Retail membership programs, like Amazon Prime and Walmart+ to Best Buy’s new program, are on the rise as retailers strive to build loyalty. One survey discovered that 51% of retailers with premium (that is, paid) loyalty programs consider their members to be four times as valuable as non-members. And 62% of retailers who provide benefits (such as free shipping) within the first week see an ROI on the program within the first six months.
Similarly, e-commerce sites are leaning more on subscription and membership pricing models for business growth and steady revenue. Marketing software provider Invesp found that 54% of online shoppers have subscribed to a subscription box service in the past year.
But it’s not just retailers that are benefiting from membership pricing models. Business owners in virtually every field are experimenting with memberships to generate recurring revenue, build brand loyalty, and deliver more value to their customers.
Health and fitness clubs
Since the early days of Jack Lalanne, fitness clubs have collected membership dues to allow people to use their services. But today’s fitness memberships extend past in-club benefits to at-home content, classes and fitness tracking services. One of the most well-known membership-based at-home fitness programs comes from Peloton, manufacturer of the spin bike by the same name. The company’s revenue from membership grew 144% in the first three months of 2021.
Today’s fitness membership pricing models also offer more flexibility than ever before. Gyms can provide different services based on tiered memberships, ranging from instructor-led fitness classes to personal training sessions. This helps make a basic membership accessible to more people while providing gyms a chance to increase revenue by upselling memberships.
Content creators
Whether they have a YouTube cooking show or a travel blog, today’s content creators know their knowledge and creativity has value and aren’t afraid to capitalize on that with a membership program.
Many content creators use Patreon as a way to collect funds from their biggest fans on a subscription basis. In exchange, these Patreon members receive extra and exclusive content as well as other perks, which can range from swag to a meeting with the creator.
Some creators use exclusive, fee-based Facebook groups as a place to share their content and connect with fans who are members of their community.
Online communities
Even if you aren’t an influencer or content creator, you can launch an online community and charge members a fee for the service. The Freelance Writers Den is one example of a successful community. It costs $25 a month but is highly regarded in writers’ circles and is recommended by top writers, making the cost very low in comparison to the value.
Some mastermind groups, collections of goal-oriented individuals within a specific industry, also charge hefty fees for membership. Higher price points for these types of groups aim to ensure that the members are among the most successful in their industry, as they can afford the cost of membership into the group. Of course, this may not always be the case, but it does help ensure that the members are, at the very least, serious enough about their success to invest a substantial sum of money.
You might not be Amazon, but if you show your customers the value of a paid membership, deliver members a superior customer experience, and price the program at a rate your subscribers are willing to pay, you can profit from paid memberships, too.
Delivery services
The “subscription economy,” or the trend of people paying for automatic delivery of products from clothing to wine, is worth roughly $650 billion right now and is expected to grow to $1.5 trillion by 2025, according to financial services firm UBS.
Shoppers love the convenience, cost savings and time savings of receiving the items they need and want on a subscription basis. Whatever you sell, if you have an e-commerce site, you can consider introducing this pricing structure for customers who want the cost savings and convenience of monthly deliveries.
Car washes
People often seek out subscriptions or memberships not just for convenience, but the cost savings. That’s where the concept of “car wash memberships” comes in for D.C.-based car wash owner Robert Haddad. The Washington Post explains that Haddad charges members a monthly price equal to about 1.5 times the price of a single wash, for unlimited services. He said that the customer loyalty and word-of-mouth referrals more than made up for the few overzealous customers who would come in for a daily car wash.
Movie theaters
Similarly, movie theaters that were struggling pre-pandemic and continue to struggle today have begun experimenting with movie memberships that provide access to see a specific number of films for one monthly fee. Of course, you’ll still pay for popcorn and those giant barrels of soda, which is where theaters make their money anyway.
Medical services
Perhaps most surprisingly, networks of healthcare providers are now charging membership fees in order to provide better service and reduce wait times. Certain services are typically included with customers’ membership fees, while others are billed to their insurance companies or paid for out-of-pocket.
Other service providers, such as dentists, lawyers and accountants, could consider similar membership-based structures in order to generate steady, recurring revenue.
Paid retail membership loyalty programs
Amazon Prime stands as the prime (pardon the pun) example of a paid membership loyalty program. With such a program, you can offer your members a variety of complementary and value-added benefits with their paid subscription. These may include:
- Perks, such as free shipping, free e-books on Kindle or free audiobooks through Audible and the Amazon Prime streaming service.
- Early access to deals.
- Special members-only pricing.
- Access to value-added services, such as, in Amazon’s case, the ability to purchase movies to stream on-demand through the Amazon video service.
Before you think that your customers won’t pay for a loyalty program when many companies offer such programs for free, consider these statistics:
- Amazon collects more than $25 billion annually in subscription fees.
- Prime has 200 million subscribers across the globe.
- Prime membership in the U.S. has increased by 49.05% since 2017.
- Amazon sold $11.79 billion in goods on Prime Day in 2021, an annual, members-only sales event.
On the brick-and-mortar side, stores like Restoration Hardware and Barnes & Noble both have paid membership programs that offer discounts and other benefits to members.
You might not be Amazon, but if you show your customers the value of a paid membership, deliver members a superior customer experience, and price the program at a rate your subscribers are willing to pay, you can profit from paid memberships, too.
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