"Ladies and gentlemen, may I have your retention please." If only it were that simple to acquire regular business from your customers--new and old--or increase revenue from existing subscriptions.
We’ll spare you the seed-to-tree metaphor (for now). Still, it’s no secret that merchants are constantly nurturing customer relationships in hopes of growing strong, steady, voluminous sales--ideally without a bunch of manual hustle and expensive CAC.
Unfortunately, for a lot of companies (especially those not in the consumables market), the scenario goes more like this:
- Your revenue depends on one-off purchases from new customers
- You have few to no recurring customers because you've given them no reason to come back unless a product runs out or breaks
- Referrals are in short supply (or, “out of stock,” as it were...heh)
- You have little to no community engagement
If any (or all) of these things are true for your store, you’re basically digging a hole for a tree (told you we’d come back to the metaphor) and taking a nap in it instead.
While we understand that a soft dirt crater may look inviting (being a business owner is exhausting) there are probably better ways to use it.
Enter: memberships--beautiful seeds that, with just a little TLC, will one day sprout into a sprawling Eden of loyal, engaged, repeat customers and recurring revenue, meaning you get to say goodbye to:
- The hamster wheel of trying to sell at the same volume with new customers every month.
- Wondering if you'll meet your minimum targets.
- Endless ad spend that only results in one-time-purchasers
Instead, get more recurring sales and increased referrals with ReCharge-powered memberships--with little to no extra manual labor.
“If it sounds too good to be true, it probably is.”
Ah, dear, sweet buzzkill: hear us out.
As long as you’re listening to your customer base and designing around their needs (that's key), a memberships model can be applied to virtually any business.
What Is an eCommerce Membership?
Excellent question. In the eComm sense, a membership is a subscription-based model that gives your company predictable cash flow. In other words, you’ll no longer rely solely on one-off purchases and it’ll be easier to increase the value of existing subscriptions through smart upsells and cross-sells.
Types of Memberships
Chances are, you're already very familiar with memberships -- everything from Netflix to the gym (basically, any recurring billing feature anywhere) is a membership. How can you decide which one is the best fit for your customer base?
These memberships offer (often unlimited) use of a set of features and/or products for a monthly fee.
A Spotify membership is a great example of the Access model. Members pay a set fee for access to XYZ products or services that are otherwise unavailable to non-members. Access memberships may also offer exclusive "member pricing" on other items, or include other special incentives.
These memberships don’t just give patrons more of what they want--they also raise the LTV for each member by selling to them on a consistent, recurring basis.
Access Model Example: Educational Content
If your audience is likely to actively seek education on your products or industry, you can utilize private, customizable membership portals to distribute members-only content like tutorials, online courses, or downloadable materials.
Chances are very good that the first example to spring into your mind was the Masterclass platform, which uses expert-led classes in a dizzying number of fields of interest to tempt potential students into dropping the $180 annual fee. Subscription grants access to all classes, as well as associated PDF workbooks, audio recordings, live sessions, and more.
Many other companies offering educational content will do so in addition to free materials. Giving customers a taste of what you have to offer is a great way to tantalize them into subscribing to get more of what they’re already enjoying!
Outside of Access, the Replenishment model is likely what you think of when someone says, “subscription.” This model is most commonly associated with personal care items and consumables, with Seed and Dollar Shave Club bring two examples. You choose the product(s) you want to be sent to you on a recurring basis.
Replenishment Model Example: Consumables
Merchants often offer products at a discount if you attach them to a subscription, too--a la Chewy, which has a Subscribe & Save option.
You can purchase one case of cat food for $40, or subscribe to get the same case for $38. $2 may not seem like wild savings, but it adds up over time--and solves the mental labor, however minor, of having to remember to make another purchase on time.
The Curation model usually manifests in one of two ways.
Option one: your customer subscribes to receive a “mystery” product in keeping with a particular theme on a recurring basis. Pour More (oh, hello Tako client 🙋🏻♀️) is an example of curation. A customer chooses their favorite type of spirit and the frequency at which they’d like to receive the product, then Pour More sends a bottle of that spirit (from a different distillery each time) at whatever frequency the customer chose.
Option two: a variety of products, selected based on customer preferences, are bundled and sent on a recurring basis, a la Stitch Fix.
If you’re savvy about collecting customer preference data, Curation is an excellent way to make customers feel like you care enough to know them--with very little finger-lifting from you. That’s an important part of customer relationship-building because if there’s one thing we know about today’s consumer, it’s that (s)he wants to feel known.
Not unlike the Access model, Community memberships hinge on an engaged customer base with a niche interests. The primary difference is that Community subscribers want to go a step further and connect with other people who share their interests.
Trends offers this in spades for budding entrepreneurs. Their base offering is that they “...send you emerging business trends months before they pop, [saving you] from months of research, thousands of dollars testing, and the...regret [of] not starting sooner.”
But they don’t stop there! Membership also gains access to an enormous community where you can “network and collaborate with over 15,000 ambitious and successful people rooting for you…”--not to mention live industry trainings with experts.
Choosing the Right Membership Style for Your Store
“OK, I know what my options are. How do?”
Before you start identifying which membership type will most delight your customers (and you will need to do that because--surprise, surprise--you need to give them a reason to give you more money), you need to narrow down which options will make the most sense for your business.
For example, an Access framework is well-suited for merchants with limited offerings (such as Spotify or The New York Times), but possibly not great for shops with lots of products and variable pricing. Community may work for a niche product with an invested user base (like homebrewing), but not so much for a standard clothing retailer.
Basically, you want to ask, “What am I selling, and how can I most easily incentivize my customers to purchase it on a recurring basis?”
You'll also need to consider the billing frequency at which you want to offer your memberships. Monthly? Quarterly? Annually? Which frequency is best going to support the needs of the business? You might need to do a little A/B testing in the beginning to figure it out, but most memberships have both a monthly and an annual option.
The frequency at which you decide to bill is very likely going to influence how you set up your program. Remember the "What have you done for me lately?" philosophy. Every time the membership charge hits the client's bill, they'll be questioning the value of that charge. If they haven't engaged with you or enjoyed a membership benefit recently, you risk losing them. More frequent billings necessitate a more active membership program with more frequent touchpoints. (Hellooooo email marketing!)
Know Thy Customer
Once you’ve zeroed in on the possibilities, choose the one that is most likely to entice your customer to subscribe. Ask questions like:
- Who is my customer? What’s his/her lifestyle and how would a subscription fit most seamlessly into it?
- What value does my customer expect from my product or service? How can a membership make it more valuable?
- What’s important to my customer? How can I show them that those things are important to me too?
What membership benefits and components are going to me most valuable to them? Many membership programs are a combination of several:
Rewards are phenomenally versatile, and can be adapted to memberships by allowing members to earn points at a faster rate, have more earning or redemption methods, etc.
This one's straightforward, and a concept that customers are already familiar with. Members pay $X per period and in exchange, receive $X+n in store credit to spend.
Yes, this one's membership model all its own, but is more commonly included as part of a larger membership program. A members-only Facebook group is a fantastic way to build community and interact with (and learn from) your most engaged customers.
This covers everything from early access to limited edition products, the ability to vote or chime-in on restocks or future products releases, one-on-ones with related influencers...basically anything that your most ardent fans would die for.
Know Thy Tools
OK, so you have a good idea of what membership type will work best for you and your customer. (Yay!) Now you need to implement it in your store. Since Shopify doesn’t have a native ability to accept recurring payments, you’ll need to start with a platform that will allow you to breezily set up subscriptions.
As we tend to mention every chance we get, ReCharge is far and away our favorite platform for subscriptions. We love them for their automated workflows, supremely customizable customer portal, killer API, and generous free trial. (More on what they can do for your subscription business here.)
Once you’re set up to accept recurring payments, you’ll move on to tools specific to your chosen membership model. Some types--like Access, Replenishment, and Curation--may not require much beyond the offerings of robust platform like ReCharge. Others may require something a little extra.
(Psst...a proper email marketing tool and strategy is a must in tandem with any of them.)
If you want to implement rewards into your program, a platform like Smile.io is a life-saver. Smile allows you to set up a points system, as well as implement custom VIP and referral programs, in about as much time as it takes your Keurig to brew a cup of coffee.
(OK, don’t be a smartass and test us on that one. The point is, it’s really easy.)
For educational content--particularly if you’ll have different levels of membership that warrant different kinds of content--you’ll need an unfussy way to 1) segment customers so the right people are seeing the right stuff and 2) distribute the things*. Enter: Klaviyo.
Klaviyo integrates directly with your Shopify store, which means you can set-and-forget segments based on specific filters (i.e. products ordered, order volume, etc.) and Klaviyo will constantly sort customers into the proper groups without any manual effort from you. You can then assemble a bottomless number of campaigns and flows with your exclusive content and send them off to expectant subscribers!
*IF you’re not making the exclusive content available directly in their ReCharge portal.
Other tools you may need will depend on how you've structured your program. Connect with us for an evaluation of your planned program and all the tools you'll need to get it done right.
Ready to Get Started?
If you’re feeling confident, get in touch with any of the platform providers we mentioned here and get rolling!
If you’ve got more questions--we’ve got answers. Tako Agency is a preferred partner of Shopify, ReCharge, Klaviyo, Smile.io, and more. (TL;DR, we know our shit.) Whether you need someone to talk you through the process or Jesus-Take-the-Wheel it for you, we’re here.
Interested? Hit us up anytime.