Taco Bell, The Wall Street Journal And lululemon Create Meaningful Membership
Taco Bell has a contest for its Rewards members. Taco Bell Rewards members will be able to vote on which menu item can return to the menu: The Enchirito or The Double Decker Taco. Only Taco bell members can vote. Taco Bell’s Chief Brand Officer told Restaurant Business, a trade press, “… we wanted to continue elevating the voices of our most loyal fans by giving them exclusive access to a uniquely digital experience that fosters brand love. Nobody gets Taco Bell more than our community so we’re thrilled to empower them with this in-app voting experience that allows them to have a direct impact on our menu.”
Lululemon, maker of upscale athleisure clothing, is creating a membership program – lululemon Studio – around its Mirror connected fitness device, that will offer members access to “… thousands of streaming and in-person workout options (more than 10,000), receive perks and discounts on lululemon apparel, attend classes at stores for free and have early access to in-person lululemon events,” according to The New York Times. The Mirror device must be purchased for membership. The price of the Mirror will be lowered to $795 the first week in October and the membership fee will be $39 a month. Existing Mirror subscribers are automatically added to the program at no additional cost. Lulemon’s CEO told The New York Times that Mirror users were becoming increasingly loyal to the lululemon brand. The lululemon brand is known for having a very loyal community.
The Wall Street Journal has a membership program – WSJ+ – that offers subscribers wide variety of experiences for current users. There is a weekly members-only newsletter detailing events, offers, insights, prizes and experiences packages that include trips, discussions, free audio books, educational courses, cooking classes, virtual tours and passes for galleries. Each member receives a complimentary audio book each month. The Wall Street Journal designs its membership rewards to extend The Wall Street Journal beyond just hews.
These brands have figured out that having a membership program is not the same as having a meaningful membership program.
In our highly fragmented, uncertain world, people seek connections. Individuals form groups around brands because brands provide functional, social and emotional meaning. People want to associate with and be involved in a brand’s experience on a continuing basis. They want to belong to the brand’s group.
People want to be respected for their individuality. At the same time, people want a feeling of belonging to something meaningful. Joining a database and receiving a reward is not enough. Sure, it is great to be able to move to the front of the line when boarding a plane. But, is there a meaningful community around American Airlines? People want meaningful membership.
Meaningful membership programs allow people to join together around a brand for mutual benefit or some common reason. Meaningful membership programs are groups of like-minded individuals who are fully engaged with the brand’s experience. Just as frequent, repeat purchase is not the same as loyalty, not all membership is loyal membership. As with Taco Bell, lululemon and The Wall street Journal, a critical goal is to help members of the program increase their loyalty, moving from being merely opt-ins to advocates.
Meaningful membership programs have dual benefits. People reinforce their individual identity while augmenting their social identity through communication and connectedness of shared experiences, values and pride of belonging. These elements are what make membership meaningful.
For example, community building is at the center of lululemon’s brand. Fans recognize that connecting members in relevant, differentiated ways is one of the ways lululemon has become so popular. The new lululemon Studio program provides community members with a hybrid exercise solution. As the Chief Brand Officer said upon the lululemon Studio unveiling, “…lululemon Studio unlocks the versatility (i.e., hybrid fitness options) our community has told us they are looking for.”
Brands such as Netflix, Spotify and other streaming services focus on gaining subscribers. These brands do not focus on building a membership community of increasing loyal users. For many subscriber brands, the goal is to capture new subscribers. Some marketers believe their brands can survive on just gaining new customers. But, brands cannot survive by just focusing on acquisitions alone. As Taco Bell, lululemon and The Wall Street Journal demonstrate, the first priority must be to adore the core customer base. New customers are important, of course. After all, people age out of a brand. To generate enduring profitable growth, brands must focus on gaining new customers and keeping current customers.
Many acquisition-focused brands are learning that not only does it cost more to acquire members, ignoring loyalists hurts profitability. Recent data from a survey of CMOs shows that customer acquisition budgets are 14.7% larger than customer retention budgets. Only recently, have brands, such as Disney+, realized the need to focus on building brand loyalty. However, announcing growing numbers of new customers in analyst meetings is an addiction that is difficult to break.
Which is really sad, because research shows significant economic advantages and financial returns from highly involved, participating community members. Participants in membership communities are more loyal, less price-sensitive, more resistant to competitive promotions, more willing to recommend, buy more and are more profitable.
A recent Wall Street Journal’s Heard on the Street column focused on fast food restaurants and the battle for the breakfast daypart. The article ends with a comment about building brand loyalty. “The battleground has moved to loyalty programs that reside on your smartphone. Breakfast may be the most habitual meal of the day for those who get it to go. Now chains want to use technology and rewards to reinforces that behavior.”
Part of the problem is that many marketers just misunderstand brand loyalty. They assume that behavior is all that matters. This is wrong. Brand loyalty is committed brand behavior. In other words, there is an attitudinal element to brand loyalty that is critical. Meaningfulness is one of those attitudinal rewards.
Not all loyalty programs create meaningful membership. Rewards are good. But, real loyalty requires strong commitment. Many loyalty programs just ask customers to sign in, to register or to enroll. From then on, the rewards are merely frequency-based. However, meaningful membership means creating and reinforcing the personal feeling of specialness and the group privileges of belonging to a membership. Reinforcing brand behavior – how many times the member “frequents” the brand is not sufficient. Behavior is only half of the story when it comes to meaningful membership. Attitude is critical. For meaningful membership to develop, there must be true commitment to the brand.
Meaningful membership builds trustworthy brand value leading to high-quality revenue growth. Meaningful membership helps increase brand loyalty. Meaningful membership creates brand enthusiasm. It creates brand adherents. It is the basis of generating enduring profitable growth of the brand.