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We Chat About WeChat Authors: Yuki Yang, Mia Lü, Carmen Situ, Derek Dong, Enson Hu
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We Chat about WeChat by @msl_group

Aug 23, 2014

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MSLGROUP

With 600 million users in less than three years, companies around the world are intensely watching the meteoric rise of Tencent's WeChat platform. WeChat combines the functions of Facebook, Twitter, Instagram, Skype and walkie-talkie into one single application. It is the Number 1 app downloaded in 20 countries from India to Saudi Arabia.
The recent launch of WeChat 5.0 in China provides users with a richer, more diverse experience including rapid access to e-coupons, booking capabilities, live support, billing inquiries, and points-of-interest navigation.
MSLGROUP China's own experience with the WeChat platform reveals a powerful tool that serves organizations well beyond sales and marketing purposes. This tool can increase operational efficiency, reduce overhead costs, and increase business value.

Based on our experience helping clients develop and implement strategies on WeChat over the last nine months, our team in China has developed this groundbreaking whitepaper that explains how to construct and use WeChat. We analyze cases and cite examples from a variety of industries and highlight best practices.
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We Chat About WeChatAuthors: Yuki Yang, Mia Lü, Carmen Situ, Derek Dong, Enson Hu

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We are a Next Generation Agency that creates and celebrates big ideas and communications solutions in the digital age.

Boundless thinking, innovation driven by insights and an entrepreneurial spirit excite us. We are relentless truth-seekers

and collaborate widely to discover pearls of wisdom.

MSLGROUP is Publicis Groupe’s strategic communications and engagement agency and advisors in all aspects

of communication strategy: from consumer PR to financial communications, from public affairs to reputation

management and from crisis communications to experiential marketing and events, with more than 3,500 people

across close to 100 offices worldwide.

We deliver multi-channel creative programs for more than 25 of the world’s top 100 brands, as well as advise them on

critical business issues. The group offers strategic planning and counsel, insight-guided thinking and big, compelling

ideas – followed by thorough execution.

In 2013, The Holmes Report recognized MSLGROUP as the “Best Corporate Consultancy in the World” and “Asia

Pacific Consultancy of the Year”. In the same year, Campaign Asia named MSLGROUP PR Agency Network of the

Year for the second consecutive year (2012 and 2013).

MSLGROUP has the largest PR, social media and events teams in Greater China (12 offices and 800+ professionals)

and includes brands MSLGROUP, Genedigi Group, Luminous Experiential Marketing Communications, and King

Harvests. MSLGROUP China has remained the fastest-growing PR and social engagement consultancy in China since

1994. Our specialist full-service international firm counts 200+ staff in Beijing, Shanghai, Guangzhou and Chengdu.

We were named “China Agency of the Year” twice in the last four years by The Holmes Report. MSLGROUP China

has also won accolades from the International PR Association, China PR Association, the International Business

Awards, and China’s New Media Festival.

Learn more about us at: www.mslgroup.cn | Sina Weibo: @mslgroup

About MSLGROUP

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Contents

1 Contents

2 Foreword

3 Should I try WeChat?

4 Reaching your target audience

4 Comparing WeChat to other communication channels

8 Does WeChat suit my company?

10 Every WeChat account is unique

10 So, are you ready to try WeChat?

12 What kind of WeChat to create?

13 The essence of a public account is a mobile mini-site

13 WeChat can greatly benefit companies

15 Positioning a WeChat account based on your unique selling points

17 A service account or a subscription account?

18 How to operate WeChat

19 Gaining subscribers of public accounts

19 Daily operation of public accounts

21 Managing comments on WeChat

22 It’s all in the details

23 Five Critical Considerations

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Since its launch on August 8, 2012, companies around the world have intensely monitored the meteoric rise of Tencent’s WeChat platform. The recent introduction of WeChat 5.0 provides users with a richer, more diverse experience including immediate access to e-coupons, booking capabilities, live support, billing inquiries, and points-of-interest navigation. Southern People Weekly, a leading newspaper remarked, “[WeChat] delivers more than what is hyped: this is WeChat’s attitude and is key to whether or not it is successful.”

Despite the rapid acceptance of WeChat, many companies have not come close to maximizing its full potential. Following our thorough examination, we believe that WeChat is more than a media and marketing platform: it can also improve operational efficiency and help companies reduce overhead costs. Combined with its user-friendly interface and multi-functionality, WeChat can be a catalyst that creates value for businesses.

Based on our experience over the past nine months helping clients to effectively develop WeChat strategies and implement them, we have developed this white paper to explain the construction and use of WeChat with detailed, best-in-class examples. We also elaborate on the approach and methodology to determine and measure performance on WeChat. Readers will come away with answers to three critical questions:

Should I try WeChat?

What kind of WeChat should I create?

How can I best use WeChat?

Foreword

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Should I try WeChat?

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Tencent’s Director of the WeChat Product, Zeng Ming, shocked marketing circles when he bluntly stated in an interview on June 5, 2013 that “WeChat is not a marketing tool.” Marketers then shot back, “Well, if it’s not a marketing tool then what is it pretending to be?”

The debate continues today but the “Father of WeChat”, Tencent Senior VP Zhang Xiaolong, suggested early on: “How you choose to use WeChat determines what WeChat is for you.”

If we follow the comments of Tencent’s SVP, the use of WeChat has endless possibilities. Yet, it also raises questions about the role of marketing for companies. So before we elaborate on WeChat, let’s first examine how companies use social media as a marketing tool.

Reaching your target

audience

For public relations practitioners, marketing is communicating: a process of delivering meaningful information to your target audience. The channels and methods may vary but what matters is whether or not

you are reaching your target audience with the right message — one that places you favorably in their minds. This likeability is the ultimate measurement your communications program’s performance. The key to effective communications is knowing how to reach your target audience on a mass scale.

With this in mind, WeChat is a mobile-based mass communications channel. Its scope dwarfs conservative expectations:

In May 2013, WeChat users spent more than 440 million aggregated hours in one month, a whopping increase of 250% compared with August 2012 (Source: iResearch).

WeChat users exceeded the 600 million mark in October 2013.

Comparing WeChat to other

communication channels

China has many communications channels: the social media space counts microblogs Sina and Tencent Weibo, Renren and now WeChat. There are also propriety apps created by companies and traditional tools like SMS and MMS. Each serves a different purpose and thus has its own characteristics. Let’s focus on three channels: Sina Weibo, WeChat and apps.

Weibo and WeChat: Complementary yet unique

Since the emergence of WeChat, China has been abuzz with the question: Will WeChat replace Weibo? Before we answer this, let’s look at some figures. The following chart compares the volume of monthly users amongst the top five Chinese social media apps between August 2012 and May 2013 (per 10,000 users).

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mUserTracker - Top 5 social media APPs by active user hours per month (From 2012.08 to 2013.05)

ten thousand hours WeChat Sina Weibo Renren Qzone Momo

NO.1 WeChat NO.3 Renren NO.5 Momo

NO.2 Sina Weibo NO.4 Qzone

In iResearch’s 2013 Q2 Social Service and Mobile Device Report, WeChat users spent more than 440 million aggregated hours in May 2013, compared to 130 million in August 2012. This nearly 250% increase placed WeChat in the position of China’s top social media app and knocked down former reigning app, Sina Weibo (170 million aggregate hours). While these figures demonstrate the rising popularity of WeChat, it also shows that Weibo usage hasn’t declined either (+49.3%).

However, if we delve further into Weibo’s figures, we’ll find a clearer story: according to the monitoring service, Weibo Reach, Weibo usage has been on the decline since early 2012 and current activity on Weibo is averaging at 2011 levels.

Let’s quickly review of Weibo. When it was first launched, the platform helped us to stay connected with our friends in real-time: we shared jokes, our friends followed other friends, and new friends followed us. It supported our real-life social networks. Yet, once celebrities began to set up accounts and companies began to use Weibo as a promotion platform, Weibo’s value began to shift — it then became an issues and news information source. While users still relied on the social media service, their need to stay connected with their friends remained unfulfilled.

So when WeChat emerged with its closed, invitation-only structure, it filled this gap and slowly became the

optimum channel to share personal updates within our social circles. Yet the rise of WeChat did not invalidate the use of Weibo; users still turn to it for the latest information on trending topics. We believe that these value differences actually complement each other well. Let’s see how.

Interest-centric vs Relationship-centric

When you look at your followers on Weibo, you might notice that they are typically people in the same industry as you or that you are all fans of the same celebrities. You might also notice that you and your followers track the same information sources. As mentioned earlier, Weibo has become a primary method to view news, information and trends.

WeChat, on the other hand, operates differently. WeChat creates and protects relationships with only the people you choose to include in your circle. More specifically, if you have not added people to your network, then you cannot see what other people are posting and vice versa. For users, relationships with companies are built individually, which implies that WeChat is more suitable for companies to engage in substantive and direct communication with its audiences. We should note that unlike Weibo, where posts can be re-forwarded to create a viral effect, this trending effect is very difficult to replicate on WeChat.

Proactive Search vs Passive Liking

The strong focus on protecting relationships has compelled WeChat to limit the number of messages a company can send to its members to one a day on WeChat 5.0. On Weibo, companies are permitted to send an unlimited number of posts. Therefore, it would not be realistic for companies to consider replacing Weibo with WeChat as a primary means for disseminating information.

Moreover, Weibo fans do not need to follow a company’s official account to read posts: information is often re-posted by influencers or followers so you just need to read

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their Weibo. On WeChat, company information is limited to users who have subscribed to the corporate account. Even though subscribers may share this information within their networks, compared to Weibo, these networks are limited and not ideal for distributing information widely.

However, if companies can attract consumers to subscribe to its corporate WeChat account, then there is a tremendous opportunity to capture the hearts and minds of its audience.

Content vs Service

We have established that Weibo is an interest-driven social media platform where content is king (Read MSLGROUP China’s earlier whitepaper, Creating a Weibo that Supports Your Business).

WeChat presents a different story. If re-posting information on WeChat were the same as Weibo, your phone would be flooded with spam messages, which you then would ignore and delete. Needless to say, you would not even consider forwarding it to friends.

Now, let’s consider a different approach: you, the user, want to get information on your own terms. You send a product query to a company’s WeChat account and automatically get details about its products, pricing, and locations. This saves you valuable time from visiting a store or searching the Internet to obtain the same information. The information you want to know goes directly to your mobile device. Thus, WeChat offers a direct service, unlike Weibo, which offers catch-all content.

We should highlight that WeChat requires companies to fully understand consumer behavior and purchasing habits in order to correctly organize information delivery. Here’s a story from Today Morning Express, a leading regional newspaper from Zhejiang, that vividly captures how two business partners pulled in RMB 80,000 a month in fruit sales though the effective use of both Weibo and WeChat.

Twenty-something John (pseudonym) drives around the city delivering fruit and his phone won’t stop buzzing from WeChat messages. John opened a fruit store half a year ago but it’s really only a small storage room. He has no employees and he makes deliveries himself. His partner is a fourth-year college student named Joey (pseudonym).

Joey is responsible for graphic design and copywriting and for posting information on Weibo. John uses WeChat to collect orders and make

deliveries. Last August, they recorded RMB 4,000 in sales. This month they broke RMB 80,000 in sales.

“I don’t know what this ‘O2O’ model is but since we’ve posted our story on Weibo six months ago, our sales volume has grown tenfold,” said John.

With no intermediaries and nearly no overhead, John deals directly with customers. There’s an additional benefit for consumers, too: They get fresher fruit and thus they’re getting a greater value.

Every night, John organizes the next day’s orders.

“In the beginning, I was the only one working in my fruit delivery business. But now I have so many customers that I’ve had to hire someone to help me make deliveries. I also have part time staff for deliveries, too.”

John averages 19 orders a day but customers are buying in bulk with orders averaging over RMB 100.

“Young families tend to order my fruit so we try to focus on the most ideal fruits for them,” said John. John thinks that as social media platforms and sales merge together, his relationship with his clients will become even closer and the problem of dealing with after-sales service will become easier to handle.

This is one of many entrepreneurial stories where WeChat has been used to attract customers, conduct sales, and communicate with customers throughout the entire sales process. Weibo helps build brand visibility through information dissemination, but WeChat delivers individual sales and customer service.

WeChat vs apps: Demand determines platform

Apps were one of the first mobile digital sales channels that major companies, especially consumer goods companies, readily developed. Although apps can be customized and designed in ways to accommodate different service styles, the vast majority of corporate apps push uninteresting information. Moreover, apps are built on the mobile device, which also means that

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location, personal information, and even the user’s contact lists are accessible.

On WeChat, however, public accounts mainly follow a standard WeChat interface and private information is inaccessible. Also, there is limited personalization on WeChat. Yet those limitations are miniscule when compared to the massive reach that WeChat provides. Interestingly, well-known angel investor Cai Wensheng posted on his Weibo in April 2013: “WeChat is so widespread that it makes 50% of apps totally worthless.”

So is this really the case? Let’s take a deeper look.

Which is a better public platform?

Let’s examine the key differences between WeChat and apps.

1. Development cost: Apps are bulky while WeChat is snappy

Developing an app incurs significant development costs. Typically, companies need to conduct consumer surveys to understand need and behavior. Development teams then analyze the results to determine and agree upon the app’s functions and interface. Then, there is also the need to consider how to develop apps for all of the major mobile operating systems. It takes, on average, three to six months to develop an app and the costs can easily reach six figures and upwards.

WeChat’s built-in features and simple interface prevent developers from designing complicated content thus making public accounts on WeChat quite limited. Unfortunately, this also means that all public accounts look roughly the same with little ability to differentiate. However, because WeChat is already available on all major mobile operating systems, companies can ignore the challenges of developing apps for different systems.

This makes WeChat development costs much lower.

For example, a customized menu on a public WeChat account is limited to 5-8 items (maximum of 15), which would keep development costs under RMB 100,000.

We should be clear that this “light and snappy” characteristic means that it cannot take on complex or sophisticated features.

2. Advertising and promotion: Apps require heavy spending while WeChat is economical

Once you have developed your app, you want to promote it and get people to download it. Free apps are downloaded by the millions in the massive app store ecosystem. To gain awareness of your app you will have to see that it gets onto the lists of top downloads or promoted apps.

Advertising, media buy and even TV commercials are used to increase downloads. These are all costly activities with no guarantee that your app will penetrate the thicket of the app store ecosystem. Some companies have even turned to guerilla tactics to promote their app on store lists, but these actions are typically frowned upon by app store moderators who then punish offenders by removing their apps from store. For most companies, app download remains the biggest headache in the whole promotion strategy.

In contrast, WeChat is more relaxed. With WeChat, users can simply scan a company’s QR code in order to subscribe. Additionally, there is an already existing ecosystem with hundreds of millions of users who, as previous data has suggested, spend increasingly more time on the channel. If companies decide to launch a corporate WeChat profile, then they can leverage the massive user base, which inherently is shifting toward using WeChat, to connect with more than just their friends. The end result is that less money needs to be

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spent promoting a WeChat account. WeChat incurs greater savings when development and promotion costs are taken into account.

3. Operation and maintenance: Apps are a complicated ecosystem while WeChat is plug-and-play

Apps and software programs follow a similar process: if there is a bug, the user needs to download an update or download a completely new version. If the company wants to add new features or functions, again, the user has to download a completely new version. When there is a new version of the mobile operating system, the app also has to be updated. All these updates require additional time and resources.

With WeChat, public accounts are synchronized with Tencent’s servers so changes and updates are fully linked and are immediately reflected on the mobile device. From this perspective, operating and maintaining a WeChat public account is much more efficient.

Apps are better for targeted, in-depth services, while WeChat is better for broader, simpler services

The chart below sums up the relative strengths of apps and WeChat.

WeChat may seem better for almost everything according to the comparison chart, but this isn’t necessarily true. The inherent design of WeChat is limited to basic functions and offers little room to provide customers with more detailed service. Apps provide more functions and more interactivity. Let’s take, for example, IKEA’s use of apps. Its app incorporates virtual reality technology so users can take a photo of their space on their mobile device and ‘place’ an IKEA product into it. This function enables customers

to see how IKEA products would look in their homes and helps with purchasing decisions. This function is highly specific to apps and generally outside the realm of possibility for WeChat.

DHL is another company that uses apps and WeChat separately. For DHL, WeChat is used to target small businesses and other niche segments that need basic services like checking international shipping prices and tracking orders. The DHL app offers high-volume, long-term customers with detailed needs: pricing information, tracking system, discounts, points-based reward program and other tailored services. DHL’s app provides its sales team with a crucial touchpoint to engage and retain existing customers.

Based on our experience, WeChat’s simplicity and high accessibility make it a convenient platform to provide basic services to a wide range of consumers. Apps are better suited for more demanding services such as synchronizing accounts and providing better end user experiences by offering more functionality.

Does WeChat suit my

company?

Despite knowing that WeChat is increasingly being used as a marketing platform and that WeChat has a user base of 600 million (and growing), some companies still remain hesitant about opening a public account. The question we often hear from these companies is, “Yes, but will WeChat suit my company?”

Zhang Xiaolong, SVP at Tencent, once said,“I hope WeChat can be of service to people and help them to thrive. If you have an idea, then WeChat can help you find an audience. Even if it’s only an audience of one hundred, at least that is a start. With a good idea, a person can start building a brand and developing a client base.”

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So if one business owner can use WeChat to find 100 customers, what about companies that have thousands of customers? How can these companies ignore the potential of 600 million customers? Companies with the resources can benefit from WeChat and provide added value to their customers. Before we take that step, though, it is important to determine what that value is and how to apply metrics to measure it.

Success on WeChat depends on clearly defined objectives

For some businesses, success depends on how many products are sold; so sales volume is a measurement of success. For others, it’s not as straightforward. Those in the service industry will find that WeChat could benefit their consumers by providing some basic operations (e.g. locations, hours, contact information, etc.). For those in the consumer goods industry, WeChat may be used as a means to promote brands. However, what matters most is defining the purpose: knowing the objective will help a company measure its success on the platform.

China Merchants Bank is an example of a company that has succeeded in using WeChat to deliver a service for its credit card holders. WeChat has become a convenient channel for its clients to access account information, track purchases, and even pay bills. Because China Merchants Bank geared its WeChat profile toward providing services (and doing them well), the response from clients has been outstanding with 5 million active registered users.

Again, WeChat is only a communications channel that offers simplicity and efficiency. It is important to consider all channels in your sales and marketing mix. WeChat might not be ideal for your company if you already engage your audience in more meaningful ways.

Define appropriate metrics to evaluate success

It would be easy to say that the total number of WeChat subscribers you have would be an appropriate metric to define success on the platform and that more subscribers means more visibility and favorability. However, aggregate numbers should not be the ultimate goal; interaction and engagement rates are equally, if not, more important. Tracking the click-through rates of forwarded messages, as well as which menu service options are often used, are also key metrics.

Let’s look at an example of “Mr. Rice Wine” in Xiamen

who earns RMB 50,000 a month selling on WeChat (excerpt from “Selling Wine to 50,000 on WeChat: Living Examples of Sales on WeChat” on huxiu.com):

Mr. Rice Wine uses a traditional recipe to brew a local brand, Hakka House rice wine, in Liaopi Village in Fujian Province. The Hakka House brand is well known throughout the region and is priced at RMB 60/half-liter. For such a niche product, it is difficult to imagine that Mr. Rice Wine has found such promising results from opening a WeChat account.

Within six months of launching his product on WeChat, Mr. Rice Wine has been able to track sales data of all purchases. From the data, he found most customers buy 2.5–5 liters each time, which nets him RMB 300-600 per transaction. Knowing this, Mr. Rice Wine makes sure that his promotional messages are geared toward this high profit margin audience. As of May 2013, Hakka House rice wine has generated 22,500 followers with sales revenues of roughly RMB 50,000 per month. This is a great example of how WeChat has helped spur local business.

In the above example, sales growth is considered a key performance indicator (KPI) of WeChat marketing. However, for some companies, the objective for a WeChat profile may lie in other areas and with different audiences. In some cases, WeChat could be used as an internal communications campaign, as a method to boost employee interaction, or as means to drive traffic to other platforms. In those cases, the KPIs would all be different: employee satisfaction, open/share rates, and tracking active users.

To be clear, WeChat does not have fixed features; it can be used to provide a service, a channel for information or even act as an entry point for Internet marketing. For the same reasons, it would not be practical to fix KPIs. Setting KPIs can only become clear once the objective and audience have been defined. It is important to consider the Internet habits and behavior of your audience before positioning your WeChat strategy.

Use WeChat to enhance communications value

For some companies, the development of a WeChat account has not yielded the results that they had hoped. In some of those cases, conflicting internal interests may be an obstacle: which department should be in charge of operating the WeChat account – marketing, sales, human resources, communications, etc.? This is clearly a sensitive issue, but it also highlights how WeChat could be useful in so many ways to a company.

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WeChat is not limited to message notifications, it can also form an effective platform for CRM, online sales and online recruitment. And with mass usage, there is an opportunity to analyze big data. Thus many departments could operate the platform; however, only one department should be in charge of it while coordinating with other departments. Operating a WeChat account can be difficult without strong internal communication. Here are some of our recommendations:

1. In the early stages of development, we recommend the department in charge of communications to lead construction of the platform. For daily operation, the department that manages information dissemination should take the lead.

2. The WeChat platform involves numerous departments and each should share the gains as well as the pains together. The WeChat platform will not gain substantial support unless all the relevant departments are stakeholders.

3. Do not embark on a WeChat program until strong support is assured from other departments. Without this, operating an inactive or ineffective WeChat account will add little value to the brand or the individual departments. In fact it could potentially have the opposite effect.

At DHL, the corporate communications department led the development and operation of its WeChat account. DHL Senior Communications Manager, Zhou Haiying, said that the ability to create real value for every department in the company was a precondition for success. She needed to get all departments to realize that WeChat would help them fulfill their roles better and that WeChat could, should and would deliver all over positive results for the company, its employees, and its customers.

Every WeChat account is

unique

The successful WeChat accounts for China Merchants Bank and China Southern Airlines (featured later in this white paper) should be considered as individual cases. It would not be realistic or practical to imitate their strategies. Every company and brand has its unique selling point (USP),

value and positioning. A company’s success on WeChat will depend on its ability to define its USP and provide its customers with something that offers them value.

Let’s return to DHL as an example. As growing numbers of Chinese youth pursue overseas studies, international courier companies have honed their marketing to focus on this segment. For many students, the journey to overseas study begins when they send their application materials to each school. It was clear to DHL that this segment would also most likely be using WeChat. These anxious college students naturally would want to follow the delivery status of their applications and would value the ability to check that status anytime and anywhere. As a result, DHL made the tracking function one of the core elements in its WeChat account. Of course, tracking is not new; applications already exist that allow a user to do this. However, the process for doing this was much more complicated than the simple process of subscribing on WeChat. More importantly, DHL was able to take a first-mover advantage over its industry competitors and build brand awareness among this young and growing customer group.

In another example, Taikang Life Insurance has developed its WeChat not to service customers, but to aid its tens of thousands of agents. In its approach to WeChat, Taikang Life Insurance has provided a valuable internal communications platform for its agents who are often on the road and receive little support from the head office. Over 30,000 agents have signed up for the WeChat account since its launch and the insurance company has seen greater efficiency in its internal communications as well as customer response.

So, are you ready to try

WeChat?

Let’s review the principles:

1. Define your target audience. This serves as

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Additional Reading: The development of mobile Internet and its transformative effect on Internet applications

Internet behavior can be categorized into three needs:

Need for information: based on interests or goals Need for social interaction: maintaining an interpersonal network Need for extended services: enjoying convenience

In the 1990s, search engines satisfied the need for information and traditional IM tools such as QQ satisfied the need for social interaction, yet there were few high-level Internet services.

The rapid development of the Internet at the beginning of the 21st century introduced online retail and financial services, which hastened the growth of Internet services. The development of the PC and mobile devices further changed needs.

The launch of Xiaonei.com in 2005 marked the emergence of social network services (SNS) in China followed by Kaixin.com. Weibo represented the latest service, which has grown exponentially demonstrated by massive uptake on mobile devices. We believe SNS merges two needs: the need for information and the need for social interaction, a development that has been termed “Internet crossover.” However, Weibo cannot replace services offered by websites, which is becoming increasingly mature as they combine mobile Internet with applications.

The birth of WeChat marked the second Internet crossover, merging the needs of information, social interaction and service under one platform. While WeChat is constrained by the nature of its platform and cannot match the functionality of websites, it has satisfied the needs of Internet users in a new way.

your reason for creating a WeChat account.

2. Distinguish the role WeChat plays from other social media channels or marketing tactics.

3. Set clear objectives and KPI metrics.

4. Establish proper internal support and ensure

smooth internal communication.

5. Find a way of operating WeChat that suits you.

Once you have addressed these points then you should be ready to get started on WeChat. Next, we will focus on how to establish and operate your WeChat presence.

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What kind of WeChat to create?

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Individuals can create a personal account on WeChat simply by registering their mobile number. Tencent allows WeChat accounts to be linked to QQ or other products in the Tencent ecosystem. Companies are able to create a public account.

In this section, we will describe how a public account works and elaborate varied applications from customer service to delivering information . We will also discuss the role WeChat can play in communications through select case studies.

The essence of a public

account is a mobile mini-site

Before the popularization of mobile Internet, consumers looking for information or services were limited to certain websites or Internet tools on their computers. Mobile Internet applications have changed all that, making everything more convenient. At the most basic level, companies can simply transfer these functions and services from the traditional Internet.

There are two ways to make this transfer:

1. Leveraging applications that already have a sizeable and mature user base, such as Weibo or WeChat.

2. Independently developing a proprietary application designed for mobile devices.

While Weibo can also serve as a platform for some service functions, its features have not been extensively developed. Because of this, WeChat is the more mature and therefore better option to transfer these basic service functions onto the mobile Internet sphere.

A public account on WeChat is effectively a mini-site that incorporates basic service functions. Many functions that are found on a traditional website can be replicated on WeChat, such as checking into a China Airlines flight or tracking shipments on DHL or managing your China Merchants Bank credit card bill. The most powerful feature on WeChat is its open API, which allows administrators to access their own databases, sales systems, logistics systems, etc. WeChat is like a fully fledged cityscape where all the electrical and plumbing have been installed. Developers can come in and build all kinds of unique and distinctive real estate that assists people as they go about their daily lives.

WeChat can greatly benefit

companies

The following are some of the significant benefits that WeChat can deliver:

1. Enhanced brand preference – by further improving user experience

2. Precise localization – find and maintain core consumers

3. Reduction in cost of communication – making communications more efficient

4. Sales promotions – introducing a potential new channel for e-commerce

Once you have addressed these points then you should be ready to get started on WeChat. Next, we will focus on how to establish and operate your WeChat presence.

Enhanced brand preference – by further improving user experience

Mobile phones can provide services to consumers at any time, any place - with the speed of development outpacing those in traditional services.

WeChat specifically requires consumers to follow accounts that they are interested in. This means that consumers proactively ask you for information, and, more importantly, consumers can choose the specific information they want. This helps brands avoid alienating consumers as a result of sending irrelevant information.

Mu Zhaoxi, a visiting professor at Tsinghua University, recently wrote in a column on eguan.cn (Analysis International): “WeChat marketing is permission-based. Users will not get any WeChat messages from any brands without following their official accounts by first scanning QR codes or entering account numbers. Brand accounts can attract fewer but better followers because these proactive users are ready for messages and promotions from the companies they are following. They are loyal consumers and targets.” Moreover, due to the simplicity of the platform itself, service functions on WeChat are also comparatively simple. At the basic level, each customized menu can only deliver one basic function, which means a customer’s experience is also simplified. This, undoubtedly, promotes

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an easier and better user experience.

Precise localization – find and maintain core consumers

People have been bullish about WeChat’s potential in social CRM since its birth. Undoubtedly, it has a number of advantages over other social platforms such as Weibo and Renren.com. First, WeChat accounts are bound to a mobile phone number, which ensures the authenticity of the user. It is therefore easier to gain authentic and accurate user information, compared to other platforms which have witnessed the emergence of “zombie fans” and which makes the extraction of useful analytical data more difficult. In addition, the private one-on-one communications format on WeChat lets companies know the specific needs and concerns of certain consumers, and then give companies the ability to customize their services for different users. For these reasons WeChat public accounts offers greater value than other platforms, particularly once they are integrated with a company’s CRM systems.

Professor Mu Zhaoxi also stated, “WeChat is built on the basis of trust among acquaintances. WeChat users can build up a link with others and also subscribe to information they need. Companies can promote their products and conduct point-to-point marketing based on users’ requirements. Companies can also use WeChat to conduct market research, customer management, sales payment processing, customer support, and new customer mining, among other things.” When it comes to maintaining an account and managing potential consumers, companies can take advantage of WeChat’s basic customized-reply function to provide customers with specific consulting services. For example, if users send their location to the Watsons’ account, they would receive a reply, telling them the locations of the closest stores and information about special offers. Traditional CRM systems cannot realize this service because customers would not make costly phone calls to 114 or customer service hotlines to simply find a store. In terms of current customers, companies can do many things if they connect their CRM systems with their WeChat accounts. In this regard, WeChat can become a gateway, enabling enterprises to communicate one-on-one with their customers instantly. It also provides a more personalized and customized service, thus improving customer satisfaction and ultimately stimulating repeat purchases. Take for example Ping An Insurance. Typically, if drivers

find themselves in a car accident, they have to report the accident to the insurance company by calling the customer service hotline. Then they would need to take pictures on-site and wait for staff assistance to arrive. But with Ping An Insurance and through their WeChat service feature, they only need to take on-site pictures and send them to the WeChat account with their location. Then the work is complete! That is because Ping An has already connected its CRM system with WeChat so that their customer service representatives can receive customer information immediately when a customer contacts them. With the popularization of WeChat, companies must adjust and update their businesses in order to attract and retain customers. In the traditional retail industry, local enterprises have taken the lead and started to connect their CRM systems with WeChat. In Hangzhou, two department stores have opened WeChat accounts to allow customers to claim gifts, inquire about special offers and obtain parking information, etc. While some argue that the larger objective is to convert online traffic into in-store traffic, the real value here is that, with enough followers, a retail store can begin to analyze customer behavior and then begin to target services that drive both online and offline consumption activity. WeChat can categorize all kinds of users through their IDs and can distinguish consumers’ different habits. These steps help a company understand their customer’s potential needs while also providing information that is both relevant and engaging.

Reduction in cost of communication – driving efficiencies

Using WeChat as a customer service platform can also help reduce a company’s operating costs. For example, if users subscribe to China Southern Airlines’ WeChat account, they can use the service to check-in and select seats. These actions save time and reduce the need for staff assistance, not to mention reduce the cost of printing boarding passes. In another example, when users link their China Merchants Bank card to the company’s WeChat account, the bank can send updated expense alerts as well as provide users with the ability to view statements. Again, these actions save the bank the cost of texting, printing or posting bank statements. If we assume that China Merchants Bank sends roughly 2.2 billion SMS messages a month (one cent per message) to its customers with information regarding recent transactions, the texting cost savings alone would equal RMB 22 million! These same cost savings can be applied to the logistics industry. In 2012, there

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were 5.7 billion express packages shipped in China. If the cost of sending status updates via SMS is RMB 0.5 for each package (from sending to delivering), a total of RMB 2.85 billion could be saved! In addition, companies can use WeChat to conduct market research, which helps reduce manpower that historically would have been needed to contact people. This research is further strengthened by the first-hand, real-time customer data, detailing their personalized services.

Liu Peng, Deputy General Manger of China Merchants Bank credit card center, explained the value of WeChat to his business, “Our center has 2 million WeChat subscribers who are active credit card users, much more active than the average cardholder. We process 800,000 queries on WeChat everyday compared to 4 million queries amongst the 20 million cardholders. Although WeChat users account for 10% of all cardholders, they represent 20% of all credit card queries. Staffing costs at call centers are the highest for banks. Any way to reduce call center costs is worth exploring. Even if WeChat provides a marginal benefit in the beginning, it can be increased progressively. That is why we value WeChat.” While it is clear that WeChat can offer customers both a better user experience with more convenient communication and also provide very tangible cost savings for companies, WeChat cannot completely replace traditional communications channels. If used effectively, WeChat can become a powerful auxiliary tool to support customer interaction (call centers, check-in desks, etc.)

Sales promotions - introducing a new channel for e-commerce

WeChat’s online payment function was introduced with the launch of WeChat 5.0. This function makes it easier to manage transactions and now enables companies to turn their WeChat marketing investment directly into a sales channel. So how can companies manage transactions through public accounts? Well, consider a WeChat public account

as a mobile application, which combines search (Baidu) with e-commerce (Tmall) and online payment (Alipay). All users need to do is to follow the public account (no need to download any applications), and then they can complete the whole shopping process including searching, selecting, placing an order and paying all within the same account. More importantly, if WeChat public accounts are connected with back-end sales systems, when a consumer finishes shopping or even searches for product information, the background systems can continuously build a database about the user’s preferences (i.e. shopping habits, preferred shopping times, items of interest etc.) Companies then have the ability to provide consumers with personalized services, encouraging and stimulating further purchases. The success of such campaigns can be easily measured, honed and refined by analyzing the behavior and sales, and the return on investment for WeChat can be easily realized. There is, however, a sticking point. Mobile payments have not yet gained wide acceptance due to consumer fear over the risks and safety of payment mechanisms. Conversion rates and actual sales for mobile businesses remain far away from that of traditional PC-based online businesses. Nor is mobile shopping likely to replace traditional online shopping - browsing significant numbers of goods on a small mobile phone screen is not very user friendly. Therefore, companies with smaller product lines or those that sell on convenience are better-suited to WeChat.

Positioning a WeChat

account based on your unique

selling points

In this section we will discuss the role WeChat can play in a company’s overall communication program.

Short-term interest vs. long-term needs

At MSLGROUP we have reached a number of conclusions based upon our observations. Regardless of the communications method, consumers form their media consumption decisions and habits based on certain needs or reasons. People usually look for a channel, spend some time reading or using it, and, if satisfied, may subscribe to it, and only then will it become part of their fixed reading habits.

At the start of the ‘acquisition process’, if the reason or

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need leading consumers to form their media consumption habits is short-term focused, it is likely to be less stable. While the conversion from the initial review to subscription is very quick, the duration of the subscription may only last 3-5 days (around significant sports events like the Shanghai F1 race for example); If the interest is stable and ongoing, the conversion may be slower, but the subscription duration may be much longer (perhaps years in the case of something focused on food or for patients with chronic diseases looking for medical information).

So, when considering whether or not WeChat is right for your company, the questions we always ask are, “What is the core value of your offering? Are we addressing a short-term interest or a long-term need for consumers?”

The main purpose of thinking this through is to help us get some basic direction. Which is more suitable, for companies: a subscription account or services account? Furthermore, what role can WeChat play in your overall communication program?

For short-term interests, WeChat can probably be a gateway, which could lead followers to other platforms or even directly to an offline purchase. Here, WeChat is merely a transfer mechanism;

For long-term needs, WeChat can form a platform to assemble members and thus become an important tool for companies to communicate with consumers. This presents companies with opportunities to communicate more intimately with consumers and strengthen their brand relationships with members.

Case study: China Southern Airlines

Below is an article excerpt from Business Value Magazine, China Southern: What is WeChat?

In an interview with Hu Chengjie, CIO of China Southern, when China Southern began a major transformation in 2009 from being “product-oriented” to being “customer-oriented”, it analyzed travel behavior and divided the journey into 12 steps: making travel plans – selecting a class (economy,

business or first class); booking tickets; checking-in; selecting cabin services; managing luggage services; arriving at the hotel; checking in; leaving the hotel; arriving at the airport; checking-in; personalized interaction; and then finally moving on to the next journey. The company improved and optimized services at every step, building up a service network accompanying passenger travel called the “All behavior chain”.

“In our eyes, WeChat carries the mission of communicating, but not marketing,” said Hu. China Southern also hopes that its passengers feel that “WeChat is always with them” during their travels. In June 2013, a new version of China Southern Airlines’ WeChat account was released with more functions such as the ability to book tickets, manage bookings and view travel guides. China Southern wants to sustain its advantage over its competition with its customer-oriented communication and services, differentiated products and personalized services.

WeChat will remain a “service-oriented” tool for China Southern which treats service as a product and a core competitive advantage. “Today, channels and consumers are especially important and this actually points to the special relationship involved. China Southern has already taken advantage of WeChat to simplify services and hopefully bring value to its consumers,” said Hu.

This example demonstrates that the management team at China Southern Airlines clearly knows what differentiated services mean for the aviation industry. More importantly, the airline conducted in-depth research amongst its target audience before refining their strategy and used WeChat as a tool to further strengthen the company’s “service-oriented” approach. Through integrating its resources and meeting the needs of its WeChat users, China Southern’s reputation as a user-friendly airline has been reflected in the growing number of subscribers. The WeChat service has now been positioned as an essential component within the airline’s service chain.

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A service account or a

subscription account?

With WeChat 5.0, many companies have asked which is better: a service account or a subscription account. The reality of subscription accounts is click-through rates are much lower than non subscription ones. Likewise, information published on service accounts is limited to only a few times a month, which worries marketers. From our point of view, this isn’t a significant problem. Unlike Weibo, which is a channel for information dissemination in an open social environment, WeChat can be regarded as a key channel for passive marketing.

The difference between active marketing and passive marketing is the way to connect with consumers. Active marketing, in the conventional sense, mostly draws support from a platform with a large user base for promotions, while passive marketing features the critical time when consumers would actively look for relevant information after they show interest in a particular brand.

Traditional passive marketing is typically based on search engines. Businesses strive to be visible at the same time when a consumer is looking up information, so search engine optimization (SEO) and buying key words are important tactics. We should note that search engines are not the only touchpoints – social media is an increasingly important touchpoint for search.

Finding quality consumers through spontaneous search is better than recruiting followers through traditional methods with the former reflecting the willingness of the individual to make a potential purchase. The only thing needed is to push our targeted information through a service account or subscription account.

Now let’s review our preparation for constructing a WeChat platform as mentioned before:

Clear goals: Push information that motivates consumers to subscribe or request further information; avoid harassment

Set correct expectations: The quality of subscribers is far more important than quantity.

There is no essential difference between a service account and a subscription account for us, but attentions should be still highly paid in the actual operation. The following chart helps.

Frequency of information

Customizable menu

Functionality

Service Account

Once a month

Yes, up to 15 items

Supports page pushing, including external links.

Programmable responses

Able to develop applications, as well as offers full range of WeChat services such as location information

Subscription Account

Daily

No.

Supports images and text, does not support external links

Auto-response based on key word

Able to develop applications, but not completely synched with WeChat services

There is no need to worry which is better. As the old saying goes, “It doesn’t matter whether the cat is black or white as long as it catches mice.” Find your selling point and with persistent efforts will help you perfect your WeChat strategy.

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How to operate WeChat

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You’ve opened a WeChat account so how do you get people to sign up? Let’s start with a case.

Gaining subscribers of

public accounts

The most difficult part of operating a public account on WeChat is signing up followers, especially enlisting high-quality ones.

Mr. Rice Wine, as mentioned before, has spent painstaking care on his 22,500 followers.

First, he gathered information about the top 30 kitchen and cabinet brands in Xiamen. Then, he and his colleagues spent nearly half a year visiting select stores to recruit followers.

People shopping for high-end kitchens and cabinets might be young couples ready to get married or those moving homes and with high disposable incomes. The thing to remember is that it’s easier to approach them in these stores, unlike in supermarkets where noise and large numbers of people make it harder to pitch.

In these stores, he would hand business cards with QR codes inviting them to join his WeChat group. Most were receptive to this approach as WeChat groups are private.

It was customary for Mr. Rice Wine to post a free bottle of wine to every person who signed up, provided they divulged their addresses. Mr. Rice Wine would follow up with telephone calls to each follower, eventually winning their trust.

From this example, we can see that WeChat provides a convenient communication channel to support traditional in-store marketing tactics for individuals and for brands. However, it’s important to remember that WeChat is simply another marketing channel that complements traditional channels that serve to acquire new customers. This is a reason why those who run public accounts may find little progress in growing the number of followers.

We can also take note of QR codes on business cards: it’s another touch point for consumers when combined with advertising, public relations, product packaging, point-of-sale, etc. that directly links online with offline activities. Simply promoting WeChat QR codes though traditional channels does not deliver any value. WeChat is a tool that should be integrated into the entire

communications and marketing chain to drive sales and grow the business.

Daily operation of public

accounts

So now that you have a sizeable group of followers, how do you manage the community? The answer depends on the type of account, as each requires a different approach and different managers.

Managing a subscription account requires the aptitude of a psychologist

A subscription account generally provides members with unique, high-quality, and regular content.

Regardless of the nature of the account, not all content will suit all members, and we can expect a loss of some members over time. The priority for the account manager is to push information that builds loyalty while minimizing member erosion. A secondary, but equally important, priority is to push information that motivates current members to recruit more members.

Each piece of information should have data that can be analyzed. At the minimum, we should be able to know:

How many members engage with each piece of information? (engagement rate)

How many people read the original text? (penetration rate)

How many people share the information? (forwarding rate)

How many members are lost (attrition rate)? How many new members are there (acquisition rate)? What is the net growth rate? (Member conversation rate)

After a period of time, we need to know more about:

Which topics have a higher penetration rate?

What topics are easier to share?

Which topics are more likely to recruit new members?

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The person who manages a subscription account acts like a consumer psychologist who knows the preferences of existing members, can advise on which products will be receptive, and will know how best to communicate with group members.

Of course, not everyone managing a subscription account can be a qualified psychologist. Thus, the service account offers the convenience of disseminating information over building emotional connections demanded in a subscription account. When operating a subscription account, it is important to address customer demands in your content as much as possible. For example, retail stores use subscription accounts to distribute product offers and restaurants use subscription accounts to offer delivery menus to keep members interested and engaged.

Managing a service account demands the skills of a product manager

Just like a product manager is responsible for providing the best product or service, a service account focuses on delivering an optimal user experience with the most convenience.

The functionality and content of the service account should satisfy several criteria:

Simple interface: The interface should fulfill one, single function. Everything else is clutter.

User-friendly: Limit the number of options and steps as much as possible.

Be responsive: Portability and instantaneous responses are unique WeChat features so a lengthy response will not suit.

The following diagram shows the basic steps to setting up a service account.

There are several important items to highlight in the process.

Determine the needs of the target audience and functionality

After defining the target audience and communications objections, it is important to determine the customer’s needs and to determine how the service account will fulfill those needs. Conducting quantitative consumer research or possibly a discussion with frontline sales staff can achieve this. For example, MSLGROUP conducted a survey for WalMart’s specialty store, Sam’s Club, and discovered that many shoppers often ask about parking. The location and the nature of the stores require customers to drive there. For those who are interested in the store but haven’t yet become members, GPS is an important tool. In terms of product information, Sam’s Club customers are more interested in promotions for specific items like cherries or durian rather than regular merchandise discounts.

In the case with DHL, their couriers gathered great insights about university students. Because they interact directly with students, DHL couriers were able to provide useful suggestions during the development of the WeChat interface and functions. DHL’s subsequent WeChat account garnered high praise from the students. All of this was done without having to spend a fortune on market research.

Create a detailed customer experience path

The customer experience path is a detailed flow of the behavior and functions that trigger a corresponding answer or response. This requires a considerable amount of time in the development process in order to save time later in the modification process. In the case of DHL, when developing the function to track shipments, MSLGROUP needed to consider the way in which customers would enter the 10-digit number. The program would provide a result if the information was input correctly, and a response to re-enter information if input incorrectly. Despite this simple function, it was more complex than it seemed (as shown on the next page). Of course, the more complex the function, the

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more complex the customer experience path becomes too.

To ensure a positive customer service experience, you should avoid complex functions. If such a path is inevitable, try to clarify this early on, otherwise, your customers will ultimately find the experience wasted – a result no one wants to see.

Collecting and analyzing data

While data points are all different, it is important to measure and analyze data in a service account. We should analyze:

Which functions are used most? (the most practical function)

Which functions require a simple reply and which demand more details? (how to present features)

Which functions produce an error response? (which functions are erroneous or difficult to use)

By collecting and analyzing data on a service account, adjustments can be made to improve the overall customer experience. As long as the account satisfies customer needs in the most efficient way, accumulating users and building brand loyalty will only take a matter of time.

Managing comments on

WeChat

Whether you’re managing a subscription account or service account, after building a user base, you will be faced with the issue of responding to comments from members.

The limitations of human response

When beginning a WeChat account, it may be possible for companies to address most comments individually. However, as the user base grows, a human response is no longer practical.

1. Not all companies can take the approach of online retailer Jingdong, which provides a humorous answer to each question. A public account can attract a large number of unrelated customers. Although this gives a brand greater visibility, it does not necessarily contribute to business results.

2. Based on our experience, a dedicated customer service representative can respond to approximately 200-250 WeChat messages per day, assuming that it does not require in-depth communication. If a WeChat account has an engagement rate of about 20%, it means one representative is handling about 4000-4500 members. If the WeChat account has a growing member base, then companies would find the need to continuously hire staff just to manage these conversations!

The limitations of automated response

Understanding the limitations for human response, Tencent has designed automatic responses based on key words. This means that a key word input into WeChat triggers a programmed reply. While this solves some problems, there are some disadvantages.

1. The Chinese language is highly contextual and there are many ways to ask the same question. For example, the phrases “Are there any discounts?” and “Are there any sales?” refer to any promotions happening. Traditionally, inputting the words “sale” and “discount” would trigger only one response.

2. Certain phrases may trigger a completely unrelated response. For example, when China announced its Green Dam Internet security program several years ago, it automatically triggered the response “24 mouth switch”.

3. We typically create a Q&A database with key words in these cases and update it frequently; however, these updates can go on endlessly. This is particularly true for companies in consumer products or technology sectors

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where teams will be continually adding to and maintaining the database.

An intuitive, intelligent message management system

As limitations exist with the current options for managing messages on WeChat, MSLGROUP China is actively pursuing better options by engaging a software company to develop an intuitive, intelligent message management system, which will be made available to companies seeking to improve their customer service. Key features to include:

1. Gauge User Intent: In the case of DHL, users are typically directed to a dialog box when requesting a quotation for shipments. The question is not based on a single key word. In an intelligent system, we need to gauge the intent. So when customers input two names, they most likely want to know the delivery price from one location to the next. So in WeChat, we would program the response in a way that delivers price/transit time based on the two inputs.

2. Quizzing: After gauging user intention, we allow the system to learn the correct answer using different intentions instead of an endless output of responses from the Q&A database. As long as the system can determine the basic intention in the dialogue with the customer, we can help it complete the response. The system then can apply this to a similar program or adopt a conversation pattern thus saving time and costs.

3. Smart Chatting: We know that automated responses have limitations due to the script. For example, when asked, “Who is China’s president?” the system would respond “Xi Jinping”. However, if we then asked, “Who is his wife?” the system would be unable to respond because the computer has not identified who “he” is. However, we can program the system in a way that provides contextual analysis based on the history of the conversation so that it can respond with the correct answer. In this case, “Peng Liyuan” is the correct answer.

Of course, managing the entire system requires human input and is still under development; however, below is a snapshot of the back-end for your reference.

To be clear, a computer can never replace a human or deliver the same interaction as a customer service representative. It can only help reduce the workload of customer service staff. As we discussed before, WeChat is a precise marketing tool but the nuance of messaging still requires human intervention. The intention of developing an intuitive, intelligent system is primarily to assist companies in resolving the basic and low-value work from those that require more time and care.

It's all in the details

Whether operating a service account or subscription account, the key to success lies in the details. Continuous collection and analysis of data from either account will provide you with a better understanding of your members and their demands so you can make improvements on the entire experience. Currently, China Merchants Bank and China Southern Airlines are the best examples of operating service accounts that provide continuous improvement while also increasing their user base. Although China Southern irlines only launched its WeChat account in January 2013, by collecting user feedback and making improvements in April and June, it has now accumulated 500,000 members on its WeChat group.

Companies who can focus on the customer experience through detailed delivery will win the market.

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1. Understand how social media platforms fit into your marketing mix. WeChat and other social media platforms have key differences. Understand what they are and how they can play a role in your marketing program.

2. Plan with the end in mind. Determine your key communications objectives with WeChat and design performance indicators with measurable targets. In the case of internal communications, engage the relevant stakeholders and ensure you have adequate support to benefit target groups.

3. Generate content that is relevant, meaningful and useful. A WeChat account is only as strong as the content. Make full use of resources to recruit new members.

4. Measure, assess and refine. Continuously re-evaluate your account and make improvements as needed.

5. Focus on the user experience. The intense focus on user experience sets WeChat apart from other social media platforms, therefore companies need to abide by honing in on the details.

Last words

The emergence of mobile marketing has injected some excitement for marketers as they balance multiple channels that mix online and offline worlds. Specifically for WeChat, it offers companies a viable touchpoint for consumers who can bypass traditional online commerce.

This whitepaper is the result of the experience we have gleaned developing and implementing WeChat programs for clients over the last nine months. Our views may not be comprehensive and may not apply to every industry. However, we hope this adequately captures a cross-section of views from diverse industries to provide you with a strong foundation to pursue a WeChat program.

Five Critical Considerations

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MSLGROUP China Whitepaper

December 2013Copyright@MSLGROUP China

For more information, contact:

DEREK DONG E. [email protected] T. +86-10-8573 0688

YUKI YANG E. [email protected] T. +86-20-8767 3479

Sina Weibo @ MSLGROUP China