Store operations · Level Advanced · E-commerce Membership Retention
Membership: thresholds and benefits
A membership scheme with no clear benefits.
Prompt
Four numbers: traffic, conversion, basket, repeat. Fix whichever fell hardest, one at a time.
Task: A membership scheme with no clear benefits.
[Before you start, do three things]
1. Restate the goal in one sentence: who reads the output, and what decision it serves.
2. If I have not given you the following, ask me. Do not assume:
- basket distribution
- high-value behaviour
- cost headroom
- competitor schemes
3. Say how you plan to do it (at most 5 steps) and wait for my go-ahead.
[Go through each of these]
- one benefit only members get
- set the threshold at two to three times basket size
- compute cost as a share of GMV
- do not launch points and tiers at once
[Process]
1. Locate the failing stage with data
2. Change one variable affecting it
3. Set the test period and criterion
4. Check the margin impact
5. Say which categories this does not apply to
[Output]
Diagnosis, one change, criterion, margin impact.
[Do not]
- Never change price and image together
- 'Improve experience' is not an action
- Never ignore return rate
- Platform rules are not suggestionsWhat to state before it starts
Leave these unsaid and the model fills them with an assumption. Most 'wrong answers' start here.
- basket distribution
- high-value behaviour
- cost headroom
- competitor schemes
Go through each of these
Where this kind of work most often goes wrong. Already in the prompt, so you do not have to remember it.
- one benefit only members get
- set the threshold at two to three times basket size
- compute cost as a share of GMV
- do not launch points and tiers at once