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Membership programs and the future of business
Dean White • 12 January 2022
Membership programs can benefit both a business and customer
Humans have a strong desire for the sense of "belonging" to something. By creating a membership program, businesses are able to capitalise on one of the psychological needs that humans have.
For a business to obtain this benefit, they will need to devise a membership program that makes customers feel special, engages them and sets them apart from competitors. Providing such a service makes customers more likely to sign up and stay loyal to your company.
There are numerous benefits that a membership program brings to a business;
- Membership programs will decrease the number of defecting customers since they fulfill the basic human need to belong to an organization.
- In addition to selling products and services, membership renewal fees can provide a steady stream of revenue.
- Helps businesses sell its full suite of services without much effort. Membership programs are commonly used to sell slow moving or less desirable products and services by including them in membership packages. This makes them more likely to be used and taken advantage of by customers at the same time and adds value to a membership program.
- A membership program can be improved by including special benefits or upgrades to encourage members. Customers will then refer friends and family so that the membership program becomes in their best interest.
- Multilevel membership programs help businesses grow by encouraging and enticing existing customers to upgrade to higher membership levels and spend more money.
The more engaged your customers are with your brand, the more likely they will spend more money with you. Gallup has found that a fully engaged customer brings in 23% more revenue than an average customer. Also, it costs five times more to acquire a new customer than to retain a current one. Loyal customers can help you gain new customers.
Another benefit of using membership for a business is that it can help to earn more revenue. This goes hand in hand with customer loyalty. In addition to increase revenue, loyal customers spend more. 57% of consumers say that they spend more on brands they're loyal to. An example that supports this statement is Amazon. They run a very successful membership program, Amazon Prime. In 2018, the average Amazon Prime member spent $800 more than non-members. While every membership program might not have the same impact as Amazon Prime, there's no doubt it will help boost revenue for business.
Every business can profit from putting together some form of a membership program and enjoy some of these very powerful benefits they provide to the business.
Eazi-Apps are a company that will help local entrepreneurs achieve high levels of revenue and build apps without technical experience. It has never been more important for businesses to have an effective strategy in order to survive and make sales.
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