The success of Amazon Prime has prompted established brands to rethink their loyalty programs.
While free points-based programs were once ubiquitous, long redemption times, poor understanding of benefits, and anemic usage means the death of points programs.
Instead, paid “fee-4-VIP” subscriptions (or memberships) provide brands with a more predictable source of recurring revenue, which can be used to subsidize more loyalty program benefits.
In turn, customers receive more value, become more engaged, use the programs more frequently, and ultimately spend more money.
A win for the company, and the consumer.
Whether it’s Instacart, RH, Amazon, or DoorDash, customers with “skin in the game” means big numbers.
Doordash has north of 5 million ‘Dash Pass’ subscribers (up from 1 million ~2 years ago).
Dash’s competition is playing along.
Uber offers a subscription of its own for $9.99 a month, which includes similar free delivery options on Uber Eats in addition to perks on ride-sharing. Grubhub also offers a $9.99 monthly subscription.
The future of loyalty is already here.