The membership model – time for a makeover?

David Feldman
Written by David Feldman | November 2017
memberships makeover

“Membership has its privileges” is an advertising slogan made famous by American Express in the late 1980s. The company made a habit of calling its customers “members” and successfully harnessed the love consumers have for memberships because they fill powerful human drives – like needs for affiliation and prestige.

 

However, in today’s fast-paced digital age, the membership model is at risk of becoming dated and lost on a generation of customers who are spoilt for choice and have needs and expectations that differ to yesteryear. Membership organisations now need to think more like brands and continually evolve to deliver to the changing expectations. Google, for example, has never sat still in its efforts to deliver new possibilities for its users.

 

The distinction in different types of member-based organisations is an important one. The traditional types – insurance providers, super funds, not for profits, and recreation clubs, are hardly comparable to a Netflix, Spotify, or Costco (although some would argue these are actually subscription models). While the focus of this article is on the former, there is much to be learned from the latter. Particularly in how they built their brand equity and their ease of doing business.

 

Customers don’t want to be a part of just any old membership organisation any more. So, if you continue to think like the one you may not succeed. You must innovate, grow and adapt to the forever changing member. Members want to belong to an ethos they can buy into. Think Nike, whose mantra ‘Just Do It’ inspires the aspiring fitness enthusiast. They want less membership organisation protocol which can be alienating and boring. They want the excitement, purpose, reliability and value of a brand.

 

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Being mindful of certain principles when operating a member-based model in your organisation can accelerate growth and deliver the highly coveted ‘sticky customer’.

Let’s take a quick tour of the fundamentals and see how your member proposition stacks up.

 

Fundamental #1: Know your member

It is the member’s mission that should be the guiding star, not the products and services. Ensure you are catering to your target market’s needs and giving them what they want. Don’t be irrelevant! How often have you rolled your eyes at yet another piece of unsolicited mail from an organisation you affiliate with. Put yourself in the member’s shoes and try to imagine what they are doing with this information. If you can’t, then it isn’t working. It tells the customer they are not understood. It is wasted money, disengaging and dilutes the quality of your offer.

When a customer is thinking ‘what is your brand going to do for me?’ –  a coupon just isn’t enough! This unique business model depends on a two-way understanding between member and brand. This creates intimate, lasting relationships that often go beyond the expectations of typical customers. Companies must be willing to sunset the old and bring in the new to honour their side of the bargain.

 

Fundamental #2: Make it easy

Membership organisations need to make it easy for their audience. Nobody does this better than the big brands. In a noisy world, focus and simplicity go a long way to winning preference. Look at Apple, Amazon and Uber. They communicate a clear value proposition, adopt a what you see is what you get approach (nothing untoward in the fine print!) and encourage brand advocacy to spread their message. Another reason why your membership organisation needs to think more like them.

 

Fundamental #3: Use your community to your advantage 

If there is one thing membership organisations have over their non-member counterparts, it is the community. The network is critical. Not just the internal network created by members, but more importantly their ability to advocate for the company and build a critical mass through word of mouth referral. This boosts brand awareness better than anything!

Facilitating peer to peer exchange is fertile ground for any brand to add member value. The collective community benefits from the experiences and opinions of individuals. This connectedness forms part of the ongoing value that holds and builds appeal.

 

Fundamental #4: Be clever with your data

The ongoing data stream available to member organisations can improve services and identify opportunities to increase satisfaction. Intelligent use of data helps to answer important questions. What is the trend in member growth, by segment? What is the average customer value, now and over their lifetime? Do any of them represent upsell opportunities?

Since retention is so important to revenue, it sometimes takes priority. So, unless you are tracking new member acquisition as carefully as you track overall revenue, you could find yourself with an ageing customer base, and no awareness or relevance to future members.

But be careful where data isn’t improving member value or service in a relevant way and don’t invade your members’ private space!

 

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The perceived loyalty and passivity of members and the recurring revenue can lull companies into thinking their customers are happy. In reality, the offer may not provide the same value it once did, and the brand hasn’t evolved. Today, people see brands as more than just companies. They’re seen as thought-leaders, lifestyle advocates and can be a significant part of their customers’ lives. Wouldn’t it be great if your members started to think of your organisation in the same way?

Beware of the “taken for granted” trap and treat each member as if they are the only member that matters.

After all, membership has its privileges.

 

If you’d like to discuss any of the ideas presented, please contact GSG here.

 

 

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