How can you keep members while they are going through financial hardships?
In this episode, we are discussing different ways to give temporary membership discounts and the importance of looking at the lifetime value of clients.
We are also talking about the often-overlooked benefits of recognition and how you can solidify your members’ loyalty through rewards and acknowledgment.
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3 Big Take Aways
- Ways to temporarily give discounts to some members
- How to reward loyal clients
- The lifetime value of a client versus constant ascension
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Melissa: I'm going to move over to Lindsay and Lindsay's first time. So welcome Lindsey too.
Lindsay: So a membership for really target market is moms to learn about money. So we start with an eight weeks signature course. It's very based in day to day money management, how to, you know, set up your bank accounts and your budget and create a debt elimination plan.
It doesn't get deep pits like it's day to day basics that make a huge difference.Now there's a backend membership and a, in that backend membership, there's some accountability. And then we dive into a bigger topic, mortgages, real estate, credit scores, all of that kind of stuff. And some of the, the challenge that I'm facing right now is these are not business owners who are looking to uplevel.
They are not scholars who want to become, you know, investment gurus. They are like working middle to highish middle income moms who don't want this to be like that constant struggle in their life that they don't feel in control of. So what happens is about 18 months into the membership life is taking over, they're checking in less and less.
And I talk about being in control of your finances and managing every penny,you know, with intentional spending and they're not lugging it. And I don't, as a busy mom myself, I can't stand when somebody tries to get my time when it's just not the right time. So what's happening is the attrition is growing exponentially since COVID and people are, you know, a little, a little tighter, but they, all the emails that I get from them are so like sad.They don't want to leave.
It's only 29 bucks a month, but they're canceling Netflix. And they're, you know, being really, really mindful. So I had an idea of, maybe somewhere around the two year mark of going down to like 16 bucks a month, like almost almost alumni stylish. And it's not that the value that they're getting as any less than that,I want to devalue, you know, my time, I just, I don't want to stop being the voice in their ear.
And they're so sad to leave. They don't want to leave, but they're really just watching every penny. So I'm curious to see, you know, anybody's input on, you know, like decreasing the membership price over time.I could take out some of the value, but I don't even really want to do that. I just want to keep giving it to them and keep growing my membership numbers and lowering the attrition.
So yeah. Any, any thoughts on, on that from anybody?
Laurie-Ann: I did have somebody like several people approach me in the first one.I was just like, Oh, well this is what the rate is. But the second person, like, because I knew her personally, I actually said I decreased her to actually from $49 down to 10.
And I said until she was able, so I just kinda like, she, she doesn't have access to any of the information,but she's allowed to attend the monthly Q and a calls and she's still paying her $10, you know? And when things ramp up, I know that she'll come back. that's what I did, but that, it also like felt good to me because of who she is.
Lindsay: Totally. Yeah. And I have thought of, you know,just kind of having tiers in a sense, and like having this alumni tier, but I see that being an administrative challenge for me, cause it posts a lot of things in my Facebook group. Like, Hey, I've got five opportunities for 20 minute phone calls and I do that kind of whenever I see that my calendar's open.
I don't want to have to like open up my membership and see what level they're on.Like just it to be, you know, just kind of organic and light. So I got, I I'm stuck. Like I don't want her to do the tier thing because I don't want more work for me to have to go and see how much you're paying me this month.
I just kind of want to give
Melissa: Totally makes sense.
Jason: I was just going to chip in with it with a couple of things . As a financial person as well, I'm also a data driven person.
My first thing is, you know, exactly when these people are at that moment of leaving and COVID may have changed that landscape a bit,accelerated it to a degree, but at least, you know, when they're most likely to leave and consequently your ability to intersect that moment before they leave. So if it's a two year timeframe, maybe you pick 18 months or whatever it might be.
And that becomes the surprise and delight bonus time to say, thanks for sticking with me for 18 months.You're now getting your membership cut in half is the first thing is just a random thing. Yes, there are commercial issues attached to it, but if you're continuing to grow on the backend then and carrying on earning more money, it's just a commercial decision at the end of the day at that point.
And that's a volume thing for you to think about as well.Second thing, I had a client who, who was running CrossFit gym, physical space, and he basically gave his members an option to put the membership on hold for 25% of the cost of their regular monthly membership. He reopened a week or two ago here in the UK.
We, they were allowed to do that back into July. I think reopened, he's lost four people in the last five months from a physical gym cause welcoming six new people in the last week since opening and all of the people on pause have gone straight back without question, they're paying their normal monthly rate.
So again, even the option of saying to people almost to like Laurie Ann's point as well, just hit the pause button,we'll make it $5 a month, whatever it is, but that keeps you grandfathered in at the $29 before it goes on. At some point in the future, it may or may not, but it's just another way to hold a maintain people for a period of time, perhaps.
Suzanne: I'm in a membership that did a program with last year, it's called bright line eating. It's a food nutrition thing. And she's had her business about five years I think, and the memberships kept going up and people were starting to complain. And because it's, it's like the mom membership a little bit, you know, it's not a business membership,it's more of an individual personal development membership.
But last year at the annual event that she had, she announced that after three years in the program, you had a lifetime freeze at a certain level, which is works out to be about 29 a month. Right. And there was such a overwhelming recommitment because everybody loves, loves the association.
And so, and there's no distinction between whether you're a, we call them bright lifers, whether you're a bright lifer is three years or five years, or, you know, or you just are in one year, but you're, but at one year it's one at two years, it's a little different, right?In at three years, it flattens out at the lowest rate.
Suzanne: And so I, and I just had another friend that I brought into that program last year and it's working I think the other thing about it is, is that Facebook groups are used a lot and it's a pretty large,large membership group. But she calls on the people who've been around for a while to be sort of dorm moms in the groups and you know, sort of be a conversation starter and things of that nature.
And so there's getting people engaged and involved makes a difference in their wanting to stay in the middle too. Cause they're giving it away when you're giving it away.You like to be there, you know? So that's my experience.
Lindsay: Awesome. Thanks for sharing that. Cause it sounds fairly similar to what I'm thinking.
And I hadn't heard of somebody who had been a customer in that, in a model like that. And I imagine that that would feel like a really great gift or bonus or thank you for your loyalty. If I got that phone call from a membership that I was a part of I think my loyalty would just be more solidified, but I haven't had that experience.
Melissa: That's awesome.
Paul: Could you real quick also make that a, almost like you acknowledge people at that like instead of it, you know, in other spaces, like if you hit an income goal, they send you a T-shirt or a pin or a hat or, or certificate or something like that, where you can actually acknowledge tenure in your membership.
So when people are going towards that, that way, if people are at that 18 month and you acknowledge it to two years,because recognition is very big, you know, a lot of people over overlook recognition, you know, so look at the, the influencing factors that keeps people loyal and recognition, reward, you know, acknowledgement those types of things.
So by just having something where you, you actually can celebrate milestones with people and that could also be longevity, maybe send them a little pin and the pin costs you maybe like two bucks you know, type thing, or the mug look at that. Look at
Lindsay: that. Yeah.
So they get this, that's their one year anniversary. A membership it's called the pretty money club.
Paul: I think about it. We do that at the one year that gets them over the one year hump. You should have something that's like brag worthy of anybody. That's more than two years.You should just like send it out as a surprise and then just make it the new milestone. Some people are like at 18 months, it can be like, man, I gotta stay two months to get my mug.
Lindsay: That's kind of what I'm thinking.
Paul: Sorry, kids, Netflix is going. I need my mug.
Lindsay: Sorry. Okay. It was good to yeah.Confirmation that I wasn't, you know, totally losing my mind when, cause I mean, you just hear so much about, you know, don't reduce your price, don't devalue, you already giving them so much, you need to increase your price, decrease your price.
I'm like, ah, none of that, none of that feels right in my gut with my market.Um, so yeah. Thanks everybody for that. Yeah. I think the moment that each of us switch and think about lifetime value of a client versus constant Ascension, are you keeping that client in and acknowledging them if they stop, they would normally stop at 18 months.
Then that's when the income stops, that's their value. Right. So if you're able to extend that average person out a year or two more,even at a half the amount or a fraction of what you currently get, how much exponential would you make because you're basically, you're constantly back-filling that part as people go through that cycle.
So the average lifetime value of the customer will actually be considerably higher, you know, on, on average. So I would just, I'd definitely focus. You know,if you, if you're seeing that tracking, I would definitely make it an advantage, you know, like a positive thing. And I just remember we're probably never going to do a cruise again in our entire lives, but we sat down next to this couple and they like had this president's club pin on and they went in on like 500 cruises,you know, just something ridiculous.
Right. And I'm just thinking in the back of my mind, like these people most likely get discounts and incentives that we don't know about. Like, you know what I mean? So in the real world, this actually happens, you know, it's kind of like a frequent flyer thing or a frequent buyer thing. You know what I mean?And interestingly, we don't think about this in this space.
Tazeem looked like you're about to say something and we're going to ask where you're going,
Tazeem: What I was going to say. That would be my parents because they have been on a gazillion cruises, incredible deal. So you're totally right about that. But beyond that, I was going to ask in regards to what so many people have shared,and I love the idea. You know, you pay this much in your first year, you pay this much in your second year and this much in your third year, and then you're kind of grandfathered in, but what do you do when most of the members that you have are founding members and they've, or they're already paying in my eyes, I mean, it's, it's not like a lot of memberships at 20 mine.
My intro founders members was $79. And now most of my members that are not founding members are paying $99 a month. So how low do you go without getting like you're giving away the farm?
Paul: They're already on your lowest tier. You might not need to at them just acknowledged their tenure just because they got the founding member rate.So that's probably, what's going to keep them there.
Cause it keeps seeing the other rates raising. Right. I'm not sure if they would be incentivize of, of getting a lesser rate, Just give them the, give them the swag, give them the something the recognition I think would be, that would be good.