From Paid Advertising to Word-of-Mouth Marketing: Marketing Recipes of a Blister Equipment Seller
In 2002, Mr. Zheng founded his own company named Shanghai Jiuluo Mechanical and Electrical Equipment Co., Ltd., selling blister packaging equipment. Like many entrepreneurs, Mr. Zheng rented an office and started the business alone. Every time he made a deal, he would recruit an employee to scale up his company. If he hadn’t gotten in touch with network marketing, He would have kept going at this pace。
In 2003, a salesman from an online trading platform called “E BigChina” contacted him, hoping that Jiuluo could be their paid member and build its online business. Mr. Zheng didn’t know much about the Internet at that time, so he rejected it out of hand. ut the salesman didn’t give up. He said that Mr. Zheng could use the platform for free to see whether it was helpful. He could pay for the membership after he had received business.（in fact, you could publish free information on all of the large B2B websites, but this salesman had mastered the skill of mass postings, so he was confident in helping customers get orders at that time when the competition was not fierce). Mr. Zheng agreed and provided the required words and pictures concerning the company. After that, he didn’t bother to think about it. To his surprise, after only one month, there were some customers contacting him through this information platform and making a deal with him. It was from then on that his paid cooperation with “E BigChina” started (the annual membership fee was quite low at that time, which was RMB 950 yuan).
I also met Mr. Zheng through the information on this B2B platform. It was in April 2004 when I was about to go to Shanghai to set up a blister packaging factory in Xi’an, and was collecting information about equipment suppliers online in advance (Note: although the need of finding suppliers in different places is not much, it still exists. In comprehensive network marketing, this should also be taken into consideration). After arriving in Shanghai, I negotiated with several equipment suppliers at the same time. I learned that Jiuluo was just a small trading company at that time, but Mr. Zheng was very honest, and he was familiar with the business. We also shared common opinions on network selling. So I handed over some small orders to their company. In return, he invited me to serve as a part-time network marketing consultant for his company.
Given that he was only posting information on a paid B2B platform and had no related personnel to manage the online business at that time, I suggested that he build an independent corporate website first, and then spend money on Baidu advertisements and become a paid member of Alibaba. He put them into practice one by one, and his online sales had risen from tens of thousands of yuan to hundreds of thousands of yuan per month in only half a year. Excited, he asked me if there were more ways to expand the business. I said, “You need nothing but a person. A person who can take care of the paid online advertisements, and who can post a large amount of free information. If such a person is in place, I am confident that the sales will double again.” So he hired a young man majoring in computer science. He was smart and it didn’t take many days to train him before he started working. With his help, the free information about Jiuluo was almost all over the Internet market.
Meanwhile, in order to increase the conversion rate of inquiries and deals, I suggested that he improve the hard power and soft power of the company as soon as possible, such as applying for the company’s unique technology patent, implementing ISO9001 standardized management, and establishing his own production base. If these advantages were posted on the website, it would naturally increase the success rate of transactions, because the experienced purchasers would pay more attention to this.
As expected, the online sales hit more than 3 million yuan in 2006.
But in 2007, there were not many new online orders, because many companies in the same industry started to pay for Baidu advertisements and the membership of Alibaba. It was getting difficult to conduct the business and the annual cost of network promotion was very high, which was about 200,000 yuan. He began to worry about the malicious clicks from the opponents of the same trade. One day he even lost about 1,000 yuan for no reason. Although part of it was refunded after lodging a complaint to Baidu, there was still much money swallowed that could not be refunded. During that time, the first thing he did upon arriving at the office was to order the network information assistant to click on the advertisements of all opponents of the same trade. When I went to his office, I was amused at the scene and I believe that the personnel in Baidu company would laugh more loudly.
So I suggested that he optimize and promote the company’s independent website to expand online business channels and reduce bidding costs as well. Since I was still in charge of the factory at that time, I didn’t much energy to help them promote the website. Instead, I introduced to them a company that specialized in optimization. Because Jiuluo’s website had been optimized before, it didn’t take the website long to rank high and surpass the other companies in the same industry. Then they reduced certain cost on Baidu advertisements according to the situation of natural listings. In this way, their total investment in online advertising in 2008 dropped to hundreds of thousands of yuan. It was also in 2008 that they finally achieved the annual sales target of 10 million yuan.
But don’t think that the sales of 10 million were all the credit of the Internet. According to Mr. Zheng, the direct benefits from network marketing did occupy a large proportion at the beginning of the development. But with the continuous expansion of the company’s scale in recent years (now he has his own factory) and the accumulation of loyal customers, the proportion of online business was lighter than before. Of the 10 million, only 20% were from the online business, while the remaining 80% from the “word-of-mouth- marketing” in the industry.
This model of “word-of-mouth marketing” started from Mr. Zheng’s first order. In 2004, a Shanghai-based company purchased several high-frequency machines (for plastic packaging) from Jiuluo through the Internet. The order was not very big, only about 100 thousand yuan. But the buyer was deeply impressed by Jiuluo’s stable equipment performance and thoughtful service, so he introduced a bigger customer in Qingdao to Jiuluo. In the following two years, Mr. Zheng made deals of more than 2 million yuan with that customer alone. After seeing the huge potential of the customer-to-customer mode, they would give customers the advice in future sales, “I will give you a commission as long as we have made deals with the new customers you introduced.” It was like the multi-level marketing, but it did work quite well for the blister industry. Because the customers of the blister machine factory were usually in need of high-frequency machines, and in most cases, it was the customers who asked the blister factories to help recommend the high-frequency machine manufacturers. It was no big deal to introduce Jiuluo to them, which also helped customers to solve their problems; and they could also get some small profits, which was an actual win-win. That’s why I said that they had multiplied the results of network marketing by a factor of ten through multi-level marketing.
Now Jiuluo has a complete network marketing team: a manager of the network department who was also in charge of website optimization and promotion, a network information assistant responsible for publishing information about the enterprise and products, an online direct salesperson responsible for telemarketing and direct communication online, and “half a” copywriter responsible for answering questions on the Internet and writing professional technical knowledge schemes, who was also a technician in the workshop. Although they didn’t reach cooperation with many direct customers, they kept on being at the top of the industry and maintained annual sales of more than 10 million yuan for the company.