities, and whether there are strong reminders. Therefore, the lower the price, the more promotions, and the more activities, the higher the consumption frequency of users will be.

Therefore, Luckin's core skills in the entire private domain operation ultimately come down to "three tricks": regular weekly group private messages, regular content reminders in the circle of friends, and regular issuance of coupons, new products, and meal packages in the community.

OK, then I am a consumer brand with low customer orders, right? I don’t need to do more care and greetings.

The decision of users to buy this product is relatively simple and easy. I think Luckin must have a very clear and straightforward thinking on this point.

Therefore, in private domain operations, it does not need to perform many complicated actions. What it needs to consider is how to enable consumers to place orders quickly and how to make them continue to repurchase after placing the order?

We can see from the front end that its private domain operation seems to be very simple and light. In essence, it has a very clear and firm idea of ​​the positioning of private domain in the business chain.

On the other hand, many of our companies have not thought clearly about the positioning of their private domain businesses and always want, desire, and also want.

However, I believe that the backend behind this simplicity is "heavy" for Luckin, because after all, it operates tens of millions of private domain users and tens of thousands of communities.

3. Two Key Points of Backend Management

The value of private domain is unquestionable. For Luckin, we only need to consider how to make my private domain form a closed loop with the entire purchasing chain of my business, how to make the private domain more efficient, how to lower the cost, and how to reduce the risk.

Therefore, the management of the backend is actually heavy, and heavy means both importance and high investment .

I think this backend includes two key aspects: one is private domain operation and management, and the other is private domain infrastructure.

Let's talk about the infrastructure of the private domain first. The infrastructure of the private domain is the digital management platform and digital touchpoints. In this regard, Luckin Coffee, a native digital enterprise, has been ahead of many traditional enterprises from the beginning. They are a true digital benchmark enterprise.

We all know that Luckin has a super customer management platform, which contains not only consumer data, but also supply chain data and product data. It is Luckin's data brain, and the investment in this matter is at least hundreds of millions every year.

The picture comes from public information

We talk about tools and infrastructure. Of course, these tools and infrastructure are not only applied in private domains, but also in the entire global marketing, even automated marketing, user profiling, data analysis and so on.

Luckin’s private domain is centrally managed, with unified operations and management by the headquarters. Tools can be used to manage the private domain efficiently and on a large scale.

Based on this point, Luckin has a huge gap with the vast majority of traditional large companies or some emerging companies that want to enter the private domain. This is the "heavy part".

In addition to private domain infrastructure, another focus is the management of private domain operations.

With such a tool, your management efficiency and difficulty will actually be reduced a lot. At this time, you only need to organize the private domain team and determine what kind of people the company needs.

For example, some are responsible for content, some are responsible for activities, and some do data analysis. Managers need to set this framework.

Second, I have my own requirements for people in each position, right? Because I have the tools, I don't need to rely on a person's individual abilities, right? I only need to achieve standard abilities.

So the structure and management mechanism is nothing more than how I can motivate the team and tell them the value of private domain in Luckin's growth system, right?

The last point is to reward good business, increase salary, and give money for promotion. This is the set of things in private domain team management.

The SOP for private domain operations is the most important part of Luckin’s private domain. SOP not only improves efficiency, but more importantly, it can prevent risks.

For example, what kind of content will the welfare officer push on Monday? How is this content planned? Who will produce this content? Will this content be released at 8 am or 7:30 am? This set of SOPs must be in place.

Image source: Fenxi Consulting

Of course, I mentioned whether it should be sent at 8 o'clock in the morning or 7:30 am. This can be optimized and adjusted based on the data feedback behind it. So this part involves the people issue we just talked about and the private domain infrastructure issue.

And what kind of content should be posted in the group? Since they manage nearly 20 million private domain users, it would be impossible to do it relying solely on manpower, right?

As mentioned before, the Luckin Coffee team operates in a centralized manner, which means that the stores are not responsible for operations. The stores are only responsible for making good coffee and receiving customers.

The centralized backend team can become very efficient through tools.

Regarding the back-end centralized private domain operation model, I talked about it a long time ago when I was working on projects for Quanmianshidai and Baiguoyuan. Retail stores must have shopping guides, and the less the clerks do, the better. They can't do that.

The back-end centralization provides a unified experience and service. On the front end, you only need to let store staff collect coupons and guide customers to add the company WeChat account and enter the private domain.

So you see, the whole private domain, why I said the heavier the backend, the easier the frontend. But to achieve this, you first have to see whether the backend can be done and whether you are willing to invest.

If the construction of private domain tools and the management of private domains are not done well, then your front-end operations will become complicated, unstable, difficult to replicate, the cost will be very high, and even unsustainable.

IV. Summary

So, having said this, if you have not seen Luckin's premise and its backend success, and you try to learn from Luckin, you will either find that there is nothing worth learning from Luckin, or you will learn to death.

However, most companies do not have the back-end operational capabilities, from the investment and construction of tools to the company's consideration of the closed loop of private domain business in the entire business.

This is why I have repeatedly emphasized that private domain operations require systematic planning and good design. I don’t know where your focus and emphasis are in combination with your business. Do you think your private domain can be done well?

Many of our companies hope that their private domains can be like Luckin Coffee, where one community can contribute 30% of my sales.

You want to get that result, that's fine. But you ignore the fact that there are so many prerequisites to support it, and these prerequisites are a million miles away from what your company is doing now, so you will definitely not be able to learn it.

It is not just Luckin Coffee. To be like the benchmarks in the industry, you cannot just copy and replicate them. You have to see if your prerequisites are met.

Today, the reason why private domain businesses are not doing well lies in two areas: the private domain management system and the private domain operation system. Neither of them can be missing.

In the past five years, I have helped many companies to establish private domain operation systems.

On the left hand, there is the private domain operation system (6-step method), and on the left hand, there is the private domain management system. We have a complete set of experience, from the positioning of the private domain in the business, to the organizational structure of the private domain, to the collaboration process between private domain positions and departments, to the assessment mechanism, to the operation process and standard SOP.

If you now realize the importance of these two points, you should make up for them now. But you don't have to grope for them again.