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  • Crafting a membership program that your customers will love
  • Ready to start building? Use the guide below.

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  1. Strategy & Best Practices

Memberships 101

Crafting a membership program that your customers will love

Membership programs are the best way to provide a truly unique, branded experience for your most loyal customers. Unlike traditional loyalty solutions, memberships powered by Inveterate allow you to choose and customize as many or as few benefits as you like. With Inveterate, no two brand’s membership programs look the same.

But, with the power of flexibility comes the responsibility of curating an effective membership program experience. We want you to succeed from the first day you launch your program, so we turned to Allison Spalding, our Director of Customer Success, for her advice on how to craft a program your customers will love.

Two steps to focus on when conceptualizing your membership program

The most critical part of launching a membership program is creating an experience that customers want to participate in and are willing to pay for. When you accomplish both, you have created a structure that captures predictable repeat revenue, motivates customers to spend and purchase more frequently, and boosts your business’s bottom line.

When crafting your program, focus on these two steps:

  1. Purposefully pick your benefits offering

  2. Pick a membership price that’s makes sense to the customers

These steps may sound obvious and overly simplistic, but humans tend to overcomplicate things! Remember, it takes mere seconds for your customer to make their mind up, so you’ll need to present an offer that’s too good to pass up.

Step #1: Purposefully pick your benefits offering

Many brands go wrong by first picking benefits that fit their business goals, and then tailoring those benefits to fit their customers. In order to succeed, you should first identify what your customers want, and then figure out what your business model can support.

Additionally, the benefits you select should address or solve for any existing friction in the customer journey. Removing barriers to purchase, particularly for your most loyal customers, will drive a noticeable impact on your business.

Here are a three questions to ask as you are conceptualizing your membership program benefits:

Question #1: What are your customers telling you?

Where to look for answers: Source information from your Customer Service team. They are in daily communication with your customers and know what they want more of, as well as what may be challenging. Survey and interview your customers. Don’t be afraid to proactively reach out to a VIP segment to get their direct feedback and opinions. Review social media comments and engagement. Aggregate comments to see where you’re winning with your customers.

Takeaway: Talk to your customers, then listen to them. They will tell you exactly what they want when engaging with your brand.

Question #2: What’s unique about your brand?

Where to look for answers: Review your brand value propositions and what sets you apart from competitors. Analyze your business model and identify what parts of that contribute to higher conversion rates and AOVs. Those are areas to capitalize on within your membership benefits. Identify operational advantages and package those as customer benefits.

Takeaway: Provide benefits that motivate customers to purchase more frequently..

Question #3: How do I narrow it down?

How to answer it: Pick one to two major benefits - this should be the most compelling reason for your customers to sign up. Add secondary benefits that compliment your business model and add perceived value to your customers.

Takeaway: Keep it simple and start small. You can always add on benefits as your program grows - taking them away isn’t the ideal customer experience.

When you land on a simple but compelling combination of benefits, you will make it so easy for your members to place more orders and spend more money.

Step #2: Pick a membership price that makes sense to the customers

To drive strong membership opt-in rates, your benefits should outweigh the cost of the membership but not diminish your brand value.

We want customers to immediately perceive the value of the membership program. So, when deciding how much to charge for your membership program, you should challenge your assumptions by asking: “Will customers immediately understand that the value of the benefits outweighs the cost of the membership?” If it takes longer than 2-3 seconds for your customer to understand that the benefits outweigh the cost, then you will likely see a low sign-up rate.

Here are some KPIs that can help you determine how much and how frequently to charge for your membership program:

  • Average Order Value (AOV): How much does your customer typically spend at checkout? This dollar value is a good indicator of a potential membership cost because your customers are already comfortable spending that on your site.

  • Average Yearly Spend: How much is the average customer spending during a 12 month period? Your VIPs will quickly calculate if the benefits they receive will outweigh the cost of the program compared to how much they spend with you.

  • Repeat Purchase Rate: What’s the average time it takes for customers to place a second, third, fourth order? Or, how many orders on average is a customer placing during a 12 month period? This is a good indicator for how frequently to offer automatic store credit or member-only discounts.

Additional metrics you may want to assess to help you land on a membership billing structure could include product margin, operational costs and customer lifetime value. Choosing a membership price and billing frequency will be unique to each brand, but examining these metrics will help you lock in your billing structure.

Ready to start building? Use the guide below.

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Last updated 10 months ago

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