🧠 CHAPTER 2: The Modern Buyer Brain: "The Switch from Service, to Status"

From Service to Status: Membership Identity

Okay, we're on chapter two here from our deep dive on the buyer brain. This one, I'm gonna talk about the switch from service to status. If you're just joining right now and you didn't catch the first one, make sure you listen to chapter one, 'cause these kind of all build on each other.

So, uh, this is chapter two. We're talking about the switch from service to status. Now let's talk about something big that's happening in e-commerce right now. There's a, there's a fundamental psychological switch for the last decade. I would say brands believe that the path to loyalty was service. Faster replies, bigger discounts shorter time holds, uh, an extra 5% off.

If you look like you're about to leave. But listen, it's not that service doesn't matter, but great service is really the minimal viable product. The MVP, it's not, it doesn't win you anymore. It's the minimum. It's table stakes. You don't earn loyalty by answering emails quickly. You just avoid getting roasted on Twitter, but you have to do that.

That's table stakes. The next wave. What's actually driving retention? LTV, lifetime value referrals and real loyalty. It isn't service, it's identity, it's status, it's belonging. Customers don't want to be served. Customers want to belong to something, and this is the psychology switch most brands haven't made yet.

It's from transaction to badge of membership. And here's the truth. Every brand needs to start thinking like a membership brand, period. Full stop. Not a subscription brand, a membership brand. I wanna make that very clear, whether you, I don't care if you sell subscriptions or not a membership brand, that's, there's a huge difference.

Subscription is about delivery. Membership is about identity. Subscriptions move a product every month, subscription. Moves people, subscriptions, say, here's your package. Membership says you're part of us now. And customers are craving that more than ever because humans are just, we're wired for belonging in the Maslow hierarchy of needs.

It showed this well before Shopify was even a concept. We define ourselves. By the groups we choose, the communities we opt into, the badges we wear literally and metaphorically. And this is why someone will pay $900 for a pair of headphones if they have a fruit logo on the side. Hands up. I'm guilty of this.

It's not really the sound, to be honest. I don't even think they're the best sounding headphones. It's, it's the identity. It's why Nike doesn't sell shoes. They sell the idea that you're part of the athlete tribe. You feel part of the athlete tribe when you put on a pair of Nike shoes. It's why people stand in line for a, for a supreme drop.

Their product is fine, but the status is the thing. D two C brands have missed this. They're still stuck thinking that they're serving customers instead of building an identity, customers want to claim. There's very key difference there. I'm not saying don't serve your customers, but that's the table stakes.

They need to serve and build an identity that customers want to claim. Customers want to feel known and let me read a line actually straight from this interview that I did now, if you go back a couple episodes, there's an hour and a half interview. You can listen to the whole thing because I still think this nails it.

Customers don't want more subscription products. They want to belong to a brand. They wanna feel that brand knows them. That's the key. Customers don't wanna be served faster. They wanna be recognized. They wanna feel like their membership says something about who they are. And here's the surprising thing.

It it, it almost has nothing to do with discounts are points. It's the psychology. Think about your own life for a second. Why? Why do you use. The same gym 'cause it's 20% cheaper or because the people there feel like you, they feel like your tribe. They're your people. Why do you drive your car brand You drive Because the service team answers emails fast.

Probably not, right? Or is it because it says something about the kind of person you believe yourself to be? In fact, my wife is looking for a new vehicle, and the words used when we were looking at this particular vehicle was smart people drive that vehicle. I, I, I, I actually don't even think the service person selling it was that great, but.

That what that vehicle says about people makes me feel smart. People driving. It was a Volvo. Just to give some perspective on what the vehicle is, status is the invisible gravity of brand loyalty. And the crazy part is most DC brands, they don't use it at all, which is encouraging. That means there's so much potential still.

So I wanna talk a little bit about the rise of status driven commerce. Okay. Lemme give you some data here to start. McKinsey actually found that memberships with clear status tiers produce 30 to 60% higher retention than flat programs. So just membership programs, but ones with tiers, 30 to 60% higher retention.

Another report showed that customers with status levels spend 3.5 times more than customers without them. And sociologists have shown for years that earned status creates emotion, emotional commitment. That's actually far stronger than discounts. And I know I've experienced this in my life where when I earn status, in fact, as I'm recording this, just right now, it's in December.

And my wife needs one more night stay at a Marriott hotel and then she becomes elite platinum. I don't even know what it is, the highest level of something. And she's probably listening to this podcast. She'll be like, oh my gosh, I can't believe you said that on the podcast, but I'm gonna say it. And she needs one more night to earn the status.

And we actually don't even need a night stay this month because there's nothing we need it for. But she might just book. The hotel room for one night to earn that status. Isn't that wild? Earned status creates such emotional commitment, so much stronger than discounts. When a customer earns something, even something symbolic, their attachment skyrockets.

Earning. Earning, okay? That's the key, not just given they feel like they've earned it. Humans will protect their status. They'll defend their status, they'll brag about their status. I can't tell you how many times people they name drop what status they're a part of. And when your brand becomes a symbol of that status, you win long-term loyalty.

Without bribing people, can your brand become a symbol of that status. Now I wanna talk a little bit about the badge effect. So let me paint this. Clearly. A subscription is a payment. A badge is a statement. Okay. So just to define this, it's, I'm a Prime member. I'm a Peloton rider. I'm in the rh, the Restoration Hardware membership.

I'm a black card holder. I'm, I'm a, I'm the early access tier. Now. You don't walk around bragging about the discounts you get, you brag about the status you've earned. I know some people might mention they got a discount, but in general you don't. Walk around telling people that, oh, I'm a, I'm a 10% off person.

You brag about the status you've earned. And this is why I keep saying subscriptions aren't the future. Memberships are, and the brands who embrace this shift first, they're the ones that are gonna ab absolutely dominate the next decade because they're tapping into human psychology instead of just transactional economics.

Your subscription isn't a product. It's an identity layer. That's the switch. So stop thinking of yourself as a skew as a product. Start thinking of it as a badge. Imagine this. Imagine every subscriber feels like they have some type of a, like they have back backstage access. Imagine every subscriber unlocks things non-subscribers Can't imagine.

Every subscriber gets some kind of special recognition. Imagine subscribers get. A story they can tell every subscriber feels seen. When you do that, customers stop comparing price tag. They stop thinking monthly. They stop looking at alternatives. They stop considering canceling because they're not just buying your product, they're buying a version of themselves.

So here's the takeaway. You're, you're not competing with competitor brands. You're competing with identity. You're competing with status and you're competing with belonging. Service is great. Don't get me wrong. I wanna make sure that that comes through, but it's not the thing that keeps your customers coming around.

The thing that keeps them coming around is the feeling that being a member says something me meaningful about them. If your membership doesn't make someone feel proud. You don't have a membership, you have a delivery schedule. So I'm gonna end off here with my challenge. In each of these chapters, I'm gonna break it out into kind of five challenges and so that for this one, my challenge is create identity, not discounts.

Now, here's your challenge for this week. Five steps to this to build. My, my challenge this week is build status into your membership. So last week we talked about moving from defense to offense. Not last week. I don't know when the last episode was out. Could have been yesterday. But the last episode, this one we're talking about building status into your membership.

So define your identity promise. Okay? So answer this in one clear sentence. Now, we dove into this a little bit in the last episode, but I'm gonna mention it again here. What does being a member say about someone? What? For your members, if they're a member of your brand, they buy your product.

They're not just a customer, they're a member of it. What does being a member of it say about them? Does it say they value. Excellence. Does it say they value quality? Does it say they're part of some type of a tribe? Like honestly, it can be anything. It can be redneck hillbilly, it can be elite tech. It can be anything.

Does it say they're part of one of those connections? If you can't answer that status doesn't exist for your brand, you that you need a crystal clear answer to that. Number two, create one status marker. So, not a discount, but some visible symbolic piece of identity. And this will be fun for you to create this.

So this can be a tier that your customers earn a badge of some sort that they earn. Maybe they earn early access, a special portal, a members only product member, only SKU member only access to some content on your site. Maybe member only access to you. Maybe you're doing some type of like quarterly zoom calls with your, with your clients.

Maybe it's live meetups in person, but something that says, I'm a part of this. Something, a badge is something, a status marker that they can hold onto and say, I'm a part of this. That's number two. Number three, give members something. Non-members can't get a perk, an event, a benefit, some type of access because scarcity equals status.

Status is psychology and psychology. Turns into retention. So give them something that's scarce so that they feel that they have the status, which affects through their psychology. That turns into retention. Number four. Personalize something this month. Just one email, one homepage experience, maybe one subscriber recommendation, just one.

Personalize something for your members in some way. You, there's, it is easy to do this if you, if you don't have personalization tools on your site, you can do this by customer tag. If you can't do that, segment your customers so easy to do. You can create segments in Shopify and then email just those customers.

Tag them with. VIP tag them with something, but do one thing to personalize something to those members that have achieved, not achieved a badge. It was just, they're a member. Do one thing to, to personalize an experience for them this month. And then number five, build one moment of pride into the first 30 days for your customers.

One moment that they feel. Pride that they are part of your brand and a member of your brand. It can be in the welcome box and maybe it's a separate welcome box. Maybe you, maybe they get your product, but you send a separate welcome box completely unconnected to your product. Maybe it's a handwritten note.

Maybe it's a surprise upgrade. Maybe it's a, you've unlocked this experience or you've unlocked this product but make customers feel like joining was the smartest decision. They ever made. Now do all that and you'll notice something very quickly. People won't just stay for your product.

They'll stay for the identity they feel when they're there with you, and that's when you stop playing the subscription game and you start building a brand. People want to belong to. Okay. That's it for chapter two here. Remember, there's eight more. Now, make sure you go back and listen to the previous one.

We're going deep into the buyer brain of the modern customer, the ways they think, and how to win in the next five, 10 years of commerce. Thanks so much. We'll see you on the next one.