Overview: What is a member offer?
Member Offers are incentives sent to existing members to retain and deepen customer relationships. They give customers a chance to try a higher value plan at a reduced price in the short term, with the goal of moving that customer onto the new plan at typical pricing for the long term.
The Rinsed team analyzed over 200,000 member offers to identify best practices and performance benchmarks, discovering that customers who accepted member offers generated 30% more revenue over the following six months compared to peers who did not accept one.
Why Member Offers Work
Customers love these plans since they get to try an enhanced package for no immediate cost. If done right, it can feel like a reward for brand loyalty. For the wash, it’s a chance to deepen the relationship with a customer, ultimately boosting LTV.
The data proves this strategy. Comparing members that accepted offers in July 2024 to a peer group of non-accepting members at the same price point, the acceptors had 37% better 6 month cashflow, driven by a six-month retention improvement from ~57% to ~71%, and an average price increase from $33 to $40.
Which Member Offers Work Best?
The best performing offers are plans that are one tier above what a customer is currently paying with a trial period of 30 or 60 days.
The key success metrics of member offers are:
- Redemption Rate: of the customers who received an offer, what percentage accepted?
- Adoption Rate: of the customers who redeemed an offer, what percentage adopted the higher priced plan?
Final Recommendations
- Offer a Mid-tier plan for the price of a Basic plan over a 30 day period. The high implied discount will drive a strong redemption rate, and the short term nature of the plan combines exposure to greater wash value without the attachment to the lower price.
- Offer a High tier/Ultimate plan at the price of a Mid-tier plan for a 60 day period. The longer term discount will appeal to mature, existing customers that want more time to understand the value proposition of a high tier/ultimate plan.
Analysis detail:
Term definitions:
- Days: Length of promotion period until customer is required to either opt in to the higher priced plan or reject the offer and return to their current plan
- Upsell Strategy: Description of the offered plan and targeted audience
- Implied Price Discount: The average percentage discount observed for that upsell strategy
- Redemption Rate: The percentage of messaged customers that accept the promotion offer
- Adoption Rate: The percentage of redeemed customers that ultimately adoopt the higher priced plan without opting out
- Conversion Rate: Redemption Rate * Adoption Rat
