On the Internet, Everyone Is a Dog

In the never-ending quest for stickiness, web sites have implemented a variety of means over the years to attract and retain visitors. None of these means are more ubiquitous than web site membership.

Membership is a key enabler for personalized services such as custom web pages and free email. Conventional wisdom has it that these services — the roots for what many like to call one-to-one marketing — convert web nomads into devoted followers and drive repeat visits.

Of the critical mass of sites offering free content and services, more are experimenting with e-commerce for revenue generation. However, their only guaranteed revenue is typically a few dollars for every thousand advertisements their visitors ignore. Membership thus provides a sort of personal information toll that savvy sites can leverage to increase their revenues per visitor.

With Members Like These, Who Needs Anonymity?

However, there’s something slightly delusional about the value of web site membership. In June, Yahoo boasted some 65 million registered members. Yet — also for the month of June — Media Metrix reported that Yahoo had 37 million unique visitors. Even if you made the preposterous assumption that Yahoo’s June traffic came exclusively from registered members, that would still mean over 43 percent of their members didn’t visit the site in over a month.

If that isn’t enough to make Yahoo membership sound about as sticky as a greased pig, there’s more. With just a few keystrokes and a mouse click, Yahoo members can just as easily become members of Excite, Netcenter, Lycos, Snap, Go, and just about any other web site.

Thus membership on today’s web sites is akin to ownership of a Members Only jacket in the Michael J. Fox 1980s: There’s the veneer of exclusivity, yet that exclusivity encompasses anyone with a pulse and $20 to their name. And in an era of free PCs and Internet access, even $20 is raising the bar a bit high.

Like nearly all other sites with membership, Yahoo tries to appease everyone — no matter how much of a fiscal deadbeat he might be — with the same opportunities and level of service. While this sounds egalitarian, it’s actually the antithesis of true one-to-one marketing. Businesses, in order to maximize profits, discriminate among levels of service based on a customer’s value.

The ubiquity of this kind of membership has also greatly diminished its value proposition for consumers. Given the tens of thousands of free, personalized memberships available to anyone on the Internet, why would anyone want yet another arcane username and password to remember — particularly if what they all offer is largely commoditized? (As has been asked before, “Is there a site that doesn’t offer stock quotes these days?”)

It’s no wonder that a National Family Opinion survey found that only 30 percent of consumers are registered with six or more sites. With very little or no switching costs for the user, just where is the stickiness in that?

Customer Loyalty: On Sale Now!

So how do you build loyalty? On one end, you have Lycos paying bounties to other web sites for user referrals. On the other, you have the web’s revival of S&H Green Stamps — where users are rewarded with cash and prizes offered through some outsourced, third-party program.

However, you don’t see tiers of service. A few sites, like JFax, offer a free loss-leader to attract customers who might potentially pay for upgraded service. But why not offer incentives of free service enhancements, offerings, and customization options for those members who qualify?

Credit cards and airlines sort their customers into tiers of service with tremendous success. It makes sense to offer your best services only to your most profitable customers, and it provides loyalty incentives to encourage more business from your other customers.

Offer real-time stock quotes. Offer free shipping. Instead of 5MB of free home pages, offer 20MB and the ability to run CGI scripts. Web site visitors can qualify for an upgrade from lead to gold membership through repeated use of the site or by providing more detailed personal information as barter.

Web site visitors should be offered incentives to establish a deeper relationship with your business — and they should be rewarded when they do. The idea is to create switching costs for your users.

So why haven’t tiered services caught on with web sites as they have in many other areas of business?

We suspect that it reflects a greater, industry-wide ignorance where we often don’t know who our most valuable online customers are. (Or at least we haven’t been able to reliably distinguish them from the dead weight.) All of this underscores the importance of developing success metrics for your site and for its users.

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