The practice of merchants cultivating customers’ repeated purchasing habits through various stimulating means such as coupons and red envelopes is called customer incentives. Customer incentives can be divided into long-term incentives and short-term incentives. For example, a single marketing activity can complete a direct short-term incentive. A common long-term incentive method is the membership system.
The membership system is a common customer incentive method in cross-border e-commerce. Through the store membership system, the core purchasing power group can be retained to achieve the purpose of promoting store sales, improving store customer loyalty, and delivering brand value. The membership system itself is a customer screening mechanism, which aims to screen out customer groups that are more willing to pay, and to dig out more benefits from them, and provide different services to different customers.
Member level and member rights are two essential elements for building a membership system.
1. Member level
Member levels are generally divided according to the transaction amount and the number of transaction orders within a certain statistical period. On Alibaba International Station, store members are divided into 3 levels by default: ordinary members, senior members, and VIP members. (1) Ordinary members are customers who have successfully exchanged business cards with merchants. Ordinary members are potential consumer groups. Through the zero-threshold membership method of exchanging business cards, they can strengthen their connections with potential customers, facilitate proactive contact, and achieve further marketing conversion. (2) Senior members are customers who have already traded with merchants, but the transaction amount is within a certain range. Senior members are in the loyalty transition stage and need further incentives to improve their loyalty. (3) VIP members are customers whose annual transaction amount is greater than a certain amount. The specific amount is determined according to the specific situation of the merchant. VIP members are the merchant’s loyal customer group.
2. Membership rights
Differentiation of member rights is an effective way to motivate members to purchase. Rights that are difficult to be copied by competitors are the greatest attraction to customers. The essence of stickiness is the user switching cost. Common types of member rights include product discount rights, logistics rights, and service rights. Member-exclusive private products, prepayment ratios, and free samples are three common ways for Alibaba International Station to effectively motivate members.
Member-exclusive private products refer to products that are only displayed to designated members. The company’s latest styles, test styles, super-low discount prices, and upgraded products of high-priced products can be set as member-exclusive products, allowing members to experience a sense of exclusiveness. Setting prepayment ratios for different customers can reflect differences in member rights and interests. The prepayment ratio should be set based on the customer level and the characteristics of the company’s products. The prepayment ratio for customized products is relatively higher than that for regular products. Setting prepayment ratios for different customers can reflect differences in member rights and interests. The prepayment ratio should be set based on the customer level and the characteristics of the company’s products. The prepayment ratio for customized products is relatively higher than that for regular products.
The prepayment ratio for customized products in the wig industry of Alibaba International Station is generally around 75%, but for regular products purchased by VIP members, some merchants can accept a prepayment ratio as low as 30%. Free samples can be delivered to customers as special member rights to promote member purchases. For example, VIP customers can get free samples for unlimited times, and ordinary members can get free samples 3 times. In addition, member rights also include member discounts, priority delivery at member-exclusive prices, logistics upgrades, etc.
When designing the rights and interests system in the membership system, we must start from the actual situation of the store and consider from the customer’s perspective whether the membership system is attractive enough to the specific member groups of the store and is sufficient to drive the members’ purchasing behavior.