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