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Taking A Customer-Centric Approach To Building Your Membership Program

Taking A Customer-Centric Approach To Building Your Membership Program

A membership program can often be the key to creating better customer loyalty, higher retention, and increased customer lifetime value (LTV) for ecommerce stores. To be successful, merchants need to tailor their membership program to their customers’ preferences and needs—which requires a deep understanding of their current customers and target audience. 

In this post, we’ll cover the difference between membership programs and traditional customer loyalty programs, plus how to understand your customers better so you can design a membership program that is exactly what they’re looking for. The more personalized and tailored your membership program, the more successful you’ll be. 

Key takeaways

  • Use market research, customer data, and customer personas to better understand your audience.
  • To design a membership program with customers at the center, brands should keep personalization and flexibility top of mind.
  • Offering a membership program with different options and customizations can help you be more successful.

Why membership programs are so valuable

The value of a membership program is undeniable. When customers buy into your brand, either with a one-time or recurring fee, they’re making a commitment that will lead to a stronger relationship with your store. 

Memberships help merchants to increase their LTV by encouraging a higher purchase frequency and better brand association. Members are 60% more likely to spend more on a brand after joining—compared to just 30% for free loyalty program members.

A membership is also a great way for your brand to gain insights into your customers’ behaviors and preferences, since most members will purchase directly from your brand and not through a third party. Memberships encourage direct shopping by giving customers specific benefits that they can’t receive from other retailers or third parties. This means brands can collect meaningful data that will then make it easier to personalize the shopping experience—a win-win for both you and your customers.

Memberships vs. loyalty programs

With rising customer acquisition costs, the focus has turned back to customer retention. How can ecommerce merchants increase loyalty among existing customers? 

Free loyalty programs often come to mind. But, as we’ve discussed above, memberships are really the ticket to creating a higher level of loyalty. Perhaps because a cost is associated with them, unlike unpaid loyalty programs. Customers have to actively choose to participate, and therefore are more likely to engage and purchase with the brand, knowing their loyalty will be rewarded in ways that are appealing to them.

Subscription products also work much like a membership, where the customer commits to buying a product or service on subscription, and receives special benefits like free shipping or discounts because of it. So whether you offer a paid membership or subscription products, you customers will be actively buying into the experience. 

How to better understand your customers

In order to build a robust membership program, ecommerce merchants have to deeply understand their customers. Below we’ll get into a few different ways brands can do that.

1. Conduct market research

Checking out competitors in your market is an excellent place to start when you’re looking to create or enhance your membership program. See what others in your industry are doing in terms of membership price, offerings, and special perks to compare to your own program. 

Don’t be afraid to look for inspiration outside of your industry, as well—especially if you’re one of the first brands to offer memberships within your vertical. Learning from leaders in the membership space is always beneficial, no matter the industry. You’ll be able to see what is appealing to customers and incorporate some of those aspects into your own program. 

2. Analyze customer behavior & preferences

Use the customer data you already have to fully analyze your customers’ behavior and preferences. Knowing how they shop, what messaging they resonate with, and what they are looking for in terms of the customer experience can help you go above and beyond in your membership program. 

Plus, taking a look at your current LTV can help you determine the right price for your membership. If your LTV is at $52, for example, you wouldn’t want to price your program at $69.99.

If you already have a free loyalty program, analyze which components are popular among shoppers and see if they could be elevated as offerings in your membership program. Brands can also consider asking their top customers what they’d be interested in and sending out an email with information about a membership program. Include a link to join a waitlist so you can better understand interest levels in certain types of programs you’re considering.

3. Create customer personas 

A final tip for better understanding your customers in relation to your membership program is to create customer personas modeled after your target audience. Getting specific about who your customers are—including their lifestyle, shopping habits, preferred offerings, and motivations for buying—will help you create a membership that truly fits with your audience. Reach out to existing customers for ideas and feedback to create accurate personas that really capture your shoppers well.  

Designing your membership program with customers at the center

Once you have a clear idea of the best strategies to employ for your membership program based on customer data and your personas, it’s time to design your membership. Offering ease, personalized benefits, and clear communication are just the start—continue reading to learn a few other tips for creating a successful membership program. 

1. Personalization & customization

Personalization is one of the key tactics to creating stronger customer relationships—showing your shoppers that you know and care about them will lead to better brand trust and retention. With your membership program, it’s crucial to work in personalization and customization so that your customers get the most out of your offerings. 

For example, allowing different frequencies, like monthly vs. annually, can give customers the ability to choose what works best with their schedule. 

2. Value-driven proposition

Another key strategy to creating an appealing membership program that customers will want to join is to have a value-driven proposition. With both tangible and intangible benefits, customers will commit to paying a membership fee because they know they’ll receive something out of the commitment. Memberships can also include exclusive content and products that regular customers don’t have access to, driving the value of your membership up.

Early Majority has a strong mission behind their membership.
Early Majority has created a membership that brings together people with the same values—making their connection with customers even more powerful.

3. Transparency & clear communication

Customers like to be kept in the loop, especially when it comes to their membership. Offer clear and concise communication about membership offerings, benefits, and perks through the channels that make the most sense. Consider tailoring communication based on the channel—plus try out A/B testing to see what content customers are responding to best.

Benefits should also be clearly defined so that customers know what to expect. When they sign up for the membership, the terms and offerings should be clearly stated so they know what to expect and can start engaging with your brand and the membership right away.

Part&Parcel show member pricing on each product.
Part&Parcel showcase member pricing on each of the products on their websites—showing shoppers just how much they could save with a membership.

4. Flexibility & convenience

As mentioned, offering tailored membership tiers or multiple membership options is a great way to ensure every customer is motivated to join your membership. A one-size-fits-all approach might not be the best tactic when it comes to memberships.

Additionally, offering flexible membership terms and convenience is crucial to keeping customers happy. Make sign-up simple and easy and ensure members have access to the resources they need. Creating a landing page for memberships ensures customers will have a dedicated place to learn more about the program and be able to reference it any time they have questions.

If they have to cancel, ensure it’s a smooth process and that there are churn reduction measures in place. An easy cancellation process could help you win back a churned customer in the long run.

Building an attractive membership for your customers

By keeping customers at the forefront of your membership offerings, you’ll create a program that’s not only attractive to customers but also beneficial to your brand. With a strong membership program, you’ll enjoy higher LTV and customer loyalty—leading to increased revenue and retention.

Get started today by working to understand your customers better, then build your membership with their needs and preferences in mind.

Special thanks to our friends at ReCharge Payments for their insights on this topic.
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