Many business owners ask me, Teacher Zhu, is it too early for our company to start digital transformation now? I express my view in three sentences: Digital transformation must be early, must be difficult, and must be done. There is much discussion about digitalization from various angles and positions. Here, I mainly stand from the perspective of brand owners, discussing how enterprises can achieve digitalization through channels. The main problems faced by traditional channels are profit distribution and sell-through at all levels. Simply put, someone is willing to sell, and someone is willing to buy. One is the physical space grab for shelf space, and the other is the occupation of mind space. The role of the channel is to transmit value. If the buying and selling problems are solved, the value transmission of the channel will naturally be smooth. Digitalization must be guided by the logic of offline channel operations. Before digital transformation, first break down all aspects of offline channels so that digital transformation can be better integrated. The traditional channel operation model is usually: from investment promotion and layout—terminal distribution—activating terminals—customer relationship ripening—sales conversion. From point selection and store entry, push-driven sales to natural sales, then to maximizing in-store sales, to maximizing multi-category share, to full channel blooming, full channel occupation, from single-store breakthrough to regional breakthrough to national breakthrough. Traditional channel structure: the distribution structure is F2B2b2C. Head brands can achieve F2B2b2C and F2B2b, some second-tier brands can achieve F2B2b, small brands can achieve F2B. Even head brands that can directly connect to C-end are few, and those that can operate C-end data are even fewer. Offline channel management mainly includes: 1. Managing and serving distributors; 2. Developing and maintaining channel terminals. The purpose is to quickly enter products into terminals, achieve high-speed product turnover in terminals, maintain price rigidity, prevent product cross-region sales, stabilize channel profits, and maintain a healthy channel structure, thereby expanding market share and occupying the market. The main means is the human wave tactic, through personnel route visits, small-area refined operations, solving information transmission, customer relationship establishment, sales conversion, and product flow. Problems: Headquarters cannot understand in real-time the status of sales personnel in various regions, the distribution of terminal sales in various regions, the sales distribution of each single product in each region and channel terminal, cannot collect user consumption behavior information, cannot accurately form user profiles, classify users, and effectively reach them. Expense investment is one-size-fits-all, egalitarian, cannot achieve precise investment, targeted placement by point, direction, and product, effectively activating dormant terminals, sustaining best-selling terminals, and defending against competitors. A large number of frontline sales personnel mainly rely on subjective initiative. Management difficulty increases, cannot let the frontline call for fire, quickly empower frontline combat personnel, causing frontline personnel and the enterprise to be in a game state. The main reason is the mismatch between efficiency and effectiveness, working hard but not achieving results, or even not working hard and not achieving results. After breaking down traditional channels, where do we start with channel digital transformation? What is the essence of channel digitalization? Channel digitalization is not buying software, building a mall, or decentralizing, robbing channel distributors, terminals, and their users. It is about restructuring channel relationships, improving efficiency, and increasing satisfaction at all levels of the channel chain. Through internet tools, establish connections, create relationships, achieve interaction, improve user experience, complete sales monetization, and strengthen user brand loyalty. In the past, when internet infrastructure was immature, brands had low efficiency and high cost in obtaining user information, could not achieve real-time dialogue with consumers, had no consumer behavior data, and therefore could not understand user demand changes or respond quickly and agilely to users. Reach a cognitive consensus on channel digital transformation First, reach a consensus on channel digital transformation. Clarify the purpose. The top leader must have determination, the team organization must have confidence, and thoughts must be highly consistent. Channel digital transformation is not just a business department matter; it is about restructuring business processes. It is necessary to break down departmental walls, and all involved departments must collaborate to advance. Any department with problems will affect the progress of the transformation. The premise of reform and transformation is smooth advancement, minimizing resistance. The way to reduce resistance is to let a small number of people act first, let a small number get rich, and use the effect of small-area changes by a few to leverage and influence more people to actively participate in digital transformation and reform. Effective, visible, conforming to human nature, not hegemonic and oppressive. Only then can tactical adjustments, optimization, and upgrades be run through and fought through. How to achieve visible and effective results? 1. Start with the easiest business action changes. 2. Find the most willing and proactive people. 3. Choose the region with the best market foundation. Second, clearly make a channel digital transformation plan. 1. Budget for channel digital transformation investment. 2. Organizational structure and division of labor for digital transformation. 3. Staged breakthrough goals and implementation plans. 4. Business system transformation demands. 5. Transformation promotion plan. Set up a digital transformation project team with goals, plans, organization, division of labor, monitor goals, grasp the process, promptly hold meetings to address problems in the promotion process, and quickly and efficiently solve bottlenecks. Sort out the logic of channel digital transformation Digitalization is a sales business service. To meet sales business needs, empower sales business and drive business growth, two actions: First, all business dataization. That is, complete the online transformation of business processes, with the basic capability of data collection, processing, and storage. Second, all data businessization. Through data processing and analysis, feed back to business, empower business, improve business efficiency. The operation logic is connection, interaction, and matching. Deconstruct the offline channel sales model: regional market sales = number of terminal outlets * single-store sales; single product sales = number of items * sell-through rate. Sell-through depends on user consumption frequency, so channel digitalization must be user-centric. Users do not exist because of channels, but you must be by the user's side, available at any time. Users are the first gear and original driving force for the operation of the channel chain. If users do not move, nothing moves, and everything is in vain. To achieve user connection, effective means are using one product one code as a tool, driven by layered benefits, and based on the principle of simple operation. Starting from users, achieving connection with users, completing user profiles, the most effective tool is one product one code. One product one code can bind and associate users, terminals, secondary wholesalers, and distributors, obtain user data, and master product flow. Dongpeng Beverage started by connecting C, influencing small b, solving sell-through, connecting small b, promoting big B (channel merchants), and thus built the F2B2b2C marketing digitalization system. Main methods: small stores scan the box code when stocking, receive red packets, complete registration, and establish connection with small stores. Consumers open the cap to win prizes, achieving brand connection with C-end. Customers receive red packets and can simultaneously enter the lottery mall. Use red packets, points, lotteries, and other effective ways to create customer stickiness. At the same time, on the store mini-program, promotional information and expenses are sent to terminal stores in a timely manner, avoiding to a certain extent the deduction of expenses at intermediate levels. Efficient verification makes channels willing to promote and sell prize products. The company uses "one box one code" to effectively monitor all circulation links from factory to distributors, and the large incentives such as box-opening red packets and prize redemption red packets at terminal stores are all linked to code scanning, bringing the last link of the circulation chain into the company's monitoring scope, achieving full-chain product tracking, effectively improving channel inventory transparency and channel control. Currently, the company has more than 1,000 distributors, and the sales network covers about 1.6 million terminal stores nationwide. As of the end of 2019, consumers scanned codes more than 1 billion times cumulatively, and the mini-program had about 120 million unique users. Key points:

  1. Based on the top-level design at the marketing level, all code scanning behaviors are driven by benefits. There are two situations: whether it is normalized. If normalized, consider consumer fatigue and market investment budget planning; if non-normalized, once the reward mechanism is removed, how to know consumers' purchase situation in the first time.
  2. After obtaining three types of user data (original data, behavior data, transaction data), accumulating private traffic, forming user profiles, the next step is how to do precision marketing, precisely reach consumers, and establish relationships with consumers. Operational steps of channel digitalization 1. Guide all touchpoints of the channel chain online, first realize all business dataization. Use one product one code to connect the channel chain, obtain data at all levels. Issues involved: the cost invested and the intensity of promoting code scanning directly affect the effect of one product one code and the impact on the price system after removing it. Previously, I served a liquor company. The deadline for scanning codes to win prizes was approaching, but consumers did not know; the investment was not enough, and consumers had no motivation to scan codes. 2. Data operation, turning traffic into retention. Without professional operation personnel and communication feedback channels, one product one code becomes a chicken rib, a pile of zombie data. From data acquisition, user profiling, to depositing on WeChat official accounts or cloud stores. How to do good operation, from content operation, activity operation, product operation to maintain user stickiness, let users participate, empathize, resonate, and co-create. 3. Empower channels. One product one code empowers marketing. The frontline calls for fire, precise point, direction, and time explosion, placing awards in designated regions, terminals, and time periods, activating terminals, and assisting frontline personnel. Through middle platform analysis, find the dual core: core terminals and core consumers. 4. Achieve automated operation. Through the introduction period, running-in period, problem period, stable period, optimization period, gradually iterating to grow into an organ integrated with the enterprise. This tests the determination of the top leader, the organizational ability, coordination ability of the team, and the execution ability of frontline personnel. Survive it, and it is rebirth. Finally, form a natural operating mode for the enterprise. Once formed, the dividend period brought by digitalization will be long, and the competitive barrier will be strong. Move towards difficulty, look up at the sky, root down, always maintain the power of enterprise evolution, and you will be the king in the future. Introduction: Zhu Chaoyang, General Manager of Zhenjian Management Consulting Co., Ltd., co-author of "New Marketing 2.0", a practical marketing expert who grew up from the market frontline, has served the beer/white wine/food/beverage/condiment industries, and provided marketing consulting services for many small and medium-sized enterprises. Help enterprises grow rapidly, achieve strength and scale, and develop steadily and sustainably. Are you "watching" me?