Should I join group-buying APP platforms like Meituan? Understand paid vs. organic promotion
[Hua11.com Original] We frequently receive inquiries from students planning to open flower shops or studios: "Teacher, should I join a certain mobile Internet platform? What are the effects?" They often add, "However, their fees are exorbitantly high. The entry fee alone costs several thousand yuan. If customers make purchases, a percentage of the commission is deducted. Moreover, I fear receiving negative reviews from customers."
This article uses joining the Meituan APP platform as an example to analyze in detail the decision to engage in paid promotion.
I. Benefits of Paid Promotion
Clearly, paying the Meituan platform yields immediate results.
Why is that?
Because you are directly ranked ahead of other non-paying merchants (flower shops). The higher your rank, the greater the likelihood that users will click on your shop. The more people who browse your shop, the more transaction opportunities arise.
This is a reasonable expectation for paid promotion.
As for the ranking position, based on our observations and past experience at Hua11.com, it is generally influenced by the following factors:
- The total transaction amount within a cycle (e.g., one week)
- Conversion rate (e.g., the ratio of people who view to those who order)
- Participation in official APP activities
- The strength of your shop's discounts
- Your shop's dynamic score
- Bidding for ranking
- Traffic inclination towards new shops
And so on.
There may also be deeper ranking strategies involved, such as:
- User query time periods
- User's geographical location at the time of query
- User's basic attributes (gender, age, etc.)
- User's past behaviors (preferences, operating habits, etc.)
The system uses this data for personalized recommendations.
If you are interested in understanding the more detailed ranking algorithm, you can consult the corresponding promotion specialist. After all, you have paid, and they are obliged to inform you.
II. Shortcomings of Paid Promotion
After reading the first analysis, do you feel a bit overwhelmed: I just want to sell flowers. Why is it so complicated?
In fact, it is that complicated.
The founding team of Hua11.com has extensive product design experience and knows that these Internet product forms are changeable, strategies are frequently altered, and are uncontrollable for merchants.
Even if you pay, to a certain extent, you are still at the platform's mercy because the platform is very powerful.
From a product design perspective, the more rules and flexibility, the more beneficial it is for the platform to handle most situations. Correspondingly, merchants (referring to paid promoters, that is, you) must adapt to more platform rules.
From an operational perspective, the more rules, the less operational risk for the platform, and the risks are transferred to merchants (if any problem arises, it's the merchant's issue, not the platform's). Additionally, a series of thresholds can be set to encourage merchants to pay or take actions beneficial to the platform.
In this way, merchants seem to have become the platform's pawns. But if you choose paid promotion on this platform, you must accept all of this.
OK, besides dealing with the platform, what are the shortcomings of engaging in paid promotion? Let's list them:
1.Inertial Dependence:
Since the platform drives traffic to you, if the results are not particularly bad, it's likely that you will continually rely on the platform. After all, it's relatively easy. But consider this: what if the platform closes, blocks you, punishes you, removes your products from the shelves for some reason... or even goes bankrupt? Don't dismiss it as impossible. In the Internet industry, anything is possible. So, what's your Plan B?
2.Lack of Initiative and Business Development Ability:
Obtaining customers easily and without much effort can diminish your motivation for active marketing. If you're not proactive, you may find yourself lacking in strategic thinking and too complacent to expand the business. This increased reliance on the platform perpetuates a negative cycle.
3.Diminishing Returns and Unstable Ranking:
As an increasing number of merchants join the platform, your share of traffic will diminish, and your ranking may become less stable. The logic here is akin to what's discussed in this article: [Hua11.com · Marketing Advanced Series 1] Analysis of marketing channels for Taobao, Tmall, and JD.com (platform logic, customer quality, etc)
4.Sharp Decline in New Customers After Stopping Paid Promotion:
Ceasing to pay means your ranking will fall behind those who continue to pay. Without alternative channels to attract customers, your business could quickly find itself in a difficult situation.
III. Difference Between Paid and Natural (Non-Paid) Promotion
We have discussed the pros and cons of paid promotion above.
Alternatively, you can choose to promote naturally (non-paid). For example:
- Register as a merchant on the APP platform without paid promotion. When customers search nearby, they can still find you, although you are ranked lower.
- Establish an official account, consistently produce valuable content, and attract followers to subscribe and spread the word.
- Create a website or blog, and optimize for search engines to rank higher.
- Post shop and service information on various free information platforms. When customers have needs, they can view your information.
Natural promotion methods are slower (usually taking months or even years) and require significant time and effort for preparation and operation initially.
For instance, blog search engine optimization may require daily creation of fresh, valuable content for several consecutive months. Search engines favor original, valuable content, gradually improving your ranking until it's at the top (except for paid ads).
This process is challenging and requires additional Internet technology and marketing knowledge. But once ranked high, it forms a competitive barrier. Barring major mistakes, your ranking remains stable, making it easier for customers to learn about your services.
This method largely avoids the shortcomings of paid promotion.
IV. What Should You Do?
In summary, the choice of promotion method depends on your own circumstances.
However, those reading this likely have little Internet promotion experience. If you want to generate orders quickly, choose the paid method. It's a shortcut.
But treat this promotion as a serious project, not just a financial transaction with the platform.
Since this is a project, there should be assessment goals. You need to at least make the following records and comparisons:
1. Project Start Time: Note the start time of the project.
2. Assessment Cycle: Set the assessment cycle, such as one month.
3. Data Recording within the Cycle: Record the following data within each cycle:
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Browsing Volume: The volume of the shop and product views.
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New Customers: The number of new customers.
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Average Customer Transaction Amount: The average transaction amount per customer.
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Gross Profit Margin: The gross profit margin.
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Repurchase Rate: The rate at which customers make repeat purchases.
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Positive Review Rate: The rate of positive customer reviews.
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Customer Maintenance Difficulty: Reflecting the quality of the customer source from the platform to a certain extent.
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Most Popular Product: Identify and optimize the most popular product.
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Least Popular Product: Analyze and consider replacing the least popular product. For guidance on how to replace it, see [Hua11.com · Product Analysis Series 3] Creating in-demand floral solutions and pricing them effectively using A/B testing.
4. Effect of the Assessment Cycle: Compare the outcomes across different cycles.
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Comparison Between Cycles: Analyze the performance from one cycle to the next.
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Holidays vs. Non-Holidays: Compare the impact of holidays versus non-holiday periods.
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Effect of Activities: Assess the impact of holding (platform or merchant's own) activities versus not holding activities.
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Higher Fees vs. Current Fees: Compare the effect of paying higher fees versus the current fees.
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And so on: Continue to analyze other relevant factors.
With the above records, you can gradually summarize the experience needed to better utilize this platform for your business.
If the platform meets your expectations, continue to pay; if not, formulate a backup plan and exit the platform step by step.
V. Is Joining Meituan in Groups a Better Choice?
The above discusses individual applications to join Meituan. So, are there more choices?
Yes, joining Meituan in groups.
The most direct benefit is immediate access to the group's sales and samples.
Take the "Flower 24 Hours" alliance's group Meituan service as an example:
If you join the alliance with a shop sales volume of 100, and there are 500 shops with the same volume, your displayed sales volume becomes 50,000.
Such sales data make customers and the system prioritize your shop, improving your ranking under the same other factors.
Remember, customer decisions depend on more than sales volume and ranking; sample suitability and competitive pricing also matter. The alliance's experience guides this.
Joining a group immediately provides these experiences, improving your success rate. It's a wise choice.
In conclusion, regarding joining Meituan, you should have your own ideas by now. Remember, you're running a business, not just working. Be diligent and pragmatic. Step by step, you can reach your goals.
Copyright Statement:
This article is an original creation by Hua11.com and is included in the “How to Run a Flower Shop and Floral Studio” Ebook. The content of this article may be periodically updated and is initially published on the Hua11.com official website blog. You can find the article at this link: https://hua11.com/blog/4708.html.
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