Should You Open Your Business Up to Memberships?

Photo Credit: “re:publica15” (CC BY 2.0) by Helge Thomas

Over the years, thousands of businesses have achieved great success by applying membership models regardless of what it is they are selling. Here, we’ll be looking at examples of successful companies, models and strategies before answering the question: should you open your business up to memberships? 

The Success of ARB Models

By far one of the most popular membership models for online businesses with memberships is automatic recurring billing (ARB). Not only does this ensure a base of loyal customers but it also allows the business to attain a predictable cash flow. Netflix is a fantastic example of ARB, with each of the online streaming service’s 130 million subscribers paying a monthly fee to access TV shows, movies and documentaries. 

Rewarding Members With Exclusive Content

Members aren’t only rewarded with on-demand shows and movies that are available on cable or at the movies though. Netflix have taken their content a step further by creating original content, all of which can only be viewed by members. House of Cards, Orange is the New Black and plenty of other Netflix originals help to make members feel like they’re part of an exclusive club and, due to the shows’ great reputations, they also encourage more people to join. 

Personal Attention & Bespoke Gifts

Speaking of exclusive clubs, this is a tactic that numerous online and offline businesses have used to draw in customers. Take for instance The Dollar Shave Club, an innovative company that you may recognize for sponsoring your favorite podcast or YouTube personality. For a monthly fee, the company delivers bespoke shaving kits to their members, ensuring that every individual’s kit receives personalized attention and service. Of course, shaving isn’t the only thing a business can create an exclusive club around, as there are now wine clubs, shoe clubs, comic book clubs, anime clubs and almost any other sort of club you can imagine out there that each sends you personalized gifts in exchange for a monthly fee. 

Merging Online & Offline Models

Fortunately, membership models aren’t solely reserved for online businesses. Quite the contrary, many brick-and-mortar retailers and service providers have been able to create flourishing membership models by merging their real-world stores with online platforms. An example of this is Buzz Bingo, a bingo company that rewards both their online patrons and live bingo players equally. By joining their exclusive membership, those in the know can skip the queues and receive special offers when visiting Buzz Bingo live games, as well as receive approx $38 in bonuses when they play online. 

Loyalty Cards & Reward Programs

Many high street stores also use this model of rewarding both online and offline patrons, usually by handing out loyalty cards and issuing reward programs. Macy’s, Banana Republic, Kohl’s and J.Crew are just some of the hundreds of stores that do this, usually offering early access to sales, complimentary services, invitations to private events and free goods once certain amounts have been spent. 

Should You Open Your Business Up to Memberships?

So, could a membership scheme help your business? The clear answer is ‘yes’. No matter which model you choose, the chances are it will result in a reliable monthly income and, if you gain enough members, higher profit margins. Memberships also help keep customers loyal as they will return for great service and rewards.

Make no mistake, there are cons to employing a membership model. For example, you will be responsible for ensuring every member is completely satisfied and building a reliable membership base can take a long time. However, if your company is able to do this, then you can run a successful business helping loyal members for years to come.