Michael Steele - Why Every eCommerce Site Should Have a Membership Offering

Michael Steele is a co-founder of Member Up, a small Texas consultancy that helps people build and grow membership products. He also has courageously ventured into the dark abyss of running an eCommerce shop with his wife, Terri. He hopes to survive emotionally intact.

Why every eCommerce site should have a membership offering

The biggest challenge for growth is getting customers to come back and buy again. Otherwise, you have to spend a lot of money constantly acquiring new customers in order to meet sales goals. Return customers are more likely to buy again and cost A LOT less to a business to acquire than first time buyers. A membership offering (free or paid) can make a huge impact on building customer loyalty. This talk will cover:

* The different ways a membership component is valuable to an ecommerce site
* What that can look like (examples of common and creative use cases being done well)
* The challenges to expect that come with this
* How to get something really simple set up quickly with WooCommerce Memberships

Transcript

1. STEELE MICHAEL 10:50 MEMBER UP MAIN ROOM NEXT WOOCONF2016 WHY EVERY ECOMMERCE SITE SHOULD HAVE A MEMBERSHIP OFFERING
2. WHY EVERY ECOMMERCE BUSINESS SHOULD HAVE A MEMBERSHIP OFFERING …and what that could actually look like @el_steele
3. CUSTOMER ACQUISITION VS. RETENTION Attracting a new customer costs 5x as much as keeping an existing one. -Lee Resources, 2010 “
4. CUSTOMER ACQUISITION VS. RETENTION “The probability of selling to an existing customer is 60 – 70%. The probability of selling to a new prospect is 5-20%” -Marketing Metrics (book) “
6. AMAZON PRIME In 2014, Amazon Prime was a major investment in customer retention. Billions spent on Prime shipping costs 1.3 Billion spent on Prime Instant Video
7. LET’S SEE WHY “Prime members spend $1,500 a year on average, compared to non-members who spend about $625 a year.” Non-members $625/yr $1500/yr 2.4x
8. FIVE ECOMMERCE MEMBERSHIP MODELS
9. LOYALTY/REWARDS PROGRAM Value: ➤ Discounts on products ➤ Stay top of mind with customers and influence return purchases ➤ Builds customer loyalty
 Works best for ➤ Product potential for return purchases (retail, duh) ➤ Has high profit margins 1
10. MUSICIANS FRIEND Why go anywhere else for gear?
11. REPLENISHMENT MODEL Value: ➤ Ultra-convenience ➤ Set it and forget it ➤ Cheaper (thanks to lower inventory overhead and higher LTV)
 Works best for ➤ Products that need to be replaced or “replenished” often 2
12. ESPRESSO REPUBLIC Convenience is never being without
13. L. CONDOMS Can offer lower cost thanks to higher LTV Membership as a convenience and cost saving option
14. DISCOVERY/CURATED PRODUCTS Value: ➤ Exciting “discovery” experience ➤ Less risk for customer to try ➤ More personalized to needs and taste
 Works best for ➤ Boutique retailers ➤ Curated products 3
15. BOOKROO Exciting discovery experience
16. STITCHFIX Personalize!
17. VALUE-DRIVEN CONTENT Value: ➤ Customers learn more about the things they care about ➤ Adds depth to customer relationship ➤ Makes you a trusted authority
 Works best for ➤ EVERYONE! 4
18. BIRCHBOX TV
19. XERO SHOES The Xero Circle Great example of going beyond the newsletter using a combo of exclusivity and value
20. JOIN THE CAUSE Value: ➤ Philanthropy + commerce ➤ They get to be a part of something bigger ➤ Adds depth and loyalty to customer relationship
 Works best for ➤ Anyone with an underlying vision/purpose for their business put better photo here 5
21. TOMS SHOES “Join the cause”
22. BAD IDEA GOOD IDEA
23. BAD IDEA: Attempting to create an entirely new product
24. GOOD IDEA: Start out using membership to improve sales of current SKUs
25. BAD IDEA: Undercutting costs too much on member discounts
26. GOOD IDEA: Keep your margins high – people don’t need massive discounts to be incentivized.
27. BAD IDEA: Only thinking in terms of traditional loyalty programs.
28. GOOD IDEA: Go beyond just the discounts. Deepen the customer relationship with value-driven content and better experiences.
29. THANK YOU! MEMBERUP.CO/WOOCONF For free resources on bringing memberships to your shop @el_steele