Economic Anxiety Ahead: Membership Marketing Strategies for Engaging Cash-Strapped Consumers

They say the U.S. economy is growing strong. They say inflation is nearly back to normal. They say consumer spending is as strong as ever. They say unemployment is at a 54-year low.

The numbers certainly support the sunny picture “they” are painting. However, if you ask the average Joe or Jane on the street (AKA, your target audience), you’re more likely to hear stories of massive grocery bills, impossible housing prices, fear of layoffs, mounting credit card debt, dwindling savings and rising anxiety about finances permeating their day-to-day thoughts. In fact, 76% of Americans report that while economist say things are getting better, they just aren’t feeling it where they live.

People nationwide are turning their focus to financial security, and it’s is changing the way they interact with businesses and organizations. Therefore, it requires a shift in the way businesses market to their audiences and how membership organizations market to their members.

Cost of Living Shifts Financial Focus to “Wallet Wellness”

To understand today’s consumer, we need to understand their financial situation, which has become the number one concern in 2024.

Financial wellness has been a big deal for a long time, especially when it comes to long-term goals like home ownership and retirement. Increasingly, however, the average American has had to shelve long-term goals and focus on today. With the majority of Americans living paycheck-to-paycheck they’re fighting just to achieve “wallet wellness” -- having enough to pay for housing, food, transportation and all the other day-to-day necessities. The number one thing keeping people up at night is worrying about paying their monthly expenses.

How is this even possible?

The fact is, sharp increases in cost-of-living expenses have outpaced salaries over the last few years. This erosion of buying power means that even mid- to upper-division salaries often fall short of monthly expenses.

First of all, the cost to own a home is higher than ever. Many homeowners owe a third of their take-home pay to the mortgage company every month. On top of that, expenses like maintenance, repairs, insurance, taxes and utilities add up to $17,500 a year on average.

That’s if they’re lucky enough to own a home already. Right now, both house prices and mortgage rates are so high that most Americans are priced out of the market. One study found Americans with a median household income fall far short of affording a median priced home in 99% of the nation’s housing markets. Morale is especially low among millennials and gen z (two generations disproportionately burdened by student debt) many of whom believe they will never own a home.

Unfortunately, renting is not the solution it once was. For the first time in history, the typical U.S. tenant is officially “rent burdened,” meaning rent takes up 30%, 40% (or even more for some metro areas) of one’s salary. People are finding themselves with less and less of their, often, low to moderate incomes left to cover everything else needed to survive.

Should we talk about groceries next? Historically, food inflation was a fairly steady 2% increase per year. However, the madness of the pandemic years and the ensuing supply chain issues caused grocery prices to rise 11% in 2022 alone and an additional 6% in 2023. The expected inflation rate of 2.9% for 2024 might sound reasonable by comparison; however, you have to remember that this year’s increases build upon last year’s. When you add it all up, grocery prices are 25% higher than they were only three years ago. As a result, it will take a while yet before the sticker shock eases from public sentiment.

With that in mind, it’s easier to see how Americans went from record high savings to record high debt in only 2 years.

How Wallet Wellness Impacts Memberships

A person’s perception of the economy and their own personal financial wellness can have a profound impact on their willingness (and ability) to stay loyal to the companies they love. As we’ve shown above, many are feeling increasingly hopeless. In fact, 37% of Americans (52% of renters) say their financial situation is downright poor right now.

Could this be part of the reason why 25% of Americans cancelled 3 or more entertainment streaming services in the last 2 years? Could it be why U.S. union membership hit record lows in 2023? Could it be why the majority of membership associations stopped growing in 2020 and why over half still saw no growth (or declining membership) in 2023? There has even been a 70% surge in declined subscription billings, which is when a recurring charge is declined because there’s not enough money available in the linked account. 

Certainly, people are looking to change their spending habits in order to achieve wallet wellness. One study showed that 77% of consumers plan to spend less on non-essential products and services this year as a direct result of the current economy, and 21% are even trying to reduce their spending on essentials. Perhaps even more tellingly, they’re more willing than ever to abandon their regular brands and try something different to save money.

Making Your Membership Matter: How to Stay Relevant in Hard Times

Member acquisition and retention is always a challenge, but it’s even more so when your audience is worried about paying the next bill. The consumer of today is more price sensitive, more value-conscious, quicker to blame and slower to trust. Has your business already felt the pinch?

When people are worried about the future, they’re pickier about where they spend their precious discretionary dollars. Now, more than ever, businesses have to deliver undeniable value. They need to show empathy and be willing to adapt to the current environment. The good news is, many businesses are able to thrive and grow, even when times are tough. Here are 5 strategies to get started:

Craft Empathetic Messaging

Empathy is the number one ingredient needed to communicate during any crisis. It should permeate through every interaction you audience has with your business, be that face-to-face, through outgoing emails, through customer service, via social media, etc.

Empathy in business communication could come in many forms. It could look like taking a member-centric, rather than a sales-centric approach to marketing your business. It could look like empowering customer service reps to address dissatisfaction and offer personalized solutions. It could look like doubling down on social responsibility and ethical practices. It could look like actively engaging with your online community to foster a supportive environment. It could look like proactively disclosing changes and explaining the reasons behind them.

Businesses, too, are affected by inflation. Many have to make difficult decisions like raising prices and dues, cutting back on products or benefits and/or laying off staff. Unfortunately, these actions quickly erode member trust during a time when they have little trust to spare.

People are more likely than ever to blame inflation on corporate greed, going so far as to call it “greedflation.” In droves, they’re turning against companies that treat their employees poorly. Therefore, businesses need to be very transparent when delivering bad news. Fortunately, customers are more likely to show empathy and forgiveness toward businesses that show them empathy first.

Offer Flexible Membership Options

When times are tough and budgets are tight, some consumers have no choice but to take an “everything must go” approach to their subscriptions and discretionary spending. Therefore, businesses with an all-or-nothing approach to membership will likely see more and more members choose “nothing.” There are other options to explore that give members the flexibility to stay within their budget without saying goodbye, maybe forever.

Perhaps your members would appreciate the option to drop down to a more affordable membership tier (with limited benefits) for a time? Or, maybe some would choose to pause membership for a short time until it fits in the budget again if given the chance. Flexibility allows businesses to continue a positive relationship with their audiences, giving consumers a good reason to return as soon as they are able.

Another way to add flexibility is through a loyalty program. History has shown us that people flock to loyalty programs during economic downturns, making them one of the best ways to engage your audience when times are tough.

For one thing, consumers are actively seeking the savings and rewards they can earn for remaining loyal. Also, you can deliver a personalized experience based on individual preferences. There are many ways you show empathy to your most loyal members by extending the expiration dates to redeem rewards or gifting them bonus offers “surprise and delight” style.

Add Value. Real Value.

Giving members a way to pay less is not the only strategy for showing empathy to your audience. You can also pump up the value with added benefits. Doing so not only adds to your membership’s wow factor, it can also add variety to your messaging giving you an excellent reason to reach out more often. Our favorite solution every year, but especially in times where budgets are tight, is member discount programs.

The best private discount programs help members stretch the buying power of every single precious dollar. They do this by providing steep discounts where people shop on a regular basis: right in their own neighborhoods. This way, members can shave a few dollars off each trip to restaurants, retailers, auto shops, hair salons, etc. and watch as the savings stack up.

In just a few purchases, you audience can feel a significant improvement in their wallet wellness, and they’ll have you to thank for it.

For even greater impact, partner with a discount program provider that offers incredible travel deals. For example, Access Development runs its own private label travel platform with prices typically 10-50% better than popular booking engines like Travelocity and Booking.com. The savings potential on flights, hotel stays, theme park tickets and car rentals can reach hundreds of dollars, bringing dream vacations that might otherwise be unaffordable into the realm of possibility.

However, before partnering with a free discount program, we caution you to thoroughly vet the provider. Free discount programs are often filled with low-value, online-only, and even exploitative offers. Programs like these are worse than useless because they can actually erode the trust of your members.

In a time when people are putting every purchase and subscription under the microscope, wouldn’t it be nice to prove that members could actually lose money by cancelling with you?

Showcase Your Membership as a Solution

During the recent COVID-19 crisis, businesses studied how consumers felt about advertising during a time of worldwide crisis. According to results, 74% of consumers want to hear from helpful brands about how they can assist in daily life. On the other hand, nearly as many consumers are on the lookout for those who would opportunistically for their own gain. It’s a fine line to walk, but most experts agree, the right message can help a business grow, even during times when others flounder.

What is the right message? Your first goal with advertising should be to prove value with authenticity, something consumers place extra emphasis on during times of economic uncertainty. Ideally, you’ll already be in tune with your audience because hard times often cause people to reassess what they value most. Is there a challenge they’re facing? Is there a goal they’re working toward?

When you position your product or service as a solution to a problem, a road to personal development, and/or as the best (or only) of its kind, you’ll be addressing their needs directly and offering tangible benefits.  

One more key membership marketing strategy that helps relieve cost anxiety is education. Help your audience learn every way they can maximize their investment into your product or service so they’re getting the most out of it.

No matter your message, studies show it is a good idea to continue on with your established marketing personality (just inject some extra empathy). Lightheartedness, confidence, and even humor are appreciated as long as it’s done with tact and is mindful of your audience’s struggles.

Many brands react to crisis with a period of marketing silence. Perhaps you too feel like this is the right response because you don’t know what to say, you want to respect your audience or you need to cut back on expenses.

However, a study of the most recent three economic recessions revealed a winning strategy. Businesses that emerged on top from the crisis found the right balance: they continued (or even increased) investing in marketing and innovation, and saved money elsewhere by improving operational efficiency. Also, these businesses were dialed in on their audiences’ changing needs and focused their marketing efforts there.

Cultivate Connection by Building a Strong Community

Financial and economic hardship often cause feelings of loneliness and distress. One way your business can be a solution to this increasing problem is by cultivating a strong online community.

A brand community can bring your members together to bond over their shared experience and shared interests. Many studies have shown how emotional connection with a brand builds the strongest forms of loyalty. Lively communities are one way to turn customers into loyal members, and members into lifelong advocates.

Social media, video content & learning platforms, business collaboration, e-commerce sites and more give you opportunities to interact positively with your audience and get feedback in real time about what your members want and need. Perhaps even more importantly, your members get a chance to influence each other and draw their friends in too.

Consumers of today are savvy shoppers. They want the most value for their money, and they’re increasingly willing to change brands (even ones they’ve been loyal to for years) in order to get better value. Even more, their method of determining value (and therefore which businesses to frequent) is evolving too. More and more, consumers are turning to user-generated content rather than company-created marketing to guide their purchase decisions. Having a robust digital presence gives you more chances to solicit reviews and position positive feedback front and center where your audience is sure to see. 

Value-Added Benefits: A Compelling Addition to Any Pitch

Membership marketing is hard enough when you're competing against other products and services. But what about when people are choosing between continuing on with their favorite brands, or replacing their kid's worn out shoes?

For members with tight budgets (and there's a lot more of them today), minor imperfections can quickly become major reasons to churn. Let’s face it, some products and services will always lean more toward wants than needs. Some subscriptions face unprecedented levels of competition. Some memberships offer great value, but struggle to keep excitement high when advertising the same message over and over (and over) again.

When times are tough, money-saving discounts tend to capture people’s attention fast. Offering a value-added member discount program to your offerings is one way to stand out from the noise. This is especially true if you can demonstrate that your members can use the program to save the entire cost (or more) of membership with just a few uses. The best discount programs feature high-value deals at on everyday necessities at the local places they frequent anyway.

Learn how to spot a quality discount program in this Ultimate Buyer’s Guide for Turnkey Discount Programs.