E-commerce promotion and paid membership operation strategies!

The last e-commerce festival of this year, "Double 12", has come to an end. If we pay close attention, we will easily find that this year, merchants are not only promoting benefits such as discounts and full-value discounts, but more importantly, this keyword: membership.

In fact, it is not only businesses that are promoting memberships. "Platform memberships" have been very popular in recent years. Like Taobao 88VIP membership, JD PLUS membership, Suning.com Super membership... major platforms are stepping up the layout and upgrading of paid membership business. Then why are e-commerce platforms starting to promote “paid membership”?

Don’t worry, let me tell you the advantages of paid membership. How do these e-commerce platforms implement paid membership?

1. Why are e-commerce platforms so keen on paid memberships?

As the traffic dividend gradually weakens, the market has shifted from incremental competition to stock competition, and platforms have also begun to deepen their user resources.

Moreover, a single model can no longer meet the differentiated needs of consumers. Some high-end consumers are willing to pay more to enjoy better services.

The tiered services of "paid members" can just meet the needs of this part of users, which has prompted e-commerce platforms to pay more attention to the rights and shopping experience of paid members when consuming on the platform.

Of course, the biggest reason is profit. To sum up, paid membership has three main advantages and characteristics.

1. Able to make money and provide a stable cash flow for the platform

First of all, the most obvious benefit of paid membership is the membership fee, which can directly bring cash income to the company. For example, the number of Amazon Prime paid members exceeds 100 million, and the annual membership fee revenue reaches tens of billions of dollars.

In addition, paid membership can greatly increase user repurchase rate. For example, Amazon Prime offers unlimited free shipping, and users will increase their order rate in order to earn back the "membership fee."

2. Enhance user stickiness and screen high-value users

With the cost of acquiring customers becoming increasingly high today, users mean everything. Paid members can not only screen out those users who highly recognize the brand and can bring high profits to the brand.

Moreover, when users become "paying users", the user retention rate will be greatly increased.

3. Build a traffic bridge to acquire more users

The paid membership benefits of many platforms are diversified, which can reach users in different fields and attract more users to join.

For example, the benefits of Taobao 88VIP members include NetEase Cloud Music membership, Ele.me membership, Fliggy membership, etc.

Facts have proved that with the rapid development of "paid membership" in China, major e-commerce platforms have also achieved performance improvement and user growth.

Next, I will summarize the paid membership models and characteristics of each major platform. There must be something worth learning for you.

2. How do these platforms manage their members?

As early as 2005, Amazon launched the Prime membership program, and now the number of members has exceeded 100 million.

In contrast, in China, JD.com launched the PLUS membership in 2015; in 2016, Vipshop launched the Super VIP; in 2017, the membership model began to explode, with NetEase Kaola, Suning.com, NetEase Yanxuan and others entering the market; it was not until August 2018 that Alibaba launched the 88VIP membership.

Timeline

• In October 2015, JD.com launched the PLUS membership service.
• At the end of 2016, NetEase Yanxuan launched membership services
• In June 2017, Xiaohongshu launched the Black Card membership
• In August 2017, Vipshop launched Super VIP
• In November 2017, Kaola launched the Black Card Membership
• In December 2017, Suning.com launched SUPER membership
• In April 2018, NetEase Yanxuan fully launched the "Super Member"
• In July 2018, Xiaohongshu Black Card was upgraded to Xiaohong Card
• Taobao launched 88VIP in August 2018
• Pinduoduo launches money-saving monthly card in August 2019
• In March 2020, NetEase Yanxuan upgraded its Pro membership and launched the "Enjoy first, pay later" and "Refund the price difference if no return" services.
• Taobao 88VIP upgrade in August 2020, covering 9 major life scenarios

You see, almost all the platforms we are familiar with have launched their own paid membership programs. Especially in recent years, we have been constantly taking action to upgrade our membership products frequently, with significant optimization and adjustments made in terms of rights types, content, prices, etc.

Here, I have reviewed the membership product information of the current mainstream platforms and summarized them below:

3. What are the trends and characteristics of paid memberships?

From the above we can see that all the mainstream domestic e-commerce platforms have launched their own paid memberships. Behind the various membership products of these platforms, I have summarized four trends and characteristics.

1. Three benefits: saving money + service + co-branding

The membership benefits design of all platforms is almost always centered around the three pillars of “saving money + service + collaboration”. Among them, the core benefit is saving money, the basic benefit is service, and the value-added benefit is co-branding.

1) Save money

We can see that "saving money" is the top priority among all types of benefits. From card opening red envelopes, coupons, membership prices, exclusive brand discounts, etc., all are "real money" benefits.

This also indirectly reflects that no matter how many membership benefits there are, "saving money" is the interest that consumers care about most.

2) Services

User service is actually the most important aspect that reflects the value of membership and is also one of the greatest charms of the membership system. However, the service rights and interests currently provided by these platforms are still relatively basic, with only “exclusive customer service” barely becoming standard.

But even at this point, the depth of service on different platforms varies. Some are online 24 hours a day, some do not require queuing, and some provide services at fixed times and require advance reservations.

3) Joint

This is a popular way of playing on major platforms and an important factor that consumers are willing to pay for.

From the user's perspective, this is an economic account. If the benefits include joint membership, then there is actually money saved.

From the perspective of merchants, this is not only an effective diversion of traffic between brands and a win-win situation, but also, through the linkage of different merchants, it opens up multiple online and offline consumption scenarios for users and establishes a full-scenario advantage with a closer relationship with users.

2. Bundle the "growth" model to encourage more consumption

An excellent membership model is never just one.

Membership models usually include free membership, paid membership, stored-value membership, and a growth membership. Merchants will package and combine several models in order to achieve the best results.

In the design of paid membership on these platforms, many of them are bundled with a "growth" model, which is simply a "consumption points system."

The more you spend, the more points you earn, and the more benefits you enjoy. The platform encourages consumers to buy, buy, and buy as much as possible through this positive incentive "step-up" method.

For example, when joining Taobao, you need to have a Taobao value greater than 1,000, and you can purchase it for 88 yuan. If it is less than 1,000, it will cost 888 yuan, which is a difference of 10 times! It’s similar with JD.com. If your JD value is greater than 4,500, you can use 99 yuan to purchase a PLUS membership that originally costs 199 yuan.

For example, NetEase Yanxuan’s double points and exclusive redemption, and Suning.com’s 10~20 times diamond rebate are all aimed at guiding consumers to buy more and earn more points. For the same consumption, member users can enjoy more points than ordinary users, so they have more motivation to consume.

3. Benefit distribution is intentional and encourages regular consumption

The platform not only hopes that you buy more, but also hopes that you buy frequently. Because only by ensuring a certain consumption frequency can users establish consumption habits, create stronger stickiness, and thus develop trust and goodwill towards the platform brand.

Therefore, the platform is also full of "intentions" in the distribution of membership benefits.

One aspect is frequency control. Platforms like JD.com, NetEase Yanxuan, Xiaohongshu, and Kaola.com all issue a certain amount of coupons on a monthly basis, and also offer free trial products, membership day events, shipping fee reductions, etc. "Monthly" has become a very important cycle, ensuring that users have sufficient and reasonable consumption frequency.

The other side is to break the whole into parts. Everyone should have realized this long ago. Don’t be fooled by the fact that these benefits packages contain coupons and red envelopes worth hundreds of yuan. In fact, this is just the total amount, and what you actually get is just “change”. For example, Suning.com’s 140 yuan coupon is actually 7 20 yuan coupons.

If you really want to make full use of these coupons, you have to buy more, buy more frequently, and use them again and again. This is also a common "routine".

4. If the savings are not enough, the price difference can be refunded to provide a safety net for users

I have mentioned before that in Baiguoyuan’s membership model, “refund of price difference if savings are not enough” is a big highlight. Nowadays, this model has also begun to appear among platform members, becoming a new trend.

We have seen that both NetEase Yanxuan and Suning.com have launched a policy of "refund of price difference if no return of principal is made". If the amount of money saved by an annual member during the membership period is less than the card fee, the price difference will be returned to the user's account in the form of a gift card or a no-threshold coupon.

Although it cannot be withdrawn as cash, it can still be used within the platform, which is beneficial to both the platform and consumers.

This "refund of price difference" model is very attractive. It firmly grasps the pain point of "saving money" for consumers, provides a safety net for consumers, and provides the greatest degree of protection, so that users can buy boldly and willfully without worrying about calculations.

At the same time, this approach has effectively narrowed the distance between consumers and the platform, lowered the threshold for building trust, and laid a good psychological foundation for the platform's subsequent membership operations.

As a brand, you can consider these four key points when designing paid membership. Of course, consumers and markets are always changing. The correct answer is not to keep focusing on one good method, but to learn to embrace change and constantly explore consumer needs.

4. Final Thoughts

Nowadays, the market is moving from "incremental" to "stock". Companies should pay more attention to in-depth management of users and start to work hard, and "membership" is one of the effective weapons for user management.

The domestic "paid membership" model has just begun. It is hoped that businesses can truly improve the service level of users in this process and allow consumers to benefit tangibly.

Author: Yan Tao Sanshou

Source: Yan Tao Sanshou