President and CEO, Massage LuXe International.
You know what a membership model is, even if you aren’t familiar with the term. If you’ve ever paid to be a member of a country club, shop at Costco or Sam’s Club, or watch a show on Netflix, then you’re working with a business that uses the membership model.
It probably sounds like the perfect business model for any business owner because it means you have guaranteed monthly revenue.
Except, of course, nothing is guaranteed. I’ve learned this lesson firsthand in my own business through our membership offerings. That’s why I’d argue that if you’re going to create a business with a membership model, you need to realize that what you’re really forming is a relationship model. And if you don’t quickly establish a relationship with your customers, your membership model is doomed to fail.
Why are relationships vital to a membership model?
Of course, most businesses are relationship-based. It’s just especially important that a membership model is based on forming relationships.
After all, you probably spent a good deal of time and effort with your marketing materials to attract customers and to convince them that it’s worth it to pay your business a monthly membership to partake in your services. If they decide to give you a chance, and then a little later they leave, how do you get them back?
MORE FOR YOU
The answer: You don’t. You can promise that if they sign up again, this time things will be different, and, sure, sometimes that might work, but odds are, the ex-customer is going to say, “Sorry. You had your chance.”
It’s different if, for example, you own a gas station located at a freeway exit. Most of your customers might be transient, passing by only once. The stakes are also pretty low for a consumer to give a gas station another chance. If somebody has a bad experience — maybe one of the pumps was broken or they didn’t like a candy bar they bought inside your store — they’ll probably return and see if things work out better the next time.
But if you have a customer who stayed with you for a month or two (or more) and committed to paying good money for a service that they ultimately found lacking, they may have decided, “I’ll find someone else.” Why would they come back?
You need to put the work in.
Any relationship, such as a friendship or a business partnership, generally thrives if two people put in an equal amount of effort to make things work. Otherwise, the person expending all the effort starts resenting the passive, lazy partner.
If you own a business, you’re the one who should be making all or most of the effort in your relationship. The more effort you put forward, and the better you get to know your customers, and the easier it is to make them happy.
Because of your hard work, you start knowing what people like and don’t like, so, naturally, you can do your job better. Think of a tutoring service: A teacher is obviously going to be able to make a bigger impact with a student they’ve worked with many times than a child who has just shown up for the first time.
Relationships also mean you start forming a bond with the customer. In my business’s case, I know that when our franchisees’ employees get to know the people they’re working with — when they learn their pets’ names, their favorite foods, where their kids are going off to college — it helps in building relationships. This makes your business stronger. In my experience, it’s harder for a customer to leave a business when they like the people working there.
Now, I’m not suggesting you ask your employees to strike up friendships with clients or customers only in an effort to make more profits. But, I am saying that if you encourage your employees to get to know customers and to be human, then everybody wins.
Show them you care.
You can’t take customers for granted. Recognizing that you might be doing that is often half the battle.
The other half is actively showing your most loyal patrons you care and feel that they’re a top priority in your business. If you have members who you feel make a huge difference in the success of your business, make them feel special. Give them the deals and discounts they deserve. Have some special days out of the year, or an entire month, where you offer benefits to your members that nobody else receives. Treat your members like VIPs because they are, indeed, very important people.
You could offer your members early access to your deals or bonuses when they refer new customers to you. Whatever you do to show them you appreciate them, it will likely resonate.
After all, your most loyal guests like your business. They’ve proven that. Because you don’t have to spend a fortune in marketing dollars to woo them over, they really do deserve a break on your services.
But there’s another reason to lavish attention on your members: It attracts new revenue to your membership model. If you’re constantly catering to your best customers, everyone else will see that. Some of those people will then want to be a part of that elite club, and you’ll end up bringing in more members.
Finding new ways to make your members happy also simply makes you a better business. If you’re always looking for new ways to surprise and delight your customers so they stay in this relationship, you’ll end up improving your services or products. Meanwhile, if you’re constantly improving what your business does, your memberships will stick around. This is how you end up getting revenue, month after month, year after year, that’s guaranteed — almost.