In order to create more opportunities for brands to retain core users and prevent the loss of valuable users, a membership incentive system came into being. Different brands have different incentive systems. The author of this article lists 10 common incentive methods for super members, analyzes and compares them one by one, and shares them with everyone.

1. Traditional Rewards

Since the emergence of the membership system, rewards have been everywhere and have basically become a standard feature of the membership system.

1. Free products and samples

In the food and beauty industries, especially in the fast-moving consumer goods industry with high shopping frequency, free products/samples are particularly effective and are also an important factor in "consumption upgrading". For example, high-end samples given free of charge when buying cosmetics, and higher-quality tea given free of charge when buying tea, etc., not only maintain relationships, but also secretly lay the seeds for "consumption upgrading".

In addition to "consumption upgrade", "consumption order upgrade" is also very common. For example, when buying small cakes and nuts, there may be a promotion of "spend 1 jin and get half a jin free", so that consumers who originally only wanted to buy 1 or 2 small cakes for breakfast the next day end up buying 1 jin.

Such free gifts often appear in membership systems, such as the Chick-Fil-A One app, where consumers can earn points while shopping, and then redeem the points for their favorite free dishes - including French fries, salads, etc.

In Sephora’s latest membership system in 2020, all members can get samples, and second- and third-level members can also get exclusive gifts.

In short, freebies really do increase the value of a membership program in the eyes of customers.

2. Cashback & store points

Cash back and store points are also common logic. Generally speaking, cash back is given when a certain amount is reached. For example, Kohl's in the United States is "for every $50 spent, get $10 back."

For the membership system, consumption cashback and store points are almost equivalent, because generally speaking, these cashback and points can only be used within the merchant’s own system, so there are limitations to a certain extent.

However, there is also a more unique American case here. This is a startup project called Stake, which received US$9 million in angel round financing in 2019.

This project is mainly aimed at solving the problem of income loss for landlords due to reasons such as inability to rent out houses or short lease periods. Its entry point is to increase tenants' rental time through the "membership system":

As long as the tenant pays the rent on time through the Stake APP, he can get a 3% cash back (which can be withdrawn to a bank card at any time). If he can keep more than 80% of the refunded amount in the APP, he can get an additional 2% reward.

3. Discounts

Valuable discounts will make consumers willing to consume repeatedly. The trick is to give better discounts to your members. For example, the public discount is 95% off, and members will receive information saying that they can enjoy a 10% discount and additional services and experiences.

In the digital age, the best discounts are actually personalized, giving completely different discounts to different consumers. Customer characteristics need to be considered here. Whether you want to increase consumption of a customer with consumption potential or awaken a previous excellent customer, the discounts and services provided here (for example, you may need to contact by phone or directly reach out to them via WeChat) are completely different.

It’s very simple. A discount is not about putting an “X discount” advertisement at the door, but about establishing an introduction and reason to reach out to consumers in a personalized way.

4. Birthday Surprise

On your birthday, do you only receive blessing text messages from operators or airlines? This makes many people feel like failures.

Giving customers free gifts on their birthdays can be a good solution to this problem. There are many types of gifts, which can be limited-time discounts, multiple points, or even directly sending a cake. The key is how to make birthday rewards a real surprise, which requires a deep understanding and insight into consumers.

PFChang's offers members a free appetizer or dessert within one month of their birthday.

5. Buy in advance

Some membership systems also provide members with "early purchase" benefits. Many of these benefits are "insider sales" provided point-to-point through channels such as telephone, APP, and WeChat.

During Amazon Prime Day, Amazon will reveal a large number of "bug-priced" products in advance, but at the same time will tell users that they can start buying them half an hour in advance by becoming Prime members (or only Prime members can buy them). In essence, it is "forcing" consumers to experience Prime (annual fee is US$119).

At this time, Amazon will provide a one-month free trial of Prime service. With the support of services such as two-day free delivery (one-day free delivery in some areas) and Prime Video, a large number of consumers who have experienced Prime are later converted to Prime.

6. Cooperation rights

Many merchants will cooperate with other merchants to form points redemption and points sharing, which is equivalent to the public domain sharing of private domain traffic and the privatization of public domain traffic - mutual drainage and mutual traffic washing.

Plenti is a case in the United States, but unfortunately it closed down in 2018.

However, Shell's membership system still refers to this logic: when consumers join this membership program, they can enjoy discounts when refueling at Shell gas stations as long as they shop online, dine at more than 10,000 specific restaurants, and book trips (including flights, hotels, and car rentals).

In Japan, the best performing program is Tsutaya T-Card, which had 70.66 million members by the end of July 2020, equivalent to 56% of Japan's population. As of January 2020, 6,190 trading companies have been connected to the T-card system. Consumers with T-cards can earn points for purchases at stores under these trading companies, and the points can be used in other stores.

2. Unique Rewards

In addition to traditional rewards, some businesses can provide more unique goods and services. Here are some simple examples for your reference.

1. Exclusive limited edition

How do I upgrade my freebie? It's simple, that is to provide members with exclusive limited editions.

In the United States, the multinational professional clothing store Zumiez often produces co-branded products, including skateboards, bags, clothing, accessories, etc. Consumers must use points to redeem them, which increases the value of the membership system and points in the eyes of consumers.

Here are some of its co-branded products:

2. VIP Experience

It’s also important to provide exclusive experiences for your best customers, especially when those experiences are deeply integrated with the brand.

The VIPeak program, a membership system of outerwear brand North Face, allows members to redeem points for outdoor adventures around the world, which is a perfect match with North Face's own focus on the outdoors, extreme environments, and adventures. Some previous events have included endurance challenges, camping in US national parks, rock climbing, and more.

The Nordy Club, a membership program under high-end department store Nordstrom, allows customers to experience participating in beauty and styling workshops, and more advanced members can have priority access to fashion events and VIP events.

3. Priority right to use products

Providing the latest products free of charge to the most loyal and enthusiastic high-level members can be seen as a benefit on the one hand. If the product is excellent, they can share and spread it directly. On the other hand, at product trial meetings, merchants can obtain the real opinions of these high-end customers, which in turn helps product managers iterate the product.

Sephora understands this and offers this privilege to its most senior members.

4. Charitable Donations

Abroad, public welfare elements also appear in the membership system, and the effect is best when the values ​​of the recipient organization and the merchant itself are similar.

For example, The Body Shop, a British cosmetics and skincare company, will donate its $10 membership reward to Born Free USA or the National Parks Conservation Association, both of which are animal protection and welfare organizations, depending on the member's own wishes. This donation is a perfect fit with The Body Shop’s commitment to sustainability and will essentially strengthen its connection with customers at the value level.

Author: Wang Ziwei

Source: Retail Wei Observation