How to Create a Membership Program: A beginner's guide

Generate extra income from philanthropic giving and create opportunities to delight patrons with our guide to creating a membership program.

When memberships are well designed and effectively managed, you can find yourself generating extra income from philanthropic giving and welcoming a lot of happy customers more often – in short, everyone wins!

But to achieve this, you first need to take a step back and do your homework. This means understanding exactly why your organization has (or wants to have) a membership program in the first place, researching your customers and having a clear marketing and fundraising strategy for the short and long term.

Use this how-to guide to develop a successful membership program for the first time, or to check that your current plan is up to scratch.

1. Align on your objectives

First, you need to understand why your organization wants a membership program. Knowing what your objectives are will help determine what type of program to develop:

• To increase attendance and secondary spend, choose a commercial membership plan. This type of plan offers a financial incentive to join, rewarding customers who book the most and encouraging them to book more, and is usually managed by the marketing team.

• To generate philanthropic giving and get donors on the first rung of the giving ladder, develop a philanthropic program. There are little or no financial benefits to this membership program, but people who want to make a charitable gift or get access to non-financial benefits will be motivated to join. Usually, philanthropic membership programs are looked after by the fundraising team.

2. Choose the right benefits to offer

When you’re thinking about what benefits to offer, there are two golden rules:

1. Make sure your membership brings in more money than it costs to run. This might sound obvious, but there are plenty of examples of memberships that don’t do this. 
2. Beware offering a single membership with just one benefit level. It’s much better to offer multiple entry points by developing tiered memberships that offer benefits at different levels. Performing Arts Houston created membership tiers ranging from $25 to $10,000, giving patrons a clear pipeline to grow loyalty and increase their giving year over year.

Benefits that cost you money

There are some great benefits you can offer that will cost you a small amount of money, but will be an effective incentive to join your membership program. These financial benefits make memberships easy to sell, generating income and more bookings.

In Spektrix, members can access any of the following benefits automatically when they log in. There's no need for discount codes or manual processes by your team. 

• Waived transaction fees
• Percentage discounts on some or all tickets
• Prime seats at a discounted price
• Discounts on your concessions or merchandise
• Free events, such as members' receptions or season launches
  
  

Benefits that don’t cost anything

You can offer members valuable benefits that don’t cost you anything. These are great if you want to set up a philanthropic membership program:

• Priority booking periods
• Priority mailings
• Thank you messaging in event programs or on your website
• Exclusive access to flexible benefits, like the ones listed below

Benefits you can charge members for

Finally there are benefits that do cost something to your organization, but can also carry a small additional cost to members. They require a small amount of administrative time, but are great options for any kind of membership program as they generate both revenue and increased engagement:

• Pre and post-event talks
• Building and backstage tours
• Dress rehearsals
• Artist meet and greets
  
  
  

3. Tailor your membership program around patrons' interests

You might know what you want to get out of a membership program, but to make it successful you'll also need to give your patrons what they want. Delve into customer behaviors by looking over their booking and donation history, understanding their interests, building segmentation models and mapping them to patrons' motivations and incentives.

These examples explain how to analyze customer behaviors in Spektrix. If you're using a different CRM system, reach out to your Support team for guidance. They should be happy to spend time helping you make your membership programs a success.

• Priority booking. Use drag-and-drop segmentation tools to build Customer Lists, where you can easily identify those patrons who book early and choose your most popular events. If they're drawn to programming that regularly sells out, or if they love to pick their favorite seats every time, then the offer of priority booking may be a great incentive for them to join your membership program. Priority booking is easy to set up, doesn't cost you anything, and generates income through membership fees. It's a great option if you're just getting started with memberships and exploring which options have the greatest impact. 
• Waiving transaction fees. The Ticket Sales Analysis report gives a breakdown of sales by channel, price band and more. This will tell you the proportion of customers in your chosen segment who purchase tickets over the phone or at the counter. Waiving transaction fees for online purchases not only provides a great incentive for customers to join, but also frees up time for your box office team by nudging patrons to make their purchases through your website.
• Philanthropic giving. The Donations Analysis report breaks down the proportion of customers making a donation when they purchase tickets. If you identify a segment of customers who already have a high propensity to give, a philanthropic membership scheme would encourage them to take the next step on the donation ladder.
• Membership pricing. Understand patrons' spending patterns using the Customer Analysis report to explore average spend per order and per ticket. Use this data to indicate how much people might be willing to pay for a membership. For example, if the average spend per order is $30, a $20 membership represents a big increase on the cart value. If the average spend per order is $100, that same $20 membership might prove to be an easier upsell.
  
  

4. Do some due diligence

Make sure that you’re asking the right questions about your membership program and how it fits in with your wider offer. Talk to other departments, understand their strategic plans, and think collaboratively about how to build the most successful membership campaign.

• Does your membership program offer a better deal to customers than any current offers (e.g. flexi-series, season tickets, preview nights)? Your membership needs to be easy to understand, so avoid conflicting messages and make sure your members get the best deal.
• Does your membership program undermine your other fundraising efforts? If you have targets for individual giving, make sure you’re not confusing people by encouraging them to become members while also asking them to sign up to regular donations.
• How many members do you need for the program to be profitable? Don’t forget to take into account any staff time required. Once you’ve worked this out, is it still feasible?
• Who'll be responsible for managing the program? A CRM with good, integrated fundraising and membership tools should make it easy to set up and sell memberships, and help members access their benefits. But even the best software relies on your team finding the time to monitor sales figures, track targets and continually improve the promotion of your memberships.

5. Promote your membership program

Even with great incentives on offer, you’ll still need to market your program to customers. Here are a few ideas to get your membership invitation in front of the patrons who are most likely to show an interest.

• Target potential members.  Segment your database to find customers based on their past behaviors. For a commercial membership plan, look for people who spent over a certain amount on tickets in the past year, and might have saved money as members. For a philanthropic membership plan, focus on patrons who regularly donate at the point of sale.
• Flag potential members to upsell. Once you've identified your most likely prospective members, tag them in your CRM system. That way, box office and front of house team members can quickly see who they are when they call, collect or scan their tickets, giving them an opportunity to upsell your membership program at the point of sale.
• Create a simple purchase pathway. Make it easy for patrons to purchase memberships online, as part of another transaction or as a standalone item. In Spektrix you can mix and match targeted upsells at checkout with one-click Memberships prompts on the website, making it smooth and simple process for patrons to join your program, no matter their starting point.

6. Keep your members engaged

So you’ve developed a solid membership program and you’ve got a growing list of members. Great job! Now you need to keep them on board. Here’s how:

• Set memberships to renew automatically. Memberships set to auto-renew see a 60% increase in renewal rates. Using Continuous Payment Authority, customers can purchase renewable memberships online with just one added checkbox, increasing your long-term revenue while maintaining a smooth purchase pathway. 
• Remind members to enjoy their benefits. Once your program's up and running, make sure members are making the most of any benefits you offer and are engaged with your organization. Set automations to flag any patrons who haven't accessed key benefits and contact them individually, or build email automation programs to remind them not to miss out.
• Remind your whole team to say thank you. Tag members in your CRM system so they're highlighted to box office and front of house teams, every time they visit. Keep team members appraised of member benefits and of your current philanthropic activity so they can thank members for their support and remind them what more they could enjoy.

Above all - don't forget to listen. Give members the opportunity to tell you what they think, ask them what other benefits they'd like to receive, and reach out to them if they don't renew. Even if you can't persuade them back, it's important to know what made them leave. Be sure not to promise you'll fulfil every individual request, but record feedback, look for patterns, and use feedback to drive sustained success.

7. Keep experimenting

Once you’ve developed a membership program that fits your objectives and the needs of your patrons, don’t stop there. Too many membership programs fall flat because they are never reviewed. Undertake regular data analysis and review members' feedback to check if the program is working as you intended or if there's room to achieve even more.

If lapsed members tell you the price is too high, consider a lower cost, entry level tier. If a good proportion of people choose your highest tier, consider creating an even higher value option. If very few people are attending post-event talks, try replacing that benefit with something that excites them more. The makeup of your audience changes year on year, so make sure you're not doing things one way just because that's how it's always been - mix and match incentives to meet the needs of your longstanding audiences, and to build loyalty among the loyal patrons of tomorrow.