Making Occasional Customers Loyal

My wife and I recently closed a bank we hadn’t used for many years. I tried for years to convince my wife that we should close the account because we weren’t using and I didn’t want to continue paying fees. She insisted we keep the account open because she was a “charter member” of the bank and did not want to lose any privileges.

She is a frugal woman, but she still paid for a membership that provided no benefits or services. Then, I understood how important it was to “belong.” To be loved, wanted, and appreciated is one of our most basic human needs.

Is Your Company Required to Have a Membership Program?

Businesses often ask me if a membership program would be “right’ for their business. As a response, I provide the following membership qualification test. Test your business to see if it needs a membership program.

Does your company…

  • When providing service to customers, does the company have to conserve limited resources?
  • Want to improve customer loyalty and decrease customer turnover?
  • Need a steady, predictable revenue stream?
  • Want to sell your full suite of products and services with less effort?
  • Want to increase revenue from your existing customers?
  • Aspire to improve the referral business significantly?

Your company may benefit from creating a membership program if you answered yes to any of the questions above. You’re probably thinking, “There’s not a single company that would say no to any of these questions.” But that’s exactly what I’m saying. A membership program is a great way to market your business.

A closer look at the benefits

Membership programs can improve the performance of your business. Take a look at these benefits in more detail.

1. Saves company resources. The resources are distributed according to the level of membership. Lower membership level = less resources; higher membership level = greater resources).

2. Customer loyalty increases. A sense of belonging is created by membership, and this fosters loyalty.

3. A predictable revenue stream is provided. Membership programs are a great way to get a constant stream of customers and cash flow.

4. Increase sales of services and products by using less effort. Membership packages include slow-moving or less desirable services and products. People are more likely to take advantage of these because they are available.

5. Increased revenue from existing clients. Membership programs with multiple levels encourage customers to spend more in order to reach higher levels.

6. Referral business is improved. Referral business is improved.

Types Membership Programs

Membership programs come in many different forms. Here are some examples of other membership programs. These include businesses that sell hard goods, services, or knowledge.

Three membership programs are examples of how every business can benefit from these categories.

Costco – Superstore for Business and Consumer Supplies

Gold Star membership. Costco allows consumers to buy products for their personal use in any Costco store worldwide.

Business membership. Business membership allows businesses to buy products for personal, business, and resale* purposes.

Executive Member. This membership allows consumers and businesses to save money through exclusive services, such as a reward of 2%, credit card processing, and business loans. It also offers larger gift certificates when it comes to mortgages or real estate, travel benefits, and lower prices for check printing.

Hertz: car rental company

Hertz #1 Club. Your private club number will automatically populate your information form and speed up the rental process.

Hertz #1 Club Express. Exclusively for Hertz #1 club members, this counter is solely reserved for members of the express program.

Hertz #1 Awards. Only available to Hertz Club members, you can earn points on every dollar spent for business or leisure rentals. These points can be exchanged for air miles and prizes.

Kennedy Inner Circle, Inc.: Marketing consulting services company

Silver Inner Circle. Includes monthly newsletters, free periodic teleconsultations, invitations to marketing roundtables, and discounts on info products.

Gold. Includes all the benefits of Silver Membership plus exclusive monthly interviews with marketing experts. Call-in times are extended, and members have access to a special area on our website that contains past newsletters and articles.

Gold+. Includes all the benefits of Silver and Gold membership plus one-on-one and group-based telecoaching, printed material, additional coaching days, and weekly success stimulator faxes.

VIP Gold. Includes benefits of Silver, Gold, and Gold+ memberships plus three “mastermind meetings” with two days per meeting for personal coaching.

Platinum. Includes all the benefits of Silver, Gold, or Gold+ VIP memberships, plus four Mastermind Group meetings. This level is only available by invitation.

These examples contain several important elements that will help you create a successful membership program. Each company offers different membership levels, with greater service offerings, discounts, accessibility, and speed at higher levels.

1. Costco offers a variety of discounts that are tailored to different demographic groups.

2. Hertz’s express level is more accessible and speeds up the process of fulfillment. A number of awards are also given to buyers based on their purchase volume. This encourages them to buy more.

3. Kennedy Inner Circle offers different membership programs that provide a greater level of access to detailed information.

Membership programs don’t have to be multi-leveled like the ones in these examples. But they must offer a set of exclusive benefits not available to other customers.

Examine some of the membership benefits that small businesses can enjoy.

Dry Cleaner

Basic Membership. Basic Membership.

Premium Membership. Premium Membership.

Certified Public Accountant

Basic Membership. Free newsletter, monthly tax-saving calls and teleconferences

Premium Membership. Teleconference calls, newsletters, one-on-one consultations, monthly mastermind meetings, plus express call-in questions and answers.

Oil and Lube Franchise

Basic Membership. Basic Membership.

Premium Membership. Email service, car washing, motor oil and free automatic transmission fluid, engine cleaning, tire rotation, and oil changes every month.

Movie Theater:

Basic Membership. Basic Membership.

Premium Membership. Monthly movie reviews, eight movies for the price of five, online ticketing, express window, and monthly newsletter.

Every business has products and services you can package as premium membership services. Just a little bit of creativity is needed. Create more services if you are only offering one product or service. Package them all together and offer them as a membership.

Membership Pricing

There are many different pricing models for membership programs. You must test them to find the best price that works for your company and clients. It is smart to price your lower levels of membership at a low cost. It would be best if you aimed to convert customers into members so they feel a sense of affinity towards your business.

You can start the process of upselling after your customers join by offering tempting offers for moving up the membership ladder. Consider your first level of membership as a “loss leader.”

Sam’s Club, for example, only charges $10 per year. Hollywood Video is a free video chain. My local library charges $25 per year to become a member. Low membership fees are meant to draw people in, but since it is not free, they will value it and use it.

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