Asking people to pay to join an elite group of your best customers can increase your turnover, as it encourages them to buy new products and services and in turn provides a healthy cash flow boost.
Amazon Prime is a perfect example. When it started, for £49 a year, it gave customers free one day delivery, upgrades to express and evening delivery for a set rate and more than 350,000 free Kindle books to borrow.
More than ten million people worldwide have signed up for Amazon Prime programmes, which makes Prime a £500 million business. Like most memberships, payment was upfront which gave Amazon a massive cash injection.
Many businesses promote some sort of loyalty programme, e.g. buy nine coffees and get the ninth free. The difference with Amazon Prime is they are charging customers to sign up for their club and the fact that they do pay to join changes their buying behaviour in an effort to claw back their membership fee.
Do you have an elite club that your customers would pay to join?
If you take the time and effort to build it right, not only will the club itself make a profit, but it will also provide a boost to your cash flow and create a band of loyal customers, who buy more because they paid to become a member.
Recurring Revenue is one of eight key drivers of your Value Builder Score.
The Value Builder Score is a survey of more than 20,000 businesses, measuring the finances, opportunities and risks associated with their business, and the offers they have received.
Business Partnership uses the Value Builder System to help business owners increase the value of their business by up to 67 per cent.