Talk bout How to Understand and Build a Membership System


The membership system is often used in platform products. What aspects should we think about as a product designer / manager for the establishment of the membership system?

Since I also need to build a membership system in my previous projects, and constantly learn the working methodology of experienced product managers in the process of thinking and implement, I will also summarize and record this, and welcome to discuss.

The membership system is an integrated system that focuses on the how the product provide value to customers in the user life cycle process and reflects the user value.

From the user's appearance in our product to the final loss, this process requires a good membership system based on the product for the platform to judge and make decisions on user value.

The membership system is not unfamiliar to us. For example, we often see cashiers guiding customers to apply for membership in offline supermarkets, accumulating points through consumption, and members can perform irregular rewards or product exchange in supermarkets.

This is also a common system design for online e-commerce platforms. Next, let's talk about how we should think about the establishment of a membership system in an e-commerce platform.

1. The value of membership products

First of all, what is the value and significance of building a membership system in the product?

Here, our thinking about value can be considered from the user-side value and platform-side value.

From the user level, users continue to generate behaviors in the platform, such as order transactions, order evaluation, product sharing, and so on.

This reflects the user's contribution and loyalty to the product.

From the various behaviors we can perceive from users, the platform can create more user value and continuously improve the user's shopping experience by focusing on the sales path of e-commerce: pre-sale - in-sale - after-sale.

From the platform level, we can quantify different user values ​​through a series of behavior data and transaction data generated by users, and analyze and stratify a large number of users.

Create more opportunities or benefits for the business through refined operational means. This is an indispensable value embodiment in the process of platform operation.

2. Four elements of membership products

To build a membership system, we often need to consider four elements, including:

  • Member information;
  • Membership level;
  • Member growth value;
  • member benefits.

1. Member information

Member information, as the underlying data of the entire system, mainly provides data support for the following three elements.

Similarly, the acquisition of member information is also the necessary data to assist the platform to build user portraits, which mainly include basic user attribute information, transaction information, and other behavioral information.

The role of membership information, in addition to realizing user differentiation and personalized customer relationship management, is also the main information for the refined operation of platform customization.

To this end, we often need to identify and stratify users , and the membership hierarchy is an important way to stratify users.

Through the membership level structure, we can stratify massive users according to elements such as behavior, needs, preferences and values. For different users, the focus of the product is different.

For example, the heavy user group, that is, people who have a certain degree of loyalty to the product, in the process of using the product, their focus may be on:

  • Pre-sale product activity perception - such as the acquisition and use of coupons for pre-sale products, which affects users' decision-making when placing orders;
  • Freight and delivery in the sale - such as whether the shipping fee is free, whether there is shipping insurance, and the timeliness of delivery;
  • After-sale service - Entering the abnormal after-sale process, returns and exchanges and refunds are the issues that users are more concerned about.

For ordinary users, the common behaviors such as searching and completing a one-time purchase, they may pay more attention to the simple and clear shopping process.

2. Membership level

Regarding the design of the membership level, the key is to consider the rationality of the membership level gradient and the matching degree of the corresponding membership rights, and at the same time, it is necessary to ensure that the membership level has enough room for growth in future business expansion.

When designing membership level, the concern should be that levels should be designed neither too few nor too many.

  • On the one hand, users with too few levels are easy to reach the highest level, which loses the value of segmented customer groups and differentiated services, and users will also lose the motivation to continuously upgrade, resulting in the loss of some activity;
  • On the other hand, too many levels will lead to insignificant differences between levels or difficulty in upgrading, resulting in an unreasonable distribution of the number of members at each level.

The ideal membership level model generally refers to the five-level pyramid model: SVIP - VIP - Senior Member - Ordinary Member - Registered Member

From the bottom of the tower to the top of the tower, the proportion of distributed users is often inversely proportional to the corresponding upgrading difficulty, user contribution, loyalty, etc. 

  • Registered members - the minimum threshold, registration is achieved.
  • Ordinary member - when there is a transaction or other valuable contribution, you can be promoted to an ordinary member (such as placing order, evaluation, sharing, etc.).
  • Senior members - a transitional buffer level belonging to ordinary members and VIP members. On the one hand, it is used as a resource reserve for potential customers, and on the other hand, it is used for the buffer design of levels and rights. Users who are distributed at this level are the groups that need to focus on conversion. 

VIP, SVIP—Following the 80-20 rule, the number of users may account for 20% of the total number of users, but the contribution often reaches 80% of the total revenue.

This is the key maintenance customer of the platform, the user group that needs heavy operation of the platform, and belongs to the backbone of the platform. Most of the marketing investment can be carried out around this kind of group.

The specific rating latitude takes into account transaction volume, transaction frequency, activity status, etc.

In addition, SVIP can be said to be a die-hard fan of the platform, and it is extremely important for the platform to continue to create value and spread word of mouth.

3. Member Growth Value

Member growth value runs through the core of the entire membership system. 

By quantifying and managing membership value, when formulating membership growth rules, we take into account the difference in the importance of each user's different behaviors, and give different growth values ​​based on the contributions made by users.

Generally, when designing or specifying the growth value, in order to distribute the growth value reasonably, in addition to considering the acquisition (ie accumulation) of the growth value, it is necessary to have a reverse thinking, and also consider how the growth value deduction mechanism is defined.

It can generally be defined as positive cumulative behavior: such as the growth value of the transaction order amount (core behavior), the growth value of participation and interaction (auxiliary behavior), the length of stay, and so on.

Reverse deduction types such as long dormancy or churn need to deduct the growth value. The meaning of deducting the growth value: it can increase the threshold for users to exit, and on the other hand, promote users to continue to maintain value output.

4. Membership benefits

The platform builds a membership system not only to define the value of members, but also to implement the value. Giving members rights and benefits is the core of the value of members.

Screenshot of OMINI High-Fidelity Shop App

Membership rights are value-added services for platform business, and different rights and benefits also affect the user end and the platform end.

For users - when the privileges granted by the platform are too few or too small, it is not attractive to users.

For the platform, too much or too much privilege will be a test and pressure on the platform resources, and it is necessary to strictly consider whether the input and output have reached a balance.

For the granting of membership rights, we can also think about how to give them around the pre-sale, mid-sale and post-sale, such as:

  • Pre-sale service - shopping guide and reservation stage, giving more rights such as priority snapping, exclusive discounts, pre-notified of events, etc.;
  • In-sale service - around payment and distribution and other benefits, to ensure the service experience of the delivery process;
  • After-sales service - you can think about the rights and benefits of returns, expedited processing, exclusive customer service and so on.

3. Write at the end

Regarding the establishment of the membership system, as a member product manager, you should fully understand and think about whether the system you build conforms to your own platform positioning.

Personally, I think that not all platform products need to build a large and comprehensive system, but the basic system structure still needs to be combined with the real business.

Through the correct methodology, go into the online environment for rapid test and verification, and continuously optimize and iterate, gradually improve the platform system, and fill more vitality for the business.

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