Adding a membership to an online store

If you sell products online, you know the rhythm of a store: a busy week after a new release, a quiet patch, a sale to bring people back, then another quiet patch. Much of your marketing goes into persuading the same customers to return, often with discounts that eat into your margin. A membership offers a different relationship. Customers pay regularly, you know roughly what next month's revenue will be, and your best buyers have a reason to stay with you rather than shop around.

But a membership for a store isn't the same as a content membership. Your members aren't mainly paying for lessons or articles. They're paying for convenience, savings, discovery, access or belonging, and the offer only works if it delivers one of those clearly without losing you money on every order.

Four shapes a store membership can take

1. The replenishment subscription. Products customers use up, delivered on a schedule: coffee, tea, pet food, art supplies. The value is convenience and never running out.
2. The discovery club. A curated selection each month or quarter, with notes on what's inside. The value is surprise and expert choice.
3. The perks membership. An annual or monthly fee for benefits such as free shipping, member prices, early access to new releases and members-only products. The value is savings and access.
4. The know-how membership. Lessons, guides and a community around using what you sell. A shop selling model railway kits might offer monthly build-alongs and a members' forum. The value is skill and belonging.

Many stores combine two: a discovery club with tasting notes and a members' group, or a perks membership with a monthly live session. Start with one, though. Each shape has its own logistics and its own promise to keep. If you're combining items into a single package, bundles: combining courses, products and membership covers how to price them.

Check the numbers before you promise perks

Perks feel generous to offer and can be expensive to deliver. Work through the arithmetic before you announce anything. Here's an illustration with round, made-up numbers.

Wen runs an online tea shop and is considering a perks membership at $60 a year, including free shipping and $2 off every order. Shipping costs her about $6 an order. She estimates that a typical member will order eight times a year:

Cost of free shipping: 8 orders at $6 each = $48

Cost of member discount: 8 orders at $2 each = $16

Total cost per member: $64 against a $60 fee

On these assumptions, every member costs her $4 a year. The membership only makes sense if members order more often than they did before, or spend more each time. If membership lifts a typical customer from eight orders to twelve, and each extra order earns her $15 after costs, the four additional orders add $60 and the picture changes completely. Wen decides to test it with her most regular customers first, and to limit free shipping to orders over a minimum amount, so small orders don't wipe out her margin.

Offer something members can't get by waiting for a sale

A membership built only on discounts is fragile. Members compare it with your next public sale, and if the sale is almost as good, they cancel. The strongest store memberships include at least one benefit money can't otherwise buy:

• Products made only for members, such as a small-batch blend or a limited print run.
• First access to restocks and new releases before they go on public sale.
• Notes, guides or short videos that help members get more from what they buy.
• Members-only events, such as a live tasting, a behind-the-scenes session or a question-and-answer hour.
• Recognition, like a member number, a welcome card in their first order or their name in a founding-members list.

Low-priced memberships also need to become a habit to survive; retention for low-priced memberships explains how to build one.

Plan for the practical differences

Physical products bring questions a content membership never faces. Decide the answers before launch and state them clearly:

• Timing: when members are charged, when orders ship and what the cutoff is for changes.
• Flexibility: whether members can skip a month, pause or change their selection.
• Addresses: how members update where things are sent, and what happens when a parcel comes back.
• Shortages: what you'll substitute if an item runs out, and how you'll tell members.
• Cancellations: whether an order already being packed still ships.
• Systems: how your store and your membership software stay in sync, so member prices and perks apply automatically.

Tax treatment can differ between physical goods, digital content and memberships, and between places you ship to, so check your situation with a qualified professional.

Invite your best customers first

Your order history already tells you who your most loyal customers are. Invite them before anyone else, personally, and use every package you send as a chance to mention the membership, as described in everyday touchpoints that market your membership for you. A short invitation from Callum, who runs a hypothetical shop selling fountain pens, ink and paper, might read:

Subject: You're one of our most regular customers, so you're first to hear this

We're starting the Ink Club: a small monthly parcel with two new inks chosen by us, a sample of paper to try them on, and notes on how each one behaves. Members also get first pick of limited editions before we list them publicly. It's $18 a month, and you can skip or cancel any month from your account. We're opening it to fifty regular customers before anyone else. Would you like a place?

Your first steps

1. Choose one shape: replenishment, discovery, perks or know-how.
2. Work out the cost of every benefit per member, using your real order data.
3. Add at least one benefit that members can't get from a public sale.
4. Decide your rules for timing, skipping, shortages and cancellation.
5. Invite your most regular customers first, and add a note to every package.
6. After three months, compare members' order frequency with their buying before they joined.