The Membership Model: How It Sets Up Franchises For Success
Most people have been a member of a club or organization at some point in their lives. These clubs lend themselves to a feeling of community, a sense of belonging and even exclusivity. Whether it was Scouts, a college fraternity, a coffee club or a service organization, membership creates a common bond. Integration in a club may be voluntary, by invitation or it may require payment.
The same is true when this membership model is applied to business. There are several variations of this blueprint. Professional organizations may require an annual fee to be paid by all members. Country clubs charge members to pay a set price per year, and businesses like wholesale clubs expect customers to pay an annual fee for the opportunity to shop.
There are also businesses like MassageLuXe that, as a spa franchise, provide membership opportunities that not only supply a steady revenue stream for franchise owners but perks for our clients, like their choice of massage and facial amenities and discounts on products and waxing services and unlimited HydroLuXe sessions, our dry-water massage table. Our clients benefit from our services with some fringe benefits while we rely on a constant revenue stream.
Requiring members to pay these recurring fees to access services or privileges of the business is the essence of the membership model. The benefit of this business plan is that it provides a guaranteed stream of monthly income. Different membership levels may require distinct pricing tiers. At MassageLuXe, for example, we offer four tiers of membership, each providing specific services to best meet that client’s needs. This revenue source can greatly improve the overall financial outlook for business through:
- Recurring payments: The membership model provides a continuous cash flow. Rather than dropping one lump sum of money, spreading out payments is often better for the customer’s budget and provides a continual revenue stream for the business, guaranteeing monthly income and profit potential.
- Brand loyalty: Membership buy-in from a customer shows their preference for one business versus the competition. With that loyalty, they expect exclusive deals. Their monthly membership fees may provide preferential treatment or access to new promotions or events before the general public. Loyalty produces benefits for the business, too, including members getting special rates or services for recruiting friends and family to the business.
- Increased sales opportunities: This model lends itself to sales boosts, or the upsell. Having additional products or add-on services at a special rate intended only for members can increase revenue.
Developing and Maintaining Guaranteed Income
Businesses decide the best economic renewal of membership and get permission from the customer to charge a credit card or bank account on file to collect the agreed-upon subscription. Typically, the agreement also includes language stating that membership may be cancelled at any time based on acknowledged criteria. At MassageLuXe, our memberships are month-to-month. We encourage clients to enjoy the benefits of membership by allowing unused services to roll over to the next month.
Membership or subscription-based business models are a great strategy for certain kinds of business because it can guarantee income each month and helps keep the business alive and thriving. The challenge for businesses is increasing customer acquisition and retention. Not only does a business have to reach specified benchmarks of membership numbers, but those subscribers must be maintained to ensure monthly payments.
Many companies prefer the subscription-based revenue model over a one-time payment because it generates revenue in regular intervals, and it provides guaranteed income even during tough economic times. Recurring revenue is becoming an enviable model that applies to many sectors.
An Appealing Model
We see recurring revenue in industries like entertainment, where there are subscriptions to streaming services. Plus, millions of people pay for software, apps or cloud services that are automatically charged to a credit card monthly or annually.
MassageLuXe is Built for Success
In franchising there are any number of industries that utilize the efficiency of this recurring revenue model. It’s popular with meal delivery services, gyms and especially spas like MassageLuXe.
MassageLuXe is a pioneer in wellness membership franchises. We designed our membership pricing model to encourage ongoing client participation and visits, create steadier sales cycles, and reduce administration and billing time. For franchise owners, it means a better chance for success when opening a massage business. Not only do our franchisees gain the benefits of our recurring revenue model, but they partner with a recognized and respected franchise brand, enjoying the advantages of a business with growing consumer demand.
Massage is an $18 billion industry, as wellness has become a high priority for our customers who want to relieve stress and enjoy being pampered. But massage is now seen as complementary medicine and a must-have for many who are experiencing acute or chronic pain or stress.
As previously mentioned, massage is not the only offering on our menu of services; clients can enjoy facials and waxing as well. We believe a variety of services enhances the scope of revenue options. As a franchise owner, offering a greater selection in addition to upselling facial and massage products and service add-ons complement in-spa services for guests and create multiple revenue opportunities.
To learn more about spa franchise opportunities with MassageLuXe, scroll down to fill out the contact form below.