What’s your next loyalty program or subscription service that may be up for renewal? Are you deciding whether to cancel or not?
There are seemingly unlimited options and varieties of valuable subscriptions and loyalty programs to join these days. I subscribe to a mix of seven different paid monthly subscriptions right now and I surprisingly use all of them.
Granted, I use them all to varying degrees, but they all have a different purpose and value.
When renewal time comes around, I’ll find myself considering the same factors as consumers in the 2019 Premium Loyalty Data Study.
There are multiple factors we’ll consider when renewal time comes around.
Here are a few that stand out:
How Often Am I Getting Value?
Depending what the subscription or loyalty program is will determine how often you’ll use it, right?
At your favorite movie theater or apparel store, you could be stopping in weekly or a couple times a week. Streaming movies and music could be multiple times a day while you’re at home, on the drive to work, at work, or even working out.
At your favorite coffee or lunch spot you could be purchasing daily or weekly, depending on how embedded it is in your routine, of course.
If it’s a specialty subscription, maybe you’re only seeing value a few times a year like I do with my boxing streaming subscription.
According to the 2019 Premium Loyalty Data Study, 40% of consumers consider frequency of benefits when choosing to renew their membership.
Premium loyalty programs are quickly evolving to become more immersive and value driven.
Brands are dedicating time to find new and meaningful ways to integrate into their members’ lives.
Brands achieve this by offering members benefits that can be redeemed outside of their stores (i.e. teaming up with other brands to offer benefits to a variety of places).
Brands also offer experiences that tie into members’ hobbies and lives outside of shopping with them.
Regular value and meaningful value stand out to me when considering renewal. Most members ask themselves: How often am I using this? Am I getting frequent value or exclusive benefits?
Sixty percent of consumers say they want benefits at least once per week, the study notes.
In the case of a subscription service, members want to be streaming at least once per week and for a loyalty program they want to receive value at your store once per week even if they’re not coming in that often.
What’s It Cost Me?
Members do the math. Before they join and when they’re considering whether to renew or not, they’re weighing cost vs. perceived value then cost vs. actual value.
Thirty-nine percent of consumers consider cost as the second most important factor when renewal time comes around.
Now that these members have paid for this subscription or loyalty program, they’re evaluating what they’ve paid and how much it’s gotten them during the duration of their membership.
Cost is an essential area of consideration when building a premium loyalty program. Brands evaluate the benefits and their frequency, what members would be willing to pay, and what they’ll see in ROI.
It must be a price that works for everyone and makes sense because members do the math too.
Take the RH Membership program for example. For $100 per year, members get 25% off all purchases. They know if they buy even one piece of furniture, that membership will pay for itself.
I don’t mind paying for the subscription services and loyalty programs I’m a member of currently because I’m actively getting value from them.
But when I need to consider renewal (when baseball season is over), I’ll probably be scaling back a few of my memberships because the frequency of value will decrease and then price will become the most important factor.
Once the benefits are coming in less frequently, we all start paying much more close attention to price.
What Does This Mean for Brands?
Deliver value consistently.
When members reap the benefits of a premium loyalty program or subscription service on a regular basis and receive unique, valuable benefits, it outweighs the membership cost (given your program is priced right).
Consumers join programs when they perceive value and feel like it’s “a deal.”
This means at the time they thought the benefits outweighed the cost.
If that value increases or continues to deliver, members will remain loyal and eventually become brand advocates.
Don’t you want that to be a result of your loyalty program?