Driving customer loyalty is vital for your business, and membership programs are by far the best long-term solution for customer loyalty. Read on to learn five secrets to creating a winning membership program that drives customer retention for your business:
1. Base Your Membership On Your Best Customers
Your best customers are the ones you recognize when they walk through your doors. They’ve made repeated purchases at your business, and you have a strong bond with them. You may not know all them by name, but you have an idea of what they like.
For example, a brewery might offer their most valuable customers a few “on-the-house” pints per month, because they know their loyal patrons like to share their favorite brews with friends and loved ones.
2. Price Your Membership To Be A Sweet Deal
Membership prices vary greatly depending the business and its operating/production costs, but here’s a rule of thumb:
Your membership should be profitable, but it should also convey significantly more perceived value than the price. Aim for a 2:1 perceived value-to-price ratio or higher.
Many organizations achieve this by offering a membership benefit to patrons that grants them early access to events, new products, and other special offers throughout the year. This benefit gives patrons a sense of exclusivity, but does not cost the business anything to redeem.
3. Offer Annual & Monthly Pricing Options
Many subscription memberships are billed monthly, however, this poses a risk of monthly churn for businesses. This is why annual pricing options are so important. They guarantee revenue for an entire year!
Businesses offering both monthly and annual pricing options typically discount the annual price by giving patrons a deal, such as two months free, if they pay annually.
For organizations like nonprofits, this is a key secret to creating a winning membership. 72% of patrons of one nonprofit using Stitch selected annual payment options over monthly.
Patrons appreciate the discount and want to support your business. Don’t deny them the opportunity to pay you more money!
4. Pre-Launch Your Membership
Another way to create a winning membership for your business is to run a pre-launch campaign. Send your existing customers a message telling them you’re about to roll out an exciting new membership program, and include a digital form where they can sign up for more information.
Another pre-launch option is to sell your membership to existing loyal patrons at a discounted price, before you officially launch, for a limited period of time (e.g., a one-week sales window).
Pre-launching your membership to a small audience initially will give your business access to an engaged group of loyal customers who will inform you of ways to improve your membership offering and promote it to their friends, family, and loved ones.
5. Enlist Your Employees To Promote Your Membership Program
One secret to long-term success with a business memberships is taking the time to enlist your employees in promoting your membership program.
This may come in different forms, like training or incentivizing, but the result drives serious membership growth. Your employees are ultimately your best ambassadors. Many may even have existing relationships with customers at your business. Studies have shown that people are far more likely to buy a service when recommended by someone they know, so use those relationships to your advantage.
One brewery using Stitch made nearly $15,000 in new membership revenue in just two months by enlisting their employees to help promote and sell their mug club membership.