Sometime last month we were sitting around the conference room table with a team of executives brainstorming ideas to help their partners increase sales and customer loyalty. One of those in the room with a short-term thinking “mind-set” brought up the “fact?” that in her experience she found that customers who signed up for gym memberships would continue to pay for the membership, even if they didn’t work out at all, for an average of 14 months after signing up. The charge would just appear on their cards and it wasn’t until over a year later, these member customers would wake up to the fact that they were pouring money down the drain.
This “experienced” professional was proposing this membership model as a revenue driver and was asking the team to think short-term while charging customers a membership each month – on top of the service price they are already paying, with the thought that these same customers would forget they signed up and continue to pay the $9.99 a month on their cards for the year to come.
This is the same type of greed-induced strategy that got our economy where it is today. Now, it’s a good thing that customers everywhere are all the wiser and are completely aware of scams like this one proposed.
This kind of thinking also reminds us of the recurring charges that customers get stung with (and that web companies are under investigation for) which you can read about here.
Membership Programs in 2012
Your membership program has to bring real value to the table in order to even appeal to new customers and keep existing customers loyal, especially in this day and age. The real fact is, customers are too smart and watching every penny they spend. Membership program enrollment is down and there have been three major reasons for this decline – economic changes, demographic shifts, and technology.
Now, new technologies can enhance a great membership experience -from social media platforms that celebrate customers who promote your business to data mining tools that help target your customers, and help keep them coming through the doors.
If you are considering adding a membership program to your business, think about what you have to give to attract and retain customers. Consider your business model, your customer’s purchasing behavior and think along the lines of –
- Programs that offer real value and no risks
- Possible discounts with every purchase and no restrictions
- Cash prizes and upgraded shipping
- Special savings that translate to 15% to 35% off retail prices
- Exclusive promotional offers void of black out dates and messy disclaimers
- VIP membership events
- First dibs on new products, appointments and services
- Product guarantees and free offers
- Upgrades and same product/service add ons
- Co-marketing programs with synergistic businesses
In other words, your membership program must contain a well-defined value proposition that resonates in today’s environment.
- Consider not charging a membership fee
- Offer valuable services like free overnight shipping and
- expedited returns
Once you have developed a valuable membership program you must consider how much you have to spend on spreading the word (marketing the program)- through e-mail, newsletters, in-store signage and website updates as well as social media platforms. Your employees should also be ambassadors for the program and able to relay its value to customers. This happens with proper training and real support.