How to Strengthen Relationships and Grow Your Business with Club Memberships
Get to the Point
- Define Benefits - You have to first decide what the customers will get when then enroll in your membership.
- Define Cost - Figure out the opportunity costs, and actual cost of the benefits you decide to offer.
- Stay Organized - Making sure you follow through on promises you make to these customers is very important. Keeping good notes, and having reminders will be paramount the the success of the program.
Club Memberships are an upcoming strategy I’m seeing many many home service businesses implementing.
They can help:
- Increase annual revenue, while building customer loyalty
- Keep your techs on the payroll during the slow season
- Promote new or emerging services your business is offering
If Club Memberships intrigue you, or it’s on your “let’s look into this’ list, then read on.
The Big Benefit: Automatic Recurring Billing (ABM)
All business owners want reliable, steady income - each month of the year. Well, Club Memberships provide Automatic Recurring Billing (ABR).
This benefits your business by:
- Increase annual revenue
- Creates customer loyalty
- Expand business service offerings
- Keep techs on the payroll during slow season
Just think about it, with Club Members your business will become the one-stop-shop for ALL their service needs you can provide. This will help expand growing parts of your service business, keep your techs working year-round and overall increase your revenue, while making happy customers.
How to Start a Club Membership
- Define Benefits
The first thing you should do is think about what services you’d like to offer exclusively to your members. But here are a FEW suggestions could be offered.
Discount - The first, and most obvious thing members will look for is a discount of some sort on services. You could give a percent off each visit/project or a flat rate of discount.
*TIP! Giving a percent has a higher perceived value because there are higher ticket jobs and the buyer can’t just add up the number of dollars they saved and compare it to their monthly or yearly fee.
Added Value - If you don’t want to offer a discount, there are other ways to provide value to your customer without affecting your profit, here are a few ideas:
- Free Annual Inspections / Cleanings - Offering cleanings, tune-ups, or inspections are usually quick visits that can identify future needs for the customer. These visits give you an added benefit because they will often create future jobs and visits for you.
- Priority Visits -
- Same Day Service - You can offer “same day call service” to Club Members, or some guarantee their service will be prioritized.
- Quicker Service - Another form of priority could also make sure to always send 2 techs (even if it’s a master and apprentice) to club member service calls, allowing the job to be completed quicker.
- Exclusive Hours - “Member Only Hours” could be another benefit. Giving your members the option to choose times that fit their schedule outside of your “normal” hours.
- Coupons - This option is beneficial because you choose when to send them! You can offer a promotion when you are having a slow week or month, or launching a new service or manufacturer's line card. Additionally, you can gauge the pricing and expiration dates as it benefits your business.
- Holiday Benefits / Birthday Visit - Now, it might seem funny to have a birthday club for a service business, but having a special pricing for your Club Members birth month is always fun, and gives another level of personalization to what you have to offer. Another option is if you have a “Pre-Thanksgiving Check” for plumbing, or a “Christmas Party Tune Up” to make sure their house is ready for increased use of plumbing or heating. Giving your members peace of mind IS a benefit.
- Thank You Gifts - Have you ever swiped a rewards card and found out you got a free coffee, or a discount on your next visit? It feels great! The little added perk of having exclusive rewards makes being part of the Club Membership, well, ‘rewarding’. For example, my plumber sends a $5 coffee gift card with each invoice. You bet I open those invoices as soon as I get them! It’s thoughtful and leaves a happy impression every time I work with him.
2. Define Cost
The next step in implementing a Club Membership would be to decide how to turn customers to members, and calculate the cost to you, and then to your potential members.
- Your Cost; Their Cost - At this point, you have a good idea of what benefits you’d like to be offering your members. Find out what the minimum cost, maximum cost, and expected cost will be per year for the membership.
- If there are defined costs like 10% off every service, you can see the monetary impact, if you want to offer rush services, you might find it more difficult to define the cost that would place on you in overtime or other expenses. Work closely with the dispatcher at your company to help find what the labor costs could look like.
- Yearly or Monthly Billing - Next, decide how often you want to charge people for your Club Membership. Typically we see annual service contracts, but with a quarterly or semi-annual billing/invoicing. When determining this, factor in what cost your customers will perceive as a value and the frequency of service to each location.
3. Stay Organized
Logistics: Figuring out a marketing strategy, payments and billing are critical to the success of your Club Membership program.
Here are a few points to consider:
- When to Bill - People will be joining at different times, how will you know when they owe money? One option is to have a list internally with which members joined in each month. In June, you can send a reminder to the members who joined in July telling them it's time to renew their memberships. If you have a billing system that can automatically bill at a set time, you could use that too.
- Knowing Which Customers - How can you make sure you add discount every time a member has a service visit? In our flagship software, Pointman, there are clear customer management notes. You will be able to clearly see who has a membership, and in the invoicing section you can apply the proper discount code, which would already be programmed to the account.
- Getting New Customers - Using the customer management system built into Pointman can let you know if the current customer was a club member and if you’ve talked to this customer about the program before. Training your technicians when to offer membership is important. If you are using Pointman, your dispatch team can leave notes in the Customer Information section to guide the techs in what to do.
Club Memberships don’t just give you another customer. It can build loyalty with those customers. Loyalty comes from trust, which comes from integrity and discipline. The expectation is with more information and insight into the customer’s needs you will be better equipped to delight them. You must make sure to follow through on all promises made in your membership. When you do what you said, and do it well, you can possibly delight your customers so much, that they become your best salespeople.