How to Create a Membership Program From Scratch

How to Create a Membership Program From Scratch

Starting a membership program from scratch can really transform your business, helping you build lasting customer loyalty and create a steady stream of revenue.

It’s not really just about rewarding—it takes careful planning, smooth execution, and continuous engagement to make it work.

In this article, we’ll guide you through the key strategies to create a membership program that not only attracts members but keeps them engaged and renewing!

How To Create a Membership Program From Scratch

Determine if a Membership Program is Optimal for Your Business

Before launching a membership program, it’s important to assess whether it’s a good fit for your business.

Not every business model works well with memberships. Key factors to consider include your revenue model, industry, competition, and the frequency of customer purchases.

For example, if you’re a SaaS company with a subscription model, like Spotify or Netflix, a membership program makes perfect sense.

Similarly, businesses like car washes or spas also benefit from this model.

However, if you run a car dealership, where customers don’t purchase vehicles frequently, a membership program may not be ideal. In that case, a referral program would be a better loyalty solution.

Find a Software Solution That is Omnichannel

Now that we’ve covered the suitability, it’s time to choose the right membership software.

Without the right solution, you won’t be able to fully maximize your membership program.

We recommend finding an omnichannel software, meaning it integrates everything—your booking platform, CRM, email marketing, social media, and even your physical POS system.

This way, your customers can join and access benefits no matter where they are or which channels they use.

An omnichannel solution also allows you to communicate with your audience and offer promotions or upgrades.

If you need help finding the right software, feel free to check out our membership program page for more details!

Be Clear With Benefits & Go With The Industry Standard (Tier)

For your membership program to succeed, it’s key to make the benefits clear and have a straightforward way to distinguish between them.

We recommend using a tiered structure—it’s a tried-and-true method that works well for most membership programs.

This gives customers the flexibility to choose the benefits they want while deciding how much they’re willing to pay for each level.

A simple bronze, silver, and gold setup is easy for most people to understand, but if it fits your brand, feel free to get creative with the names!

Always Provide a Free Tier

All Accor Membership Program Tiers and Benefits

No matter what tier names or benefits you choose, we strongly recommend offering a free tier for members to try out.

Based on our research, a free tier is a great way to attract new members with minimal investment.

It serves as a lead magnet, encouraging sign-ups, and gives you the chance to upsell—turning free members into paying ones.

Without a free tier, you miss out on these opportunities. It also helps warm up cold leads, making them more likely to upgrade later.

A good example of this is Accor SA, the hotel group behind brands like Mercure and Pullman.

They offer a free tier with perks like member rates, free Wi-Fi worldwide, and other partner benefits.

Members can then choose to upgrade if they feel it’s worth it.

This strategy has worked well for Accor, as their revenue has been steadily increasing since they revamped their loyalty program in 2018!

Anchor & Optimize the Middle Tier

Next, focus on optimizing the middle tier. What we mean by this is making the middle tier both the most profitable for your business and the most appealing for your customers.

To do this, offer the most rewards in the middle tier, but make it priced significantly higher than the basic tier, while still making it look like a great deal compared to the top tier.

Let’s break it down with an example. Imagine you run a spa with three membership tiers—bronze, silver, and gold. The bronze tier should offer essential benefits at an affordable price.

The silver tier (the one you want to focus on) should provide the most rewards and have a price much higher than bronze.

The gold tier, on the other hand, should be much exponentially more expensive but offer fewer, higher-value perks.

This strategy works the same way at the cinema, where the middle tier is often the best-seller because customers see it as the best value for their money.

Most people will choose the middle tier (silver), so it’s smart to maximize the value of that tier!

Plan Your Rewards Based on How You Want Your Customers to Behave

The next step is to plan your rewards, and they need to align with both your business goals and to shape your customers’ behavior.

For example, if you run a spa and want to encourage customers to visit more often, offer a fixed monthly package—like 4 sessions a month.

This works well because of the sunk-cost fallacy, where customers feel like they need to use what they’ve already paid for.

You can also use these visits as opportunities to upsell, increasing your revenue each time.

If you run a hotel and want guests to take advantage of your partnered airport lounges, include extra lounge access as part of the monthly rewards.

Again, the sunk-cost fallacy can nudge customers to take action.

Not to mention, this will shape your members’ behavior long-term, getting them used to using your service or visiting your premise.

Keep Rewards Flexible if Possible

It might seem like this contradicts the previous point, but we also recommend keeping rewards flexible.

This could mean allowing customers to swap rewards they don’t want for ones they do.

The key is to strike the right balance between achieving your goals, encouraging long-term customer loyalty, and still offering some flexibility.

In any reward program, there will always be some rewards that are less popular than others.

For example, customers might not be as interested in hotel dining vouchers or complimentary car rentals from an airline.

So, why not let members exchange these less desirable rewards for something they actually want, like an airline upgrade or extra points?

This creates an incentive for users to upgrade and keep engaging with the program, knowing they can get the rewards they truly value.

Just be sure to set up an exchange ratio that works for you, to keep costs manageable. For example, you might offer 3 car rentals for one upgrade.

Always Reward Upon Sign Up & Make Signing Up Easy

Next comes the sign-up stage. It’s a good idea to offer a reward when people sign up, no matter the industry or size of your business.

This really helps reduce friction and makes people more likely to join. Without this incentive, you’ll likely see a drop in sign-up rates—trust us on this one.

A free gift, like a voucher or some add-ons, or even a discount on membership upgrades, is a great way to get people on board.

Also, make the sign-up process super simple for the free tier. Only ask for three things: their name, email address, and phone number.

This will help prevent people from changing their minds halfway through the process, which happens more often than you’d think.

Don’t worry about gathering too much info upfront—you can build more detailed customer profiles later on through future interactions.

The goal here is to make sign-ups easy and straightforward, so members are more open to upgrading down the line.

Market Your Membership Program on Offline & Online Channels

The next step is to start marketing your membership program to your customers.

Remember the omnichannel approach we mentioned earlier? It’s time to use those channels to reach your audience and promote your program.

If you already have an email list or newsletter, you’re in luck—it’s an easy way to get promotion started.

The same goes for SMS or WhatsApp. But if you don’t have those, don’t worry!

Start by promoting your program on social media and offer an easy sign-up option, especially through a chatbot.

Also, make sure customers can sign up directly on your website, since that’s how most people will join if they discover you via Google.

Offline channels can actually be even more powerful than online ones.

Customers who’ve already experienced your product or service are more likely to be open to joining a membership program.

This is where staff training becomes crucial. Your team is one of your best assets for promoting the membership program.

Combine that with a free tier (as we discussed earlier), and you’ll have a strong sales funnel to bring people in!

Make it Effortless to Renew & Offer Multi-Year Subscriptions

Once you’ve got some members on your paid tiers, make sure it’s super easy for them to renew. We’re talking about one-click renewals.

To make this happen, start by getting your members to save their payment details in their accounts and encourage them to set up recurring renewals.

Offering a discount is one of the best ways to get them to sign up for automatic renewals.

Even better, consider offering multi-year subscriptions, allowing customers to sign up for 2 or 3 years upfront.

This can work really well, especially for gyms. Since gym members often think of their membership in monthly terms, a multi-year discount could make them feel like they’re paying less each month.

Plus, gym members tend to be pretty loyal, so this approach can be a win for them.

Just be sure this strategy makes sense for your industry before you roll it out.
Segment & Personalize as Much as Possible

Segment & Personalize as Much as Possible

At this point, you likely have a solid base of paid members, which is great for keeping your membership program running.

But now, you need to focus on keeping them engaged. Engagement is key, even after they’ve paid to be part of the program.

Whether through personalized promotions, gamification, or rewards, it’s crucial to keep members interested and engaging.

We’ve seen time and time again that low engagement often leads to cancellations or non-renewals – a membership program is not a one-and-done type of thing.

So, make sure you’re finding ways to keep them involved—whether that’s getting them to open your emails or, more importantly, encouraging them to actually use and redeem their rewards.

You’ve got plenty of tools at your disposal, from social media and email to push notifications.

Even small touches like hand-written cards or little gifts when they arrive can make a big difference.

These small things add up and help improve the overall customer experience, boosting the chances of renewals down the road!

Collect Data & Improve Every Aspect

Next, it’s time to start collecting data from your membership program and using it to make continuous improvements.

While rewards and engagement are important, ongoing improvement is something you can’t overlook.
In the competitive membership space, every little improvement counts, and so does the feedback you receive. Some key metrics you should be tracking include:

  • Average time spent engaged
  • Redemption rate and frequency
  • Membership longevity
  • Net Promoter Score (NPS)

For more details on loyalty KPIs, check out our article!

In addition to tracking metrics, don’t forget to regularly send out surveys to your members.

Survey feedback is crucial because members tend to share their thoughts only when they’re either really happy or really unhappy, making their responses highly valuable and accurate.

By this point, you should have a solid membership program in place that will support your business for the long haul!

Need an Effortless Membership Solution?

Now that you have all the knowledge you need for a great membership program, it’s time to actually implement and create one from scratch!

If you need the software to back you up, why not check out our membership software solution? Click the button below to get a free consultation tailored to your industry – no strings attached!

Complete Guide to Digital Membership Cards – Full Rundown

Complete Guide to Digital Membership Cards

What are Digital Membership Cards?

Digital membership cards are virtual alternatives to traditional physical cards, offering significant benefits for businesses and their customers.

They are easily accessible through apps, websites, or digital wallets, eliminating the need for physical cards and offering a more convenient way for customers to access services and facilities, as well as redeem rewards with a simple scannable code.

Many digital membership cards can also function as payment methods within an organization, using a form of proprietary credit.

This is similar to how access cards are used on cruise ships or how Starbucks cards work at their locations.

Benefits of Having Digital Membership Cards

Improved Customer Experience & Convenience

One of the biggest advantages of digital membership cards is the enhanced convenience and customer experience they offer, both for your customers and your organization.

Research shows that customers prefer to carry fewer cards and physical ones often get left behind, reducing opportunities for engagement.

With digital cards, customers can easily access your services, whether it’s for entry (like ticketing) or redeeming rewards, all with a simple scannable code via an app or email.

Increased Chance of Engagement

Building on the previous point, digital membership cards can significantly boost customer engagement.

Since these cards are typically managed through an app, they provide an opportunity to send push notifications, allowing you to communicate directly with your customers—whether it’s to promote campaigns or just share updates.

Plus, if your app is on their home screen, you gain valuable digital real estate on your members’ phones.

This is a great advantage, as it can naturally drive more engagement without spending any extra money on marketing.

For businesses, engagement is a key metric used to measure the return on investment (ROI) for customer loyalty.

Automated Data Collection Through a CRM

By using a CRM, your digital membership card can help you gather valuable customer data, predict their behavior, segment members, and send personalized rewards or targeted marketing.

This can all contribute to increasing each member’s customer lifetime value (CLV).

For example, if you’re a gym, you can track things like how often members visit, their preferred times, how often they use facilities like yoga studios, or even their purchases of lessons or supplements through the app.

With this information, you can boost revenue by offering discounts during off-peak hours or sending timely renewal promotions, among other strategies.

You can also cross-reference member data using time and location filters to identify which members visit with others. This can be really useful for segmentation and creating targeted promotions!

Minimizing Risk of Fraud & Revenue Loss

One of the key benefits of digital membership cards over physical ones is the reduced risk of fraud and potential revenue loss.

With physical cards, members can easily share them with friends or family, who would otherwise be paying customers.

Digital cards help prevent this by making it much harder to pass phones around—especially when the app requires biometric verification to unlock.

It’s true that some customers may not be thrilled about this, but it ultimately benefits organizations by protecting revenue and improving operations.

Streamlined Referral & Organic Membership Growth

Digital membership cards also make it easier for members to refer friends and family, leading to organic membership growth for organizations.

With physical cards, members had to bring their referrals to a location—sometimes even a regional office—which added friction to the sign-up process.

This was because referral programs typically require both the referrer and the referred to be present to claim their rewards.

With digital membership cards, however, users can share a referral program through a QR code or unique link.

Once the referred person completes the requirements, rewards are automatically granted to both parties.

This has helped many of our clients grow their memberships without spending extra on advertising, reducing acquisition costs by up to 40%!

Best Practices for Digital Membership Cards

Use a Reliable Digital Membership Solution (If You Don’t Already Have One)

The first thing you should do is pick a solid, customizable digital membership card platform—something that gives you the flexibility to make changes, which many cheaper options lack.

Other than the standard digital membership card QR code validation system, there is a lot more to do – to fully-optimize your digital membership solution.

A reliable platform sets you up for success as you grow. For example, tweaking things like landing pages can have a big impact on revenue and renewals by improving the user experience.

A good platform lets you easily adjust everything, even small details like button size and font, which can make a real difference in click-through rates.

And that’s just the start—once you have the right tools, you can optimize even more with features like pop-ups, one-click renewals, and digital wallet integration.

This is the most important step because if your software doesn’t let you make these customizations, everything else won’t be as effective.

Check out our article on how to choose a membership management software if you’re looking for one!

Integrate With Every Aspect of Your Business

Next, it’s important to integrate your digital membership program with other systems so that data flows smoothly between them, creating a seamless experience.

This is typically done through customer relationship management (CRM) software, which acts as the hub connecting your membership platform to other tools like email marketing, sales, and accounting software, and even IoT devices like barcode scanners, auto-gates, and digital lockers.

CRM integration ensures everything works together without duplication or unnecessary complexity.

Not to mention a CRM can help collect data, build member profiles, and segment them to different groups, to increase conversion rate and get a higher rate of participation.

This is also why having a strong digital membership card solution is so crucial—it makes all these integrations possible and efficient.

Makes Payment Simple & Seamless

To give your digital membership card solution the best chance of success, make sure the payment process is smooth, simple, and seamless.

Features like one-touch top-ups, auto-renewals, and saving credit card information can make a big difference.

One of the best ways to achieve this is by offering your own proprietary wallet, where members can easily top up using their cards or other payment methods.

By reducing friction in the payment process, you keep members engaged and avoid interrupting their experience with complicated payment steps, like repeatedly entering card numbers.

Having your own digital wallet also helps create predictable revenue, even if members haven’t spent their credits yet on things like bookings or premium events.

While it might seem like a small step, this credit approach has helped many clients nearly double their revenue, since many of their members don’t immediately associate their credits with tangible currency.

Offer Personalized Value-Added Services If It Makes Sense

Instead of just using your digital membership card app as a fancy ticketing or membership benefit checker, we recommend adding occasional promotions through push notifications.

For example, if you run a café chain, you might want to encourage coffee orders during off-peak hours.

In that case, sending a push notification with a special offer directly in your app would be a great way to do it.

This works even better if you can segment your members and personalize the offers based on the data you’ve collected, as mentioned earlier.

Another thing you can do to get the most out of your app is to also allow members to trade their annual benefits within the app, based on their membership tier.

For example, a hotel with a premium membership could let members swap their five free hotel nights for five airport lounge accesses if they prefer.

This kind of flexibility has helped many of our hospitality clients improve retention by up to 15% compared to the previous year, with more members through word-of-mouth!

Incentivize Adoption Through Rewards

The loyalty and membership industry is driven by rewards, and it’s the rewards that keep customers coming back and spending more—often more than factors like customer experience or convenience.

To help your digital members succeed, focus on incentivizing their usage with rewards, gradually shaping their behavior over time. This strategy is how popular apps like Uber and Airbnb initially gained traction.

When introducing digital membership cards, reward users for engaging with your app and signing up.

The initial rush of rewards creates excitement and sets the stage for ongoing interactions.

Use gamification, like daily check-in challenges or referral bonuses, to keep members engaged and encourage regular app usage.

The same idea applies to digital wallets. To get members to adopt your digital wallet, consider offering a top-up bonus.

This strategy was key for Starbucks, which made around $1.5 billion in 2020 through its digital wallet program!

What Industries Are Best for Digital Membership Cards?

Businesses that thrive on recurring memberships or high purchase frequency, and long-term engagement can benefit the most from digital membership cards. 

These cards help simplify managing memberships, renewals, and member activity. Here’s how different types of businesses can make the most of them:

  • Gyms, Fitness Centers, and Yoga Studios: These businesses are about membership renewals and tracking member visits. Digital membership cards make it easier to manage billing, check-ins, and keep members engaged over time.
  • Restaurants, Hotels, and Retail Shops: Even businesses that aren’t purely membership-based can use digital cards for tracking rewards, and encouraging repeat visits. 
  • Clubs (like golf clubs or social clubs): For clubs that need to track memberships, schedule events, and stay in touch with members, digital cards provide a streamlined way to do it all while keeping members engaged.
  • Subscription-Based Online Businesses: Services like online learning platforms, streaming services, or premium blogs can simplify sign-ups, manage subscriptions, and create personalized experiences with digital membership cards, making it easier for members to stay connected.

Overall, to keep it short, any business with recurring members or subscribers can improve operations, enhance engagement, and boost retention by using digital membership cards.

Looking for a Digital Membership Solution?

Looking for a digital membership card solution? With KlikNGo, you can give your members easy access, the ability to pay, and even earn rewards—all through one simple platform.

Want to learn more? Just click the button below for all the details, or check out some cool membership case studies here!

7+ Great Membership Program Examples to Copy

Successful Membership Program Examples

What is a Membership Program?

A membership program is designed to build strong, lasting relationships with customers by offering them exclusive benefits, rewards, or access in exchange for their membership.

The goal is to keep members engaged and encourage them to return, creating a sense of loyalty.

To manage this, a membership management system helps organizations handle everything from sign-ups and renewals to payments and communication. It simplifies the process and ensures things run smoothly, making it easier to stay connected with members.

These systems also allow organizations to personalize the experience, track member behavior, and run targeted campaigns based on insights into member trends.

Membership programs can be paid, where members pay a monthly fee for rewards and benefits, or based on earning points through spending.

Members can upgrade to higher tiers either by paying more or accumulating points, unlocking better rewards as they level up.

Many programs feature tiered structures, where the higher the tier, the more rewards members receive.

Some programs require a minimum spend to maintain or upgrade status, while others just require a fixed payment.

5+ Great Membership Program Examples to Copy

Pacific Coffee Hong Kong

Pacific Coffee - Membership Program Example

One of our clients, Pacific Coffee Hong Kong, asked us to create a well-designed membership program that includes a monthly coffee subscription.

The program offers two plans: the Standard Plan at HKD 800 per month and the Premium Plan at HKD 1200 per month.

Each plan includes 20 and 30 complimentary drinks, respectively, along with additional rewards, more points earned per dollar, and birthday surprises.

This paid membership model not only provides steady, predictable revenue for Pacific Coffee but also encourages members to develop regular coffee-buying habits.

Even if they cancel their membership, many are likely to continue returning with a similar purchasing frequency.

Pacific Coffee also offers a digital wallet that lets members reload credits to use for coffee and other food and beverages.

This feature encourages members to spend more often since they don’t directly associate the credits with actual monetary value.

Results

  • Increased the chain’s revenue by as much as 40%, through monthly subscriptions, vouchers, and credit reloads.
  • Gained 30% new members year-on-year, as a result of loyalty marketing and streamlined digital operations.
  • 100% improvement in recurring visits and purchase frequency, as a direct result of the membership program.

All Accor Loyalty Membership Program

All Accor Membership Program Tiers and Benefits

Accor Group is a French, publicly-listed hospitality company that owns and operates a global network of hotels and resorts, including renowned brands like Sofitel, Raffles, Pullman, Swissotel, and Mercure.

They offer a membership program with five levels: Classic, Silver, Gold, Platinum, and Diamond, each offering escalating rewards.

The goal of this program is simple—encourage loyalty to Accor and keep customers coming back, rather than choosing competitors like Hilton or Marriott.

While Classic and Silver members receive modest perks like welcome drinks and late checkouts, Gold members see only a slight increase in benefits.

The real value comes with Platinum and Diamond memberships, which include sought-after rewards like lounge access, dining and spa benefits, and free breakfast.

These valuable rewards motivate members to upgrade and maintain their status, ensuring that Accor retains its most loyal customers while maintaining a strong return on investment.

The program also includes a downgrading system—if members don’t meet the annual spending threshold, they risk losing their status, creating an incentive to spend more before the year ends.

Results

Amazon Prime

Amazon Prime is a paid membership program offered by the online retail giant, Amazon.

One of its standout features is the well-known one-day delivery service, which is mainly available in larger cities with many nearby warehouses. In the U.S., a membership costs $139 per year.

The subscription encourages customers to buy more from Amazon due to a psychological phenomenon called the “sunk cost fallacy.”

This means that once people have paid for something, they feel the need to get the most value out of it, often leading them to make more purchases.

Not to mention, Amazon Prime members also get access to Prime Video, Amazon’s answer to Netflix – which also constitutes a perk that contributes to a growing member base.

As a result, Amazon benefits from increased sales, in addition to the membership fee.

Results

Apta

Apta - Membership App Example

Aptamil, a well-known baby formula brand, wanted to create a better way to connect with its customers across both online and offline channels.

Their goal was to build a member portal that integrates all their data and provides a smooth, personalized experience for members.

Aptamil’s new portal collects important details about parents, like pregnancy status and baby’s age, allowing them to send tailored advice and product suggestions.

For example, as the baby grows, parents get reminders about when to switch to different products.

The Apta Club Member Wallet makes it easy for members to shop online or in-store, with vouchers for discounts on relevant products. The centralized system keeps members’ information up-to-date across all platforms.

Aptamil also offers exclusive classes and fun activities like quizzes, rewarding members with perks like milk powder samples.

This approach helps build a stronger connection with customers, making them feel more supported and engaged.

Although not your traditional membership program with tiers and everything, it’s still a good avenue to increase customer lifetime value and retention!

Results

  • Smoother Customer Journey & Engagement
  • Increase in Revenue Through Membership Upselling & E-Shop Integration

Costco

Costco runs a membership-based business model where customers pay an annual fee to access bulk products at discounted prices.

With over 76.2 million paying members worldwide, membership fees are a huge part of Costco’s revenue, making up almost $5 billion in 2024, even though they account for only a small portion of total sales.

This model benefits both Costco and its customers. For Costco, it creates a steady income stream and keeps customers coming back, leading to bigger purchases.

For customers, the membership offers access to high-quality products at great prices, encouraging them to shop more often to get the most out of their membership.

One of Costco’s well-known tactics is its “loss leader” strategy, like the $1.50 hotdog and soda combo.

Even though they sell it at a low price, it helps draw customers in, increasing foot traffic and encouraging them to buy other items while they’re there.

Results

  • Almost $5 billion in yearly revenue (2024).
  • 76.2 million + paying members globally.

What Do These Membership Program Examples Have in Common?

These membership programs focus on building customer loyalty and repeat business through personalization.

For example, Aptamil gathers detailed data on parents and babies, sending tailored product recommendations and advice to strengthen customer bonds and increase repeat purchases.

Pacific Coffee uses its subscription model to encourage habitual buying, with a digital wallet that encourages members to preload credits, making spending feel seamless and routine.

Amazon Prime and Costco leverage psychological triggers like the “sunk cost fallacy,” where customers feel compelled to maximize their membership’s value, driving more frequent purchases. Costco’s bulk-buying model reinforces this effect.

Data integration is also key. Programs like Accor’s loyalty system track customer behavior across various touchpoints, ensuring a consistent experience that strengthens brand relationships.

As long as you focus on these 4 things, which are personalization, customer experience, data analytics, and attractive rewards – it’s honestly hard to go wrong.

Looking for a Membership Program Solution?

Struggling with your membership program, or just want to emulate the success of these examples?

Reach out to us for a free, personalized consultation, and let’s get things on track. Just click the button below to send us a message—no strings attached!

5+ Proven Membership Retention Ideas & Strategies to Know

Membership Retention Ideas and Strategies

Keeping your members engaged and loyal is crucial for any organization, whether it’s a business, non-profit, or community group.

Contrary to popular belief, it’s not just about rewarding—it’s about building meaningful connections and making your members feel valued. 

In this article, we’ll go into some practical membership retention ideas to help you retain your members, from personalized outreach and content to creating a supportive community.

These tips can help you keep your members around and ensure they stay committed to your cause or brand!

What is Membership Retention & How to Calculate It

Membership retention refers to the strategies that businesses or organizations use to reduce the number of members who leave, whether they are paying or non-paying.

It applies to a wide range of situations, from keeping a newsletter subscriber list engaged, to retaining gym members, to maintaining retail memberships (like Costco or Sam’s Club), and even in organizations like churches, non-profits, or charities.

Even community projects can have members and work on keeping members engaged.

For example, we’ve had clients who are car enthusiasts pooling their money to create an app for planning meetups, making payments, and booking appointments.

This helped them retain members and build a stronger, more connected community by streamlining their processes and operations!

To calculate the membership retention rate, you can use the following formula:

Customer Retention Rate = [(Customers at the End − New Customers Added) / Customers at the Start] x 100

To calculate the percentage of original customers who stayed, subtract the number of new customers added from the total number of customers at the end.

Then, divide that result by the number of customers at the start. Finally, multiply by 100 to convert it into a percentage.

Here’s an example:

Customers at the Start: 1,000
Customers at the End: 1,100
New Customers Added: 300

Customer Retention Rate = [(1,100 – 300) / 1,000] x 100 = 80%

Alternative Membership Retention Calculation Method

We understand that some businesses may not be able to track new customers, especially if they don’t have a proper system for recruiting members. In such cases, we recommend using a simple formula to calculate your customer retention rate.

Simplified Customer Retention Rate = (Customers at the End / Customers at the Start) x 100

Example:

  • Customers at the Start: 1,000
  • Customers at the End: 1,100

Simplified Customer Retention Rate = (1,100 / 1,000) x 100 = 110%

If the result is more than 100%, it means your customer base has grown, though this doesn’t show how many customers are new versus retained.

If the result is less than 100%, it indicates you’re losing customers and your customer base is shrinking.

Why is Membership Retention Important?

Membership retention is vital, especially for businesses that rely on recurring revenue, such as beauty salons, restaurants, or even your most popular apps like Spotify or Netflix, not to mention, of course, gyms.

Keeping members subscribed provides predictable revenue, cash flow, and better forecasting.

Members tend to be some of the most loyal customers, engaging with the business the most—whether that’s by redeeming rewards, using perks, attending events, or participating in other activities.

These loyal members often generate additional revenue beyond just their membership fees, through things like extra services, cross-promotions, or referrals.

Plus, it’s much cheaper to retain existing members than to constantly attract new ones—about 500% cheaper.

How To Retain Your Members Through These Membership Retention Ideas

Be Proactive in Engaging Your Members

To retain your members, one of the first steps is to actively engage with them.

Many businesses assume that offering great rewards is enough to keep people around, but that’s not always the case.

With so many brands competing for attention, if yours loses its relevance, it could quickly become forgotten.

So, relying on rewards alone won’t guarantee member retention.

What can you do instead? Start by engaging with your members through email, SMS, or messaging platforms like WhatsApp.

Connect with them through surveys, share freebies or special offers, and keep them updated on what’s going on.

Social media can also be a great tool—create group chats where your brand and members can interact.

Customer-to-customer engagement is often the most genuine and can help build a stronger, more connected community.

Relevant Content is Everything

Building on the previous point, content creation plays a crucial role—especially when it’s personalized.

In addition to your usual content marketing efforts, like blog posts or social media updates, it’s important to create content tailored specifically for your members.

This could include personalized newsletters or microblogs that are exclusive to them.

If you’re not sure where to start, begin by gathering data on your members—things like their purchase history, browsing habits, and preferences.

From there, you can segment your audience and craft content that speaks directly to those groups.

For example, if you run a hotel and know which locations your members frequent, you could create a list of the best coffee spots near “Hotel A” for their next visit.

The more relevant and personalized the content, the more likely your members will stay engaged and renew—and the better the return on investment for your membership program.

Data-Driven Retention: Predicting and Preventing Churn

The previous strategies focus on engaging customers after they’ve taken action, but data-driven retention helps you predict and address potential churn before it happens.

It’s important to act before a member decides to leave. For example, if a member hasn’t engaged with your app or website for 3 to 6 months, their chances of not renewing are significantly higher—even if they’ve paid for a yearly membership.

By using your data, you can identify these inactive members and reach out to them early.

Send personalized content to reignite their interest—offer special rewards or exclusive vouchers that are easy for them to use and encourage them to engage with your brand again.

Being proactive and relevant can go a long way in keeping your members loyal.

Introduce a Decay System to Your Membership Program

Creating a sense of exclusivity within your membership program encourages members to maintain their status in order to enjoy exclusive benefits.

If you have a tiered, upgrade-based system (non-paid), consider introducing levels with clear requirements, such as minimum spending, activity days, or the number of referrals.

Members who don’t meet these criteria can be downgraded within a specific timeframe.

However, make sure to be reasonable with your limits—don’t immediately downgrade a gold member to bronze.

Provide a clear path for members to easily move up again if they fall behind.

This creates a balance between motivating them to stay active and offering a chance for redemption.

For paid subscriptions, this kind of system may not be as relevant. Instead, you can offer an auto-renewal model to make the renewal process seamless.

You can consider offering personalized incentives to encourage members to opt for auto-renewal, making it a no-brainer for them to stay with you. The goal is to make the experience as smooth and easy as possible.

Give Members Benefits & the Royal Treatment

Show your members that you truly appreciate their support by making them feel like VIPs.

The way you welcome them, thank them, and make them feel valued goes a long way in building loyalty.

It doesn’t have to be extravagant—small gestures like a personalized welcome, a drink upon arrival, a handwritten note from the manager, or even a piece of chocolate can make a big impact.

Luxury brands like Chanel, Hermes, and Dior understand this well. They offer champagne and chocolates in their VIP rooms because they know this exclusive treatment keeps customers coming back for more.

Hotels often do the same thing to make guests feel special.

If these examples aren’t relevant to your industry, something as simple as addressing customers by their names can have a significant effect.

Sources show that using a customer’s name makes them feel more connected and valued.

This kind of personalized attention also ties into your PR and branding efforts, creating a positive reputation that spreads through word of mouth.

As your satisfied members share their experiences, you’ll naturally attract more members, especially if you have a strong referral system in place.

Every customer touch point matters, and sets the stage for the next interaction.

Care About Your Members & Build a Community

To truly keep your members loyal, it’s essential to listen to them and take their feedback seriously.

Regularly ask for input through surveys, reviews, and polls—engagement is the key. When members see that their opinions are valued and acted upon, it strengthens their connection to your brand.

Customer service is a big part of this. When complaints come up, address them quickly and thoughtfully.

Members need to feel that their feedback is not just heard but also appreciated and resolved.

Beyond just handling feedback, get involved in the community your members are part of.

Observe how they communicate and share with each other. You can join or create communities on platforms like Facebook groups, Discord, Telegram, livestreams, or brand forums. These spaces help foster a sense of belonging and engagement.

Building an active, supportive community is one of the best ways to keep members engaged and encourage them to renew.

For example, hotel loyalty programs like Accor and Hilton have vibrant Facebook groups—either managed by the brand or the community—where members can share information, find deals, organize meetups, and feel more connected and valued.

Can These Strategies Be Used for Non-Profits & Organizations?

Yes, these strategies can be applied to non-profits and organizations. While some examples focus on businesses, the core ideas of engagement, personalized content, data-driven retention, and building a community are highly adaptable for non-profits.

For example, non-profits can proactively engage their supporters through emails, surveys, and social media, keeping them updated and involved.

Personalized content, on the other hand, like targeted newsletters, can help keep donors and volunteers informed about the organization’s impact.

Using data, non-profits can identify inactive members (like lapsed donors) and reach out to re-engage them.

Recognition is also key—offering exclusive benefits or simply showing appreciation, such as personalized thank-yous, can encourage continued involvement.

These strategies also help non-profits maintain long-term relationships with supporters and encourage ongoing participation!

Need More Help With Membership Retention?

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