Not long ago my wife and I closed down a bank account we had not used in many years. I had tried to persuade my wife for many years that we needed to close the account because we just weren't using it, and I didn't want to keep paying fees. But she insisted that we keep it open because she was a “charter member” of the bank and didn't want to lose her privileges.

My wife is very frugal, yet she was willing to continue to pay for membership in something that she received no services or benefits from. It was then that I realized just how powerful it is to “belong” to something. It satisfies our deepest needs as human beings to be wanted, loved, and appreciated.

Does Your Company Need to Establish a Membership Program?

I am often asked by businesses if a membership program would be “right” for their company. In response, I offer the following “yes” or “no” membership qualification test. Take the test and see if your company needs a membership program.

Does your company…

  • have to conserve its limited resources when providing service to its customers?
  • want to decrease customer turnover and dramatically improve customer loyalty?
  • need a constant, predictable stream of revenue?
  • desire to sell its full suite of services with less effort?
  • wish to get more revenue out of its existing customers?
  • aspire to significantly improve its referral business?

If you answered yes to one or more of the above questions, your company could benefit from establishing a membership program. Okay, you're probably saying, “There isn't a company in existence that wouldn't say yes to one of the above questions.” And that is exactly my point. Every business can benefit from a membership program and should establish some form of membership marketing.

Take a Closer Look at the Benefits

Membership programs provide powerful benefits that will improve your company's performance. Let's take a closer look at the benefits that were just mentioned.

1. Conserves limited company resources. Resources are allocated according to the customer's level of membership (i.e. lower membership level = fewer resources, higher membership level = more resources).

2. Increases customer loyalty. Membership provides a sense of belonging to an organization, which breeds loyalty.

3. Provides a predictable stream of revenue. Instead of sporadically selling products and services, membership programs provide a steady stream of customers, providing a steady stream of cash flow.

4. Sells more services and products with less effort. Because slow moving or less desirable products and services are included in membership packages people are more likely to take advantage of them.

5. More revenue from existing customers. Multi-level membership programs incentivize customers to spend more to move up to higher levels of the program.

6. Improves referral business. People like to tell their friends about a company to which they feel a sense of loyalty.

Types of Membership Programs

When you think of being a “member” of a business most people think of Sam's Club or country clubs, but membership programs can take on many forms. The following are examples of different types of membership programs, which include a business  (a) selling hard good products, (b) selling service, and lastly, (c) selling knowledge.

Every business on the planet will fall under one of these business categories, so there is something to learn for every businessperson from the following three membership program examples:

Costco: Business and consumer supplies superstore.

Gold Star Membership. Allows consumers to purchase products for personal use at any Costco throughout the world.

Business Membership. Allows businesses to purchase products for business, personal and resale* use.

Executive Membership. Allows consumers and businesses to save money by offering exclusive services such as a 2% reward, business loans, and credit card processing, larger gift certificates for mortgage or real estate transactions, travel benefits and lower prices on check printing.

Hertz: Car rental company

Hertz #1 Club. Private club number automatically fills out your information form, thus speeding the rental process.

Hertz #1 Club Express. Available only to Hertz #1 Club members and provides an exclusive checkout counter for express members only.

Hertz #1 Awards. Available only to Hertz #1 Club members and allows you to earn points for every qualifying dollar you spend on business and leisure rentals that can be redeemed for prizes and air travel mileage.

Kennedy Inner Circle, Inc.: Marketing consulting services company

Silver Inner Circle. Includes monthly newsletter, periodic free tele-consulting calls, invitations to “marketing roundtables”, and discounts on information products.

Gold. Includes Silver membership benefits plus monthly taped interviews with marketing experts, exclusive additions to monthly newsletter, longer call-in times, access to special member's area of website containing past newsletter issues and articles, and receipt of three marketing books during the year.

Gold+. Includes Silver and Gold membership benefits plus one-on-one and group based tele-coaching, printed materials, additional coaching call-in days, and weekly success-stimulator faxes.

Gold + VIP. Includes Silver, Gold, and Gold+ membership benefits plus three “mastermind group meetings,” two days each with personal coaching.

Platinum. Includes Silver, Gold, Gold+, and Gold+ VIP membership benefits plus four mastermind group meetings. This level is by invitation only.

The following are several elements from these examples that are important to a successful membership program. Each company provides different membership levels with more offerings of service, discounts, speed, and accessibility at each higher level.

1. In the case of Costco, programs are targeted toward different demographic groups with an increasing number of discount options.

Subscribe today...it's free!

MarketingProfs provides thousands of marketing resources, entirely free!

Simply subscribe to our newsletter and get instant access to how-to articles, guides, webinars and more for nada, nothing, zip, zilch, on the house...delivered right to your inbox! MarketingProfs is the largest marketing community in the world, and we are here to help you be a better marketer.

Already a member? Sign in now.

Sign in with your preferred account, below.

Did you like this article?
Know someone who would enjoy it too? Share with your friends, free of charge, no sign up required! Simply share this link, and they will get instant access…
  • Copy Link

  • Email

  • Twitter

  • Facebook

  • Pinterest

  • Linkedin


ABOUT THE AUTHOR

David Frey is a long-time marketer.