Image by mohamed Hassan from Pixabay 

To improve their brand visibility and increase customer loyalty and spending, many brands are turning to membership programs, also known as customer loyalty programs. By signing up for one of these programs, your customers could gain access to exclusive discounts when they buy from your brand. You can also provide them with exclusive content on a regular basis, or even exclusive events, like members-only festivals. In exchange, they may pay an annual membership fee, or they may be enrolled completely for free.

Why are membership programs becoming so popular as a marketing strategy, and how can you get started with one of your own?

The Advantages of Membership Programs

There are several benefits to executing a strategy like this, especially when compared to other marketing strategies:

Low Overhead Costs

Marketing is all about return on investment (ROI), or how much revenue you’re able to generate, compared to what you invest. Accordingly, you can focus on improving results, focus on lowering costs, or preferably, both.

Customer membership programs are especially appealing because they’re much less expensive than, say, buying up a bunch of billboards around town or launching a national-scale paid advertising campaign online. The discounts and freebies might cost you a bit. However, they won’t cost nearly as much as most marketing and advertising campaigns.

Flexibility

What do you want your membership program to be? You have nearly limitless options for how to design and execute your platform. For example, are you interested in providing members with exclusive content or exclusive discounts? Alternatively, are you more interested in collecting annual payments from members in exchange for special privileges at your locations? There’s no right or wrong answer here. It all depends on your goals.

Word-of-Mouth Potential

Customer loyalty and membership programs have powerful word-of-mouth potential. This is because when someone gets some free product as a reward for being a member, or when they land a huge discount, they’ll likely tell their friends and family members about it. That’s an easy way to spread visibility and awareness of your brand. Moreover, it also serves as a warm introduction, making you instantly more trustworthy in those new customers’ eyes.

Status Quo Bias and Customer Loyalty

People are inclined to keep things the same for the sake of preserving familiarity. If they have your membership card, and they’re used to all the privileges that are associated with it, they’ll be disinclined to switch to a competitor. What’s more, this is likely to remain true even if the competitor offers slightly better deals or incentives.

This is why membership programs are so important for retaining customers and improving loyalty. The only catch is that you have to sign your customers up before your competitors beat you to it.

Customer Data Access

Most brands use customer membership or loyalty programs as a way to gain access to more customer data. By signing up, customers provide more information about themselves. Moreover, by scanning their membership card regularly (or using their online account), they’ll be feeding you data about their buying habits and interests. You can then analyze the data to learn more about your target demographics. This will enable you to market to them better in the future.

Natural Customer Pool Optimization

If your customer membership program has even a slight barrier to entry, it’s going to filter out customers who aren’t likely to stick with your brand long-term. This has a nice secondary effect of filtering your customer pool to favor people more likely to be loyal to your brand—and therefore those who are more profitable to the business.

Better Customer Communication

Membership programs also allow you to improve communication with your customers. For example, you’ll have a good excuse to send regular emails to your customers. Additionally, they’ll have a good reason to reach out to you if they have a question, comment, or concern. Ultimately, this results in a better consumer-brand relationship—and more benefits for both of you.

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How to Start a Membership Program of Your Own

Despite these massive advantages, starting a membership program of your own can be challenging. Designing a schedule of rewards for your customers and launching a system that can collect and store customer data securely is not something everyone can do.

Fortunately, there are many out-of-the-box membership programs you can use as a template to design your own. What’s more, website plugins and add-ons to make it easier to collect customer information.

If you’re just getting started, the best place to begin is with your high-level goals and objectives. Obviously, you’re trying to improve customer loyalty and increase sales, but how exactly do you want to do that?

Are you trying to make more money short-term, or are you trying to optimize your customer pool long-term? Are you more interested in existing customer loyalty or the attraction of new customers? Understanding these objectives will help you shape your membership program in a way that complements and supports them.