There are two cognitive systems that form the basis of our consumption decisions: System 1 and System 2. Nobel laureate Daniel Kahneman describes these two systems as "intuition" and "rationality." Intuition produces fast thinking, while rationality produces slow thinking. He wrote a famous book, Thinking, Fast and Slow, to explain these two systems. These two systems coexist in our brains and are independent. Most of the time, System 1 dominates our thinking and decision-making, because our brains also "lazy" and seek shortcuts. We are accustomed to making routine decisions automatically and quickly with the help of intuition, rather than collecting a large amount of information, comparing repeatedly, and finding the optimal solution to make rational judgments. Only when System 1 encounters obstacles does System 2 activate, providing more detailed and explicit processing. Clearly, when we watch live streams, it is System 1 that helps us make purchase decisions. We rely on first impressions and liking to make quick decisions and impulse purchases. Under this decision-making model, products suitable for live-stream selling have three major characteristics: 1. Low involvement — Consumers can make decisions without collecting a lot of information, without investing time and effort in research, and can buy on impulse. These are low-involvement products, such as snacks, fresh produce, and daily necessities. Such products are suitable for live streaming. When I watch a live stream and buy a large pack of tissues, a box of pens, or a few peaches, I certainly don't need to spend time and effort researching the product. High-involvement products, in the short and noisy environment of a live stream, cannot be quickly decided and ordered. 2. Low decision risk — If consumers have doubts and uncertainties about the quality or brand of a product, or if the product represents the consumer's identity or social status, they will carefully assess risks before purchasing to avoid losses. In such cases, consumers will not make impulse orders during live streams. 3. Low average order value — On one hand, higher prices increase decision risk; on the other hand, high-income people will not spend hours watching live streams to buy a product. The essence of "three lows" products is that they fit the operational characteristics of System 1, enabling quick decisions and orders. This is why current live-stream e-commerce products are mainly food, daily necessities, beauty products, and clothing, with average order values under 100 yuan. If a product is high-priced, high-risk, and requires consumers to acquire a lot of knowledge before deciding whether to buy, then consumers must invoke System 2 for decision-making. For System 1, the decision elements are liking, impression, and familiarity; for System 2, the elements include authority, reputation, and trust. However, live streaming cannot easily build trust; consumers can only trust the host's character, which is like gambling in today's flood of live streams. At the same time, live streaming is also difficult for building brand awareness. Because live streaming is a purchasing scenario, not a learning scenario. Would you patiently listen to a salesperson explain technical knowledge and product concepts while shopping? Wu Xiaobo said in his live-stream review: "Halfway through the live stream, I realized that people flooding into the live room were more interested in buying things than listening to a lecture. I called everyone 'classmates,' but in fact, they were 'babies.'" That's exactly the point. Therefore, home appliances, furniture, and cars are hard to sell via live streaming, while liquor, tea sets, and milk powder live streams often fail. Li Xiang sold mink coats in a live stream; 1.3 million people watched, but not a single coat was sold by the end. That wasn't because Li Xiang lacked business ability, but because the product price was too high, and consumers wouldn't buy impulsively. Wu Xiaobo's New National Products live stream sold only 15 cans of milk powder. Wu explained his logic for selecting milk powder: "Since the melamine incident, domestic milk powder has gone through a brutal trust recovery period. Among annual overseas purchases, imported milk powder has ranked first for many years... I visited several dairy companies for field research and deeply believe that domestic milk powder has been reborn. The brand (XXX) on the live stream was a new product after the company (XX) built its own pasture and production line in New Zealand. During the live stream, I said: The era of new middle class buying milk powder through overseas shopping can really end..." The reality is that for high-risk products like milk powder, consumers simply cannot listen to a few words from the host and order an unfamiliar brand. A brand-new milk powder brand lacks authority and brand reputation in consumers' minds. So the value of live streaming is ultimately just selling. Using live streaming for brand promotion and consumer education is a very unrealistic expectation. After Luo Yonghao's first live stream this year, some self-media claimed that Luo created a new business model where he could act as a brand spokesperson and tell brand stories. That's a joke. We always say consumers don't like ads, so would they spend two or three hours watching you do ads? The only brand promotion a brand can do with live streaming is to leverage the fame of top hosts like Viya and Li Jiaqi, and various celebrity live streams, to endorse and expose the brand, making consumers realize "this is a brand that has been on Viya's live stream, so it must be strong and trustworthy." This actually uses the host as a brand endorser, which is essentially unrelated to live streaming. -01- Fundamentally, the ultimate goal of marketing is to elicit user responses. All marketing actions ultimately aim to trigger four consumer responses: memory response, cognitive response, evaluative response, and behavioral response. Memory response is to make consumers remember the brand name, understand its basic attributes, and recognize its key features—i.e., who the brand is. Cognitive response is to make consumers master brand knowledge, understand brand value and differentiation—i.e., what makes the brand different? Why buy the brand? Evaluative response, also called emotional response, is to make consumers evaluate the brand and hold positive attitudes and feelings toward it. It mainly refers to whether the brand is credible, whether consumers identify with it, and whether they like it. Behavioral response is to make consumers make purchase decisions: whether to buy, and when to buy. From these four user responses, live streaming cannot evoke memory response, because a live stream features many brands, leaving each brand very little time, making it hard for consumers to remember the brand. It is also difficult to educate consumers in such a short time, so live streaming cannot achieve cognitive or evaluative responses either. The value of live streaming is to trigger behavioral response, acting as the final push. But in the entire marketing value chain, if consumers are unfamiliar with, don't understand, or don't identify with a brand, they won't buy it. Memory, cognitive, and evaluative responses are prerequisites for behavioral response. What achieves these three? Brand and content. The core meaning of brand is to trigger memory and evaluative responses, making consumers remember the brand and develop liking and identification. Of course, brand also represents the brand knowledge consumers hold, influencing consumer cognition. In traditional times, the main way to influence consumer cognition was advertising, but due to limited ad duration and insufficient information density, ads cannot fully convey brand information. Moreover, many ads use brainwashing methods to force-feed consumers, which not only consumes large advertising budgets but also easily causes consumer resentment. Therefore, a better way to build consumer cognition is through content. By providing useful/interesting content, consumers actively learn about the brand and, based on cognition, develop positive feelings and feedback. This means the complete value chain of making consumers remember, know, like, identify with, and buy the brand is: brand seeding, content planting, and live-stream harvesting. Enterprises gain a ticket to consumers' hearts through brand building, planting a seed in their minds. With this seed, enterprises follow up with content to stimulate purchase desire and successfully complete "planting grass." Finally, through live streaming and various e-commerce activities, they achieve sales harvesting. This is a complete marketing logic. -02- After the first New National Products live stream failed, Wu Xiaobo's second live stream made changes. First, in the live-stream process, Wu Xiaobo first came on stage to introduce the brand, mainly telling entrepreneurs' startup stories to move consumers; then entrepreneurs came on stage to introduce and demonstrate products, interacting with Wu Xiaobo in Q&A to explain product selling points and functions; during this time, assistant hosts posted purchase links and introduced discounts and ordering methods. Although Wu Xiaobo tried to integrate brand promotion, product introduction, and promotional selling, these are not important. The key to actually driving sales was that Wu Xiaobo brought in the enterprise's private traffic during the live stream. Actually, using the word "traffic" here is inaccurate; it was integrating the enterprise's dealer system into the live stream, using dealers to acquire potential consumers. For example, before the live stream, TATA Wooden Doors gathered the general managers of twelve major regions to headquarters, mobilizing 2,219 stores nationwide, 3,695 dealers and employees to participate in the live stream. The basic model of this approach is that dealers and store staff distribute live-stream QR codes to their potential customers in advance. Consumers scan the code to watch the live stream and place orders at discounted prices. Because of the QR codes, the brand can easily identify which dealer brought in sales and customers, and then share profits based on the transaction volume brought by each dealer. At the same time, if consumers pay a small deposit before watching the live stream, they can enjoy greater discounts; this is called "locking customers." If customers share the live-stream link with more friends and family, they may get even greater discounts; this is called "fission." This is the key to driving sales. The "New National Products Live Stream" title and the model of "Wu Xiaobo introducing brands + business owners demonstrating products" are just to turn a promotional event in the form of live streaming into a brand campaign. This campaign integrates public traffic from the platform, private traffic from the enterprise's dealer system, and traffic from celebrity hosts. Live streaming is actually the final detonation step of this campaign, the carrier and platform for the final conversion of the entire marketing activity. The customer accumulation, traffic attraction, and activation before live-stream conversion are actually more important, and achieving these requires the enterprise's marketing system, as well as initial brand building and content creation. In the first half of this year, DeRUCCI and Gree's Dong Mingzhu, who were actively doing live streams, actually used this closed-loop model of mobilizing dealers and national store employees to complete offline customer accumulation and online transactions. Among the celebrity live streams on Douyin this year, most celebrities performed poorly, but Zhang Ting stood out because she played the micro-business game, pulling her entire micro-business agency system into watching the live stream. So, what truly helps enterprises succeed in live streaming is not who they invite as hosts or how they design live-stream scripts, but the entire marketing system and value chain behind the live stream. Therefore, I say, what truly helps enterprises succeed is not live streaming, but building a new marketing value chain. If a celebrity just talks a few words to the screen and sales exceed what the enterprise's marketing department achieves through hard work all year, that is the greatest insult to professional marketers. -03- So, how can enterprises build their new marketing value chain? How can they integrate brand seeding, content planting, and live-stream selling? Based on different brand development stages and marketing goals, there are four models to reference: Mature brands: 3:6:1 This ratio means 30% of resources on brand building, 60% on content planting, and 10% on live streaming and selling. Because mature brands are already well-known to consumers, the main goal of brand building is to maintain consumer memory and keep the brand active and familiar in consumers' minds. At this stage, brands should continuously create new content to activate consumer cognition and enhance freshness and favorability. If the brand is strong and content planting is successful, then selling is a natural outcome. This is the same logic as Alibaba requiring merchants to do a round of content planting on platforms like Xiaohongshu before Double 11. Growth brands: 5:4:1 This ratio means 50% on brand building, 40% on content planting, and 10% on live streaming and selling. Growth brands need more resources on brand building for three reasons: First, the initial growth of a startup brand usually comes from spontaneous product growth, channel expansion, and relying on the founder's own resources, but this growth easily hits bottlenecks. At that point, the enterprise needs to build a brand, which can find new growth curves and fuel sustained growth. Second, brand helps enterprises find their core value and persona, so their content building is not scattered and centerless. Brand is the "spirit" that keeps content marketing coherent. Third, brand is an important moat. Startups should quickly build a brand to establish differentiation and competitive barriers, avoiding competitors' follow-up and imitation. Creating hit products: 1:6:3 The core of creating a hit product is to use content planting and selling to make the product a trend, a consumption fashion that everyone imitates. The key to creating trends is content. So enterprises should spend 60% of core resources on content planting, 30% on e-commerce sales through product strength and cost-effectiveness, and 10% on brand. This 10% on brand building is to pave the way for trends, providing confidence and dispelling doubts for consumers' trendy purchases. At the same time, because hit products have limited life cycles and trends easily become outdated, enterprises must create one hit after another. This implies great uncertainty and risk. So I suggest spending some resources on brand because brand can achieve a smooth transition between the previous hit and the next, gradually helping the brand reduce dependence on hits. Clearing inventory: 0:0:10 There's nothing to say here; just offer a sincere price and do live streaming. The most competitive selling point of live streaming so far is still the lowest price on the entire network. In fact, the rise of live-stream e-commerce this year was initially to solve enterprises' inventory pressure. Brand, content, and selling—these are the three things enterprises need to do. Of course, this ratio is for reference only; the important thing is that enterprises understand what they should do and how to allocate resources. Instead of rushing in headfirst just because something is trendy or hot, spending money for others to watch the excitement, and ending up with a mess when the heat fades. Source: Kong Shou (ID: firesteal13), Author: Kong Shou Tips will be paid 400-2000 yuan once adopted.