Membership has its shareholder rewards

Abstract

Purpose

Most business executives understand the importance of taking care of their best customers but they often limit their focus to engaging the left side of their customers' brains: the calculating side, paying attention to “hard” financial considerations such as level of discounts. In addition, executives should think about how they can engage customers' right/irrational/emotive side. One of the most effective ways to do this is to create a feeling among key customers that they are members of an exclusive club, building on the human need to affiliate. Humans want to belong to something, and preferably, something more sublime and more significant than ourselves. We want to believe that we are getting special access, special treatment, special handling – special something. Companies that can successfully tap into this left brain affiliation need will build extraordinary customer loyalty and long term value for shareholders. The author proposes four key strategies for companies considering going down this path.

Design/methodology/approach

In this article, Jackson considers a number of case examples of businesses that have built loyal “membership” customers who can be relied upon to keep coming back in large part because of the affiliation benefits they feel with the companies that serve them. Examples industries cited in the article include the real estate, retail, airlines, car rental and consumer durables. The author then draws lessons that can be applied broadly across any business considering strategies to build loyalty among its best customers.

Findings

Companies should proactively engage with the left brain needs of their customers. This involves developing programs that differentiate the businesses' best customers, providing visible benefits that are not available to ordinary consumers. The programs should target softer benefits and affiliation needs as well as providing good customer value. Those companies that are able to build a sense of membership among their customers will achieve increased loyalty and shareholder value.

Originality/value

Brand managers have always recognized how left brain thinking can overwhelm right brain hard cost‐benefit considerations in product choice. This article extends that thinking beyond brand attributes to how customers and suppliers interact. It demonstrates how company leaders who successfully target humans' left brain affiliation needs in designing customer interactions can attract and retain customers much more cost‐effectively than those who limit their focus to “hard” cost‐benefit considerations. In doing so, they can build competitive advantage and long term shareholder value.

Citation

Jackson, S.E. (2009), "Membership has its shareholder rewards", Journal of Business Strategy, Vol. 30 No. 1, pp. 53-55. https://doi.org/10.1108/02756660910926984