From Loyalty to Membership
In the modern aspiration economy, brand affinity is created not economically, but socially.
The irony of most of today’s loyalty programs is that they aren’t about loyalty at all. They have more to do with economic calculation and gain management than with the true affinity for a brand.
For example: there are programs that allow customers to earn points for following a brand or for writing a product review. This sort of bribery usually attracts the least loyal - and least valuable - audience who is mostly interested in the positive transaction utility and has a low brand investment (once they claim a reward, they can unfollow the brand). Within this calculative logic, installment payment plans like Afterpay, Affirm and Klarna may be the biggest loyalty programs of all.
True loyalty is emotional and irrational, and often at odds with our survival instinct. To achieve it, brands are better off with membership programs than the point schemes. Figuring out a good membership scenario is even more important today with a proliferation of subscription models, private chat rooms, and an ever-increasing costs of paid social as the customer acquisition tool. Converting customers into subscribers and participating in consumer micro-networks is easier if they feel like members of a group.
Membership appeals to human irrationality. A lot of sneakerheads waiting in line all night to score a coveted item don’t do it for resale; they do it for the badge value and the bragging rights. I had a hard time canceling my overpriced and underutilized fitness club membership because leaving a community is hard.
Membership is also a vehicle of the modern aspiration economy. It represents a shift from doing things for the benefit of others (conspicuous consumption) to a value model where we invest in things that benefit ourselves: access, knowledge, information, experience, privacy, belonging, self-actualization. In the modern aspiration economy, consumers are fans, influencers, hobbysts, environmentalists, and collectors. Membership programs are designed for them.
Not as straightforward as loyalty programs, membership trades on social and cultural capital. Scoring an invite for the Château de Saran, the centerpiece of the Moët Chandon empire, doesn’t have a price: “you cannot pay to come and stay at Saran, that is not the point. You have to be asked,” says Stephane Baschiera, the president and CEO of Moët and Chandon. Members of the Prada’s private club have been similarly selected by the brand. It’s secrecy and insider knowledge that counts, because no one wants to deal with the dreaded reverse network effects. A martini at Alfred’s wouldn’t taste the same if everyone was invited. And indeed, best member clubs are surrounded by myth and mystery (The First Rule of Fight Club).
Go beyond traditional luxury, and this logic can be applied across categories. Any brand can create an invite-only club of people who are passionate about what the brand stands for (e.g. gender equality, sustainability, running, brand aesthetics) and aligned with what it seeks to do in the world. For example, there are buy-sell-trade communities thriving on Instagram and Facebook around specific fashion labels, including the private messaging groups for plus-size members to trade their items. YouTube hosts niche communities that sprang around watches, menswear, makeup, cleaning, farming, gaming. Individuals themselves are launching their own membership communities around their shared interest. Niche food, niche dinner clubs and niche fashion magazines are proliferating, as do hyper-specialized gyms, intimate online spaces like group chats, and waiting in lines for Glossier drops.
The keyword here is not necessarily prestige and exclusivity, but identity and belonging.
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