This interview is part of a series where we ask different thought leaders in the loyalty and retail space to get their perspectives on where we are, where things are headed, and what you should be thinking about next.
The purpose is to provide you with many different perspectives that can help you and your brand.
This episode features Robbie Kellman Baxter, Founder of Peninsula Strategies, author of The Forever Transaction and The Membership Economy, and sought-after speaker.
Robbie is an expert on subscription pricing and membership models, specifically why focusing on and building long-term relationships with your customers is so powerful.
She also coined the popular business term “Membership Economy”, which is now well-used across the industry. She’s worked with brands such as Netflix, Oracle, Electronic Arts, and eBay.
Check out the full interview video along with the top takeaways below it.
When it Comes to Loyalty, Subscription Pricing and Programs are Tactics, Not Strategy
Loyalty is bigger than just a program, but loyalty writ large can be supported with any number of programs and pricing tactics.
That means subscription pricing is a tactic of a larger loyalty strategy.
When a customer feels loyal to your brand, they are more willing to pay you regularly. It’s something you earn the right to do over time by building trust and engagement.
If you can do that, your best customers are willing to “set it and forget it”.
That means taking off their customer hat, putting on their member hat, and trusting your brand to solve their problems and help them achieve their goals in your area for the foreseeable future.
Keep Your Best Customers Engaged with a Membership Mindset
With the changing of hats from customer to a member, and with everything going on in retail, the discussion has become around how to keep your best customers engaged.
The answer lies in a membership mindset.
Some of your customers are very transactional. They come in, get what they need, and don’t think about your brand. They may go to a competitor just as easily.
But there is a group of customers that prioritize your brand first. It’s an ongoing relationship.
A membership mindset allows you to build better relationships with that latter group of customers. And there’s where your loyalty program can be a powerful tool.
Your Forever Promise Leads to a Forever Transaction
What is the difference between a forever promise and a forever transaction?
Every retailer wants that forever transaction – That engaged, top-of-mind relationship with the customer.
But to earn the right to have a forever transaction, you have to make a forever promise to your customer. In other words, you have to promise to reward customer loyalty by continuing to work on the program, improve it, and ultimately your customers achieve their goals.
This could be in the form of discounts, free stuff, content, or experiences that help your customers.
It’s about continuing to help solve the problem your customers came to you for in the first place.
Don’t Try to Be Everything to Everyone
It’s so tempting to want to be all things to all people but it’s important to be disciplined. Figure out who your best customers are and stay focused there.
A good place to start is with lifetime value – Who are the people who come, stay, and expand the relationship over time?
These customers recognize the value they are getting from your brand and will pay a fair price for that value.
Rather than compare your best customers to your worst customers, compare your best customers to your “not quite best” customers. These are people who joined your program not just for the headline benefits, but for the recurring benefits that keep them in the program.
You have to decide who your customer is and focus on that. When you try to be everything to everyone, it’s hard to prioritize.
Keep Your Program Fresh
Some brands invest resources into launching a new program with all the right headline benefits to get people in the door. And then they stop working on it.
But as part of your forever promise means constantly evolving your program.
While attracting new members is important, retaining existing ones is just as critical.
You have to be thinking about how to continually improve your offerings even for people who theoretically aren’t thinking about leaving today.
Customer expectations and technology change rapidly, so you need to be thinking ahead to continue deepening the relationships with your customers. This applies to every sort of membership model there is.
It Can Take a Mindset Shift to Run a Successful Membership Program
Everyone wants the revenue that comes with a membership model, but for many companies, it can feel like a bit of a leap of faith to navigate this.
A membership model requires a change in mindset.
With it comes a cultural shift that’s necessary to focus on the long-term.
While no company would say they don’t care about the customer, many metrics are focused on quarterly revenue. Board meetings are focused on new customers.
They’re not talking enough about the engagement of existing customers, expansion of customers, deepening of relationships, and loyalty.
More emphasis needs to be put on retention and engagement benefits and not just headline benefits.
The product teams need to get involved to prioritize not only the features that will get people in the door but what will get them to stay.
So, if you believe that loyalty is the most important thing, and not just a marketing campaign, then this needs to become a way of life across the organization.
2020 Was a Wake-Up Call for a Lot of Retailers
The organizations that came out ahead were the ones that jumped right in and started helping their best customers right away while pivoting and making themselves relevant to the members of tomorrow.
The silver lining here is that your best customers are understanding.
They realize that no one has all the answers because these times are unprecedented. There’s a lot more forgiveness.
The ground is shifting and now is the team to be bolder and try something new, always with your best customers at the center.
Success in 2021 is going to take a shift from reactive to proactive.
What is your forever promise to your customers?
And how would you deliver on that promise today if you could start from scratch with no baggage?
If you’d like to talk more about a membership-based premium loyalty program, reach out to us anytime.