Why your loyalty program should charge a fee
With customers willing to pay extra to feel like they belong, how can you create an offering that competes with other exclusive memberships?
Loyalty programs are everywhere these days—because they’re good business. They’re often free, simple and non-invasive. But there’s evidence to support the benefits of offering consumers a fee-based loyalty model.
According to a 2020 McKinsey survey, members who pay into a loyalty program—either a one-time membership fee or a recurring subscription—are 60% more likely to spend more on the brand after subscribing. Free programs increase that likelihood by only 30%.
Why are customers willing to pay a fee when there are free options available, and how should you decide if “paid loyalty” is right for your brand?
What paid loyalty does
Is paid membership right for your brand?
Paid loyalty generally works best for brands that offer attractive but scarce benefits and want to funnel them to customers who demonstrate high engagement.
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