Liu Chunxiong: This phrase was not said by me, but by Mr. Fan Zhaolin, General Manager of Six Walnut, during our exchange. I immediately praised it. This phrase hides the secret to promoting new products, especially high-end ones, in the new environment. I have repeated this phrase on many occasions, and many have praised it as a golden quote.
Traditional marketing is sometimes called dual-wheel drive: one is brand-driven, the other is channel-driven. Brand-driven is 2C, channel-driven is 2b. The brand-driven model uses advertising, while the channel-driven model uses deep distribution. The brand-driven department is the marketing department (advertising department), and the channel-driven department is the sales department. Brand-driven solves the cognition problem—someone buys; channel-driven solves the transaction problem—someone sells. When there is both buying and selling, it becomes a business. Buying and selling form a closed business loop. In the past, China had no marketing concept, but the concept of buying and selling was deeply ingrained.
For a business to be established, cognition and transaction must form a closed loop, that is, a closed loop of 2C and 2b, a closed loop of buying and selling. There are two ways to form a closed loop: large closed loop and small closed loop. Traditional marketing is a large closed loop, where 2C and 2b are separate, and each naturally forms a closed loop after reaching a certain density. This is like looking for a needle in a haystack; as long as there are enough needles, you can always find one. In the era of mass marketing, advertising had to be intensive, often called "carpet bombing." Only carpet bombing could achieve 2C density. Carpet bombing naturally wastes a lot. So, half of advertising is wasted, but you never know which half. Central media had high coverage, so it became the first choice. There is a saying in advertising: buying a half-way ticket never gets you to your destination. So, advertising cannot be tested; it must be gambled. If you spend a little money to test and it doesn't work, you stop. But don't test; it will definitely be ineffective. Advertising that doesn't spend enough money is definitely ineffective. At the same time, deep distribution emphasizes distribution rate. Distribution rate is definitely a key KPI. Distribution rate is 2b density. Without distribution rate, no matter how much advertising, consumers can't buy. High density on both 2C and 2b sides naturally forms a large business closed loop. It is precisely because the large closed loop of 2C and 2b is undifferentiated coverage of 2b and 2C that traditional marketing requires heavy investment. The reason for heavy investment is to achieve high-density matching of 2b and 2C. 2C must score 100 points, and 2b must also score 100 points. Otherwise, there will be waste in some aspect. Therefore, the ultimate result of traditional marketing is high barriers, leading to industry concentration and oligopoly. Many small and medium enterprises exit the industry. The reason is the heavy investment in both 2C and 2b. 2C requires spending enough money, and 2b requires investing enough people. Both aspects must achieve 100 points.
After the emergence of e-commerce platforms, 2b disappeared. China's e-commerce started with C2C (Taobao). Later, although B2C became dominant, both B2C and C2C are retail. For a transaction to be completed, there must first be cognition, then transaction. The closed loop is relatively simple in e-commerce. So, early C2C completed the closed loop. This closed loop I call a point-like closed loop. A point-like closed loop is a business closed loop lacking the b-end. "There is no difficult business in the world" is because of the point-like closed loop. E-commerce transactions are "one-to-one" matching. So, only 2C needs to complete from 0 to 1. The point-like closed loop has a very low cognition threshold. Why would C-end be willing to place an order when cognition is low? This is the platform's important rule: "7-day no-reason return and exchange." Treat the platform as a "fitting room," and if it doesn't work, exchange it. How to expand matching volume? It's through paid traffic. So, to conclude on e-commerce, it can be a low-density, low-intensity cognition platform. Because of the platform's low-density, low-intensity cognition, its return rate is high, and repurchase rate is low. Achieving both brand and effect is difficult. Therefore, platforms become the stage for long-tail, the world for small enterprises and startups. Every advantage has its disadvantage. Low-intensity cognition and low repurchase rate are a pair of mutually reinforcing relationships. The survival threshold for small enterprises is lowered, but because cognition accumulation is difficult, although there is no difficult business in the world, they are all difficult to grow big. From the low repurchase rate of e-commerce, we can see the value of the b-end. Because cognition accumulates both on the C-end and the b-end. Traditional marketing has dual accumulation of b and C, but e-commerce lacks the b-end. Therefore, platforms are not conducive to manufacturers in terms of cognition accumulation.
Recently, I chatted with Mr. Liang Jian of Huatang, and we discussed the biggest environmental changes in Chinese marketing. I mentioned two points: First, the "three major marketing" have disappeared. The three major refer to: mass production, mass communication, and mass distribution. This is an important viewpoint of the HBG theory. First, the mass media, which was the main platform for mass communication, disappeared, and then channels fragmented. Of course, the most important is that mass media as a 2C platform has disappeared. Now the biggest challenge for 2C is finding a medium that can be activated with resources. The disappearance of the "three major marketing" environment actually means the large business closed loop is no longer valid. Second, self-media, as a substitute for mass media, cannot bear the heavy responsibility of mass communication and high coverage. IPs built on self-media communication have typical pulse characteristics, rising and falling quickly. More importantly, communication effects are unpredictable. Heavy investment may be ineffective; casual play may ignite. Based on the above two points, Chinese marketing is shifting from the vigorous "explicit marketing" to "implicit marketing." If you can't make big waves, you have to let trickles converge into a river. Explicit marketing is a large closed loop of cognition and transaction; implicit marketing is a small closed loop of cognition and transaction. Explicit is because it uses media power; implicit is because it finds the smallest bC unit. Even if implicit marketing succeeds and becomes widely known through media reports, it is only a result, not a cause. As a small business closed loop, bC can have a very low threshold. But when bC units are replicated, the large business closed loop forms again. The phrase from Mr. Fan in the title is the new logic of cognition and transaction: from 0 to 1 needs 2C, from 1 to 100 needs 2b. Let me interpret this: for bC unit cognition, 2C cognition does not need high density, only low density, to form a small bC closed loop. Therefore, the investment and time required for a small closed loop are relatively low, meaning the threshold for a small closed loop is low. However, a small closed loop is hard to generate large sales. To achieve large sales, you only need to replicate the small bC closed loop. When the small bC closed loop is replicated to a certain scale, a large closed loop naturally forms. The key to replication is not 2C but 2b. Cognition is the premise, transaction is the result. Only when cognition and transaction form a closed loop can it be sustained. This is the core of business. Unlike mass media and platforms that directly do 2C cognition, the cognition logic of bC integration is: based on the relationship between b and C, C-end cognition, with the support of the bC relationship, lowers the threshold and is easily converted into transactions. Teacher Shi Wei emphasized the trinity of relationship, cognition, and transaction, which is this logic. Please note that mass cognition is direct 2C cognition, but bC cognition is C-end cognition in the presence of b. For bC integrated promotion, I often say, User praise is important, but praise in front of the b-end is more important. Praise in front of the b-end means C-end cognition accumulates on the b-end. C-end cognition is amplified by the b-end. This form of cognition brings two benefits: First, C-end transactions are immediately realized; second, the b-end is activated and confidence is strengthened. What is the value of b-end activation? Because the b-end connects many C-ends, the activation of individual C-ends, such as KOLs, KOCs, and big C, is equivalent to the b-end becoming a cognition communicator. Thus, the following first-round small closed-loop logic is formed:
Step 1: Through the b-end, find C-ends with strong relationships. Step 2: In the presence of the b-end, complete C-end cognition and convert to transactions. Step 3: Because of C-end transaction conversion, the b-end is activated and confidence is strengthened. Step 4: Because the b-end is activated, the b-end, based on relationships, will activate more b-ends.
The above process completes the first closed loop of marketing. Then the second round of large closed-loop logic begins:
First round: bC completes the small unit cognition-transaction small closed loop. Starting from the second round, according to the above logic, the bC small unit closed loop can be replicated. Replicate according to the structure of super TOP, TOP, and ordinary b. When the b-end reaches a certain density, C-end density will inevitably form. When the C-end reaches a certain density, the C-end will cross-cover on the b-end. Thus, the large closed loop of business cognition and transaction is formed. Cross-coverage achieves a result: Even without a bC relationship, a cognition-transaction closed loop can form between b and C.
For example, if craft beer brands Ubrew and Taishan Original Pulp have a franchise store in a provincial capital. For a franchise store to survive, it must be based on strong bC relationships, forming a small cognition-transaction closed loop. As long as it reaches a certain number of people and repurchase rate, it can survive as a single store. Because of the existence of the small closed-loop bC relationship, a high-intensity cognition model can be adopted: scenario-based experience. Scenario-based experience has high cognition intensity but low efficiency. In traditional marketing, efficiency is more important than cognition intensity. But in the small closed-loop cognition model, cognition intensity is paramount. Thus, as Lidu pioneered immersive experience in China, the scenario-based experience model gained recognition and became the main cognition model for bC integrated promotion. As long as a single store can survive, the small closed loop of cognition and transaction can be opened, and the single-store model can be replicated. If the provincial capital franchise stores reach more than 50, C-end cross-coverage will form. And because beer is a social product, the drinking process is a cognition dissemination process. Thus, the large closed loop of cognition and transaction forms again.
Returning to the article's theme. The threshold for mass communication is high because without dual high coverage of 2C and 2b, there is no large closed loop of cognition and transaction. So, the threshold for cognition and transaction is 100. The threshold for e-commerce cognition and transaction is 1, but because cognition accumulation is difficult, even if you reach 100 through traffic, once you stop investing, it quickly returns to zero. The bC integrated cognition-transaction logic, although it also talks about 2C cognition, because the b-end participates, it is more accurate to say it is "2C cognition done for the b-end to see." The fulcrum is on C, the lever is on b. Without 2C, 2b cannot be activated. Without 2b, large sales cannot be supported. 2C from 0 to 1 is about making leveraged cognition. 2b from 1 to 100 is about making leveraged transactions. From 0 to 1 needs 2C, from 1 to 100 needs 2b. This phrase is simple, but the bC structure, C-end structure, and b-end structure it contains are complex. Are complex structures difficult to operate? Our practice proves that it is hard to explain clearly, but operation is not complex. I have always believed that complex logic, simple actions, and low thresholds are good business models. Conversely, simple logic, complex actions, and high thresholds are not good business models.
The difference lies in whether the threshold is a resource threshold or a wisdom threshold.