BrainTrust Query: I Wouldn’t Join Any Club That Would Have Me as a Member

Apr 20, 2010

By Max Goldberg, Founding Partner, The Radical Clarity Group

Through a special
arrangement, presented here for discussion is an excerpt from a current article
from the Radical Clarity Group blog.

Groucho Marx once said that he wouldn’t join any club that would have him
as a member. But in today’s world of consumer connections and social media,
forming a club can accelerate your company’s growth.

Word-of-mouth guru Andy Sernovitz suggests three types of clubs that a business
could offer:

  1. A Monthly Club: Dole out regular doses of your latest or most popular creations
    to people who love your stuff. By sending a "gift of the month" to
    subscribers, you can generate consistent sales, rather than selling one-off
    products. As Andy says, "A single sale means you’ve sold them once,
    but a subscription means you’ve sold them for a year."
  2. A Fan Club: Send out regular updates about your business to fans and encourage
    current fans to forward the email to their friends. You can start with a
    simple newsletter or an event to bring fans together.
  3. A VIP Club: Reward your frequent visitors or best customers by creating
    an exclusive club just for them. Keep them coming back with special offers
    and free gifts. Also have them refer a friend.

Discussion Questions: What can retailers do to make their current club card
programs more effective? What customer incentives or other features of clubs
do the most to build and retain customers?

Please practice The RetailWire Golden Rule when submitting your comments.

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6 Comments on "BrainTrust Query: I Wouldn’t Join Any Club That Would Have Me as a Member"

Sort by:   newest | oldest | most voted
Ryan Mathews
12 years 9 months ago

The real power of a “club” is the sense of identity and community it creates. Most retail “clubs” are just pricing programs with no real tie to an individual. A piece of plastic isn’t the same thing as a sense of identity. That’s why many customers carry pockets full of club cards with them wherever they go.

Nikki Baird
Nikki Baird
12 years 9 months ago
There is so much more that retailers could do with their club programs, but most of them require more than the mass, automated distribution of discounts. Club programs give discounts because they are easy. But if you want to build loyalty, real loyalty and not a mere addiction to discounts, then you might try: – Having a tiered loyalty program, where the tiers are transparent and progress toward the next tier is communicated with every purchase. If consumers have goals, and can see the rewards that come with the next level (which must then be differentiated from the current level), then they will think of you first when it comes time to shop. – As the article states, a VIP club can be valuable, or a sample club. But the real point is to make your most valuable customers feel special. That might mean a different colored card that gets access to gift bag handouts during the week, or a special voice of the customer line, or coupons to hand out to employees for excellent… Read more »
Max Goldberg
12 years 9 months ago

Through club cards, retailers have a mountain of data about their consumers. When will they begin to really mine that data and to offer consumers custom-tailored promotions? Right now, consumers equate club cards to discounts. What would it take to make club cards the center of better, more customized shopping experiences? Then they would truly become more valuable.

Doron Levy
Doron Levy
12 years 9 months ago

I like the tiered idea for club cards. If you look at Costco’s membership structure with Goldstar, Business and Executive, they really do market differently to each member and I think you will see different spending habits with each level and you can optimize marketing to each of those groups. Groceries and pharmacies should look at spending levels and perhaps offer better discounts or different types of bonuses to upper level members. Honestly though, I think most customers like the idea of cash back at at some point in time, hence the continued success of the Executive level of membership at Costco. and Shoppers Drug Mart’s Optimium program.

Ralph Jacobson
12 years 9 months ago

Service is the differentiator. Anyone can be matched on price or product. My wife has the “loyalty” cards of all three grocers in town. How loyal is that?! She just knows, like every other shopper, that she’ll get ripped off if she doesn’t use the cards. Priority check out lanes for top-tier customers, personal shopping assistants, etc, are the things that set your stores apart. Especially if the people performing the services have personalities to generate compelling reasons to come back to the store.

John Crossman
John Crossman
12 years 9 months ago

I think the key is making sure that the club provides value and a sense of intimacy. And, the more personalized the benefits (based on shopping patterns) the better.


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