Memberships and" loyalty programs have been in existence for years. Companies such as Sam’s, Costco, AAA, churches, country clubs, and airlines have successfully utilized them. Yes even the spa industry is now on the bandwagon. In 2009, Massage Envy opened its first membership and now it has more than 1,000 locations. This proves that the U.S. population loves belonging to clubs and being members of an organization. Due to Massage Envy’s success, there are several other brands launching similar membership programs. As a consulting firm we often get asked “how can I compete with those types of businesses”? You can. Create your own unique membership and loyalty programs. There are many benefits to offering a membership and loyalty program, but first let’s identify the difference between the two:
A membership program is where a person agrees to pay the spa a specified amount each month to receive a treatment. The monthly fee is charged automatically. A loyalty program is where you give your clients rewards for doing business with you. Ideally you should implement both, the membership ensures a steady cash flow and the loyalty program ensures retention. Here are 8 Essential Steps to Launch a Unique Membership Program
1. Design your Program: Decide on the type of program you want to offer. Don’t get stuck on only massages. Remember you want to be unique. Combine treatments to give clients a variety of options to choose from. You could offer:
- A de-stress program that includes a massage and other spa relaxing treatments.
- An acne program that focuses on adults, teens, or both.
- A wellness and nutrition program
- An anti-aging program
2. Set the Right Price: Don’t worry about being the least expensive. Focus on the type of experience you offer and introduce added value benefits. You will find it difficult to win if you compete on price alone.
3. Manage your Memberships: Having a membership software management system is essential. Don’t attempt to launch a program without it. It will assist you with usage tacking, retention, attrition and overall success.
4. Monitor Monthly Payments: Automating the payment processing is a very important management step. Set up a system where you can be aware of failed payments and initiate a collection process to avoid late member payments.
5. Set Membership Guidelines: When you implement your program, have a Frequently Asked Questions (FAQ) page that answers all the “what happens if” questions related to accrual, cancellations, multiple use, payment, etc.
6. Market and Launch your Membership: Create all your marketing materials such as posters, flyers, membership cards, website updates, membership agreements, brochures, etc., prior to launching the membership program.
7. Conduct Team Training – Selling the membership program requires a team effort. Make sure you train your team, set performance expectations, and implement rewards to ensure the success of your program.
8. Track Member Usage – To ensure a long, lifetime value, you need to track your members’ usage. You don’t want members to decrease their usage. If they do, the likelihood of them canceling is greater. You want customers to get into the habit of using the membership on a regular basis. Therefore, it’s wise to have automated reminder messages to keep the members engaged.
The best loyalty programs are simple and easy to understand, such as the programs used by the airlines where clients earn points for every mile they travel. You can do the same. Offer one point for each dollar the guest spends. The more they spend, the more points they can accumulate, and the better rewards they will receive.
If you are not currently offering a membership and/or loyalty program, I encourage you to do so and tap into this great revenue stream that will help you increase your guest retention and overall profit. Do you have a successful membership and loyalty program? Share with you your success!