Guest blog by Dylan Whitman from Inveterate

What are Memberships for brands in eCommerce?

Premium memberships have been a hot topic in eCommerce lately. So, what are they, and how can you use them to increase brand loyalty and drive new revenue channels?

In their most basic form, memberships are a type of loyalty program that rewards customers upfront with valuable incentives and experiences that keep them coming back to a brand. 

Loyalty programs are nothing new in eCommerce. But the majority of programs available today are free points-based reward systems. It is a customer retention strategy that costs the customer nothing, but the results are also not always very solid.

Why is that?

While free rewards programs are convenient, customers mostly use them when they remember to use them. They often reward routine-based behaviors, but don’t necessarily unlock additional margin, behaviors, or future purchases the brand wouldn’t otherwise get from that customer.

Subscriptions are also a type of loyalty reward - this is most often a small discount for opting in to receive a specific product on a recurring basis. Subscription programs are effective for certain categories, but are usually limited to a specific item, which can limit broad adoption of products across a brand’s catalog. And what usually happens with products on subscription? Customers end up with too much of the same item, which leads to churn as they cancel.

Premium loyalty programs, or memberships, offer immediate access to exclusive benefits and privileges in exchange for a fee.

Unlike the traditional points program, premium paid loyalty programs give a higher level of rewards and services in exchange for that membership fee.  They frequently have options and benefits like exclusive products, ongoing discounts, store credit, free shipping, or other perks. 

The customer is paying to unlock options they wouldn’t otherwise have. This is different from the free programs, where they don't get anything other customers don't also get, and just earn the rewards over time.

What Brands Benefit from Memberships?

Many types of brands can benefit from a membership. Today, they’re most common with health and wellness, nutrition, fitness, beauty, apparel, and fashion brands, especially those with an engaged community. 

Typically, memberships aren’t a good fit for items that aren't replaced often, such as a mattress or a couch.

Membership Program or Subscriptions?

As mentioned above, membership isn’t the same thing as a subscription program. A subscription usually means paying a lower price for a single SKU on a specific schedule. 

Membership subscribes a customer to the brand itself, in the sense they experience exclusive benefits on every product and they select which items to purchase on a timeline they define.

Merchants tend to believe you need to have subscriptions OR memberships, but actually, they often work better together. Customers can churn from subscriptions because they are receiving too much product or want to try something new, but memberships provide a valuable option with additional perks and access to more products.

Creating a Compelling Membership Program

Creating an enticing membership offer involves understanding your target audience, offering unique benefits, and effectively communicating the value of the membership. Here are some steps to help you create an appealing membership offer:

• Define Your Target Audience: Understand who your potential members are and what they value. Tailor your membership offer to meet their specific needs and preferences.

• Offer Valuable Benefits: Provide a compelling reason for people to become members. Offer benefits that are exclusive, valuable, and not easily accessible to non-members. Some examples include: exclusive content, discounts and promotions, personalized experiences, member-only events, and community access.

• Highlight the Savings: Clearly showcase the potential savings that members can enjoy through discounts, freebies, or access to resources that non-members would have to pay for separately.

• Limited-Time Offers: Create a sense of urgency by offering expiring cash-back or member only discounts for a limited time.

• Testimonials and Social Proof: Feature testimonials, reviews, or quotes from satisfied members to demonstrate the positive impact of the membership.

• Monitor and Improve: Continuously monitor the performance of your membership offer and gather feedback from members to make improvements and adjustments as needed.

Remember, the success of your membership offer depends on understanding your audience, providing real value, and effectively communicating the benefits they will gain from being a member.

Maximizing your Membership Program.

Designing your program is half the battle, but what you choose to power it with is a big decision. So, how do you get the most out of a membership app? 

• Explore the App's Features: Take the time to explore all the features of the app. Familiarize yourself with the different benefits, the dashboard, and how the app works. You may have to adapt the way you do things, or make sure you’ll be prepared for any integrations with other platforms you use.

• Provide Feedback: If the app allows users to provide feedback or suggestions, take advantage of this opportunity. Share your thoughts on how the app can be improved or what additional features you'd like to see.

• Stay Updated: Keep an eye on app notifications, emails, or any other communication channels to stay updated on new content, events, or offers.

• Refer Others: If you find the membership app valuable, consider referring it to friends or colleagues who might benefit from it. Some apps offer referral incentives or bonuses.

• Stay Engaged: Regularly interact with the app and play around with the features. The more you engage with it, the more ideas you’ll get around how you can enhance your membership offering or customer experience.

By following these steps, you can make the most out of a membership app and fully enjoy the benefits it offers. Remember that active participation and engagement play a crucial role in maximizing the value of any membership-based platform.

Why Inveterate?

Inveterate was built by a team with years of expertise in the field and is designed with marketers in mind but is flexible for developers. Offering intuitive marketing tools and integrations with services like Klaviyo, Postscript, and Gorgias, while providing developers with API access for custom experiences. With Inveterate, Inc., clients can create their vision with ease and adaptability.

Membership fees help generate a new source of recurring revenue, but members are proven to have higher lifetime value with increased AOV and increased purchase frequency compared to non-members. And this is observed when comparing the activity across cohorts. Additionally, across Inveterate merchants, 20-30% of new members are actually first time customers, helping to reduce acquisition costs. 

It might be time to trade in old reward systems for customized membership solutions. Offer benefits like exclusive discounts, member pricing, store credit back, and special access, all automated. It's a powerful way to foster loyalty and keep your best customers shopping on your website.