Whether communities exist because of social interaction or social interaction is built upon communities determines their value. Whether community commerce is a battlefield of the internet era or a weapon of mainstream business determines whether it remains on the fringe or enters the mainstream. Communities must connect three dimensions to move from small battlefields to big business, and only through relationship transfer can communities connect the world. -01-**** Communities are an amplification of social relationships The commercial value of communities depends on how we correctly understand them. Communities are a standard social feature for normal people, a need for normal work and life in the internet society, not a necessity for commerce. An individual's social relationships, when reflected online, become community relationships. However, compared to offline social relationships, communities have the following characteristics: 1. Communities do not change social status Those with social status offline also have social status in communities. If someone stands out through community operations, it is not due to the community itself. As long as one has ability, they will excel with any social tool. 2. Communities moderately amplify social relationships Traditional offline social scenarios occupy both time and space, so social frequency is low. Community interaction allows more people to interact at the same time but in different spaces, making social frequency high. At the same time, communities include not only familiar friends but also friends of friends, and friends with multiple relationships. Therefore, communities moderately amplify social relationships. Some commercialized communities have social relationships so complex and busy that they rely on robots to chat, and such social relationships have no value. 3. Communities are naturally distributed The value of a community is determined by relationship strength, not relationship quantity. All attempts to build centralized communities are difficult to succeed. Because the number of group members based on strong ties is limited, purely community-based businesses (such as micro-commerce) must establish multi-level communities. Or first build an IP, then build multi-level communities around the IP. 4. Communities increase interaction frequency, but changing relationship strength is difficult Three months of online chatting is not as good as a drink offline. The more community-oriented the era, the more precious offline communication becomes. The higher the level of communication, the more emphasis on offline scenarios. Frequent community interaction produces a group of "strange acquaintances." Community communication is frequent, but offline relationships remain unfamiliar. 5. Social interaction with strong ties makes communities more valuable Strong ties are the value of relationships. Communities are just amplifiers of relationships. If the relationship is not strong, the amplification is not strong either. 6. The ability to utilize communities and the ability to build and operate communities are two different abilities With the ability to utilize communities, other communities can also be used for my benefit; this is open community operation capability. Only self-built communities can be used; this is closed community operation capability. -02-**** Only with a taste of life can there be a taste of business Communities exist because of social interaction. Therefore, communities must have a taste of life. Communities without a taste of life are alienated communities. As long as there is a community, media attributes can be derived. Media attributes mean communication functions. Communication functions already have commercial attributes. Life cannot avoid business topics. Strong ties endorsing business has always been a Chinese characteristic. Relationship strength can influence business cognition and transactions. Therefore, communities hide commercial attributes. Transactions are explicit business, not implicit business. Therefore, using communities as a universal transaction medium is an alienated community. The value attributes of communities: Social attributes > Communication attributes > Transaction attributes Normal communities have a taste of life. Because of work and life relationships, communities exist. People need to interact efficiently with all kinds of people, so everyone has various communities. Otherwise, life and work communication in the internet era would be hindered. In the era without communities, there were also alienated social interactions. For example, pyramid scheme training, because it is alienated social interaction, requires continuous reinforcement to maintain group existence. With a taste of life, it is easier to establish strong ties. The stronger the ties, the easier the commercial conversion. Now there are also many alienated communities, because they lack a taste of life and are purely for business, they need continuous community activity, such as various red packets, sharing, etc. Although active means are constantly updated, they soon encounter obstacles. These are the fastest-evolving communities. Pull new → Convert → Retain → Pull new again, this is a community that exists for business. Normal life and work form strong ties. Communities that need continuous activity to maintain existence will definitely disband at an appropriate time. Therefore, there are two logics in the commercialization of communities: One is to build communities for commercialization; the other is to moderately commercially utilize communities with a taste of life, minimizing the commercial flavor. -03-**** Community commercialization models The characteristic of Chinese commerce is to use social relationships as endorsement and heavily participate in business. Agricultural society was a small circle of life, where relationships, cognition, and transactions were trinity. Industrial society entered a functional society, where mass media became the main battlefield for business cognition (such as advertising). In the internet society, because people can freely switch between various apps and mini-programs on smartphones, business once again enters the trinity of cognition, transaction, and relationship. Currently, there are roughly three types of business models around communities, as shown in the figure. 1. Natural business model based on communities When there is any business activity or information, casually posting a moment or sharing photos is a natural state of business expression. Although it sometimes works, it is better than nothing. Most enterprises' commercial use of customer groups is in this state. In community interaction, even people without commercial intent may form commercial value. For example, when people see interesting and resonant content and forward it, this process may inadvertently form commercial value. Because people forward it unanimously, forming empathy, resonance, and vibration, and ultimately forming a commercial wave. Many IPs are built this way. The reason I call it the natural business model of communities is that commercialization is completed inadvertently among group members. 2. Alienated state business model The typical example is a replica of direct selling, now called micro-commerce or social e-commerce. It evolves quickly, always with new concepts and logic, and indeed some people succeed in "cutting leeks." Of course, as long as it complies with the law, I do not oppose it. For this marginalized commercial activity, sustainability is questionable. Although it frequently triggers social discussion, its market share remains low. 3. Organized community business model, typical of community group buying At present, the most complete commercial organization system is the channel system of Chinese brand owners. European and American channels have been third-party, and brand owners' relationship tentacles are not as penetrating as China's. It is difficult to organize communities on a large scale because the characteristic of communities is distributed, and centralized communities are not valid. Communities are born from social interaction, not from business. Chinese traditional offline commercial organizations, including enterprises and channels, are highly organized. The combination of highly organized business and communities is the organized community business model. -04-**** Combining with the mainstream is mainstream Where is mainstream business? In traditional channels. Offline channels account for about 3/4 of total social retail goods, so they are certainly mainstream. During the 2020 epidemic, I explored the marketing model of "deep channels + communities + live streaming," which was effective. However, what truly broke the window paper and attracted social attention was Dong Mingzhu's "6·18 channel live broadcast" in 2020, with transactions of 10.2 billion yuan, and Wu Xiaobo's second "channel live broadcast" with TATA Wooden Doors, with transactions of 392 million yuan in 3 hours. The combination of communities and channels not only activated channel communities but also activated traditional channels. Both B-end and C-end benefited. I attach great importance to "channels + communities" for the following reasons: Channels are the most complete commercial organization system for brand owners, with stable relationships. China's channels are human chains, and customer relationships are important. Long-term stable transactions and continuous visits are useful for strengthening channel relationships. Channel members have communities as a standard feature. Channel members interact frequently, and communities are one of the main contact methods. What brand owners need to do is to make channel members willing to transfer strong ties to the brand owner. With the help of cloud stores (mini-programs), brand owners can empower terminals, and the push path of cloud stores (mini-programs) must be communities. The limit of traditional channels is deep distribution's "terminal as the end point." The power of online platforms lies in surpassing the B-end to reach the C-end. Communities combined with the mainstream, that is, combined with traditional channels. Traditional channels, with the help of KOC communities, can still reach the C-end. The relationship between the internet and the C-end is a centralized weak relationship. Because traditional channels are strong ties, KOC communities are also strong ties. Traditional channels + communities build a new system of BC integration. As long as the strong ties of the B-end and the strong ties of KOC are used well, relationships can be transferred. Therefore, the combination of communities and mainstream business is an amplification of mainstream business. The core of combining communities with traditional channels is to use the store owner group. In the eyes of terminal small stores, the store owner group is private domain traffic, that is, traffic that the store owner can influence. However, in the eyes of brands and distributors, the store owner group is public domain traffic, which can be diverted. -05-**** Relationship transfer is key Using the store owner group, the core is the relationship transfer of the store owner group. That is, the relationship between the store owner and users can be used by brand owners and distributors. Relationship transfer means that other people's community relationships are used for my benefit. Without relationship transfer, one must rely entirely on self-built communities. Expanding self-built communities is not only technically limited (no more than 3 levels), but also management levels increase and relationship strength decays. Relationship transfer is not about how many groups you have, but how many groups can be "used for my benefit." Relationship transfer is not a commercial transaction; it is just transferring relationships. For example, a friend introducing a friend is relationship transfer. However, whether a friend of a friend can become a friend is another matter. The key to community relationship transfer is voluntary, free, or nearly free. Wu Sheng called it "negative cost connection" in "Super IP." Otherwise, it cannot be widely promoted. Voluntary, free relationship transfer has three prerequisites. Content empathy. This is relationship transfer through content dissemination. As long as there is empathy, it will be automatically forwarded. When many people forward it collectively, it will cause resonance and vibration. Content empathy does not require high relationship strength. Strong cognition. Strong cognition means genuine recognition and willingness to endorse. We have been advocating scenario experience in recent years because experience is the strongest cognition. Extend from terminals to KOC. Deep distribution has established strong ties with terminals, but it is difficult to establish universal relationships with the C-end. The node of combining mainstream business and communities is KOC. KOC has strong ties with community members. As long as KOC has strong cognition, relationship transfer becomes possible. In the combination of mainstream business and communities, the original channel relationships are still valuable, and the organizational system is still useful. It is only necessary to do scenario experience, content distribution, and find KOC along the channel on the basis of deep distribution. -06-**** Community density is traffic The commercial value of communities is shown in two aspects: First, communities amplify traffic. For example, the offline channels mentioned earlier already have traffic, but through enhanced connections in communities, traffic is amplified. Pinduoduo's group buying first requires someone to initiate a group, and initiating a group requires basic traffic, so that traffic can be amplified during the group buying process. The process of group buying is actually the process of relationship transfer. Second, communities create traffic. Traffic must be the result of cognition. Communities create traffic because communities become the carrier of business topic discussions, that is, social currency. Communities are distributed. In distributed self-media, everyone has a voice, but these voices may be drowned out. Therefore, the value of self-media voices depends on the density of voices. Communities create traffic, which is determined by the density in the community and its commercialization process. Density is cognition, density is brand. Density is IP, density is traffic. In distributed business, without density, there is nothing. Why does density have such great commercial value? Because density produces cross-coverage. For example, in a county town, if 10,000 people post moments at the same time, information dissemination has density, because a person will receive information from multiple moments simultaneously, and it will also enhance attention to the information. However, if 10,000 people post moments across the country at the same time, the density is very low, and it lacks commercial value. -07-**** Communities connect B-end and C-end The density of community commercialization roughly manifests in three forms: First, the density of social e-commerce. Although we have been discussing that social e-commerce lacks strong ties, it is undeniable that social e-commerce's social interaction is often high-density among certain specific groups. However, the reason social e-commerce has always been on the fringe is that the community density of social e-commerce is only small-scale density. Second, the density formed by content through the dissemination chain. In the process of IP building, people have witnessed the phenomenon of "content going viral." A piece of empathetic, resonant content, because of empathy, is crazily forwarded by communities, finally forming resonance. Resonance is the result of high-density dissemination. The formation of IPs and internet celebrities, overnight fame, is content going viral. Third, relying on the density of other commercial organizations to form community density. Traditional commercial organizations have the greatest terminal density. In a county town with a population of 500,000, there can be thousands of terminal small stores. According to statistics from a data platform, there are over 10 million terminal stores nationwide. The density of traditional commercial organizations + community density jointly build user coverage density. High-density dissemination can form high-intensity cognition in the short term. Although a county-level city has thousands of terminals, community density may only need 500-1000 to form high density. Because ordinary citizens' WeChat moments have 100-500 people. -08- "Cognition is traffic" Among the above three commercial densities, the density formed by the dissemination chain is uncontrollable. The density formed by social e-commerce and traditional channels is controllable. Currently, pure social e-commerce lacks national, high-penetration community organizations, and community organizations themselves lack stability. Therefore, social e-commerce is always marginalized. The combination of traditional channels and communities can mutually reinforce B-end density and C-end density. There are roughly two ways: First, enterprises with advantages in traditional channels use B-end advantages to drive C-end advantages. Lvyeyuan Group, which has been called a legend in the agricultural materials industry in recent years, uses the control of traditional channels (B-end) to influence farmers (C-end) through B-end communities. Lvyeyuan employees hold an average of 200 "farmer meetings" per year. This method is called BC integration. Where does the efficient mobilization of Lvyeyuan's "farmer meetings" come from? It is by using B-end communities to achieve high coverage and achieve rapid, high-density mobilization. Second, enterprises lacking advantages in traditional channels use C-end communities to force the B-end. For example, it is difficult for new baijiu products to enter tobacco and alcohol stores. However, if C-end mobilization is completed through the community density of KOC, then the B-end (tobacco and alcohol stores) can be forced. This method is called CB integration. The above two methods, BC integration is to consolidate C-end advantages through B-end advantages; CB integration is to build a B-end system through short-term C-end advantages, as shown in the figure. An organization that integrates B-end and C-end is a highly stable commercial organization. -09-**** Community e-commerce is fringe, community group buying is mainstream Community e-commerce and community group buying are a good pair of fringe and mainstream participants. Both are business systems that utilize communities, both gather popularity through communities, and both push through mini-programs. Although community e-commerce was hot during the 2020 epidemic, it quickly faded, even for head social e-commerce brands, and some even failed at launch. The difference between community e-commerce and community group buying is whether the community is organized. So-called organized includes two aspects: One is to use the original traditional channel organization; the other is to establish an independent ground promotion team. Community e-commerce was recruited online during the epidemic, basically pure online recruitment, with low correlation with offline channels, and did not use distributor organizations. Therefore, community e-commerce basically has no store delivery, only central warehouse delivery or front warehouse delivery. Community e-commerce has smaller regional density, and except for a few still operating, most brands have abandoned it. Community group buying is currently doing well. The expansion of community group buying basically uses regional strong distributors as platform agents. Distributors have teams and terminal customer groups. Because community group buying integrates with mainstream channels, it can develop rapidly in one place. We see that when distributors act as platform agents, they basically use original retail small stores as "group leaders," because the two sides originally had cooperative relationships. When ground promotion teams develop "group leaders," there are more stay-at-home mothers. Although most stay-at-home mothers have micro-commerce experience, in terms of organizational system, terminal small stores are more organized. Source: Teacher Liu's Digital New Marketing (ID: liuchunxiong1964) ****Important Conference Announcement! January 19-20, Jiangsu Wuxi New Distribution will join hands with 500+ FMCG distributors from five provinces in East China to gather in Wuxi, Jiangsu, to provide brand owners and distributors with a conference aimed at product selection, cooperation, and exchange. Make arrangements before the New Year, start work after the New Year! Don't wait until after the Spring Festival to make arrangements! Interested brand owners or distributors are welcome to contact us. 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