One of the fastest growing business types out there is the membership model. There are a huge amount of services out there offering their product as a monthly service, and it’s something that’s being taken up in greater numbers. If you’re looking to launch your own, what do you need to watch out for?
What Is A Membership?
Firstly, what’s meant be a membership business model? It’s any business that offers their product or service as a membership deal. A popular example is the meal kit model, where customers are sent a box of meal ingredients and a recipe, so they can make new meals at home. Another example is that of software, where a customer will pay a monthly fee to have access to software, and all the updates that come with it.
What Is The Role Of Membership Management In The Service Industry?
Membership businesses have been doing well in many industries, but does it have a place in the service industry? It really does, as it has a lot of surprising uses. “There are so many businesses that are using membership companies to run their business” says Janet Gardner, a tech writer at Academized and Paper Fellows. “For example, car dealers use it to lease to customers rather than sell to them.”
This example shows how customer mindsets are shifting, and businesses need to shift with them. In the case of car dealers, customers now want usership rather than ownership, so that means they have to change how they sell to them.
As such, membership models allow you to move with the times, and meet customers where they are now.
What Are The Things To Watch Out For In A Membership Oriented Business?
If you’re hoping to create or move to a membership oriented model, there will be some things that you have to watch out for. These include:
Balancing commercial interests: Before you even get started creating a membership model for your business, you’ll need to weigh up whether it would work for you and your customers. There are a lot of advantages to it on both sides, but it needs to make sense for the product you have.
For example, think about how your customer uses the product you sell. If you sell a continuous service, such as copywriting, then it’s something they’ll need to have access to on a regular basis. This could be sold at a membership level, with a certain number of words or articles being sold at a certain price every month.
Community engagement: Once you’re ready to get started, you’ll need to get your community engaged with your product in a new way. Essentially, they need to be able to find how to sign up quickly and easily, and without fuss.
Ensuring that your website is well designed, and that everyone can find what they’re looking for, will go a long way towards getting those initial sign ups.
Driving membership value: To get more customers to come on board and use your membership service, you’ll need to create more value. There needs to be good reasons as to why they would sign up with you, rather than any other service.
Part of this will be creating a product that no one else can offer them. You’ll also want to find ways to encourage customers to try you our. You’ll often see this with membership models, as they offer free trials. This offers a portion of the product for free, so they can see what it does. This can help you onboard more customers, as they’ll be able to experience what the service offers you.
Nurturing member relations: You have those members on board now, so you want to keep those relations strong with them. They need to be happy with the service you’re offering, and be reminded of what they get with you. If not, they’re more likely to cancel.
The best way to foster these relationships is to have good buyer personas in place. When you know who your buyers are, and why they buy your product in the first place, it helps keep them on board and happy with what you offer.
Addressing member pain points: As you have those buyer personas, you should have a good idea of what their pain points will be. When you know that, you can address them pre-emptively. That’s something you need to be planning for from the very beginning, so you can retain as many members as possible.
“Offering a free trial is a common way to address pain points” says Declan Powell, a business writer from UK Writings and Case Study Writing Service. “The customer may not see how your product can help you unless they’re able to try it for themselves.” Offering that trial allows them to get to grips with the product or service, and see how it benefits them in real time.
Managing cancellations: In membership businesses, as with most businesses, it’s much easier to retain customers than find new ones. As such, you need to give customers a reason to stay with you. If a member wishes to cancel, finding alternate options for them can help you retain them.
You’ll need to know why a member wishes to cancel, and address that pain point. For example, if the pricing is too high, perhaps they can be switched to a lower pricing plan. Find the solution for them that doesn’t involve them leaving membership entirely.
Win back campaigns: Of course, you are going to have members that cancel, as you can’t get all of them to stay. However, you do have the option to run win back campaigns, and get them to come back. This works well as you’re already familiar with these customers, rather than the new customers that you have to get to know.
A win back campaign can be as simple as offering a lower price point for a few months, if they decide to come back. You’ll want to offer them something that they can only get if they come back to the membership program. If you know why members are canceling, you can address that issue in your campaign.
Customer service: It’s so important that you offer excellent customer service with your members. Remember, your customers have to be won over every time the bill comes in. That means you need to keep giving them reasons to keep coming back for more. If you can do that, you’ll find it’s less challenging to keep the customers around.
How Can A Technology Solution Help With Customer Engagement?
You’ve seen how important it is that you have a membership model that gives all your members reasons to keep coming back. That means you’ll have to find ways to keep the customers engaged. There are technology solutions out there that can help with this. What can they do to assist you?
Easing operational hassles: When you’re setting up your membership business, there’s going to be a lot to keep track of. Using tech will enable you to manage all the operational side of the business, allowing you to focus on customer service. When customer service is so important in this kind of business, you’ll want to make sure you have the right tech set up.
Track member attendance and productivity: Using tech, you can very easily track who’s signing up with you, and what they’re buying through your service. That helps you keep track of numbers, and plan for the future.
Easy email marketing campaigns/communications: Many businesses are using technology solutions to keep in touch with their members, allowing them to send out campaign emails at the touch of a button. These even allow you to personalise the emails too, making them even better.
Allows recurring payments and auto renewals: With the right tech services, you’ll be able to offer auto renewals and recurring payments. This makes things easier for your members, and the easier it is to stay with you, the more likely they are to do so.
Allows discount prices and differential benefits for members: This is something that’s highly time consuming to try and do manually. However, offering these benefits to different segments of your customer base will go a long way towards fostering relationships with them. Tech solutions can allow you to do this at the click of a button, making it a lot easier overall.
Rewards and referral programs: In a similar way, you’ll want to offer rewards and referral programs to your members. Again, it fosters better relationships, and it allows you to find more leads to grow the business. Using tech solutions can help with this too, as it makes it simple to implement and track.
As you can see, a membership-oriented business model works well in many situations, including SaaS businesses. To succeed, you’ll need to create those close bonds with your customers, and ensure you’re selling a product or service that works well through the business model.