Welcome to the Club

Wednesday, February 6th, 2013
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Among the most important and most obvious traits of successful online businesses are driving traffic and conversion. While these efforts should never be overlooked, there is another critical area where many retailers fall short: customer retention. Acquiring new business is the lifeblood of almost any organization, but building customer loyalty and capitalizing on those known sales opportunities can often be equally valuable.

This can be seen everywhere in traditional retail environments through the use of things like store-issued credit cards, savings cards at the pharmacy, and even that little key ring tag for the grocery store that people frequent. This is also true on a much larger and drastic scale of major membership-based outlets such as Sam’s Club, Costco, and BJ’s Wholesale Club. While excluding the average customer on the web and switching to a membership-only model is rarely advisable, there are some valuable things to take away from this philosophy which can be applied to normal retail operations everywhere.

Among consideration should be to offer a type of optional membership for access to reduced prices and/or exclusive products and sales. Many successful online stores offer very inexpensive, one-time membership fees (some for as little as $5) for the opportunity to buy the same products as the average customer but for a slightly lower cost. This is mutually beneficial for a number of reasons: Those membership fees can add up over time in terms of revenue. Customer loyalty is increased as buyers are now more compelled to shop on your site as opposed to full retail elsewhere. And because of this new customer segmentation, it’s even easier to market to these members: shipping incentives, holiday offers, and exclusive member promotions. And lastly, due to the savings one is potentially receiving, it could provide incentive to place larger and more frequent orders in general.

This concept works beautifully in the Nexternal system through the use of both Customer Types and the Customer Type Upgrade feature which allows the visitor to add a membership product to their cart and see the benefits of the membership right there in their first order. Some merchants will even elect to display member vs non-member pricing right at the product level to both entice new members and reinforce savings to existing ones. For more information on membership execution, contact your Nexternal Account Executive.


Chris is a Senior Account Executive at Nexternal and has been with the company since 2005. Before joining Nexternal he worked in the cloud-based educational software industry. Chris enjoys establishing new relationships with online merchants and working closely with those clients as they grow.