In 2023, why are powerful companies looking for "super users"?

As the market enters the stock era, the originally involuted market has become even more cruel. Companies now pay more attention to tapping into private domain traffic and member operations. Why are powerful companies tapping into "super members"? Let's take a look.

As the market enters the stock era, the originally involuted market has become even more cruel. Business growth has encountered bottlenecks and urgently needs new breakthroughs. When companies cannot "seek external help", they need to "look inward" to explore the value of existing user groups and seek incremental growth in the stock.

Therefore, "private domain traffic" and "membership operation" have become a good way for companies to seek growth, among which "paid membership" has become a key breakthrough.

Especially in the past two years, this trend has intensified, and user needs and corporate strategies have also been quietly changing.

1. From “traffic” thinking to “retention” thinking

In the past few years, if we talk about the hottest terms in the market, "private domain traffic" must have a place. Especially after the epidemic, the concept of private domain has become more and more popular every year.

There are also many companies that have "resurrected" and "grown in adversity" by relying on private domains. For example, Luckin Coffee used social network coupon marketing to promote conversion and turned losses into profits; Baiguoyuan was very successful in private domains and successfully listed.

However, as more and more companies enter the market, the cost of acquiring customers in the private domain has also risen sharply, and they will also fall into the "traffic trap".

iResearch showed in the "2022 Chinese Merchant Private Domain Layout Insight Research Report" that more than 80% of merchants believe that private domain costs have increased compared to the beginning of the layout, with an average increase of up to 40%, mainly from development costs, personnel and marketing investment.

In contrast, "membership operation" has surpassed "private domain traffic" and has gradually become a new industry buzzword.

More and more private domain teams realize that the core of private domain is not "attracting new customers" but "retaining customers" to further achieve user "conversion" and "repeat purchase".

Therefore, companies have begun to pay attention to the operation of members. Data also shows that the contribution of members is far greater than that of ordinary users, for example:

Baiguoyuan: The total number of accumulated members exceeds 60 million, the average monthly active members in 2021 exceeds 7 million, and the overall repurchase rate of members reaches 49%.

Jiangnan Buyi: Membership is the cornerstone of performance. As of June 30, 2022, its membership reached 5.9 million, contributing 70% of revenue;

Huazhu Hotel Group: All Seasons, Hanting and other brands are its brands, with more than 200 million members, contributing more than 75% of revenue...

…

From many cases, we can also draw a conclusion: high-value users are crucial to the growth of enterprises.

This also prompted companies to start thinking of ways to screen and cultivate their own high-value users, or super users.

If super users want to put this into practice, one of the effective ways is to become a paid member.

2. Paid membership is a major trend in the future

In recent years, we have seen more and more companies, even traditional banks, hotels, airlines, etc., strengthening their membership operations and sparing no effort to launch their own paid memberships.

For example, as early as 2005, Amazon launched the Prime paid membership, which costs US$119 a year to enjoy many benefits such as free shipping and free download of e-books.

To date, Amazon has more than 150 million paying members worldwide. According to official figures released by Amazon, Prime members spend 4.6 times more on Amazon than ordinary users. The average annual spending of members with one year is $886, while the average annual spending of members with more than three years is up to $1,640.

Companies are also aware of the huge value it contains, which is the key to why everyone has joined the game, or even has to join the game. In summary, paid membership has three major advantages and characteristics:

First: Make money and provide a stable cash flow for the platform (the bottom line of business growth)

First of all, the most obvious benefit of paid membership is membership fees, which can directly bring cash benefits to the company. For example, the number of Amazon Prime paid members exceeds 100 million, and the annual membership fee income reaches tens of billions of dollars. Membership fees bring a clear bottom line for the company.

In addition, paid membership can greatly increase the user's repurchase rate. For example, Amazon Prime can provide unlimited free shipping, and users will increase their order rate in order to earn back the "membership fee".

Second: Enhance user stickiness and screen high-value users

With the cost of acquiring customers rising day by day, users mean everything. Paid members can not only screen out users who highly recognize the brand and can bring high profits to the brand.

Moreover, once users become "paying users", the membership fees will become the consumers' "sunk costs". In order to "earn" back the membership fees, consumers will also find reasons to pay.

Third: Build a traffic bridge to acquire more users

Many platforms offer diversified paid membership benefits, which can reach users in different fields and attract more users to join. For example, the benefits of Taobao 88VIP members include NetEase Cloud Music membership, Ele.me membership, and Fliggy membership.

Every 100 88VIP members added by Taobao can bring in 38 Youku members, 32 Ele.me members, and 27 Taopiaopiao members.

Facts have proved that with the rapid development of "paid membership" in China, major companies have also achieved improved performance and user growth.

Just recently, Dongfangxuan launched its paid membership service, and JD.com and Taobao also upgraded their paid membership business this year. It can be seen that both platforms and brands are actively promoting the paid membership system.

This trend is becoming more and more obvious. When all the giants are taking action, it shows that this is a new opportunity. All companies need to pay attention to it. It can not only retain paid members and screen out high-value users, but also bring stable profit growth to the company.

In summary, the core of paid membership is to serve users. When your membership system provides enough value, consumers will pay.

3. The key to future enterprise growth: establishing a super user system

At present, the incremental dividends of various industries have peaked, and it is imperative to deeply tap into the value of users. At the same time, we have found that it is difficult to find companies in the market that do not have membership.

After investigation, we found that most brands are at the stage where they have always wanted to establish a membership system, but are afraid that the cost of trial and error will be too high and are therefore hesitant to implement it; some brands have already started operating a membership system, but have encountered temporary bottlenecks in the process and are unable to go further.

The problem is that most companies do not have the ability to screen and cultivate high-value users. If they want to tap into more high-value users, they must give up treating all users equally and implement truly tiered and refined operations, thereby establishing a super user system.

Cultivating super users means building the most important customer assets for the company.

Author: Yan Tao WeChat public account: Yan Tao Sanshou