VIP Services and a Costly Lesson in Timing
What benefits do the members of the customer club bring to the table for the company? This matter requires you to design a plan in accordance with your business. Use guidance and advice of expert business counselors to avoid loss and eventual bankruptcy of the company because of such matters. You may conclude that you need to receive a membership fee in return for using options offered in your customer club just like Costco does.
Such decisions are related to policy and strategy of your company regarding customer loyalty. Notice that infrastructure must be prepared and properly put in place before implementing any plan. Years ago, I had implemented a point allotment plan and I eventually had to stop it after suffering a 500-thousand-dollar loss because customers were unaware of that plan and infrastructures were unprepared and unavailable.
We were ten years ahead of the market, but the market structures weren’t ready for implementing that plan. One of loyalty programs is that the members of customer club have priority in purchases. For example, Apple presents its latest model to its customer club members before presenting it to the public. Your customer must feel that membership in customer club brings him/her some special benefits in addition to registering points.
These benefits can be incentive plans specially designed for members. In fact, you are telling the customer, “as long as you are a member of our club, you can benefit from us.” Here, customer is not tiered and they can use special services and benefits of membership because they are a member of your customer club. For example, airlines provide VIP airport lounges for members of their customer club.
Some companies launch customer club based on their customers’ characteristics such as their gender. For example, a well-known shoe store gives a pair of shoes as a gift to children of women who purchase shoes from them. This is an exclusive club that addresses a certain group. The target market of this company is women who have children. Another method for that company is to give a pair of shoes to charity in exchange for purchasing a pair of shoes by customers.
The gift is not directly given to the buyers because the brand wants the number of consumers to increase. Consider special benefits for a customer who is a firsttime buyer and is not a customer club member yet. Some companies use special incentive plans to attract customers and increase the members of their customer club. Paying cost for attracting customer is justified.