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Membership Churn at
Investigating reduced memberships at Rad Cosmetics
Rad Cosmetics stands at the forefront of beauty innovation, redefining the makeup experience with a commitment to cutting-edge concepts. Pioneering the industry, they offer members exclusive services to their clients. Currently their baseline membership is priced at $49.99/month with the following services:
Unlimited Stylist Consultations per month (available by scheduling)
1 free product per month (worth up to $30)
3 free sampler size products per month (pouches/sampler size)
Early access to products not yet on market (associated with partner brands).
Access to unlimited exclusive Rad Cosmetics makeup artists videos and tutorials.
Rad Cosmetics has experienced a consistent decline in memberships over the past three business quarters and have reached out to us to investigate whether the decline is attributable to internal factors or external factors like economic variables. To address this, we conduct a comprehensive assessment to identify key factors influencing membership churn.
Survey & Expected Insights
Survey & Expected Insights
Our initial step involved the formulation of a customer survey designed to gather valuable feedback on the services and products associated with the membership, as well as insights into spending habits and makeup usage. The survey was structured into distinct sections, including:
Screening questions:
Differentiate between members (current and past) and non-members.
Membership Services
Makeup Usage/Preferences
Spending Habits
Demographics.
C-Suite Presentation
C-Suite Presentation
Quantitative Analysis
Quantitative Analysis
For quantitative analysis, we plan to do count based tests to compare the differences in membership rates, satisfaction levels, and utilization frequencies across different demographic groups. We also plan on doing segmentation analysis, that is, considering different user profiles (such as those who are interested in the latest trends vs. those who are not), to address specific needs and preferences.
Proposal: Introduced tiered membership and evaluate impact of change on membership retention rate and enrollment rate for new members.
Original
Original
Membership
Membership
$49.99
Unlimited Stylist Consultations per month (available by scheduling)
1 free product per month (worth up to $30)
3 free sampler size products per month (pouches/sampler size)
Early access to products not yet on market (associated with brands we partner with).
Access to unlimited exclusive Rad Cosmetics makeup artists videos and tutorials.
Basic Tier
Membership
Basic Tier
Membership
$29.99
2 stylist consultations per month.
3 free sampler size products per month (pouches/sampler size).
Early access to products not yet on the market.
Access to unlimited exclusive Rad Cosmetics makeup artists videos and tutorials.
Premium Tier Membership
Premium Tier Membership
$69.99
Unlimited Stylist Consultations per month (priority in scheduling)
2 free products per month (worth up to $50 total).
5 free sampler size products per month.
Quick returns for products not suitable (including free products*).
Early access to products not yet on the market.
Access to unlimited exclusive Rad Cosmetics makeup artists videos and tutorials.
*conditions apply.
Planned Tests
Planned Tests
Membership Retention Rate: Comparison of the number of current members retained/not retained both before (3 months) and after (3 months) implementing the tiered membership (chi-square test of independence). See diagram below.
New Member Enrollment Rate: Comparison of the average rate of new member enrollments over the three months before and the three months after implementing the tiered membership (independent t-test). See diagram below.
Impact on Revenue: Comparison of the average revenue for the three months before vs. after implementing the tiered membership (independent t-test)
Enrollment Numbers Basic vs. Premium: Check for potential differences in enrollment numbers between the two new membership options (independent t-test). If significant differences are found, enrollment can be cross-referenced with membership demographics to identify if different tiers appeal more to different demographics.
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