New Orders Exceeding 30 Million! Real Case Study Shows You the Nuances of Membership Systems

The boss is heading to Alipay to attend a sharing session about "SCRM," which inevitably means more boasting and storytelling. As the indispensable pillar of the company, naturally, the task of preparing the materials has fallen on me. And so begins the usual routine of three questions: 

• What is SCRM?

• Why implement SCRM?

• How to implement SCRM?

1.What is SCRM?

SCRM stands for Social Customer Relationship Management, also known as membership marketing. Simply put, it means gathering customers into a circle and then managing and operating these customers to maintain a good business-customer relationship. While membership marketing may sound impressive, it is not a new concept. As early as the early 20th century, and even before, Western societies had already started using it. Its development has generally undergone four stages:

Phase 1: Club Membership Identification

Phase 2: 1960s, Customer Identification in Retail and Service Industries

Phase 3: 1970s, Emergence of Membership Points with the Development of Network Technology

Phase 4: In recent years, the concept of SCRM has risen, bringing member fine management and precise marketing into the spotlight. It not only maintains business-customer relationships but also directly promotes engagement and conversion. SCRM encompasses private domain traffic operations but covers a broader spectrum, serving as a comprehensive marketing approach.

Two,Why implement SCRM?

For B2C enterprises, as the traffic dividend reaches its peak, attracting new customers becomes increasingly difficult, and the cost of acquiring customers rises. Therefore, tapping into the value of existing customers and promoting repeat purchases becomes particularly important. For B2B enterprises, acquiring customers has always been challenging. Nothing is more important than maintaining good relationships with existing customers. It is precisely due to the dual demand for profitability through repeat purchases and customer relationship maintenance that SCRM services are increasingly thriving. Webpower once conducted SCRM marketing for the domestic beauty brand, Chando. After a period of operation, new card-bound members exceeded 560,000, and new orders surpassed 30 million. To get back on track, SCRM is generally considered both a service solution and a technical solution. A mature SCRM operating service provider will have their own developed tools. For example, at Webpower, we have independently developed an SCRM system to manage memberships through four incremental stages:

Phase 1: Global Data Interchange

Connecting user data across all online and offline regions of the enterprise. 

Phase 2: User Insights

Automatically generate user tags and user profiles based on user behavior. 

Phase 3: Precision Marketing

Based on user profiles, conduct precise user engagement. 

Phase 4: Data Analysis Feedback

Monitoring marketing effectiveness, data feedback provides further decision support. Since SCRM systems can perform automated marketing, does that mean having the system is enough? Of course not! SCRM tools are the hands, while strategy and solution services are the brain. If you only purchase an SCRM tool without the support of strategy and solution services, it will be very difficult to achieve personalized user engagement and a tailored experience for each user.

During the operation of the tool, at every stage, and even before the tool is operational, strategy and solution services need to be involved. Therefore, the entire operation of SCRM services should be as follows:

Phase 1: Member Recruitment

Strategy Plan: Develop traffic generation plans to convert regular users into members.

Phase 2: Global Data Interchange

Tool: Connect user data across all online and offline regions of the enterprise.

Strategy Plan: Address the issue of dispersed online and offline functional modules to make data aggregation more efficient.

Phase 3: User Insights

Tool: Automatically generate user tags and user profiles based on user behavior.

Strategy Plan: Conduct targeted user analysis and insights to provide a basis for precision marketing.

Phase 4: Precision Marketing

Tool: Based on user profiles, conduct precise user engagement.

Strategy Plan: Integrate marketing channels and deliver personalized marketing, event planning, and other implementation plans.

Phase 5: Data Analysis Feedback

Tool: Monitor marketing effectiveness and provide data feedback for further decision support.

Strategy Plan: Conduct targeted analysis of marketing effectiveness, with results feeding back into precision marketing. Therefore, SCRM is not just a stand-alone system tool; it should be the sum of a customer maintenance ecosystem. To summarize in a simple formula: Platform Technology + Marketing Strategy = SCRM (Member Marketing).

Three,How to implement SCRM?

The tools part of member marketing has fixed steps, which we don't need to worry about. The part that requires deep consideration is the strategy plan—formulating marketing strategies that work in conjunction with the tools to achieve the desired marketing outcomes is the primary work of an SCRM service provider. There is a concept of the user lifecycle in SCRM, which describes the cycle of a user from getting to know the brand, becoming a member, staying loyal to the brand, to eventually churning. In Webpower’s view, the user lifecycle is very similar to the stages of a romantic relationship, which can roughly be divided into:

• First Encounter (Awareness Stage): The user has just come into contact with the brand and does not have a deep understanding of it.

• Trust (Trust Building Stage): The user has a certain degree of awareness about the brand and gradually develops a sense of trust.

• Infatuation (Loyalty Stage): The user is deeply convinced of the brand, engaging with it frequently or making repeat purchases.

• Disenchantment (Churn Stage): The user’s enthusiasm for the brand declines, and their interest fades. Each phase in the user lifecycle has corresponding operational strategies. However, the periods that truly generate value are the Trust Building Stage and the Loyalty Stage. Extending these two phases as much as possible is a crucial objective in SCRM operations.

First Encounter (Awareness Stage)

Strategy: "Aggressive Attraction"

This process is the traffic generation stage, which can be achieved through a combination of offline and online methods to "entice" users to become card-holding members. Members should provide users with a sense of "identity perception" — that is, what benefits they will receive after becoming a member, and these benefits should be ones that the users actually need, with clear distinctions from non-members. Without identity perception, there is no basis or significance for membership marketing. During this period, we also need to collect user information through membership card issuance (nowadays mostly electronic cards), within the bounds of legality, so that the system can generate tags and profiles for users, facilitating future marketing processes. Luckin Coffee is actually a good example of an initial strategy done well but not worth replicating. They quickly amassed members through aggressive discounts, which, although highly effective, posed a significant financial challenge. Webpower believes that for low-ticket retail brands, it is reasonable to use some initial discounts to increase membership. However, it is crucial to control pricing and costs to avoid financial impracticality. For high-ticket retail brands, such as luxury beauty products, the initial traffic generation stage can set membership thresholds, such as paid subscriptions or membership upon reaching a certain spending limit. This approach can help gain precise and high-value members.

Trust (Trust Building Stage)

Strategy: "Gradual Warm-Up" To users, the main attractions of becoming a member are affordability, convenience, and a sense of exclusivity. Therefore, during the trust-building stage, on one hand, we need to maintain an appropriate frequency of engagement: Don't excessively annoy the users, but at key moments, such as purchase reminders, points changes, benefits changes, coupon issuances, birthday greetings, promotional activities, etc., make sure to notify them. If members have joined a community, ensure more personalized engagement within the community. Show up occasionally in front of users but ensure that each interaction with them is meaningful and not just daily spam.

On the other hand, leverage user profiles to tailor accurate engagements: For example, if we've created a profile for Ms. Zhang based on her spending habits and determined she is price-sensitive, our marketing to her should frequently involve promotional activities. Conversely, if Ms. Li has strong purchasing power and a high average spend, our engagements with her could focus more on quality-related content or materials that emphasize a sense of exclusivity. At the same time, we need a robust membership tier system and points mechanism, planning activities to keep the points dynamic and useful, motivating users to achieve higher membership levels.

Combine with some private domain community tactics to guide different levels of members into different communities for more refined operations. This allows us to gradually influence user perceptions and establish trust in a relatively slow process.

Infatuation (Loyalty Stage)

Strategy: "Strive for Stability" During this period, users exhibit the highest level of enthusiasm for the brand, shown through frequent interactions, purchases, and referrals. To maintain and extend this phase as much as possible, we need to focus on the key operation of these members. In addition to continuing the strategies from the trust-building stage, we must adopt more differentiated engagements and services, ensuring that customers not only experience high-quality products and services but also feel a psychological and emotional connection and interaction.

For example, Xiaomi once produced a short film to thank its first 100 seed members. Its premium members are often invited to participate in offline Xiaomi events, interacting closely with the executives. As a result, many Xiaomi fans have followed the brand since its inception. When new products are released, these fans are the first to buy, often leading to stock shortages, making outsiders suspect hunger marketing. Therefore, emotional connection is crucial in operating loyal members during the loyalty stage.

Disenchantment (Churn Stage)

Strategy: "Timely Redemption" The only rule to delay the churn stage is not to wait until users reach it to take action! Even though it might be inevitable. Webpower believes that the number of users in the churn stage can measure the quality of membership marketing. If a high proportion of your users are in the churn stage, it is essential to thoroughly check if there are issues in the operations of the previous stages. Of course, in the event that users have already reached the churn stage, giving up is not an option. We can still focus on reawakening and reclaiming them.

Going back to the earlier point, if users have reached the churn stage, it indicates that there were issues in the previous stages. We need to identify the reasons and "prescribe the right remedy." 

For example, if we find that a user has not made a purchase in three months and the reason for not repurchasing is price, we can send them some discount coupons or engage them with promotional activities. Alternatively, if we discover that the user churned because of a lack of maintenance on our part, we can carry out targeted engagements, such as having one-on-one customer service interactions in the community to understand their needs in detail. 

In the system, a member may merely be a number, but in actual operations, each member is a valuable individual worth understanding, and only by treating users as sustainable assets can the marketing goals of SCRM be achieved.

Conclusion: The core of SCRM lies in understanding users and delivering personalized engagements and marketing, which aligns perfectly with the recently popular concept of private domain traffic. This indicates that in the future, "people-oriented" will no longer be just an empty catchphrase. Business with a personal touch is the trend. To learn more about SCRM membership operations, private domain operations, email marketing, and digital marketing, please continue to follow Webpower. Alternatively, you can leave a message and boldly share your thoughts with our operations experts!

Webpower Rights Statement
Webpower China Region All Rights Reserved. Reproduction must include the source.