There is a lot to unpack here. First, you pay for the mirror and then you pay monthly to get workouts. The brand has a paid model and now has introduced a free loyalty program. Brand lovers will put up with almost anything as a brand/loyalty program evolves over time. You’ve got to be extremely careful when introducing a paid program into the brand relationship – and lululemon knew this full well almost 7 years ago when considering introducing the paid model vs. free. They didn’t want “all” customers joining – making it exclusive and actually limiting how many members could pay to join. When they look in the “mirror” they see a mess created by their own hand. Likewise, when you charge for something the value coming back to the member better hit the mark in benefits, access, experiences and more. Plus, you have to chase after renewals. Don’t let the brand you built be negatively impacted by loyalty program designs that cannot be sustained over a long period of time, and don’t charge more than what is reasonable for the access and services provided. Use financial modeling and an expert in program design, strategy and operating model to get the job done.
David Slavick, Co-founder and Partner at Ascendant Loyalty is a contributor to RetailWire.
