As consumers become more discerning, capturing and retaining their attention has become a Sisyphean task for luxury brands in China. Audience growth and engagement rates on WeChat, the nation’s most ubiquitous multiservice platform, has been sliding over time.
According to the recently released WeChat Luxury Index 2020 by Digital Luxury Group and JINGdigital, the growth rate of large WeChat accounts (more than 100,000 followers) has slipped from 66 percent in 2018 to 41 percent last year.
And before digital marketers wave these figures away, thinking that it can be addressed with the help of ad spend, the study also uncovered that only approximately 4.3 percent of a luxury brand’s WeChat community is recruited through media investment — or paid advertising. Given the cost involved in acquiring a follower, this is not quite a sustainable course of action.
But luxury brand marketers need not fret too much about it — because these are not the indicators that matter on a platform like WeChat.
Defining a Relevant Recruitment Strategy Based on Your Audience
First and foremost, it is important to remember that WeChat is not a social media platform per se. Due to the closed nature of its ecosystem and the fact that interactions between brands and users are not always made public, the impact of word-of-mouth on community growth is limited. Last year, audience recruitment via channels including clicking on the brand’s account name card (6.3 percent), the menu button within a post (0.1 percent), or the article byline (2.7 percent), were among the lowest.
Consequently, measurements like community size, comments, shares and favorites should not be used as absolute indicators of success. Instead of chasing numbers, brands should focus on building up a base of quality followers that are truly interested in them, so as to increase the chances of conversion later on.
The WeChat content broadcast model is rather intrusive, and having content pushed directly to your message inbox four times a month is not something that sits well with users that do not have an existing relationship with the brand. This appears to be especially for followers recruited through advertising and campaigns. The study revealed that 20.54 percent of those recruited through Post Ads (or also known as Banner Ads), and 10.56 percent of followers recruited through Moments Ads end up unfollowing the brand, suggesting that acquisition through these channels typically results in followers with lower levels of sustained interest.
Followers recruited through organic channels, on the other hand, display a much lower unfollow rate and prolonged interest in the brand. This includes clicking on the menu button within posts (2.35 percent), accessing the brand’s WeChat account name card (3.81 percent), clicking on the article byline (5.37 percent), and searching (9.16 percent) for the brand within the WeChat ecosystem. Clients and prospects recruited via QR codes and post payment also naturally tend to display a lower attrition rate, as interest in the brand is already present.
This further illustrates that a brand’s WeChat community acquisition strategy needs to be highly targeted, concentrating on profiles that really matter. Spending on paid advertising will drive awareness in the short term, but might not necessarily result in long-term retention and customer conversion. Consequently, key performance indicators on this front should be focus more on the percentage of clients and prospects on-boarded and captured in the brand’s CRM database, and less on the total size of a brand’s WeChat community.
Engagement Value Where You Least Expect It
Brands traditionally assess their social media performance based on engagement rate — often derived by calculating the sum of all “social” actions, including commenting on or sharing a post, or clicking on the “Wow” button. While the strength of a piece of content does not necessarily contribute significantly to fan growth, it does, however, inspire engagement actions and drive conversions.
Last year, up to 68 percent of the actions performed users on the WeChat accounts of luxury brands was that of menu clicks. Another 15 percent of that was related to post interactions (including clicking on in-article links, sharing, commenting, or adding a post to one’s favorites). It should be noted that out of this 15 percent, only a small proportion of actions are of a “social” nature. Adding an article to the Favorites folder, commenting and sharing the article only accounted for 0.32 percent, 0.25 percent and 2.8 percent of the total actions, respectively.
Given the high volume of menu clicks, it is clear that followers are looking to do more than merely read an interesting piece of content on WeChat. It is important for brands to develop the right features so as to capture that intention and interest, and turn that into a valuable engagement action. Based on the data collected, we can see that users visit a brand’s WeChat account primarily for three reasons: information about the brand (33 percent), to access CRM functions (31 percent) and to perform e-commerce transactions (36 percent).
Brands need to look beyond WeChat as a mere channel for broadcasting content, and embrace it for the full service platform that it is. Only through building and integrating other capabilities on their WeChat Official Accounts — such as CRM and e-commerce — will they be able to truly reap the benefits of the model. Relevant KPIs need to be defined to properly measure the impact of their efforts as well. This includes assessing the percentage of active prospects and followers, as well as the user journey completion rate.
Not Creating Social Media Posts to Inform but Mini Campaigns to Convert
As previously mentioned, WeChat is nothing like Western social media platforms — right down to the frequency of posts allowed. While there is no limit to the number of posts brands can make on their Instagram or Facebook accounts for instance, only a modest four content pushes are afforded to brands per month on WeChat.
It is imperative that this quota is fully utilized and optimized to generate maximum exposure. Brands should not squander these pushes, and instead work on customizing available content based on a follower’s interests and preferences. This can be achieved with the help of audience segmentation — something that almost 45.71 percent of the luxury brands studied already make use of. Content personalization does not have to involve a hefty investment — brands can start small and simply angle the same piece of content differently based on the audience segment it is being disseminated to.
Brands should also consider carrying out A/B testing to identify the time slot their target audience is most receptive to content. There is no fixed standard when it comes this (despite the industry’s penchant for pushing content on Thursday and Friday evenings), as every brand has a different mix of followers with varying content consumption habits.
Building a pool of reusable sub-articles centered on key categories such as CRM, sales and events will also help brands to better utilize their allocated quota. This includes articles featuring store locators, appointment engines or even information about loyalty programs that can be placed behind the week’s headline piece, and constantly repeated without much effort on the part of the brand. The evergreen nature of such content types will also ensure that periodic repetition will not vex readers.
Driving content performance on WeChat is complicated. It relies on multiple parameters and involves a complex user journey, making it difficult to pinpoint any one go-to tactic. The only way for brands to define a winning strategy is through testing and learning over time. To make this process an effective one, brands should also make sure to focus relevant performance indicators like open rates, conversion rates and unfollow rates.
Given WeChat’s advanced data collection capabilities, brands are presented with an unparalleled opportunity to understand and connect with their consumers — something that is not always possible in other markets. The onus is on brands to fully leverage this, and translate that into the growth of their business in China.
Pablo Mauron is a partner and managing director, China, at Digital Luxury Group.