The BIG Idea File: The Membership Model – How to Get Your Customers to Commit (Case Study)
Why is it customers seem to fear and loathe commitment? Perhaps this commitment phobia can be attributed to underhanded sales tactics used to get the unwitting consumer on an endless cycle of autorenewals, or the huge incentives offered to them to continually bounce between competitors.
Can you really blame customers for being a bit skittish about signing on for the long haul? Anyone who has tried to cancel an autorenewal payment knows it’s a serious pain. And why not jump ship when the competition is practically paying you to switch?
Massage Memberships: A Case Study in Rewarding Commitment
Massage Heights, a massage franchise, uses a membership model to encourage its customers to do exactly that: commit. It’s a simple variation on a proven membership model that gives members preferential treatment for committing to a monthly massage. (And who doesn’t’ want to commit to that?)
Every new customer is given the opportunity to ‘try’ them out at their preferred member rate after which they are given the choice to join or continue as a non-member. Members pay a monthly fee, which is essentially pre-paying for one massage. Non-members can enjoy their massage services as well, only at more than double the price.
It’s a win-win.
Members get a deal for joining for what they would pay for a massage and Massage Heights gets committed customers, drastically cutting down the need to continually acquire new customers. The one-time ‘try us’ rate gives new prospects an incentive to try them without penalizing truly loyal customers by offering new customers the best deal.
3 Keys to Building a Successful Membership Model
#1: Reward Commitment – All too often companies reward the wrong behavior, incentivizing new customers to ‘switch’, and neglecting their loyal customer base. Not only does it attract the wrong type of customers (disloyal switchers), it sends a negative message to your loyal customers.
Instead reward the behavior you want more of: committing! Offer your best incentives to your regular customers. That doesn’t mean you can’t entice new ones to try you out, but just means they don’t get the keys to the VIP room.
#2: Offer Options – “Package A, B or C – which one suits you best?” One-size fits all packages tend to fit no one and studies show that customers like options. Offer monthly packages that suit a range needs and budgets.
Consider offering the package equivalent of small, medium and the whole enchilada with price tags to match. That way you are rewarding the customers to opt to buy more up front, instead of buying each item individually over time.
#3: Be Customer-Centric – Don’t think of it as a simple way to boost your cash flow and get a guaranteed customer base. Think of it from your customer’s perspective – ask yourself what problem you are solving for your customers.
Your membership program should simplify the buying relationship. Perhaps by giving them a guaranteed spot in line or special privileges. Not sure what to offer? Ask your customers what they value the most.