Should We Label Loyalty?

We’re all familiar with terms like the subscription economy, membership economy, and community marketing, which have added layers to our existing loyalty vocabulary of rewards, points, and tier-based programs. A common notion of what they all mean is ‘building a base of loyal customers who drive recurring, predictable revenue’. 

But Robbie Kellman Baxter is shifting the goalposts for loyalty, no matter what label you choose to put on your program. 

The challenge, she says, is that marketers often focus on the loyalty, reward, subscription, or community program — whereas the operative word should be ‘membership’. 

The goal, therefore, is not to increase the member base of the program, but to transition customers from product ‘ownership’ to brand ‘membership’.

And to engineer this transition, what brands need is not another program or more rewards, but a ‘membership mindset’. 

In this context, the term ‘membership’ transcends all the labels we choose for our programs. It is more than a product, a program, or a pricing model. It is everything to do with how you treat the ‘members’ who have bought into your brand and product promise. 

No matter what the goal of your specific program is, the focus of a membership mindset is on creating trusted, predictable, recurring relationships with customers. The predictable, recurring revenue follows.

When we miss this important foundational step, however, the outcomes can be disastrous.

Loyalty programs may become glorified ‘churn-prevention’ programs instead of relationship-building programs. A membership mindset helps create member-centric programs where the entire journey from onboarding to maturity is optimized for value, even with tiers. Especially with tiers.

Rewards programs may become quid-pro-quo transactional programs, often missing the emotional essence of loyalty altogether. ‘Loyal members’ can misuse or even abuse the system, costing the company more than they bargained for. A membership mindset helps marketers create a customer who comes for the brand but stays for the rewards (and not the other way around).

Subscription programs, when treated as pricing plans, remain just that and should not be confused with loyalty. Inertia is not loyalty. If you are the ‘Netflix-of-something’, can you be confident a better-priced subscription won’t steal your subscribers away? 

Subscribers should also not be confused with ‘community’. After all, you may be a top-tier Netflix subscriber, but does that make you feel any affinity with the guy at the airport who also has a premium Netflix subscription? 

Similarly, paid membership programs may be all the rage today. For example, Panera Bread and Taco Bell both offer a fixed-price subscription with a high-value perception. But without a membership mindset, these programs risk quick stagnation, churn, and perhaps even misuse. (Even Netflix is cracking down on the password-sharing epidemic).  

The law of diminishing returns is real, even for free coffee. A membership mindset keeps the focus on continuously layering new value onto that base of $X/mo for unlimited anything.

Get the full episode with Robbie Kellman Baxter here .

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