Typically, organizations partner with a discount program provider, but what about creating one yourself? This article discusses critical factors to help you decide if a do-it-yourself discount program is right for you. About a 4 minute read.
I don’t know about you, but when I see something cool someone created online, my first thought is “I could make that.”
A few times, I’ve succeeded in making my own version and even enjoyed the challenge of creating with my own hands. Some of my favorite things I own are things I’ve made.
More often though, I’ve found the effort not worth my while.
Sometimes I discover that the cost of materials, tools and my time will add up to make my DIY cost more than simply purchasing a finished product.
Sometimes my estimate of how long it will take is waaaaay off, which usually means I never get around to finishing it when life gets busy.
Sometimes I’ve find that my own skills are so lacking that the final product is only worthy of a #pinterestfail hashtag and the ironical label “Nailed it!”
And sometimes I’ve just found that I don’t enjoy a task. At all.
At least all this trial and error has given me a better sense of what DIYs to embark on, and what tasks are better left to professionals.
Organization leaders are often faced with the same dilemma. Do you pay the cost to purchase something that will benefit members? Or can you "do it yourself" in a bigger, better and/or cheaper fashion?
This dilemma is especially true when deciding to offer discounts as an exclusive member benefit.No matter where it comes from, a well done discount program is a proven way to engage your members. That’s because when a member benefit is used often, it helps members form an emotional attachment to the providing organization. And when you consider that up to 90% of the population uses coupons, you’ll understand why people respond so positively to discount benefits.
And love isn’t the only thing you’ll get in return from happy members. All this emotional investment will show on your bottom line. Engaged members are more likely to renew year after year, and purchase other organization offerings. For example, this study by Gallup showed that people with a high engagement score achieved 50% higher revenue and 34% higher profitability. In short, investing in your members means they’ll invest in you.
Here are some questions to ask yourself before you start. This will give you an idea of what to expect. Then, you can decide whether you already set up to succeed… or if you’re in danger of running into any common DIY pitfalls.
The first major cost of building a discount program comes in the form of time. Your time is valuable so it’s important to calculate the hours you spend as part of your investment.
First of all, it takes time to build relationships with merchant partners and negotiate better-than-average deals. You probably already expected that, but your job won’t end there.
You’ll also be responsible for encouraging members to use their deals. Regular usage is a critical if you want a good return.
And even after you’ve built a good base of discounts, you’ll have to maintain those relationships going forward. Ideally, this will simply mean renewing the deal each year. But it could also involve renegotiating with new management, removing when companies go out of business, etc. Many times this means intervening on behalf of members who have trouble redeeming.
This leads us to the second major cost of running a discount program on your own: technology upgrades. In order to keep track of all your merchant relationships, you’ll want a database to store those all-important contracts, as well as a detailed accounting of your interactions.
Beyond that, our tech-savvy populace loves a seamless website and mobile app experience. So you may need to overhaul your technology in order to provide acceptable levels of security to merchants and usability to members.
Here are some signs you’ll likely enjoy a good return on investment when building your own discount program:
As with all investments, the less you can spend for desired results the better, right? Just don’t forget the “desired results” part. Unfortunately there are a lot of discount programs out there promising great value for free, or even to help you make money off your membership through back-end revenue deals.
This may sound great on the surface, but these programs are full of aggregated, low-value and online-only deals. At best they are uninteresting to your members. At worst, they can hurt your reputation when they fail to deliver on promised value. If the value is so low that members are not using your program, you’ve got no return. Even if you put in zero investment to get zero return, mortgaging your audience’s trust is not a good ROI.
The best discount programs offer an ongoing partnership of support. This might include any of the following: merchant compliance, customer service, member marketing, usage contests, internet security, and more.
And if you’re worried that a prepackaged program won’t come with enough industry specific discounts that will be of special interest to your members, consider this. Many partners are willing to solicit deals on your behalf to merchants of your request. Or, they can integrate any deals that you’ve already negotiated together for a seamless benefit.
For example, a rapidly growing sports organization recently partnered with us here at Access. Leaders had already built an impressive offering of deep discounts that appealed to avid players of the sport. However, their member base was growing to include casual players too.
They wanted a broader range of discounts that would appeal to a more diverse group of people. They knew they couldn’t build what they were envisioning, as scaling up their efforts was beyond their resources. Together we designed a program that included both their industry specific discounts and our everyday savings. You can read all about it in this case study.
Here are some signs a private-label discount program is likely to yield a good return on investment:
A quality discount program takes a lot of work to build and maintain. And only you can determine if you have the time, tools, skills, and desire to build your own successful discount program. But with realistic goals and some determination, you can provide your members with quality discounts they can enjoy for years.
Or, if you want a ready-to-launch solution without the work, consider a white label discount program from Access Development as an option. With over 30 years experience building membership discount benefits, Access has the largest private network of everyday discounts at top rated restaurants, shops, hotels and more.
Call us at 800-840-0032 or visit www.accessdevelopment.com to learn more.
Related articles:
20 Keys to Unlocking an Effective Member Discount Program
Why "Private" is So Important to Discount Programs
The Relationship Between Member Benefits, Discount Programs and Successful Associations