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Turning Customers Into Members

By: James Gagliardi
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This was originally published in IoTDaily

The Internet of Things is ushering in a new form of ecommerce, with new rules and new challenges for companies.

One of the key challenges of this new Commerce of Things — the concept that our everyday objects are not only connected to the internet, but also possess the capability to initiate transactions on their own — is changing relationships between companies and customers.

Formerly, a transaction signaled the end of a relationship, but in this new world, the sale is just the beginning.

Connected devices and subscriptions-based services are the drivers of this new model of commerce, a model which requires relationships to evolve beyond “loyal, repeat customers” into “members” who enjoy the added value of being a part of a club. There is a subtle but critical difference between a repeat customer and a member. Understanding this difference is the key to succeeding in an economy that is swiftly becoming a hyper-connected network of consumers who value the access and amenities that come with membership.

One of the first things a company can do to help build relationships is to identify the nomenclature that best describes the ideal relationship between their brand and customer

Disney, for example, has stood by the adage “Be Our Guest,” referring to their customers as guests for years. Everyone at Disney is involved as a cast member and everything is a show. Cable companies refer to their customers as “subscribers”; LinkedIn has always called users members.

Creating the right relationships means finding the inclusive vocabulary that will make members out of loyal customers. As members, they share the experience and the story of the brand, rather than just execute a basic business transaction. In return, companies must provide that extra, incremental value that replaces pure monetary valuations with more intangible rewards of being, in Disney’s case, a guest.

Once a company starts to cultivate members, a whole new set of metrics and data become the benchmarks for evaluating the relationship with customers. This goes past online transactions and number crunching.

Just asking, “What is a subscriber’s actual usage?” can bring revelations regarding whether or not someone is a transactional customer or an invested member. For example, January is the peak season for fitness centers around the country. Are those who sign up now really members? If they are not actually gaining benefits from being a member, then the relationship remains transactional and fleeting at best.

Good data is powerful. If the data shows a certain number of customers are not acting like members, then a company can follow up to discern the true nature of the relationship, figure out the issue and how it can become more valuable to the customer. This creates a win for both the customer and the company.

Delta Airlines’ SkyMiles program, for example, makes great use of data. When a member calls in, the automated phone system knows who it is based on the phone number; they can address a customer by name and ask about recent or upcoming trips, cutting through the barriers that prevent strong relationships from developing.

Personalizing interactions, continually making improvements and utilizing customer insights are key in this new world of ecommerce and can help transform transactional customers into members, and drive the shift to a loyal member base.