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Every business owner dreams of MRR (monthly recurring revenue). That’s why there are several subscription business models proving their marketability in the field.
But what if your business doesn’t intuitively lend itself to a subscription model? We’ve put together some of the best examples of real “non-cookie cutter” subscription businesses that are using the subscription model to succeed (without selling monthly boxes).
This article is for anyone who:
- wants to lower Customer Acqusition Costs (CAC) while increasing Customer Lifetime Value (LTV)
- wants to effortlessly reactivate their e-commerce customers
- owns a business that can’t offer cookie-cutter subscriptions (e.g. fashion, hospitality)
- has customers who don’t need or want to repurchase the same things for themselves
- doesn’t want to join the saturated subscription box marketplace, but still wants MRR
For businesses that feel monthly recurring revenue is not a natural fit for them and want to take a different approach to recurring revenue, keep reading!
The Membership Model for Retail Businesses
Have you ever flown first class? Think about the way it felt to get the VIP treatment. If you haven’t, you have likely witnessed other first-class passengers and thought to yourself, “Wouldn’t that be nice?”
Launching a membership program has the potential to invoke the same feelings from your customers (and soon-to-be customers). Airlines set the standard for first-class treatment, which usually comes at a significant upcharge, but the concept is quickly catching on as a way to bring in MRR to a variety of niches. By providing additional perks in exchange for customer loyalty, patrons feel valued and special.
Big box retailers like Costco and Sam’s Club pioneered this model in the 90s. Individuals could get dramatic discounts on their groceries and household items by buying in bulk. But in order to enter the store, retail customers needed to have a membership. Today, e-commerce businesses have access to a digital toolbox which allows them to follow suit by offering membership options to their customers.
One of the most well-known examples of a successful e-commerce retail membership program is Amazon Prime. For $14.99 per month (or a one-time annual fee of $119), members receive free two-day shipping on eligible purchases, access to the Prime video, TV and music collection, unlimited reading, and more. The exchange of value is imminent, and because of that Amazon Prime has been a complete game-changer for online retail.
Advantages of a Retail Membership Program
The refreshing thing about creating a membership-based discount program is that businesses can be as creative as they want, making it truly unique to their brands. Here are some strategies companies have used to make VIP memberships enticing.
- Promotions and exclusive offers
- Invitations to private events
- Priority access to new products and services
- White glove service
- Birthday gifts and discounts
- Access to social media groups where customers can interact with other VIP members
- A tiered program with different levels of perks
Everyone loves a bargain, but discounting your products alone has the potential to cheapen the value of what you offer. It is essential to find a way to discount your products and services in a strategic way, and VIP subscription programs are a great way to accomplish that. Memberships that offer discounts and exclusive benefits help foster customer loyalty because when a customer knows they are going to get the VIP treatment, they will stick around longer (which means more revenue for your business long-term).
Leveraging Discount Membership Program to Generate Monthly Recurring Revenue
- Unlimited access to YouGX group classes
- The option to bring a guest with every visit
- Unlimited access to all Youfit locations
- A free YouCoach fitness assessment
- Half-price drinks
As the subscription economy continues to prove its profitability (even in an economic downturn), the above companies are proving how membership-based VIP programs offer an incentive to keep customers engaged. We hope that these examples have inspired you to think outside the box on how a VIP program could generate a dependable boost of monthly recurring revenue for your business.
At PowerSync, we are passionate about helping recurring revenue businesses thrive. Just as we believe a subscription revenue model is possible for absolutely any business in any industry, we also believe membership and VIP subscription discount programs can be part of the blueprint.
Let us help you get started by scheduling a strategy session with an e-commerce expert. During the conversation, a PowerSync e-commerce expert will guide you with recommendations based on your industry, target audience and other factors. Our strategy sessions are valued at $997, but if you mention this blog article the first one is on us.