60 million paying members, performance growth against the trend, 4000 words to dismantle Watsons membership operation

As an offline beauty retailer, Watsons has been able to maintain a steady increase in sales in this difficult market environment, which is inseparable from its mature membership management. This article will systematically analyze the model of Watsons' membership management and is recommended for relevant practitioners in the beauty business~

The beauty retail industry has been experiencing a tough time in recent years. However, Watsons, which has a large number of offline stores, has maintained a steady profit. It has been profitable for three consecutive years, and its profit increased by 30% in the first half of this year.

The key to Watsons' resilience, in addition to its early digital transformation business, is its strong membership operations.

In more than 30 years of operation in the mainland market, Watsons has accumulated over 200 million users and more than 60 million paying members, covering more than 90% of domestic urban women aged 18-45 . This rich user asset is the basis for Watsons to transform its user operation thinking.

At present, the consumption frequency and amount of Watsons O+O (online + offline) customers are 3.1 times that of pure offline users, and the monthly repurchase rate of members has increased by nearly 100% after the operation.

I also tried to analyze how Watsons operates its membership business. The following is based on our five-step super user methodology, which involves identifying, cultivating, screening, operating, and fissioning .

Image source: Fengcheng Consulting

Identification

User identification is the first step of the “Five-Step Super User Method”. The key lies in how to identify and find your potential customers.

Regarding this, Watsons established a matrix with WeChat platform as the core very early on, and has operated on different platforms such as Douyin and Weibo, which enables it to reach users efficiently through all channels.

The following is a breakdown of the drainage methods and main contents of each channel:

1. Official Account

Follow the official account [Watsons Service Assistant], and you will find an entrance for private domain traffic in the welcome message.

Specific path: Welcome message of the official account – Click the link – Scan the QR code to add the WeChat account – Private chat to enter the community

2. Mini Programs

Watsons has also set up private domain traffic touchpoints in its mini program [Watsons].

Specific path: Homepage – Mall – Click on the avatar – Scan the QR code to add WeChat – Private chat to enter the community

3. Video Account

The main content of the video account "Watsons Service Assistant" is brand promotion and product introduction. The homepage sets up touchpoints for public accounts and corporate WeChat to attract traffic, and users can jump into the private domain by clicking on the link.

In addition, the account will also regularly broadcast live to increase sales, using "discount coupons" as a benefit to attract users to make appointments for live broadcasts.

4. Weibo

Watsons has 3.02 million followers on Weibo, with 166 million likes and comments. The content mainly focuses on brand promotion, event promotion, and product introduction. The homepage has touchpoints for the fan group and the e-commerce flagship store, and users can click on the link to enter the private domain.

5. TikTok

Watsons’ Douyin has 1.55 million followers and 23.652 million likes. The content is mainly about brand promotion, event promotion, and product introduction. The homepage has fan groups and e-commerce flagship store touchpoints, and users can click on the link to enter the private domain.

By operating the private domain through omni-channels and setting up a variety of touchpoints, Watsons has successfully brought fans from the public domain to the private domain, thus ensuring that it can obtain stable customer flow.

2. Cultivation

For enterprises, user identification is only the first step, and subsequent training is more critical, aiming to increase user repurchase. So how can the retail industry, such as Watsons, cultivate its own "super users"?

At present, Watsons' operational transformation is mainly achieved through three channels: one-on-one private chat on WeChat, customer circle of friends and community.

First, it is a one-on-one private chat. After adding Watsons customer service, users will receive an invitation to join the group. At present, most of Watsons' transactions come from the community. Using the community to complete the conversion can reduce unnecessary disturbance to users to a certain extent.

Next, let’s talk about the customer circle of friends. Watsons’ customer service circle of friends has been operated in a refined manner. The introduction of the circle of friends “Although the window is small, the service is unlimited” shows its attitude towards service.

The frequency of posting in Moments is relatively stable, usually 1-2 posts a day, mainly at 9 am, 3 pm, and 9 pm. The content is mainly product recommendations and promotions, using low prices to stimulate users to scan the code and place orders.

Finally, let's talk about Watsons' community, which has also formed a SOP. It is not only a welfare group, but also improves the activity of fans through a variety of activities.

Take a single community as an example:

1. Monday, Tuesday, weekends: Daily product recommendations released at 3pm and 8pm every day
2. Wednesday: 7pm: The winners of the previous event will be announced, and the next event will be announced
3. Thursday: Tea party preview at 12:00 am, official start at 2:00 pm
4. Friday: Dare to Try Day preview at 3pm, warm-up at 6pm, official start at 7pm

Through three channels: one-on-one private messaging, customer friend circles, and group chats, Watsons has successfully established the trust of users and cultivated its own super users.

3. Screening

Nowadays, the "membership model" has long been commonplace in private domain operations. It can not only better serve high-quality users, but also lock in users' consumption for a period of time in the future.

Watsons membership is divided into two modes: paid purchase and accumulated consumption. Green card and fan card members need to pay for purchase, while black card members reach the specified threshold through accumulated consumption.

Let’s focus on its paid membership. The green card membership is priced at 35 yuan, which includes four benefits: coupon package, points gift, member-exclusive price, co-branded membership, etc.

Next, let’s take a closer look at the rights and interests of Green Card members:

1. Members only price

Green Card members can enjoy Watsons member-exclusive prices, with discounts on all products, as low as 50% off.

2. Points redemption

There are two main ways to earn points at Watsons, namely, check-in and consumption. Let's focus on consumption. For every 10 yuan spent by members, they can accumulate 1 point. Points can be used to offset cash, specifically every 20 yuan of points = 1 yuan.

3. Reservation service

Watsons members can make appointments for makeup and skin tests first. Through five-dimensional testing, we provide exclusive skin care solutions and customized makeup to create exclusive looks.

4. Regret Medicine

Members can enjoy a 7-day refund service without any reason, which is very friendly to users who often misread the color number and volume, and also shows that Watsons understands consumer needs very well. Moreover, we have disassembled the cases of nearly 100 companies, and there are not many retail brands that have this right.

5. Novelty Testing Laboratory

This is a [welfare officer activity] launched by Watsons. Members can sign up to become welfare officers and try formal wear for free at 0 yuan, and samples of big brands as low as 0.99 yuan. Specific process: place an order for trial → pick up in store → experience trial → collect report.

6. 5 times points can be used as cash

On the monthly membership day, the points are worth 5 times the cash, and can be used for consumption deduction at the rate of 20 points = 5 yuan, with a maximum of 100 points worth 25 yuan. Each membership day, each card can only enjoy the 5 times points cash discount once, and this activity cannot be used in conjunction with other multiple points cash discounts.

7. Enjoy Asia with One Card

Currently, Watsons has opened stores in many countries and regions including mainland China, Hong Kong, Taiwan, Macau, Singapore, Malaysia, etc. The brand has implemented a one-card system, and members can earn points and enjoy corresponding membership rights when shopping at any Watsons store in Asia.

IV. Operation

Building super users is a long-term plan. It takes time and process to create real profit growth from the beginning. From the overall perspective of the company's cultivation of super users, there are several tasks that require the company to continue to invest energy to promote.

1. Optimize super user rights

At present, the membership model of most companies on the market is relatively simple. Either they only provide growth membership, or only provide paid membership. Or they create a dual-track membership, but the two membership systems are not connected to each other.

This leads to some users, despite having a certain degree of favorable impression towards the company, being discouraged immediately by the high threshold and high span of the membership system.

Watsons has obviously "insighted" into this user demand and upgraded its membership model.

Currently, Watsons’ growth members are divided into three levels: pink card members, green card members, and black card members.

1. Pink card members do not need to pay, just register to become one;
2. Green Card members need to spend 35 yuan to activate;
3. Black card membership is an upgrade from green card membership, and the requirement is that the membership must be completed three times with a total amount of RMB 1,000 or more.

This adjustment, by connecting growth members with paid members, successfully attracted a group of customers who have a favorable impression of the brand to become paid members, and used more benefits at a higher level to attract them to repurchase.

To sum up, for enterprises, the rights and interests of super users are not static and need to be adjusted in a timely manner based on user needs and market feedback, otherwise they will not be able to continue to attract users.

2. Create a hierarchy of superusers

Users need to be stratified, with different levels corresponding to different types and needs.

Currently, Watsons’ growth members are mainly divided into three levels: pink card members, green card members, and black card members.

The growth value and specific benefits of each level are as follows:

• Pink Card Member: Member price, appointment service, regret medicine, novelty test room, points acquisition, Asia Card
• Green Card Members: Member price, points redemption, reservation service, regret medicine, novelty testing room, 5 times points redemption, member day, points acquisition, Asia Card
• Black Card Members: Member price, points redemption, appointment service, regret medicine, novelty testing room, 5 times points redemption, member day, points acquisition, Asia One Card, anniversary gift, Black Card exclusive price

From the above content, we can see that Watsons' membership system is a combination of a payment system and a hierarchical system. Users need to pay to become members, and after becoming a green card member, they can upgrade to a black card member by accumulating purchase amounts and purchase times. This membership mechanism can, on the one hand, screen a group of high-value users and increase revenue sources, and on the other hand, cultivate members' consumption habits and increase members' activity and repurchase times. Points are more of a means of reward, which are accumulated through consumption and redeemed in the points mall to stimulate users to repurchase.

3. Establish and improve the incentive system for super users

When operating and maintaining users, companies also need to use some incentive measures. Currently, the more popular methods include points, rebates and honors.

Rebates are easy to understand, they are real benefits. Honors are mainly distinguished titles.

Let's focus on points. Watsons' points system is very well built. Many rights and interests in the entire membership system are first bound to points.

For example, in the 9-point redemption activity, members only need to spend 9 points + 9 yuan to redeem makeup remover wipes, sanitary wipes, nail stickers and other gifts. In addition, each member day can only enjoy 5 times the points redemption once per card, up to 25 yuan.

Through a sound points system and abundant benefits, users are encouraged to make continuous consumption in order to win points.

5. Fission

Based on its huge private domain traffic, Watsons will use some simple fission gameplay to reasonably utilize private domain resources to achieve the effect of attracting new customers and repeat purchases. Take the public account fission and mini program fission as examples:

1. Public account fission

The most common way for public accounts to expand is to attract users to share and participate by offering prizes or benefits in tweets. For example, inviting 7 friends to help will unlock the privilege of purchasing products at a low price, and adding the concept of environmental protection and recycling will enhance the enthusiasm of users to participate.

2. Mini Programs Split

The splitting of mini programs is even simpler. There is a special group buying area on the homepage of the mini program. By inviting users to participate in the group buying, they can get the right to buy at a low price. This not only brings in new users, but also enables new orders, repeat purchases and N purchases.

Final Thoughts

At present, not only the retail industry, but all industries are in a frenzy of "involution". In this trend, whoever can take the relationship with users a step further will win the future.

Membership is the most effective entry point. After research, it was found that most brands have begun to operate membership systems, but encountered temporary bottlenecks in the process that they could not break through.

To make member marketing more precise and to deeply tap into high-value users, we must give up treating all users equally and implement truly tiered and refined operational management, thereby establishing a super user system and achieving the company's second curve growth.

The evolutionary path of enterprise users/Image source: Yan Tao

According to data from Nielsen, a world-renowned company, super users have 5-10 times the spending power of ordinary users. Every 1% increase in their spending power leads to a 10-15% increase in new customers and a 20%-25% sales growth, which shows the enormous value of super users.

Even the smallest companies have their own super users, and we need to learn to identify and select them. In today's fiercely competitive world, it is better to cultivate users and achieve more long-term and stable growth instead of blindly rolling inward.

Author: Yan Tao WeChat public account: Yan Tao Sanshou