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
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!
