Many brands default to points-based rewards systems that often fail to drive meaningful retention or revenue growth. Here's why they're failing:
Points-based loyalty programs reward for routine behaviors and fail to change behavior or create true loyalty.
Traditional programs might attract participation, but don't drive measurable improvements in retention, incremental revenue, or margin.
Points are often tied to confusing and complicated value systems. There's a lack of transparency.
Today's programs are all the same. There's nothing special and unique to the brand.
This is why paid memberships are taking over: they drive predictable revenue, create immediate value, and cultivate brand loyalty.
FINANCIAL IMPACT
The Business Case for Paid Memberships
Unlike traditional loyalty programs, paid memberships generate significant financial benefits that directly impact your bottom line.
Predictable, High-Margin Revenue
Unlike one-off discounts or points redemptions, a paid membership program generates recurring revenue that offsets CAC.
Financial breakdown example:
$10/month × 50,000 members = $6M in annual recurring revenue
"Having our monthly operating expenses and fixed costs covered by our ARR now is such a relief for the company."
-Bambu Earth
Increased AOV and Purchase Frequency
Paid members feel invested and are 2-3x more likely to repurchase compared to non-members.
Average Purchase Frequency
+125%
Average Order Value
+18%
“Improvement in repeat customer metrics was precisely what this channel needed to maintain profitability and contribute to the health of the business.”
-Fly by Jing
Differentiation in a Competitive Market
Most brands offer some version of points or discounts—which creates zero differentiation.
Exclusive content access (workshops, tutorials)
Early product drops & limited editions
Concierge-style customer support
VIP events and experiences
"People love the exclusivity of being members more so than just gaining points."
-Sunday Swagger
How Paid Memberships Outperform Traditional Loyalty
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