Should We Label Loyalty?


Chitra Iyer

June 19, 2023
Clay banks

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 .

👉 Am I missing anything? Share your experiences with the membership mindset below.

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About the Author

Chitra is an experienced marketer turned freelance B2B content creator. She writes about CX, martech, sales tech, ad tech, retail tech, loyalty tech, and customer data and privacy. Of her two-decade-long career, Chitra spent the first half in senior corporate marketing roles in India. She’s led communications, digital marketing, and marketing ops teams for companies such as Timken Steel, Tata Play Satellite TV, and Procter & Gamble (P&G).

She has served as the editor-in-chief for the pioneering martech site Martech Advisor, which she led through a successful acquisition by Ziff Davis. She also conceptualized and co-hosted three seasons of one of the earliest Martech podcasts, The Talking Stack, with renowned Martech experts David Raab and Anand Thaker.

As a freelancer, Chitra creates original, thought-provoking content for senior B2B audiences, and has authored over 500 articles, white papers, ebooks, guides, and research reports about Martech and CX for clients around the world. She writes monthly columns for CX publication CMSWire and HR tech publication Reworked; and teaches a course on freelance B2B content writing in association with the Himalayan Writing Institute in India.

Chitra holds a Master’s in global media & communications from the London School of Economics and Political Science, and an MBA in marketing from the Institute of Management Development & Research, India.

In 2011, Chitra opted out of the city and moved to a farm in rural Punjab, in the north of India, where she and her husband breed thoroughbred race horses, grow organic food, and homeschool their two boys.

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