The eCommerce industry has seen a rise in membership models as businesses seek to generate recurring revenue and increase customer loyalty.
Membership models offer a unique opportunity to build long-term relationships with customers by providing them with exclusive access to products, services, and information. This can help establish trust and authority within your niche market.
However, while eCommerce membership models offer many potential benefits, many businesses struggle to implement them effectively.
In this blog post, we’ll explore these mistakes in detail so that you can avoid them and create a successful eCommerce membership model for your business. By the end of this article, you’ll have a clear understanding of what to avoid and how to overcome the challenges associated with implementing a membership model.
Ecommerce membership mistakes that are making your business lose sales
While these may vary based on the industry you are in, the products you sell on memberships and the target audience you’re addressing, here are some of the common eCommerce membership mistakes that could be costing you sales:
1. Confusing it with the subscription model
One of the biggest mistakes businesses make when implementing a membership model is confusing it with the subscription model. Although the two models share similarities, they are fundamentally different.
An eCommerce subscription model involves customers paying a set amount of money at regular intervals for a specific product or service. This means that the customer is paying for the same product or service every time. For instance, a customer subscribing to Netflix pays a monthly fee to access the same content over and over again.
On the other hand, an ecommerce membership model provides customers with exclusive access to products, services, and information that non-members don’t have access to. Unlike a subscription model, a membership model doesn’t necessarily involve the same product or service being delivered repeatedly. Instead, it provides customers with additional value beyond the product or service itself.
It’s essential to understand the differences between the subscription and membership models to ensure that you don’t confuse them. If you offer a membership model but treat it like a subscription, you risk alienating your customers and losing their trust. Make sure that you’re clear about the benefits of your membership program and the value it provides to your customers. This will help you to create a successful membership model that adds value to your business and your customers.
2. Not knowing your target audience
One of the biggest mistakes that ecommerce businesses make when implementing a membership model is not knowing their target audience. Without a clear understanding of who your ideal customer is, it can be challenging to tailor your membership program to meet their specific needs and preferences.
To avoid this mistake, take the time to research and analyze your customer base. Look for patterns in their demographics, behavior, and purchasing history to gain insights into their motivations and pain points. This information can help you create a membership program that is tailored to their needs and interests, making it more likely that they will become loyal members.
For example, if your target audience consists of busy professionals who value convenience and time-saving, you may want to offer perks such as free and fast shipping or priority customer support. On the other hand, if your target audience consists of price-sensitive shoppers, you may want to offer discounts or cashback rewards.
3. Not knowing what perks to offer
One of the most important aspects of a successful ecommerce membership program is providing valuable perks to your customers. Many businesses make the mistake of not putting enough thought into what perks they offer and end up offering generic or uninteresting benefits.
To avoid this mistake, you need to understand your customers’ needs and preferences. Conduct market research, collect customer feedback, and use analytics tools to gain insights into their behavior. Once you have a clear understanding of what your customers want, you can offer perks that will entice them to join your membership program.
Some popular perks that businesses offer include exclusive discounts, early access to new products or sales, free shipping, personalized recommendations, loyalty points, and access to exclusive content or events. However, the perks you offer should be tailored to your specific audience and business niche. For example, a beauty brand may offer samples or trial sizes of new products as a perk, while a fitness brand may offer access to exclusive workout videos or personalized training plans.
Remember, the perks you offer should provide real value to your customers and motivate them to stay engaged with your brand. Continuously evaluate the perks you offer and experiment with new ones to keep your membership program fresh and appealing.
4. Not experimenting with perks and benefits
One of the biggest mistakes that businesses make when implementing a membership model is not experimenting with or updating the perks. Customers can quickly become disengaged if they are receiving the same perks month after month. It is important to keep your membership program fresh and exciting by offering new perks, updating existing ones, or even introducing limited-time offers to keep your customers engaged.
By experimenting with new perks and offers, you can keep your members excited and engaged, which can lead to increased sales and loyalty over time. For example, you can periodically survey your members to understand what they like and don’t like about your program, and then use that feedback to make changes. You can also experiment with offering exclusive access to new products or services, hosting special events or webinars, or providing personalized offers based on a member’s purchase history.
5. Not planning the right validity
When it comes to offering a membership program, the validity of the program is a crucial aspect to consider. The validity of the membership program determines the duration for which the customer can access the benefits and perks of the program. If you don’t plan the right validity for your program, you risk losing customers who might feel that they didn’t get their money’s worth.
For example, if your program validity is too short, customers might not feel like they received enough value from the program and may be less likely to renew their membership. On the other hand, if the validity is too long, customers might not feel the urgency to take advantage of the perks offered and may forget about the membership altogether.
To plan the right validity, you need to consider your target audience and the nature of your business. For example, if you sell seasonal products, you might want to offer a membership program with a shorter validity period that aligns with your peak season. Alternatively, if you sell products that have a longer shelf life, you can offer a longer validity period.
6. Not conducting a competitor analysis
Failing to do a competitor analysis is another mistake businesses make when implementing an eCommerce membership model. By not knowing what your competitors are offering, you risk offering similar or inferior perks to your customers, which can lead to lower membership rates and customer satisfaction.
To avoid this mistake, it’s important to research and analyze what your competitors are offering in terms of membership programs. Look at their perks, pricing, validity, and engagement strategies. This can help you identify gaps in their offerings that you can fill, as well as areas where you can differentiate yourself from your competition.
For example, if your competitor offers a free shipping perk, you could consider offering free returns or a loyalty point system. This can help you stand out from the competition and offer unique value to your customers.
7. Not engaging customers once they buy the membership
One of the common mistakes that businesses make when implementing a membership model is not engaging with their customers once they have bought the membership. It’s essential to keep members engaged and offer them a consistent stream of value so that they feel like they are getting their money’s worth.
Businesses should think beyond the initial perks and benefits they offer and continue to add value throughout the membership period. This can be done by offering new and exclusive products, early access to sales or events, or personalized recommendations based on their past purchases. It’s also important to create a community around the membership program, where members can connect with each other and share their experiences with the brand.
One way to engage customers is to ask for their feedback and ideas on what they would like to see added to the membership program. This can help businesses tailor the program to their customers’ needs and preferences, which can ultimately lead to higher retention rates and increased sales.
8. Not having a win-back sequence
Not having a win back sequence can be a critical mistake when it comes to retaining customers after the validity of their membership has ended. If you don’t have a plan in place to re-engage these customers, they may drop off and not see the value in renewing their membership in the future.
To avoid this, it’s important to have a win back sequence in place that will encourage customers to renew their membership. This can include targeted email campaigns, personalized offers, and incentives to renew. By planning in advance, you’ll be able to win back customers in a timely manner and keep them engaged with your business.
For example, you can send an email a few weeks before the membership’s expiration date, reminding the customer of the benefits they will lose if they don’t renew. You can also include a special offer or discount code to incentivize them to renew their membership. Additionally, you can follow up with personalized offers or reminders after the expiration date has passed.
9. Not segmenting customers
One of the biggest mistakes that businesses make when implementing an eCommerce membership program is not segmenting their customers. Not all customers are the same, and they have different needs, preferences, and purchase behaviors. By segmenting your customers into different groups based on these factors, you can tailor your membership program to meet their specific needs and provide a personalized experience that they will appreciate.
For example, you can segment your customers based on their purchase history, demographics, geographic location, or interests. This will help you understand what type of perks and benefits to offer to each segment, how to communicate with them, and how to target them with relevant promotions and offers. By doing so, you can increase customer satisfaction, retention, and revenue.
Segmentation also allows you to identify your most valuable customers and prioritize your efforts towards retaining them. You can offer them additional benefits, such as early access to new products, personalized recommendations, or exclusive events. By doing so, you can increase their loyalty and turn them into brand ambassadors who will spread the word about your membership program to others.
10. Not measuring the performance of your membership program
Another significant mistake that could cost your business sales is not measuring the performance of your eCommerce membership program. Measuring the performance allows you to track the effectiveness of your program and make data-driven decisions to improve it.
Some metrics that you can track to measure the performance of your program are:
- Number of members: This metric indicates the growth of your program and helps you understand how many customers are interested in becoming members.
- Churn rate: This metric shows how many members are leaving your program and not renewing their membership. By tracking the churn rate, you can identify the reasons why members are leaving and take steps to prevent it.
- Lifetime value of members: This metric indicates how much revenue each member generates over their lifetime. By measuring this metric, you can determine the ROI of your membership program and identify opportunities to increase the lifetime value of your members.
- Conversion rate: This metric indicates how many visitors to your website become members. By tracking this metric, you can identify which pages and offers are most effective in converting visitors into members.
By measuring the performance of your eCommerce membership program, you can identify areas for improvement and make data-driven decisions to optimize the program. This can lead to increased revenue, higher customer loyalty, and better engagement with your target audience.
Ready to set up a winning eCommerce membership model?
Implementing an ecommerce membership program requires careful planning and execution. You need to know your audience, offer attractive perks, and continuously experiment and measure the program’s performance. By avoiding the pitfalls mentioned in this article, you can create a successful membership program that helps to increase customer loyalty and generate recurring revenue for your business.
To get started, check out Appstle’s eCommerce membership program, which offers a range of features and benefits to help you launch a successful program for your business.