From Loyalty to Membership

In the modern aspiration economy, brand affinity is created not economically, but socially.

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The irony of most of today’s loyalty programs is that they aren’t about loyalty at all. They have more to do with economic calculation and gain management than with the true affinity for a brand.

For example: there are programs that allow customers to earn points for following a brand or for writing a product review. This sort of bribery usually attracts the least loyal — and least valuable — audience who is mostly interested in the positive transaction utility and has a low brand investment (once they claim a reward, they can unfollow the brand). Within this calculative logic, installment payment plans like Afterpay, Affirm and Klarna may be the biggest loyalty programs of all.

True loyalty is emotional and irrational, and often at odds with our survival instinct. To achieve it, brands are better off with membership programs than the point schemes. Figuring out a good membership scenario is even more important today with a proliferation of subscription models, private chat rooms, and an ever-increasing costs of paid social as the customer acquisition tool. Converting customers into subscribers and participating in consumer micro-networks is easier if they feel like members of a group.

Membership appeals to human irrationality. A lot of sneakerheads waiting in line all night to score a coveted item don’t do it for resale; they do it for the badge value and the bragging rights. I had a hard time canceling my overpriced and underutilized fitness club membership because leaving a community is hard.

Membership is also a vehicle of the modern aspiration economy. It represents a shift from doing things for the benefit of others (conspicuous consumption) to a value model where we invest in things that benefit ourselves: access, knowledge, information, experience, privacy, belonging, self-actualization. In the modern aspiration economy, consumers are fans, influencers, hobbysts, environmentalists, and collectors. Membership programs are designed for them.