Welcome to the Juice, Episode 11!

We’re digging into the world of customer service as it relates to membership model businesses. As 3 in 4 subscription based businesses plan to raise prices in 2024, it’s important that they deliver proportional (or more) value to keep customers satisfied - especially given recent inflation in consumer goods.

Stay ahead of the curve with this roundup, including special insights from the Head of Product and Technology at
Fabletics.

Here’s your briefing:

CX INSPIRATION

Paid loyalty programs vs. free loyalty programs

When it comes to memberships, paid membership can drive a higher customer value. McKinsey found that members of paid loyalty programs are 60% more likely to spend more on the brand after subscribing, whereas for free loyalty programs, consumers are just 30% more likely to spend more.

AI speeds up service for members

AirHelp, a membership model service that helps people get compensation for flight delays or cancellations, used AI to improve their customer service. It sped up response time 65% - which is key for these members who are reaching out with a time-sensitive need during travel disruptions.

If your customers need answers fast because your service depends on it, AI implementation is a no brainer. AI’s top benefit from our 2024 AI Agent & Customer Service Index Report is 24/7 availability.

Membership model fintech uses AI to solve up to 89% of requests

Consumers take their money seriously and have high standards for their banking services. Dave is a financial technology company operating on a flat membership fee model. It integrated a generative AI customer service assistant, using it to resolve customer service issues and free up agent time to take on more nuanced requests. This enables Dave to deliver the personalized service that members seek.

Banks, usually slowest to implement new tech, are already getting into AI customer service. If you haven’t, you’re behind.

CX SPOTLIGHT

For businesses that operate using a membership model, customer loyalty is a key driving force behind their success. Membership programs create a sense of exclusivity. They provide members with perks and encourage repeat purchases (as evidenced by the McKinsey data above). Their members are less likely to patronize competitors. This builds a long-term commitment to the brand.

Whether it’s warehouse club (like Costco, which has the most loyal customers), a subscription box, gym, or country club, membership customers are highly engaged. For brands, the pressure is on to deliver exceptional customer service. Members expect an experience that reflects their loyalty. Failure to meet these expectations can erode trust, leading to customer dissatisfaction and possible churn.

How membership brands can facilitate top-notch customer service

There’s no new secret sauce. It’s all the same things you already know - anticipating needs, resolving issues efficiently, empathetic support, personalized experiences, and the like. That’s why it’s ever more important for membership brands to build a solid customer service infrastructure, with the tools (like AI agents) that can support how and when customers want to communicate.

In addition, consumers are coming to want proactive and relevant customer experiences. To pull this off, you’ll need your data in one customer CRM - not siloed in different systems.

INTERVIEW INSIGHTS

Membership models and subscription boxes are ubiquitous today. 10 years ago, however, the concept was new for DTC brands, with brands like Fabletics to credit for leading the way. Last week I had the chance to speak with Melanie Cummings, Head of Product and Technology and we dug into what customer service and its related tech looks like for a membership model business.

Melanie reiterated the importance of getting the customer service right for membership based businesses.

The customer is, “investing in us, so to speak, in the sense that you're opting into the membership. You're choosing each month if you want to get credit with us or not. You're coming to the site or the mobile app or the store to check out our inventory… if you're not listening to the customer, it's going to present a lot more tone deaf than if it's somebody who is just choosing to purchase with us once in a while.”

She noted as well that customers are savvy and paying attention, and that puts the pressure on for higher levels of service.

Consumers, “hear trends about AI, they hear trends about personalization… they know what we could do for them and they're looking at it as a choice if we don't.”

So, how does
Fabletics gather feedback from customers to shape the experiences it delivers?

Quarterly checkpoint surveys go out to all members, and it hosts in-person events to get rich qualitative information - like hearing from the passionate customer who shared she
only wants to be served up information about leggings with pockets (which my team tells me is #relatable).

Check out the full interview here.

#EndBadService

Looking for the tools to help you deliver the top-notch experience your customers are craving? The future of customer service is here. Kustomer is relaunching as the first AI-native customer service platform on October 30th. Don’t know what AI-native means? Don’t worry, we’ll show you.

Register now and join hundreds of attendees of the #EndBadService movement.