The value of paid membership programs

For the past two years I've purchased the Barnes and Noble Membership Card, but this year when my membership came up for renewal I faltered. My membership served me well. I first purchased it during a period in my life when I was going to graduate school and the discounts on textbooks paid for the membership. The value was there and I was happy to pay the $25 yearly membership fee. There's also the psychological aspect of saving ten percent on all your purchases just feels good, even if it's only on a cup of coffee. And the reality is, after the first outlay of $25 you begin to forget you had to pay for the privilege of saving.

But then life changed, I graduated with my Masters and no longer needed to buy textbooks and Borders set up shop in my neighborhood. Borders has a free membership program, one of the benefits being a weekly coupon, usually for 20 to 30 percent off the list price of one item. I tend to only buy one item at a time so the free membership outweighs the paid membership for me.

The sad thing (for Barnes and Noble) is I still spend an equal amount of time at Barnes and Noble. I prefer Barnes and Noble to Borders. But now I'm just browsing at Barnes and Noble. When I'm ready to make a purchase I wait for my weekly coupon to show up in my email (it was even better when it showed up as a text message to my phone) and I stop in at Borders on my way home from work to pick up the book I eyed at Barnes and Noble.

If you're offering a paid membership program, no matter how insignificant the price - it's best to keep track of your competitors free programs and make sure you outshine the free program in a multitude of ways. The answer need not lay in matching discounts, but could instead focus on service extras. Ideas include priority lines, VIP reading sections in the store, call ahead shopping services, table reservations at the in-store Starbucks, etc. A paid membership program should be more than a blanket discount on goods, it needs to be special and hold true value for the people willing to pay for it, not just a simple calculation of if I spend $250 per year at Barnes and Noble I should purchase the membership card.

Birthday wishes from my retailers

A few years ago I was the marketing chair for a private club in Boston. During my tenure I tried repeatedly to get a birthday program started. The design was simple; keep track of members' birthdays and send each member a card on their birthday with a special gift, such as a complimentary glass of champagne during any club dinner service. The initiative was designed to serve two purposes - reiterate how appreciated each member was by the club and remind members that the main dining room provided the perfect atmosphere for special occasions. Every time I proposed the idea it was met with resistance, primarily because there was no centralized location to store the data and an unwillingness to make funds available to create one. I still think it's a great idea, but I'm no longer as heavily invested in the club as I once was and so I let the idea die long ago. It's only the past two weeks that have brought the idea back into consciousness. And that's thanks to the retailers that appreciate my business enough (and want more of it) to wish me a happy birthday. So in recognition of smart birthday marketing programs I'd like to thank: Sephora for the free body butter, Sel de la Terre (one of my top three favorite restaurants) for the 20% off certificate and Banana Republic for the $15 gift card.

Bliss' well placed sample with Sephora

My last post ended up being a critique about Sephora's Beauty Insider loyalty program. However, I did leave out the one thing they got right. Because Sephora has my some of my personal information, including my birthday, they knew I was right around the corner from the yearly celebration. Everybody loves birthday gifts so to get in on the action Sephora partnered with bliss to give out samples of bliss' naked body butter. What makes the sample special is the printed ribbon at the top of the bottle (see image above) that says "a gift for your 'birthday suit'!" This is a smart way for a company (in this case bliss) to capture the attention of shoppers with a 'special gift' in celebration of themselves. Though it's mass produced, the birthday notation makes the sample seem personal. It makes the recipient think twice about it, feel a certain affinity toward bliss and I bet it increases the trial rate of the product, which is likely to increase the purchase rate. Way to go bliss for some well placed product samples.

Sephora's half hearted Beauty Insider loyalty program

I'm a 'beauty insider' at Sephora. It's Sephora's half hearted attempt at creating a loyalty program. When I spend a certain amount of money at any one of their stores or on-line I earn points that can be traded in for free samples. I can only imagine that Sephora's marketing department felt that they needed a customer loyalty program to help stave off increasing competition, but didn't have the budget to throw at it and instead decided to put those boxes of samples (provided to them for free from the various brands they represent no doubt) to better use. Now instead of feeling rewarded when I visit Sephora I feel like I'm shopping at a store that could care less if I ever come back, because I'm not even worth a free sample unless I've already spent a certain amount of money. I have to wonder if the average person also feels disdain for Sephora's Beauty Insider program. Or if because I'm a marketer I'm more of a cynic. After all, Sephora should be giving everyone free samples, it shouldn't be a condition of loyalty. It just makes sense because free samples bring in more sales. And if Sephora truly wanted to reward its customers it should do so in a more meaningful way such as special shopping events, discounts, free full sized products, priority beauty consultations, etc. Leave the free samples to their purpose - getting people to sample and buy.