The high street is in trouble and the cycling industry is most definitely not immune to changing consumer habits. Businesses and brands need to constantly evolve; not just to attract new customers but more importantly, retain existing ones.
Membership schemes are not new and household names (Amazon for example) provide us with the ultimate guides to how to do it brilliantly. Get customers to a point at which they can’t live without you!
At Yellow Jersey we’ve been working hard with a number of cycling businesses to help them develop their membership schemes to shift focus from acquisition to retention. One such is example is how we’ve worked with premium cycling brand Rapha, to do just that.
From 2019, Rapha now offer all their RCC members anywhere in the world, access to a group insurance policy created and tailored by Yellow Jersey to best suit their audience which includes taxi reimbursement should you get stranded, gadget cover, physio, dental and fracture cover. And they get this at no additional cost demonstrating Rapha’s impressive commitment to their customer retention and loyalty.
You can read all about it in this article below:
Premium, global cycling clothing manufacturer, Rapha, has considerable brand loyalty driven in-part through the Rapha Cycling Club (RCC).
The RCC is a huge investment in its direct-to-consumer business model, which has been key to the company’s success. The RCC is how they develop and sustain deep relationships with their core clients.
The RCC launched in December 2014, with local chapters established around the world. It is reported that by 2015, the RCC had 600 paying members. By late 2016, membership had increased 7,600 members and today, it’s over at 12,500.
As per their website, in exchange for £135 a year, members receive:
- Regular special rides, as well as weekend escapes to further flung ride destinations
- Annual end of season rides and parties
- Exclusive Rapha club kit. Only available to members
- Priority access to select limited edition products
- Priority access to Rapha events worldwide including Prestige and A Day in Hell
- One complimentary daily coffee at all Rapha Clubhouses
- Half price express shipping on all rapha.cc orders
- Support at the world’s biggest sportives, including l’Etape du Tour and Mallorca 312
- Support and advice for anyone who’d like to race for the RCC
- RCC kit in Zwift
- High-end Canyon road bikes available for hire from all Clubhouses for just £15 a day
- Wahoo GPS devices available to borrow from all Clubhouses
- Access to exclusive collaboration products throughout the year. Including RCC x Paul Smith
- Regular chapter socials hosted by the local Rapha team, usually with a theme or a guest speaker
- Preferential rates with bike-shipping experts Sherpr makes travelling simpler
- And discounts with select RCC Partners
As you can see this is an extensive list of benefits however over and above this, Rapha has also created a ‘destination culture’, as well as the organised rides it offers, the free coffee (and high end coffee at that) at any clubhouse in the world gives members a reason to search out and visit its stores.
By charging members an annual fee, Rapha has a clear data point to evaluate their brand investment against, Rapha CEO Simon Mottram states:
“We have seen exceptional growth to date, with thousands of club members now cycling and socialising together, connecting with the sport through Rapha. This membership model is profitable and extremely successful for us, contributing to our growth and providing a strong community platform for the future of the brand and business.”
Driving customer loyalty with membership programmes
So in a period when year-on-year growth of online clothing sales fell 7.5%, down 4.3% on the five-year average (Drapers), successful brands like Rapha are increasing customer loyalty and ‘per customer spend’ by focusing on membership programmes.
The best example of this is Amazon Prime, according to Fortune, 63% of Amazon’s customers are Prime members, and in the past 12 months, the total subscriber base has grown by 38%. According to Amazon’s own study Amazon Prime subscribers spend £1,000 per year, nearly double the £534 per year the average non-member spends on its site.
Another example is Net-a-Porter who, according to WWD, invite their top-spending 2% of customers into its ‘Extremely Important Person’ (EIP) programme. The EIP customers account for over 40% of sales and the EIP’s shop roughly 12x more frequently than the average customer.
Rapha’s core customers get incentives such as free shipping, crash damage replacements and free alterations, which is a strong tool in acquiring more members into a customer loyalty programmes. Keeping members engaged after the first transaction or sign-up is often more challenging.
Different tiers for members is important to create the feeling of exclusivity to the customer, one advantage of a tiered membership is to ‘gamify’ the experience and allow customers to ‘level-up’.
Another thing Rapha do well and is a powerful way of keeping a loyal customer is to convince them to pay for membership, the incentive for members to shop with a different online retailer decreases, as the cost for the same premium services would be very high for just a single transaction.
While product discounts and rebates dominate the most-valued rewards for members, it is worth noting that, according to Forbes millennials place a higher value on service, experience and customer recognition. This is especially interesting for premium brands like Rapha aiming to use their loyalty programme to increase the brand value perception of the consumer
So what’s this got to do with insurance?
For Rapha we had watched the impressive roll out of their membership scheme with admiration of a job well done but we thought we could add value. We pitched the idea of including insurance in its membership package. We promoted the idea of a shift in focus from member acquisition to retention. Insurance has been an integral part of membership packages for sports clubs for decades and is a key driver for our own business.
Rapha had considered the idea of insurance before but other suppliers had not been able to understand the particular requirements of their customer base. At Yellow Jersey however we completely understand the needs of cyclists as we also have a direct to consumer brand targeting a similar demographic.
The problem of arranging insurance across multiple countries is a challenge we duly accepted and it required a great deal of skill and negotiating. We were in the privileged position of having our own ‘data warehouse’ and were able to provide comfort to insurers that this was a risk worth taking on. Following discussions with an ‘A rated’ insurer, we proposed a group insurance policy to cover Rapha’s membership worldwide for a range of personal accident benefits. Following close consultations with Rapha, we agreed on a range of covers that best suited their membership, including taxi reimbursement, gadget cover, physio, dental and fracture cover.
Driving customer experience for the most valued members requires having the same top-level standards across all customer touch points, from front-end to operations to last mile delivery, in store experience and so on. Naturally Rapha wanted to make sure that their insurance partner could deliver a product and service that increased the value of its membership programme to its customers.
To deliver this high level of service, we enlisted a multi-lingual claims company, and created an online portal to host 6 claims forms in each of the official Rapha languages. All RCC members, irrespective of country or nationality, now receive these benefits worldwide for the duration of their membership.
Kudos to Rapha for investing in its membership programme and increasing the amount they are spending per customer to really deliver something special.
Check out the RCC RIDER INSURANCE on the Rapha website.