Here’s An Incredible Sales Formula That Drives Loyalty

In-N-Out is an excellent example and the music sharing service Spotify has even benefited from it.

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We are all familiar with car sharing companies like Zipcar, but “Higher-end companies, like the Classic Car Club, founded in London in 1995, take [car sharing] to its logical extreme. For a hefty membership fee, the Classic Car Club gives members access to a “staggeringly stylish fleet of cars,” including Ferraris and Maseratis. In Manhattan, club members pay almost $11,000 for thirteen days of driving the club’s “high-end supercars.” This doesn’t sound like a bargain. But the cost of actually owning one of these cars is mind-boggling.” (Source: HBS Working Knowledge)

From airlines and travel deal sites to financial services and luxury automobiles, there is power in it. Organizations are finding creative ways to connect with customers using two key ideas: the principles of scarcity and exclusivity.

 

An Incredible Sales Formula

Knowing a product is in limited supply gets customers excited and increases their engagement with a brand without the need for short-term engagement tactics like deep discounts or flash sales.

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In an era where commerce is driven by flash sales, deep discounts and complex promotions, customers see mostly short-term wins in the form of cheaper prices. Unfortunately, the retailer loses in two ways: revenue, and a customer who no longer respects your full retail price. No deep bond is formed.

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In an era where commerce is driven by flash sales, deep discounts and complex promotions, customers see mostly short-term wins in the form of cheaper prices. Unfortunately, the retailer loses in two ways: revenue, and a customer who no longer respects your full retail price. No deep bond is formed.

But if you use a combination of engagement strategies that leverage scarcity or exclusivity, you can provide greater value to your customer without sacrificing your short- or long-term targets.

In-N-Out is an excellent example: Its most loyal customers know they can modify menu items just by asking for them in the correct, coded way — an informal perk honored (but not promoted or perpetuated) by the company.

Meanwhile, when Spotify launched its Spotify Free product it was in an invitation-only beta, which means you needed to have received an invitation token to access the service.

 

What You Need To Do Next

So, how do you find your own “classic car club” or animal-style burger?

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