Most loyalty programs are a leaky bucket. Here’s how to make people stick around.
Free shipping. Early access. Insider discounts. Birthday gifts. Do these things actually make people feel closer to a brand?
For most brand membership programs, freebies have become no-brainer member benefits that easily get someone in the door. But how many times have you signed up for a loyalty program on the promise of a discount or immediate perk, only to cancel or unsubscribe as soon as you got what you wanted? Or maybe even worse, ignored every subsequent communication from the brand completely. If you’re like most consumers, you’ve done this a lot.
This is the state of most loyalty programs today. They’re largely leaky buckets — a revolving door of transactional benefits that get people in through commercial perks but often don’t satisfy any greater need or meaning to get people to stick around. Do these door-opening benefits create loyalty? We’re skeptical. In fact, we think they’re actually often responsible for cheapening the brand.
We’ve come to focus on what we call a membership mindset, and a key part of this is deeply understanding member needs. Yes, if you ask consumers what benefits they want, they’re all going to say discounts. But it’s the job of the business to dig deeper and understand what value you can uniquely provide to create an ongoing relationship with an audience. Maybe it’s about helping them achieve personal performance goals; perhaps it’s about expanding mental wellness. The best loyalty programs are actually relationships — a progressive, ongoing, give and take — that operate on a deeper level, one beyond transactional rewards.
Think of Nike Training Club, which push you mentally and physically on the daily. Or Ennismore’s Dis-Loyalty program that encourages members to step outside of their usual travel bubble. Or web3 upstart LinksDAO’s purpose of reinventing golfing for modern players, which includes owning a share of your own course. Each of these have cracked the code on membership not by getting you in the door, but by giving you reasons to return again and again.
So the next time you think about what benefits you offer your members, think of their needs first. What does your membership uniquely promise that helps them do something they never could have on their own? How can membership help people get closer to the goals they have already set for themselves?
Here’s a simple Hellen Benefits Framework we use for thinking about the jobs of different benefits. Some get you to sign up. Others get you to stay. In a healthy membership, they will all fuel each other.
What’s the hook? (What gets you in the door?)
What’s the baseline? (What are the table stakes, friction-removing benefits?)
What’s the promise? (What’s the aspiration of the membership?)
What’s the staying power? (How do we fulfill our promise in an ongoing way?)
Hellen Contributors: Pierre-Laurent Baudey, Elsa Perushek, Peter Petrulo, Jason Zabel, Adrian Ho
