In 2021, how to build a good membership marketing system?

Today, when the cost of acquiring customers is getting higher and higher, it is more important to retain old customers and operate members in a refined manner than to attract new customers. From the perspective of the enterprise, how to build a good membership marketing system?

Due to the recent recurrence of the epidemic, I believe all my friends in retail have felt that the number of people entering our stores has decreased, whether it is restaurants or supermarkets. At this time, it is very difficult for us to attract new customers and increase our business.

Since 2020, our company has been working on how to prevent the inventory from decreasing and to retain as much inventory as possible.

At this time, the core of our efforts to build existing business is just one keyword – tapping into the customer’s lifetime value . Whether it is private domain traffic, fan marketing, or membership system, its underlying logic is customer lifetime value.

The term customer lifetime value is not a new term. It has already appeared in American marketing books more than 30 years ago.

The so-called customer lifetime value refers to the sum of a customer's past, present and future value. The calculation of customer lifetime value is actually related to factors such as frequency, unit price, duration, etc. When the concept of customer lifetime value was created, there was no mobile Internet, nor was there the booming social media era as it is today. The term customer lifetime value has changed a lot between 30 years ago and 30 years later.

In today's era of mobile Internet, we will find that every customer is a terminal and a media. At this time, the lifetime value of our customers is magnified n times.

When we consider customer lifetime value, we need to consider the influence index of each customer, the number of times he is willing to share with you, and the amount of distribution he can bring to us. Today, our customers are no longer simply consumers, they can be considered as consumers-merchants, that is, consumers, promoters, and operators.

When we look at our customers in this way, we will find that today the B-end of our business and the C-end of users can be integrated into BC. We need to turn the flowing traffic into something that can be retained, and the retained amount is to maximize the lifetime value of each of our customers.

As the concept of customer lifetime value changes today, our membership system also needs to change accordingly.

I recently proposed four rules for building a membership system, and I would like to discuss them with you.

Rule 1 : Digitalize membership .

This is for traditional enterprises that have not yet completed digital transformation. Looking at the current situation of our enterprises, it should be said that the vast majority of enterprises have not yet completed the digital transformation. Only a very small number of leading or excellent companies are ahead in the game.

But as far as the membership system is concerned, as early as the traditional retail era, most of our companies and merchants have adopted the membership model to tap into user value.

But here I must emphasize that in the era of mobile Internet, there is a big problem with our membership system, that is, online and offline memberships are not universal, and the rights and interests they enjoy are also different, which makes it very inconvenient for our customers when consuming.

You can imagine that many of our retail companies started their membership systems offline, but in recent years everyone has started to develop online businesses. However, our offline membership rights are not interoperable with online ones. In the past, our management of users was very extensive. In the past, customers’ demands were not high when they were shopping. They mainly wanted to buy the products they needed, but this has changed dramatically in the past two years.

With the rapid development of our economy and the great abundance of material goods, the previous situation of no worries about sales has turned into overcapacity. In the past, people looked for goods, but today, goods look for people. Customers are becoming more and more picky and they hope to have better service and experience.

At this time, the separation of our online and offline membership rights will inevitably lead to a poor customer experience. If there are similar companies and businesses that do better in this regard, users will be attracted to them. Therefore, in today's environment, online and offline membership interconnection and omni-channel membership model have become important development directions for many enterprises and businesses.

When we use mobile Internet to arm our membership system, many of our companies are now already using WeChat mini-programs, WeChat public accounts and our corporate apps in combination. First, it can divert traffic to the APP, and second, the vast majority of customers are WeChat users, and combining with the WeChat ecosystem can provide users with more convenient services.

In order to realize the digitization of our members, we need to make good use of our valuable asset, user big data, and combine our member digitization with big data to open up multiple links such as product selection, supply chain, capital chain, payment, ordering, etc., so as to deeply explore the personalized needs of users.

The first rule mentioned above is to realize the digitization of our members, especially to connect both online and offline, to make all our users online, and to make all our members our digital resources.

Rule 2 : Carry out refined operations for members.

First of all, I want to share with you an experience that happened to me and my friend yesterday – we went to eat at Haidilao. My good friend was a member of Haidilao’s Black Sea Club.

A few months ago, we ate at Haidilao together and found out that because he did not spend 12,000 yuan in a year, he was downgraded from a Black Sea member to a Gold Sea member. We had dinner together last night and I found out that his membership rights had been downgraded from Gold Sea Member to Silver Sea Member.

The entire Haidilao membership level is based on rules based on consumption amount, consumption frequency, and consumption time intervals. This is also the way we currently establish the rules for our retail enterprise membership system.

Today, when I talked about Haidilao's membership system, and when I mentioned our friend's continuous demotion, and when I talked about their promotion rules, one of our corporate friends on the scene blurted out: This is really a rigorous assessment of our customers.

In the past, when we talked about customer relationships, we always said that it was a management system, a customer relationship management system. The current membership system has actually become a management system without the company realizing it. It uses an assessment mechanism, which means that we are assessing our members.

We say that all business is an insight into human nature. Today, we should focus more on operating our members. The essence of operating members is to inspire members to love us and make contributions to us.

I have always had a very personal idea. I always feel that it should not be called a membership management system or a membership management system, but a membership operation system. Including our previous CRM, I think it should not be called a customer relationship management system, but a customer relationship operation system, and change it to CRO.

In order to motivate our members, we must first base our analysis on data. After realizing the online membership, we need to conduct in-depth analysis of our member big data, identify the heavy users with strong consumption power and high frequency, as well as the users with strong communication ability, love to share, strong interactivity and willingness to contribute, and carry out tiered management.

I believe that many bosses or executives in our group have their own membership systems, but many times our membership systems are ineffective. Why? We say that 20% of customers contribute 80% of sales revenue, but we do not carry out in-depth operations for these 20% of customers or provide more incentives for them.

Although our other 80% of customers only contribute 20% of sales, many of them may have the ability to spread information or interact with us. In essence, they are willing to contribute to us. However, we have not tapped these people, nor have we taken targeted actions for them.

After the features are mined, we need to perform operations based on technology. In the past, when we delivered information, it was all the same, with one standardized message sent to all member customers. In the future, we will be able to provide different services to different people and send different information based on the different situations of members. For example, we can send different greetings to people in Beijing and Shandong, from one face to a thousand faces for each person. Today, some of our excellent companies have achieved a thousand faces for each person. Information can be pushed and prompted to each person based on different scenarios every day.

Luckin Coffee has achieved this. Let’s put aside Luckin Coffee’s bubble in the capital market and its financial problems. As far as user operation is concerned, I think it is still very worthy of our study and research. For example, I walked to a shopping mall in Beijing, and as soon as I got off the car, I received a push message. Luckin Coffee reminded me that I still had a 38% discount coupon that I hadn’t used, and I could use it at a nearby store.

When I got off the car and arrived at this place, I looked up and saw three coffee shops, namely Starbucks, Pacific Coffee, and Luckin Coffee. At this time, I would probably choose Luckin Coffee first. Because Luckin Coffee meets my needs in the current scenario. Of course, this is based on lbs and location-based information push, which is achieved based on technology. Based on technology, we can stimulate users' repurchase and stimulate users' purchases.

The other is content-based, content that interests users, content that users find fun and valuable, and content that users need under certain scenarios. All of the above are for refined operations for our members. Based on our data analysis, we create different portraits of our members, and we perform refined operations for our users and members based on technology and content.

Rule three : Be more attractive in terms of membership benefits .

Our retail businesses, especially our friends in the group, all have their own membership models. When we design a membership model, there are generally two points. The first is the price discount for members. The second point is the privileges we enjoy. This privilege is very important. To make our rights attractive and appealing, I think there must be both emotion and benefit . The model should be able to stimulate emotions and attract interests.

I would like to emphasize three small aspects:

The first is to build an experience officer system . Many of our companies have experience links, and we all realize that if we can give our users more experience, it will have a very good promoting effect on our transactions. However, our companies generally do not treat the experience officer as a systematic model and build it into our entire membership system.

If we can allow our core members to serve as experience officers within their rights and interests and experience new products, it can firstly enhance their sense of honor, secondly they can obtain usage feedback, and thirdly it can enhance the sense of ceremony.

For example, Xiaomi’s entire fan system is connected with its experience officer system. The highest level of fans is called Rong Zuer, which means honorary development team member. They are also the last tester for all new products brought to market.

This experience officer model is a lower-cost word-of-mouth economy model that is more suitable for the social era. Xiaomi has accumulated a large number of fans in this way. Every one of our companies can learn from this approach, not just emerging Internet companies like Xiaomi, but many brand companies can also do this. For example, when we were serving COFCO before, we created a COFCO fan group, in which we created an experience officer model called Shiyuan.

Le Chun Yogurt, which has gone from offline to online in the past two years, became popular with the model of thousands of experience officers. It was just an ordinary yogurt shop. In the early days, it made 100 boxes of yogurt every day and asked fans to try it. Based on the feedback, it optimized the 100 boxes of yogurt for the next day.

Therefore, when we build a membership system, we can implant our experience officer model into it to activate our core members, which is very beneficial for improving their participation and stickiness.

The second is about the enhancement of membership’s sense of ceremony . The sense of ceremony is particularly important, and I think it is also part of refined operations. Because today, each of us may have countless membership identities or membership cards. Whether online or offline, we have applied for a lot of membership cards. But we don’t even remember to use most of them, let alone stimulate repeat purchases or enhance stickiness. Many membership models are useless.

A very important reason for this is the lack of sense of ceremony, which does not leave a deep impression and has a very strong relationship. Therefore, when we are building the entire membership system, we must highlight the sense of ceremony for members. For example, when you are online, what does your membership ID look like, and during which time periods can you enhance our sense of ceremony?

For example, when you become a member, when you log in, when you upgrade, when funds change, etc.

The next thing is the creation of our core membership day. Whether it is online or offline, once we have it connected, we must hold membership day activities regularly every month and every quarter. Only members are eligible to participate in these activities, and many products are only available to members. This enhances the sense of ritual, allowing members to fully enjoy this privilege and benefit, which will enhance their sense of belonging and honor.

For example, Haidilao’s Black Sea members will put a sign on the table when they dine. How much does this sign cost? But it reminds everyone that Black Sea members are dining at this table. Many other diners will take a second look at them with envy. The waiters and restaurant managers will also keep coming over to ask if they need anything. For us members, it is a great honor.

Some luxury brands, such as Hermès and LV, have exclusive membership day events. On membership day, members can enjoy great discounts. Luxury goods like these are not normally discounted, but during membership days many of their items can be discounted as low as 40% or even 30% off, but only members are eligible to purchase them.

The third point is about the rights and interests of our cross-industry alliances. All of us in the retail industry are learning from Costco, the originator of our membership system, and its 13 membership benefits. If you study it carefully, you will find that there are 10 rights and interests that are closely related to life, all of which come from his cross-industry alliances, that is, from the rights and interests of his partners.

We must have an open mind to form alliances.

Many of our retail companies are still playing with themselves, playing with member prices, member promotions, and other discounts. However, when it comes to privileges, the use of some related rights and interests is very attractive to fans.

Now many of our friends are JD Plus members, and at the same time you can also be a member of iQiyi. If you are an 88 member of Taobao Tmall, you can also be a member of Youku. These rights and interests are still very effective and practical for everyone.

Rule 4: Start from the user's perspective and spare no effort to improve the member experience .

Why are many membership systems ineffective? I think it's because it's careless in many aspects and lacks empathy for users.

For example, I am a member of an airline, and I often receive messages from them reminding me how many miles I have and when they will expire. They remind me quite frequently, but frankly speaking, this information is not very effective for me.

After I received this message, I didn’t know how much these expired miles were worth to me, so I didn’t really care. I have received such information for many years, and I may have lost 100,000 miles, but I have not done any further research on what value these miles can bring to me.

Optimization and iteration are very simple. He can tell me, for example, in his text message, he can clearly state what benefits can I get from the 20,000 miles that are about to expire? I can exchange it for a plane ticket, or upgrade to a first-class cabin within a certain number of kilometers, or exchange it for 10 Luckin coffee coupons. If he can tell me this clearly, I think I will pay more attention to it.

It can directly put a link in the message, telling me clearly how to download which APP and how to link the download of the APP. If it does this, I may be able to see for the first time what benefits this mileage will bring to me and how I should use its rights. I definitely don’t want to waste it.

Building a membership system is a complex project. There is no best, only better.

Author: Bao Yuezhong

Source: Bao Yuezhong New Retail Forum