How to Choose the right live streaming KOLs

Until the first quarter of 2020, the number of monthly active users on Taobao Live has reached 756 million and watching live streaming has become one of the habits of many netizens. At the same time, live streaming e-commerce has also become a new growth point for various brands, more than half of brand merchants have achieved new growth through live streaming channels.

Key Opinion Leaders (KOLs),  as the traffic center for live streaming, can help brands achieve various goals: traffic gathering, recommendation, sales conversion, and brand marketing.

With the development of the live streaming industry, KOLs also present a pyramidal distribution structure. The influence power of the KOLs is very different, and their preferred categories, styles and business models are also different. How to choose the right live streaming KOL for the brand? What are the primary contact channels and cooperation models? After reading this article, I believe you will have a more precise answer to the above questions.

1. What is Live Streaming KOL?

1.1 Bridge between the supply chain and consumers



Live streaming KOLs originated from live-streamers. Live streamers are more like online sales in function, and usually have professional product knowledge reserves (e.g., Austin Li used to be L’Oréal offline sales). After switching from offline one-for-one sales to online one-for-all, live-streamers with more fans accumulated are called Live Streaming KOLs. They can actively recommend products for fans, upgrade the online shopping experience, and stimulate fans’ shopping desire.



At the same time, the live streaming KOLs directly connect the supply chain and consumers through the live streaming platform and help the brand to convert sales and accumulate loyal consumers quickly. KOLs have gradually begun to replace traditional retail channels and become a new online channel for brands.

 

 

1.2 Distribution ecology of KOLs



Looking at the Live Streaming KOLs structure of the entire industry, the tail KOLs exceed 90%. Live Streaming KOLs have low threshold and high demand, but it is not easy to stand out. Although most companies do not stipulate the academic qualifications and work experience of live streamers, inherent and comprehensive abilities are required to be a head KOL. Not all live-streamers can become KOLs, and KOLs with great traffic or fans pool may not necessarily sell well.

Chinese people use body parts to represent the influence power of different KOLs, from high to low, namely: head, waist, and tail. We can see that the head- live streaming KOLs are occupying an absolute advantage in the Taobao ecosystem, represented by Austin Li and Viya, and their annual GMV accounts for more than 50% of Taobao Live’s.

As the top two KOLs with the most comprehensive ability, they also have a wide variety of categories. Besides personally distinctive label categories (Austin Li’s beauty makeup and Viya’s fast-moving consumer goods), other types of products are also selling well.
In contrast, for non-head KOLs without professional team support, it is not easy to connect with clients in all categories. More live streaming sessions were made in product development that they are familiar with. For example, Li Xuanzhuo, the “Wine God on Kuai”, took the wine industry as a breakthrough and intensely cultivated in the vertical field, quickly became the top KOL of the wine industry, and skillfully avoided competition with other head KOLs.

1.3 The portrait of live streaming KOLs becomes more diversified



With the vigorous development of e-commerce live streaming, traditional celebrities from all walks of life have also entered the game. Superstars, hosts, and entrepreneurs compete for live streaming, either for brand promotion or public welfare. Their power of product selling is impressive, and the viewing volume and turnover rates have continuously reached new highs. They have already become strong competitors of traditional head KOLs.



The entry of celebrities diversifies the live streamers’ identity, which intensifies the competition in the industry and raises the level of content quality, forces the Live Streaming KOLs to improve their professional qualifications and comprehensive capabilities. Besides, the boundary between the Live Streaming KOLs and superstars is becoming increasingly blurred, and live streaming is becoming popularized throughout all industries.


2. How to choose right Live Streaming KOLs for your brand?

There are four tips you need to know to choose right KOLs for your brand:
2.1 Fans amount ≠ High conversion rate — KOLs’ temperaments should match the brand positioning

– Be cautious about using superstars to sell products:

Many brands still stay in traditional marketing thoughts, thinking that popularity is the most significant factor that helps brands. However, if you want to retain users to achieve purchase conversion, the live streaming KOL’s professional quality is essential. In addition to a good appearance and fans quantities, reliable communicational power and knowledge of the product will be the KOL’s decisive weapons. For example, Austin Li, who is the most popular KOL in the beauty category, can distinguish the difference between the brand and color number from more than one million lipsticks immediately. This professional ability promised that he could instantly gain the audiences’ trust when recommending the beauty brands. However, superstars often lack this kind of attainment when they just joined the live streaming industry.

 

– Find the correct positioning of the brand and choose the right channel:



Proper KOL marketing requires matching between brand character and KOL temperament. In addition to the KOL’s professional ability, personality is also one of the critical points for the brand to consider. For example, this year, there was a failure case on TikTok: Zhu, who gained many fans through black humor and social irony, once entered the live broadcast to sell goods. Many brands only valued his influence power (more than 10 million fans) but did not study the reason behind his popularity. As a result, the black humorous selling style cannot catalyze consumers’ desire to buy in the live broadcast room, and the ROI is also terrible.



2.2 High traffic ≠ Great sales value — Data analysis to avoid traffic fraud and to accurately target customers



To avoid the problem of poor live streaming sales, data analysis can be a good choice to help brands accurately target fans and select suitable KOLs.



Firstly, in live streaming platforms’ histories of all KOLs, you can see the data of fans’ “like”, “comments” and “reposts”. These three indicators can be regarded as fan interaction core dimensions. You can intuitively understand the number of active fans and loyal fans of the head KOLs and can effectively avoid fake fans and bought fans.



Secondly, if you want to perform more accurate positioning, you can ask professional organizations to make fan crowd portraits for the target KOLs. For example, Austin Li’s fans account for most young women, while Viya’s fans have a huge targeted group of mother and baby products. Luo Yonghao’s loyal fans are mostly men, and they are more interested in 3C digital products.



Finally, practical data analysis can also eliminate data fraud behavior in live streaming and effectively screen out the goods return data. Since the Cost Per Sale model is currently the mainstream, the accurate data monitoring can win more profit space for the brand when it is subsequently settled with KOLs.


2.3 Great sales value ≠ Profitable — Reasonable profit sharing is necessary


Although live streaming sells goods quickly with fantastic and attractive data, it is still worth studying the profit margin that the brand can finally get. Head KOLs usually needs the brand to provide the lowest price across the network to further create marketing gimmicks and stimulate consumers’ desire to shop. A reasonable profit split between the brand and KOL will become particularly important. Here we first provide the basic industry-wide sharing models and quotations. In the follow-up, we will separately launch a detailed article to explain how brands choose the most appropriate profit-sharing model according to different selling purposes. Leave your email below, and we will send our research and reports to your mailbox as soon as possible.

 

2.4 Combined operation strategy— Head + Non-head KOLs
We have learned that the KOL pyramid effect of the live streaming industry is obvious. Besides, the actual functions of different levels of KOLs are also different. Understanding and combining the marketing functions of different KOLs can help brands achieve brands’ long-term development goals.

– Functional differences between KOLs

Head KOLs: Attract attention and traffic. Head KOLs have larger fan size and appeal, but their cost is higher. They are suitable for increasing the brand’s exposure early in the event.

Waist KOLs: Spread the message. Waist KOLs are cost-effective and can be used as the main propaganda force, covering multiple fields and platforms to spread marketing information.

Tail KOLs: Distribute information. Long-tail KOLs have limited influence and content creation ability and can be used as an auxiliary distribution channel to further spread marketing information.

– Head + Non-Head: Increase users’ retention

Under normal circumstances, brand recognition is mainly divided into five steps: Attention, Interest, Search, Act, and Share. The marketing idea of Head + Non-Head is to find the right delivery person to spread compelling stories and converted sales effectively. The specific process is as follows:

a. Attract attention: Head KOLs manufacturing topics, attract attention, and allow consumers to have a preliminary understanding of the brand.

b. Continuous propagation: Non-head KOLs assist in diffusion and recommendations on major platforms to achieve radiation in the size circle.

c. Deepen penetration: Guide consumer reviews, establish brand emotional connections, and realize penetration from awareness of interest.

d. Activate conversions: Live streaming products selling to activate purchase desires and convert sales.

e. Word-of-mouth sharing: Seed consumers initiate further word-of-mouth communication through sharing and recommendation.

3. Where can we find these Live Streaming KOLs?

After identifying the KOL, it is more challenging to find KOL resources through different channels. And because of information asymmetry, brands are often in a disadvantaged position. Comparing or hiring in-house professionals can help brands obtain higher bargaining power. Here we list some primary cooperation channels:

3.1 Official Channels The major live streaming platforms will launch their own official KOLs resource cooperation information, such as the Superstar Map of TikTok, the Ali V Mission of Taobao. The commission fees for both platforms and KOLs are indispensable, and sometimes promotional resource packs are also needed to gain more traffic.

3.2 MCNs The full name of MCN is Multi-Channel Network. Usually, these agencies will sign many live streaming KOLs. Of course, if you want to cooperate, you will naturally have a commission fee. Since the development status of China’s MCN industry and the unspoken rules of cooperation is another huge topic, we will follow up with a specific article, interested friends can leave a contact email below. In addition to the above two official channels, these jobs can also be outsourced to third-party service companies. eTOC can provide overseas brands with a variety of professional services related to the Chinese e-commerce market. KOLs cooperation negotiations and platform selection are also within our service scope.

4. Key takeaways

As an emerging channel and shelf for brand sales, KOLs can quickly solve the brand’s sales and communication needs. The critical factors of the live e-commerce transaction are the cost performance of the products and the trust relationship between KOLs and the fans. Choosing the right KOL is a short-term demand for bringing goods and an essential part for the brand to establish a long-term image and cultivate long-term loyal consumers.
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