Business owners are increasingly investing in membership websites. But are memberships good for business?
Entrepreneurs are eager to invest in digital assets that will elevate their business. But you need to monetize your online community quickly, so are memberships the solution?
Are Memberships Good For Business?
The simple answer is yes, memberships are generally good for businesses. They open new avenues to information and revenue.
Recurring Revenue From Memberships
You can tap into a steady and predictable income by implementing a membership model into your company’s online offerings. In today’s economy, diversifying your income streams can be vital to keeping a company afloat in tough times.
And the fresh memory of COVID-19 will remind many entrepreneurs that being able to lean on an alternative income saved jobs and companies.
Customer Loyalty: Building A Tribe
What better way to capitalize on a strong brand than by building a tribe around it?
Community membership helps clients and customers feel a stronger affinity for your brand. This will further increase loyalty and encourage them to become a brand advocate, recommending your to their friends and family.
Also, by subscribing to your service via a small monthly fee, these members will feel they are helping you with your business. Are you a recycled clothing retailer, or do you offer some other noble cause in your marketing? Having your best customers get involved through a membership can cause them to feel that they’re helping to bring about a better world. And, really, they are.
This sense of contribution can help breed even stronger loyalty and brand advocacy, ultimately increasing lifetime customer value.
Upselling Opportunities Directly To Members
Members of your online community are sold on your company’s product offering. This opens up opportunities to upsell or cross-sell additional products and services.
Do you think Amazon Prime members receive more Amazon marketing emails than you do? Probably, and Amazon can get away with it because these are the most keen Amazon shoppers.
The result is that Amazon can offer more products to Prime members and ultimately earn more revenue off of them.
And since they’ve self-identified as your best customers, you can offer them additional products, or higher value products, without fear of upsetting them.
Data And Insights From The Members
Being able to tap into raw data from your community means you have a competitive edge over the other businesses in your field.
The data you harvest about your target market means you can tailor your business’s offerings to speak more directly to your best customers. It makes a lot of sense to focus on creating the product or service that your best customers want, since this is the strongest pulse you have on the market and insight into what’s working for you in terms of product-market fit.
Usually, most companies would have to purchase this information but running your community means much deeper and more cost effective insights.
Building A Healthy Community
Developing a healthy community creates an engaging one as well. An attractive community is one where participants share information and insights freely.
When you turn your community into an asset for your members, who can rely on it for information, they will spread the news via word of mouth. This, in turn, means they can potentially tap into a new loyal market.
What Businesses Currently Have Memberships?
Many businesses utilize membership models. However, depending on the industry, business memberships can differ widely.
These businesses using this model include:
- Fitness centers or gyms such as Gold’s
- YouTube creators such as The Story Till Now
- Retail memberships such as Costco
- Airline and travel programs such as Air Canada
- Outdoor retailers such as REI
These are just a few businesses that can benefit from implementing a membership program in their community.
Now that we’ve answered if memberships are good for business, why not start your own?
Read next: What Is The Purpose Of A Membership Website?