A few days ago, I communicated with a classmate who works as a channel partner. He said he feels particularly insecure. Because after all, he sells products owned by brand owners. He worries: what if one day the brand owner goes direct, or switches to another channel partner? What would he do? Should he consider building a factory to make his own products? Indeed, this sense of crisis or insecurity may be shared by many channel partners. But we don't need to sell ourselves short. Although we don't have our own products, as channel partners, we also have our own scarce capability, which is the ability to reach potential consumers at scale. This is the essence of channels and the value of channels. Today, let's talk about this topic of channels and share my views, hoping to inspire you. Why is the essence of channels the scalable reach to potential consumers? For example, you sell anti-hair loss shampoo. Distributing flyers at a subway entrance is a way to reach potential consumers at scale. But among the 100 people you reach, perhaps only 10 are your target customers. Such a channel can only be an ordinary channel, or an imprecise channel. So what is a good channel? A good channel is low-cost scalable reach. For example, what if you distribute flyers at the entrance of a men's hospital? The working hours are the same, but the users you reach may be more precise. Among 100 people reached, maybe 30 are target customers. So distributing flyers at a men's hospital entrance is low-cost scalable reach. Is there an even lower-cost reach than this? Yes, that is innovative channels. For example, distributing flyers at the entrance of internet companies. Among 100 people reached, maybe 50 are target customers. This is even lower-cost scalable reach. So, channel innovation is about achieving lower-cost scalable reach. Then, as a channel partner, you might ask: how can I achieve channel innovation and lower-cost scalable reach? Don't worry. Before answering this question, I think it's necessary to discuss a very important matter: having an unbiased understanding of your core competency. Why discuss this first? Because in the business world, not all companies clearly separate product, marketing, and channels. Even channel partners now have private labels, such as Walmart, Metro, and Yonghui, which all have their own private label products. So, if you misjudge your core competency and misattribute it, it will lead to huge strategic mistakes. But in reality, many people do misjudge their core competency. When I train entrepreneur students, I often ask: Is your team's core competency product, marketing, or channels? Think before answering. Really think carefully. At this point, many students think seriously and then tell me: Our team's core competency is product. Then I ask further: Is your R&D team larger or your sales team larger? Does your product team have higher authority or your marketing team? Are the branch offices you open in various places to gather local R&D talent or to gain local market share? After these questions, many entrepreneurs start sweating and gradually realize that their core competency is not product but marketing or channels. Why do many companies that are clearly channel-driven want others to see them as product-driven? This may be related to our public opinion environment, where making good products is considered more prestigious. But in the business world, whether it's product, marketing, or channels, if you do it to the extreme, you can achieve great success. The fear is that you have core competency A but think it's B, and put all your efforts into B. So, to achieve sustained development and success, unbiased self-awareness is crucial. After having an unbiased understanding of your core competency, if your company's core competency is channel capability, Then how do you continuously build this capability to achieve lower-cost scalable reach? I believe the specific methodologies will vary greatly depending on local conditions and different industries. Today, let me share two suggestions to spark discussion. First suggestion: aggregate offline traffic into your private traffic pool. Let's take Perfect Diary as an example. Once, on a business trip in Changsha, I was hungry and went downstairs to get something to eat. I entered a shopping mall and happened upon a Perfect Diary store. Although I was very hungry, I still walked in to take a look. The store was beautiful, and the products were indeed very cheap. Many people were browsing inside. A young woman came over and said to me, "Feel free to look around. If you scan the QR code today, you'll get a free cotton pad." Oh, I immediately understood something. Then I searched online. Sure enough, Perfect Diary was adding users' personal WeChat accounts through methods like scanning QR codes to give away cotton pads. In traditional offline retail, location represents traffic; opening a store means buying traffic through rent and then selling goods. But for Perfect Diary, the core of opening a store may not be selling goods but adding WeChat friends. It sounds incredible. So how many WeChat friends has Perfect Diary added in total? Millions. What does this mean? It means Perfect Diary can post (theoretically) countless moments in their friends' feeds every day, showing them to these millions of WeChat friends. Coming to a physical store to buy a lipstick is just one touchpoint. A consumer may only come a few times a year. But once you add them as a friend and manage them in an army-like manner, this touchpoint becomes infinite. This is channel innovation achieved by diverting offline traffic into your private traffic pool. Second suggestion: in online public traffic, group people into communities based on a common point. For example, in WeChat's public traffic pool of over 1 billion users, "Logic Thinking" has gathered tens of millions of students who love learning; "Uncle Kai Storytelling" has gathered millions of young mothers. Another example is ourselves, the Runrun Liu public account. Why do we insist on only writing content about business insights, management cases, and career advancement? Because we want to gather people who like reading business insights, management cases, and career advancement from the entire WeChat ecosystem into the Runrun Liu public account community. Why do we want to gather people who like these three types of content? Because we want to reach China's high-value人群 at scale. Only entrepreneurs and founders like reading business insights; only corporate executives and core management like reading management cases. Only ambitious young people like reading career advancement. We insist on writing original content on these three topics year after year, hoping to gather these people and form the ability to reach China's scarce high-value人群 at scale. Writing entertainment gossip might get very high readership. But it wouldn't reach the highest-value人群. Increasing followers for the sake of increasing followers would lose our original values and tone. The people we want to reach at scale don't like reading such content and don't have time to read it. The people attracted by such content are not the ones we want to reach at scale. So, there is no shortcut to increasing followers; only by persisting in content. To date, our public account has 2.6 million readers. These 2.6 million people are all scarce high-value人群 in China. In the past, to reach this group, you might have had to broadcast to 9 million or 90 million people, which was very costly. But today, we use continuous high-quality business content to select these 2.6 million people from 90 million, helping brand owners achieve lower-cost scalable reach. We have tried providing this group with high-end luggage, conference speakers, red wine for business banquets, and commercial tea gifts, and received exceptionally enthusiastic responses far beyond normal levels. This is the result of lower-cost scalable reach. So, my second suggestion is to group people into communities based on a common point in online public traffic. Of course, the carrier of the community is not necessarily a WeChat public account. WeChat personal accounts, enterprise accounts, QQ groups, online forums, etc., can all serve as carriers to gather people with common interests. Final words: Finally, let's return to the classmate's original question. He felt worried because he had no control over the product. Actually, there's no need to worry. As long as you have an unbiased understanding of yourself and know what your core competency is, then just keep polishing your core competency. If your core competency is channels, the ability to reach at scale, Then what you consider is no longer the product, but whether there is a way to achieve channel innovation, and whether there is a way to obtain scalable reach capability at a lower cost. Of course, different industries may have vastly different methodologies. I offer you two suggestions to spark discussion. 1. Aggregate offline traffic into your private traffic pool. 2. In online public traffic, group people into communities based on a common point. I wish you can find your core competency unbiasedly, and I wish you can obtain scalable reach capability at a lower cost. Source: Liu Run (ID: runliu-pub) Are you "watching" me?