Does offering memberships help with customer loyalty and wallet share?

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Overview

Membership programs have always been powerful tools of the retail and service industries, even before they became mainstream in internet and e-commerce. From airlines to Apple, memberships and unique customer IDs (the Apple ID!) have become the way to go.

In this article, I have outlined how membership plans work, and touched upon the process to use Appstle Subscriptions to create and manage membership plans.

Membership categories

There are 2 key types of membership plans.

  • First – Loyalty memberships
    This type of membership facilitates the merchants to have their store open to all customers, but reserve a few attractive perks to their members, who pay a small recurring fee for the membership. The best example for this is Amazon Prime. While shopping on Amazon is open to the world, being a prime member (for a fee) gives customers specific benefits such as free and fast delivery.
  • Second – Access memberships
    While exclusive access memberships (for clubs, etc) have been around for many years, this has specifically become more common in the digital world, albeit in a relatively more affordable scale! In an access based membership, a merchant allows access to their product or service, only if the customer is a member. The membership fee can either be separate from the individual price of the products within the store, or can be all inclusive. The best example for this is Netflix! A user pays a specific subscription fee on a recurring basis, to access all of Netflix’s content. If a user’s subscription to Netflix expires, he/she can no longer watch the movies and TV shows in it. The content in Netflix is only for its members.

Managing membership Plans:

Creating and managing membership plans involves 3 components:

1.Recurring membership fees: This is the most important component of offering membership plans, as it not only implies revenue to your store, but is also the key determining factor in providing specific perks and services to your members, as opposed to non-members.

2.Member tagging: The second most important factor to provide member specific services, is ‘tagging’. This involves the automatic identification/marking and segmentation of your store members, as opposed to non-members.

Tagging can be a simple member versus non-member tagging, or can involve further gradation and sub-categorizations among members, such as basic members, gold members, and platinum members, based on membership pricing tiers. For example, going back to Netflix, the company has multiple membership and pricing tiers, differentiated by the number of screens that the user/his family can view Netflix on, at any given time.

Tagging and sub-tagging functionality is essential to determine and provide specific perks to different membership tiers.

3.Membership Perks: This can be defined as the actual perks/special features that the merchant provides to members.

At present, Appstle supports both components 1 and 2 (processing recurring payments, and tagging). We are currently working on component 3, and expect it to be available soon. In the meantime, we provide a strong integration with third party apps such as Eber and AAA.

Setting up membership plans with Appstle

There are 3 essential steps to setting up your membership plan with Appstle Subscriptions.

1.Creating a membership product
Just like you create a product page in your store (which your customers can check out as a one-time or recurring purchase), you will have to first create a membership product page, to provide membership plans for your store. This membership ‘product’ will have to be bought by the customers, to become a member of your store.

Once, a customer checks out this membership product from your store, Appstle will automatically bill them for the membership, thus taking care of the recurring payments for their membership.

2.Tagging the member customers
Just the way Appstle enables you to tag your subscribing members and the recurring orders, to distinguish from non-subscribing customers and one-time purchases, it also enables you to tag your members!

These tags help you provide membership discounts or/and any other perks to your store members. The tags can also be used to produce sub-segmentations such as basic/gold/platinum memberships!

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If you are looking to understand more about memberships, you can reach out to us . Our 24x7x365 available experts will be happy to assist you further.

About the Author

Hussain Qureshi

Hussain Qureshi

Hussain Qureshi is the Product Support Manager at Appstle Solutions. Hussain is level headed and loves interacting with new people and developing strong client relationships. His biggest interests are problem solving (especially tricky ones!), cricket, F1 racing, and European history!

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