Exclusivity: The Secret Weapon for Selling Almost Anything
- Which costs more for brands, attracting new customers or keeping existing ones?
- What part does FOMO play in brand loyalty?
- What part do exclusive perks play in customer self-satisfaction?
Is it possible to convince the very rich that behind a politely, yet securely guarded door, the grass is much, much greener? Yes, it is. In fact, large sums of money are being made by entrepreneurs in industries as diverse as restaurants and airlines who understand the basic psychology of aspiration and reward.
In most cases, the appeal of these exclusive memberships lies in the fact that most people can’t join the club. This is FOMO – fear of missing out – on steroids.
What This Means for You — Most savvy brands understand that keeping existing customers, especially those who spend substantial amounts each transaction, costs less than trying to attract new ones. Offering the possibility of exclusivity and/or other incentives are the latest ways of building customer loyalty and better ROI. If your brand uses these tactics, this piece will suggest ways to do this better. So, keep reading, or you may miss out.
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Core Values: Exclusivity and Paid Loyalty Programs
In September of 2023, New York City social club “Core” moved to much swankier digs at 711 Fifth Avenue. According to the Robb Report, “The outpost—which has initiation fees that run from $15,000 to $100,000—will occupy over 60,000 square feet within the building.
“It’s a pivotal moment in our Core story,” says CEO Jennie Enterprise in a Robb article. “From the beginning, Core has been committed to curating a global community of relentlessly curious individuals who are energized by cultural exploration, committed to community engagement, inspired by original perspectives, and dedicated to enjoying life without compromise.”
The club will be positioned on the top four levels of the building with an additional 6,000 square feet of outdoor terrace space. In addition to spa treatment rooms, a salon, and a barbershop. Elsewhere, members can visit the Dangene Institute on the 16th floor for customized, anti-aging skincare services and stop by the juice bar for a rejuvenating drink after hitting the gym. The 17th floor will feature an extensive “wine library,” plus a speakeasy lounge serving up Mexican, Italian, and Japanese-inspired small plates.
To the surprise of no one, the NYC Core is killin’ it and two more – in Milan and San Francisco – are scheduled to open next.
All the Rage in Restaurants and Retail
The opening sentence in an Associated Press story about paid loyalty programs such as the one used by Core asks: “How much does it cost to feel special?”
Apparently, for members of the Core program, about 100K a year.
The news service adds, “Paid loyalty programs are all the rage in the restaurant and retail worlds. Looking for reliable sales in an unpredictable spending environment, more companies have extended their point-based loyalty tiers to making their most dependable customers feel valued for an up-front fee.
“For companies concerned about churn rates, creating a fee-based loyalty program can seem like a win-win in terms of revenue. A 2020 McKinsey survey found members of paid loyalty programs were 60% more likely to spend more on the brand after opting in, while free loyalty programs only increased that likelihood by 30%.
“E-commerce site Hive Brands, a startup launched in 2020, wants to be the go-to online marketplace for eco-friendly cleaning products, toiletries and pantry staples from soup to nuts. But after finding shoppers not returning as frequently as hoped, it launched a loyalty program in January that costs $60 a year.
“Members get speedier shipping and a $120 credit for recurring deliveries. Hive also plans to tag them for priority treatment to ensure their inquiries or orders are dealt with first.”
India-based NUPI, has an international client list for whom they design exclusivity-oriented customer acquisition and retention programs. In a LinkedIn article, the company noted, “In the competitive landscape of customer loyalty, brands are constantly seeking innovative ways to stand out and create meaningful connections with their customers. One strategy that has proven to be incredibly effective is offering exclusive perks and rewards to loyalty program members.
“But the value goes beyond just the tangible rewards. Exclusive perks have a profound psychological impact on customers, tapping into their innate desire for recognition, belonging, and status. When customers receive exclusive benefits, they feel appreciated and special, fostering a deep sense of loyalty and affinity towards the brand.
But the benefits extend beyond just fostering loyalty; offering exclusive perks can also drive tangible business results. By incentivizing repeat purchases and increasing customer lifetime value, exclusive perks contribute to revenue growth and long-term profitability.”
The travel and tourism industry has several unique reasons for offering incentives for repeat travelers. Click here to read how they are doing this.
Flying in Rarified Air
No where is the power using exclusivity to drive brand loyalty more evident than in the elite programs of international airlines. They are invitation-only and even the members have no idea how they got in the program. They have names like, “Global Services” (United), “ConciergeKey” (American) and “Delta 360°” (Delta).
According to The Wall Street Journal, “It’s a semi-secret, status-on-steroids level that big spenders strive for every year. The airlines don’t like to talk about what it takes to snag an invite, how many people have such status or even the perks. Even the high rollers themselves don’t know for sure.
“Get into these exclusive clubs and you get customer service on speed dial, flight rebooking before you even know there’s trouble, lounge access and priority for upgrades. Not to mention bragging rights and swag. People even post unboxing videos of their invites on YouTube. Anyone with this super status needn’t fret about the value of airline loyalty or the devaluation of frequent-flier points.
“Airlines don’t publish qualifications for Global Services, Delta 360° or ConciergeKey. That doesn’t stop road warriors from speculating in online forums about the required spending levels ($50,000-plus a year is mentioned a lot) and travel patterns (lots of high-cost international flights in premium cabins on the airline, not partner carriers).
How to Use Exclusivity in Marketing
Based in London, LoyaltyLion specializes in designing loyalty-based marketing programs for a wide range of companies and industries. In a recent poll of 2,000 customers about what made them loyal to a brand, they found that aspiration and exclusivity are the two key drivers.
The company noted, “To build long-term relationships with consumers, it’s essential to make your customers feel like VIPs and to give them something to work towards. To grow the advocates you have, focus on making your most loyal customers feel special. This is especially important as our research showed that 74% of customers become loyal to a brand if they have something to aspire to.”
Fostering feelings of aspiration and exclusivity seems simple enough and it’s logical that any brand could benefit from these tactics. However, this is easier said than done. The LoyaltyLions offer 5 tips to make the plan work.
#1 Understand your customers’ motivations
Find out what drives your customers to ensure you’re offering the right rewards and benefits that build loyalty. We found:
– 79% said that they are motivated to engage with a loyalty program if they receive financial incentives.
– 66% are looking for experience-based rewards. It’s clear that experiential benefits can lure in long-term customers and social media help them share this with friends.
– 79% of customers feel that they are motivated by accumulating points that they can benefit from later.
#2 Create a feeling of exclusivity with a tier-based program
Loyalty tiers give your customers something to aspire to, always showing them more exclusive rewards on the horizon. Allowing customers to unlock bigger and better perks at higher levels encourages them to engage more frequently so that they meet the points threshold to unlock a new tier.
#3 Offer that VIP feeling with exclusive access
Exclusive access is one of the most common approaches to keeping a loyal customer engaged.
With tiers you can offer your customers exclusive access to new products or seasonal sales.
You can create promotional campaigns to surprise your loyal customers with VIP rewards on the anniversary of being your customer.
#4 Show loyal customers they are valued with exclusive gifts
To encourage your at-risk customers to return to your store, surprise them with exclusive gifts or points on their birthday. This will show how much you value them and strengthen your relationship.
To encourage your regular customers to repeat purchases and spend more, offer exclusive gifts as they as they move up your loyalty program tiers.
#5 Host events and exclusive experiences
Customers are looking for an experience that makes them feel special. Entertainers such as Taylor Swift and Beyonce have executed this tactic to perfection.
Brand Fandom
In an earlier Magnet article we suggested brand fandom is about encouraging and giving consumers a chance to create a personality around a brand.
Using a strategy of exclusivity transforms the brand’s personality to something of value, and, at the very least, puts a damper on that FOMO.
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