---
title: "The Private Domain 3.0 Myth: Do You Really Distinguish Between Private Domain and Membership Systems?"
description: "In the recent wave of new consumption, rising customer acquisition costs have made 'private domain' and 'membership' key tactics for brands to capture users. However, many people do not actually understand the difference between private domain and membership, and some even think they are the same system. Even companies that have already built membership systems still have many questions, such as why their membership platform is not attractive to users, and why members are unwilling to redeem their points despite having so many."
author: "刀法行研"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2022-02-15"
language: "en"
canonical: "https://xinjignxiao.com/en/articles/the-private-domain-3-0-myth-do-you-really-distinguish-between-private-do-4a66b1ee/"
markdown: "https://xinjignxiao.com/en/articles/the-private-domain-3-0-myth-do-you-really-distinguish-between-private-do-4a66b1ee.md"
original_source: "https://mp.weixin.qq.com/s/xFUZAas_e31bVeyfs-kjQg"
translation: "https://xinjignxiao.com/zh/articles/%E7%A7%81%E5%9F%9F3-0%E8%BF%B7%E6%80%9D-%E4%BD%A0%E7%9C%9F%E7%9A%84%E5%88%86%E6%B8%85%E6%A5%9A%E7%A7%81%E5%9F%9F%E5%92%8C%E4%BC%9A%E5%91%98%E4%BD%93%E7%B3%BB%E4%BA%86%E5%90%97-4a66b1ee.md"
attribution: "New Distribution — https://xinjignxiao.com/en/articles/the-private-domain-3-0-myth-do-you-really-distinguish-between-private-do-4a66b1ee/"
usage_policy: "https://xinjignxiao.com/ai-policy.txt"
---

# The Private Domain 3.0 Myth: Do You Really Distinguish Between Private Domain and Membership Systems?

> In the recent wave of new consumption, rising customer acquisition costs have made 'private domain' and 'membership' key tactics for brands to capture users. However, many people do not actually understand the difference between private domain and membership, and some even think they are the same system. Even companies that have already built membership systems still have many questions, such as why their membership platform is not attractive to users, and why members are unwilling to redeem their points despite having so many.

In the recent wave of new consumption, rising customer acquisition costs have made 'private domain' and 'membership' key tactics for brands to capture users. Suddenly, it seems all brands are focusing on private domain and membership.
However, many people do not actually understand the difference between private domain and membership, and some even think they are the same system.
Even companies that have already built membership systems still have many questions, such as: My membership platform is already built, why is it not attractive to users? I have so many membership points, but why are members unwilling to redeem them?
Recently, the Dao Fa Research Institute invited Jing Qiu, who has worked at Lenovo, Baidu, Ctrip, and Alibaba, to share in detail how brands can build a membership system using the internet '3-step' thinking. This sharing mainly answered the following questions:
**1. What is the difference between private domain and membership?**
**2. What are the models of membership systems? What scenarios are they suitable for?**
**3. How to build a membership system?**
This article summarizes and excerpts the essence of Teacher Jing Qiu's sharing, hoping to bring inspiration and help to brand owners and operators.
**For Different Business Scenarios**
**Private Domain and Membership Each Have Advantages**
In recent years, we often hear people talk about 'what benefits private domain can bring to a company.'
Private domain is a good tool to help operational growth, but the private domain system cannot be used in all scenarios. When we help many companies build digital user operation growth, we often judge whether to prioritize private domain or membership based on the company's situation.
The essential purpose of building private domain and membership is the same: to build a system for reverse touch with users, so that users can actively and proactively find the company. In this process, **private domain helps companies build a reverse touch system, and membership helps users actively find the company.**
In different company sizes and sales models, the priority of these two systems is different. Here I can list three common forms:
**First, large enterprises + direct-operated business, prioritize private domain.** Low-frequency consumption and high unit price direct-operated business means that users need a lot of services, and doing membership is difficult to have a big impact on user mindset, so it is more suitable to do it in private domain.
**Second, large enterprises + distributor business, prioritize membership.** The greatest value of distributors is to reach more users. A membership system can penetrate distributors to reach users and obtain data. Conversely, wanting to sink users into a private domain pool is difficult, and distributors will feel insecure.
A well-designed membership system can not only serve as ammunition for distributors to help them serve users, but also not harm distributors' interests.
**Third, small enterprises can treat private domain and membership as one thing,** and just put membership benefits in your private domain system.
In different scenarios, private domain and membership systems each have advantages. When it comes to specific business, you need to analyze the company's situation specifically.
**Five Common Membership Systems**
Membership systems are everywhere in our daily lives. Whether it's a frequent flyer card, or a points card for daily supermarket or coffee purchases, brands are connecting with consumers based on membership systems. The following are five common forms:
**1. Points System**
Take Starbucks as an example: buying a cup of coffee accumulates 0.3 stars, and consumers can exchange 30 cups of coffee for a free cup. Many shopping malls also do this: spend 100 yuan to accumulate 1 point, and 100 points can be used as 1 yuan.
If it is a retail business, and you don't need to pay attention to whether it serves different products and services throughout the user's life cycle, you can use a simple points system.
**2. Cross-Industry Cooperation System**
Take Japan's Tsutaya Books as an example: 80% of its revenue comes from membership cards. Among Japan's 120 million population, 70 million are its members. It cooperates with many chain hair salons, beauty salons, and restaurants. Spending in these stores can accumulate points, which can be exchanged for cash in all stores.
In this membership system, Tsutaya Books acts as a 'bank'. It designs a concept similar to 'exchange rate' to stipulate the proportion at which users' spending in different stores is converted into cash. Other stores only need to decide the extent to which they participate in this system.
This method is suitable for companies that serve a certain circle of users, such as core users being high-net-worth clients, or early education institutions and photography institutions in the parent-child field.
**3. Behavior Monetization System**
In this model, the source of user points is not only linked to consumption, but also to other user behaviors. Some internet companies are using this way to build their membership systems, corresponding to different membership levels based on the number of platform points.
For example, in Dao Fa's previous activities, if you shared high-quality content, you would be given 'Dao Coins'. This is a typical behavior monetization.
This method is suitable for pure online companies, as they can count many user behaviors.
**4. User Co-Creation System**
Huaxizi is a typical example of this type of system. When you become a co-creation officer of Huaxizi and join the membership system, every time a new product is launched, you can apply for product trials as an experience officer. Those users who are approved for trials may post on their Moments to promote the product, thus completing user co-creation.
If the product serves people with common preferences, or certain niche groups, then the user co-creation membership system is more suitable.
**5. Paid System**
The last one is a common and classic method: the paid system. I need to pay a fee to purchase membership qualification, and then obtain additional benefits. Many well-known companies such as Prime, Costco, Taobao 88VIP, JD PLUS, etc., all use this paid subscription membership system.
So how do paid membership cards attract consumers to pay for them?
Generally, the card-opening logic of all companies' paid membership cards is the four-step logic of **'spend, get, save, enjoy'**.
The first step is spend: pay the membership fee.
The second step is get: after paying the membership fee, you usually get some gift packages. In product design, generally a 100 yuan membership fee corresponds to a card-opening gift package worth 150-250 yuan, including low-cost products, high-perceived-value products, and essential high-frequency services.
For example, Sam's Club provides teeth cleaning services and also provides free cash discounts.
The third step is save: the specific form is shopping rebates. Member shopping accumulates points, which can correspond to more discounts.
The fourth step is enjoy: generally refers to enjoying some privileges, such as Ctrip Diamond Card having Longtu Travel lounge, fast security check channels, and one hour free KTV, etc.
**Four Steps to Build a Membership System: Grading, Earning Points, Maintaining Level, and Operation**
Next, let's elaborate on the key steps to build a membership system, mainly divided into four parts: **user grading, designing point earning rules, user upgrade and level maintenance rules, and membership operation system construction**.
**Step 1: Grade Users**
Brands can classify user groups based on consumption level, user age, etc.
In each group, further distinction can be made from three perspectives: consumption price, consumption frequency, and consumption ranking. Other dimensions such as region, whether they are price-sensitive or service-sensitive, can also be used as references.
We can horizontally compare three membership systems of similar products.
The three levels of Huatai Zhangle U membership system are: user login, binding trading account, and paying a 12 yuan membership fee. It can be seen that its membership system is based on paid subscription logic.
The membership system of Guotai Junan Junhong is divided into five levels. The first three levels are simple requirements for user behavior: downloading the App, registering a mobile phone number, and registering a trading account. From the fourth level, users are required to have assets of 500,000 yuan, and the fifth level requires assets of 5 million yuan.
This means its membership system is designed from the perspective of points and behavior monetization.
For Ping An Securities' membership system, the first five levels are requirements for user behavior; the last two levels are requirements for user assets. It is also a typical system of user behavior and membership points.
So when thinking about how to classify and grade members, you can choose to analyze the depth of user behavior. The design method you choose depends on which behaviors you want to incentivize users to perform in this membership system.
In user group stratification, there is a group that needs special attention: those members who are about to upgrade. They need key marketing.
When we see at the data level that a user is about to upgrade, we should remind them through various methods: pop-up exposure, SMS, EDM, etc., to remind customers to complete a few actions to achieve membership upgrade and enjoy more benefits.
**Step 2: Design Point Earning Rules**
The classification of point earning comes from user behavior, user transactions, and user dissemination. How these points should be earned is a rule that brands need to design and define.
Usually, there are the following three types.
**The first is through user consumption.** The higher the consumption amount, the more points.
**The second is through users performing certain operations on the product side to earn points.** For example, daily operations such as logging in, checking in, or using new features, or users participating in a big event can get double points.
**The third is through user dissemination to accumulate points.** For example, forwarding helps the brand increase readership and transactions, while users also earn points.
Take Alipay as an example: there are many ways to get Alipay points. You can earn points through transactions such as shopping, utility payments, and financial management, and you can also do some user behaviors within the Alipay app, such as doing tasks, to accumulate points.
**Step 3: User Upgrade and Level Maintenance Rules**
After designing the rules for users to earn points, the next step is to consider how to make users actively want to earn points.
In other words, how to design membership upgrade and level maintenance rules. This involves how to stimulate members who are about to upgrade to upgrade immediately through consumption, and how to let members who are about to churn maintain their level.
This essentially uses users' loss aversion psychology and the psychology of what is near at hand. If a member hasn't come for a long time, remind them that 200 points are about to expire, and ask if they want to redeem a gift.
**Here, everyone can think: do users really not want to accumulate points?**
No, it's just that users think your points are useless. A good point redemption system can help users choose and use products more under the incentive of point benefit products.
For example, take me as an example: I haven't flown Sichuan Airlines much, but recently I found that Sichuan Airlines has linked with many airport bookstores, and Sichuan Airlines points can be exchanged for books at airport bookstores. Previously, I always felt that Sichuan Airlines points were useless, so I generally wouldn't choose them.
But now, if the time and route are suitable, I will consider choosing Sichuan Airlines. Flying twice to exchange for a book is also good. This is a good product benefit.
In a situation where product homogeneity is high, your point **benefit products are truly considered from the user's perspective.** If you provide benefits that users are interested in, users will choose your product more. This is also a place that needs careful consideration when building a membership system and doing point redemption.
**So what kind of product benefits should be set for users?**
This is another very important question. Essentially, it requires **core insight into user needs and user persona.** Brands need to constantly think about who your core user group is, and what product-related services they hope the brand can provide, and turn that into membership benefits.
For example, there was a period when 'Haoche Du' Lao Ji was very popular. He provided many high-value services for his members, one of which was door-to-door cleaning: a team of 9 people spent two days cleaning the house spotless, and even found that the dog food was almost finished and prepared it.
Such super deep and meticulous cleaning services make users feel that if your cleaning service can be so good, your car will definitely exceed expectations. Such cleaning services as membership benefits will make users willing to establish continuous stickiness with it.
**Step 4: Build a Membership Operation System**
To retain users for a long time, it involves the membership operation system, which is also divided into four parts.
**1. Generate a Sense of Honor and Identity**
Brands need to think about how to make users feel honored to become your member and use your membership benefits. For example, users generally have this sense of honor when they become airline gold card members or private bank clients.
Here are three common operational ways to make members feel a sense of identity:
**The first is member day event planning.** We previously planned Yunnan Baiyao's member day with our client Yunnan Baiyao: choose a day to close the store, only invite VIP members to the store, and offer 50% off for all purchases, using member day events to give back to members.
**The second is experience officer event planning.** For example, let Huaxizi and its members co-create, and then select people with content output ability and delicate detail perception, make them experience officers, use products for free, give suggestions, and help spread the word.
**The third is member offline meeting day.** When we serve bank clients, we do such activities, such as salon activities or parent-child activities, to create stronger connections between users.
**2. Design Benefits and Incentive Systems**
This is also very important. Generally, it can be done from four perspectives: 'turn paid products into free', 'turn scarce products into free', 'continuously update benefits and incentives', and 'obtain more resources through cross-industry and cross-border cooperation'.
**3. Pay Attention to Risk Points**
In membership operations, there are also several typical risk points related to points that need special attention.
**First, member points are a market cost,** because members will definitely redeem them. So companies need to account for points not consumed by members on an annual basis.
**Second, points should pay attention to timeliness and upper limits.** For example, member points should not exceed 500,000, or member points cannot accumulate for more than 3 years, otherwise they will be cleared.
If your membership system has a large number of unconsumed points, it will enter an inflationary points system, which will impact the entire financial situation.
**4. Build a Phased Membership System**
A membership system is a systematic project with many details. It is more successful to build a phased membership system. First build the basic framework of the membership system, then build the incentive and promotion framework, and finally build the continuous operation framework.
These are the three key steps for the overall phased success of building a membership system.
**Conclusion**
For every enterprise, it is necessary to constantly think about how to build a system for reverse touch with users and achieve effective communication with them. A membership system is helping enterprises build this process. A good membership system will make users repeatedly perform the action of 'actively coming to the enterprise', thereby deepening the connection with the enterprise's products or services.
According to different business types, match the form of private domain or membership accordingly; then based on the enterprise's business scenario, match the most suitable membership form, and then build the membership system based on the four steps. In this way, in a good membership system, users will be willing to maintain stickiness with the enterprise, and truly help the enterprise's business get better and better.
Source: Dao Fa Research Institute (ID: DigipontClub) Author: Jing Qiu
 _-END-_


---

## Copyright and AI use

This article is sourced from New Distribution. Search, quotation, summarization, and model training are permitted, but every use must credit New Distribution and retain the canonical source URL.

Contact: zhaobo258@gmail.com · +86 158 5481 7671