5 Important Things to Consider When Implementing a Reward Program for Your Club
It seems like loyalty and reward programs are everywhere. You probably participate in a few; your favorite coffee shop, the gas for your car, restaurants you like, the grocery store, frequent flyer program, and maybe even a car rental company if you travel a lot. They exist because they are effective. 84% of consumers say they are more likely to remain brand loyal if a reward program is offered. 67% of customers actually change their spending habits because of the ability to earn rewards. In fact, loyalty & reward programs can generate upwards of 20% of a company's profits. Seems like there is enough data to suggest every business should have some type of a loyalty and reward program in place. Funny thing is, I see very few country clubs, golf clubs, or yacht club, etc. using a reward program to thank members for their business and loyalty. Just because members pay a fee or annual dues does not disqualify the need to gift, reward, incentivize, and thank them for their use of the club. As was outlined above, the benefits derived in offering a reward program outweigh the costs, and if done correctly, the loyalty and reward program will become an additional amenity of membership and actually increase revenue!
Here are five (5) important things to consider beyond statistics.
Membership Dues Do Not Breed Loyalty - Experiences Breed Loyalty: Customers don't make purchase decisions solely on price. Instead, they evaluate the entire buying experience. With respect to private clubs, every service, product, and amenity you offer is scrutinized by your members. When joining your club or using your club, members take into consideration branding, prestige, exclusivity, convenience, quality, facilities, amenities, social & professional relevance, and reputation. Loyalty is developed through an accumulation of these separate experiences and benefits. One important component in the experience and loyalty building process is the feeling of gratitude, appreciation and thanks. When's the last time you thanked your members for coming to your club? For enjoying your club? For supporting your club? Two simple words we all love to hear, "Thank You" is what loyalty & reward programs are designed to accomplish. "Thank You" completes the buying experience and it breeds an incredible bond of loyalty and retention when it is executed frequently and correctly.
Multi-Activity Rewards: Proper member loyalty is achieved via integration throughout a variety of products, services and amenities. Across the entire member experience you should sprinkle rewards and "Thank You". Every member uses their club differently. Some members joined your club predominately for golf, others for tennis, others for the family friendly dynamic, and yet others for the dining and social aspects. This means your club needs to deliver rewards for multiple activities or services used. Your reward program must distribute gratitude and thanks to each segment of your membership for their favorite activity and specific to their individual use of your club.
Rewards as a Differentiator: Almost 60% of Internet users believe that rewards and loyalty programs are one of the most valued aspects of the buying experience. Granted the buying experience online is a competitive ecosystem with multiple purchase options just clicks away from each other. Clubs are a different animal you say... but are they? Members usually review a few different clubs before joining one that fits their needs best. Once they join a club, its not uncommon to see a member's usage drop after the newness wears off. Member's interest in their club wains over time or as their life situations change. Offering a loyalty and reward program that adds value to the membership, and more importantly, a reward program that is a unique amenity of membership helps differentiate your club from other clubs and helps retain members longer.
Data Driven Loyalty: Finding the right partner who can help you design, develop, and implement your club's loyalty program is critical to your program's success. One of the most important factors in designing an effective program is data analysis. Understanding how club's work, and being able to research and interpret your member's club usage is key in striking the right balance between rewarding customers, while also keeping costs down, and ultimately increasing your club's bottom line.
Not Just Rewards... A Valuable Amenity Offering: There is endless information available which confirms loyalty programs work both in building short-term and long-term income for businesses. For clubs it is important to go beyond a simple point reward system (which allows members to redeem their points for additional services at the club); or a marketing and communication plan which sends emails (thanking members and letting them know how special they are). Don't fall short with these simple and outdated techniques. For prestigious and exclusive clubs it is critical to design a loyalty and reward program which adds value and becomes an additional amenity. This extra amenity needs to distinguish your club as different and unique from all other clubs. An amenity reward program must have a high perceived cash value (not easily available elsewhere); have choice of redemption options outside of the club (rewards that can be redeemed for a variety of different services and products); be aspirational (something that people are willing to spend more to earn more rewards for); offer relevance (something people need or want); and be convenient (easy to understand and use). A great example of an exclusive club amenity that also doubles as a loyalty and reward program is Privat-VIP's Travel & Rewards Club.
It is critical that the above five elements are incorporated into any club loyalty and reward program you implement. If one or more elements are missing, your program will be compromised and is unlikely to succeed.
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About the Author: Eric Ruehlmann is a versatile business executive with over 25 years of service in the club management industry. Eric's knowledge and experience is broad having held advisory positions and worked on projects in a variety of industries such as; consumer research, loyalty & rewards, travel & leisure, and lifestyle products & services. Eric is currently focused on sharing his knowledge about loyalty and reward programs with club managers and club board members. Eric Ruehlmann is the founder of Build A Better Club and a managing partner of Privat-VIP- Travel & Rewards.
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