"Terminal is king," "channel is king"... Views like these have been popular in the business world for over a decade. As the author, I was no exception. In the first few years after 2001, I published many related views in publications such as Sales and Marketing, to the extent that by 2004, Professor Niu Yongge and others from the Business School of Sichuan University even directly stated in their paper "Research on the Growth Path of Weak Brands": "Domestic scholars represented by Li Zhengquan have proposed the idea of 'channel is king, win at the terminal'." Thus, the proposer of "channel is king" was directly attributed to me.

To this day, the aforementioned views are still regarded as the golden rule by many enterprises. But in the past year or two, I have begun to sing a different tune, because the push of channels is increasingly giving way to the penetration of consumer marketing. To put it more bluntly, compared to the previous decade or so, the push of channels is becoming less and less important, and a new marketing era belonging to the penetration of consumer marketing is coming.

The reason I say this is simply that when the sky changes, the way changes too.

When the Sky Changes, the Way Changes

The so-called "sky change" means that the macro environment for corporate marketing has already changed.

In the past, consumers had to watch TV or read newspapers to learn about a product's information. Now, the TV turn-on rate in some large and medium-sized cities has dropped to 30%, and traditional print media in city after city have suspended publication or closed down. In the past, consumers had to go out, go to the street, and visit stores to shop. Now, consumers can complete their shopping while sitting at home... The change in consumer behavior is the main factor driving the major changes in the marketing environment. Influenced by the fact that consumers are the source and living water of all business and marketing, everything from terminals to distributors, marketing teams, and all corporate marketing and marketing management behaviors are being restructured under the new environment of internet-based consumption behavior, fragmented mobility, and decentralization.

That is to say, the "way" of marketing must and is also changing accordingly.

In the past, when we talked about corporate marketing, we often mentioned two words: one is "push"—by giving distributors, secondary wholesalers, and terminal merchants more gross profit and expense support, or by giving corresponding staff of these channel merchants more interest incentives, to let them proactively promote our products to downstream customers and consumers; the other is "pull"—through various brand promotions and consumer promotions, to pull the recognition, acceptance, and selection opportunities of our products in the consumer market.

Now, the push of channels is being weakened irresistibly. Because "push" is more based on "information asymmetry"—for downstream customers and consumers, what you push to me is what I know and what I might choose. The increasingly evolving internet is making this phenomenon a thing of the past: in the vast network data on PC and mobile, we can find corresponding suppliers and merchants for any product we want. That is to say, under the new internet environment of information symmetry, upstream manufacturers can directly reach terminal customers and consumers through online and offline marketing penetration, while downstream terminal customers and consumers can learn about more, better, and more cost-effective products through their own initiative.

Terminal merchants and consumers increasingly do not need upstream channel merchants, especially those distributors and wholesalers that act as second-hand or third-hand intermediaries. However, compared to the already mature Taobao and JD.com, a distribution and delivery platform for terminal merchants and corresponding commercial supporting forces is far from as mature as the consumer internet.

Following such changes, we also face challenges in terms of consumer marketing, marketing organizational structure and channel construction, marketing team and market control, all of which need to adapt to trends!

Channel Push Increasingly Gives Way to the Penetration of Consumer Marketing

The situation described above is gradually becoming a reality. In this great change, those enterprises with keen awareness and the ability to combine business ideas and strategies with new business technologies to carry out consumer marketing will be the first to benefit.

At the beginning of 2015, a large health enterprise in Jiangsu brought us a very specific need: they wanted to plan and design a mobile-based closed-loop consumer marketing system—to guide their thousands of offline consumers to an online platform, and around the diverse needs of these consumers, customize development, targeted promotions, precise communication, and sell corresponding diversified product categories online and offline. The chairman of the enterprise once told me the reason for launching this project. In the Henan market, just by combining the secondary development of WeChat official accounts and requiring agents to collect consumer data, and by focusing on consumer data, they achieved a sales growth of over 50% in just two to three months.

Although this growth cannot be separated from the foundation of agent data, the 50% growth was not due to traditional channel push, but mainly benefited from consumer marketing based on consumer data information.

There will be more and more such examples. Because when we grasp the city, street, and even community where consumers are located, their communication numbers or other instant contact information like WeChat, and their consumption preferences, frequency, and other data, we can achieve more "zero distance" between enterprises and consumers, allowing them to participate in co-creation and sharing in product development, packaging design, spokesperson selection, etc., making enterprise products become products co-developed with consumers, and turning the marketing behavior of enterprise initiative and consumer passivity into a marketing behavior where both consumers and enterprises exert subjective initiative.

This is a subversion of traditional marketing. Under this subversion, the "wasted 50% of advertising fees" will be minimized, and the penetration of targeted and precise marketing to consumers will upgrade traditional "regional deep cultivation" and "channel intensive cultivation" to consumer deep cultivation and consumer intensive cultivation. Moreover, factors such as the possibility of innovative cooperation models with new and old retail channel merchants, the maturity of commercial supporting forces and models for home delivery or self-pickup, and the formation of an open online and offline commercial closed-loop ecosystem will make traditional channel merchants and channel push increasingly unimportant.

That is to say, marketing aimed at the source of business and marketing—consumers—is not only the trend and direction of our marketing progress, but also, as the starting point, all changes will bring earth-shaking changes to the traditional business order and channel ethics.

The ability of consumer marketing will determine our future rise and fall, life and death! Now, let us innovate and adjust our models, cultivate our capabilities, and optimize our resource allocation around consumers and the penetration of consumer marketing!

WeChat public account Business Trends, author Li Zhengquan (WeChat ID: lizhengquan01). The author's new book "From Trends to Action: Internetization of Traditional Enterprises in the Next Decade" is about to be published.

-END-

Content Selection Click on the title below to read directly:

[Practical Operation Guide for Route Sales Representatives (with full PPT download attached)]