The high street is in trouble, and the cycling industry is not immune to changing consumer habits. Businesses and brands need to constantly evolve, not just to attract new customers but, more importantly, to retain existing ones.
Membership schemes are not new; household names (Amazon, for example) provide us with the ultimate guides to do it brilliantly. Get customers to a point at which they can’t live without you!
At Yellow Jersey, we’ve worked hard with several cycling businesses to help them develop membership schemes to shift focus from acquisition to retention. One example is how we’ve worked with premium cycling brand Rapha to do just that.
From 2019, Rapha now offers 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, including taxi reimbursement should members get stranded, gadget cover, physio, dental and fracture cover. And they get this at no additional cost demonstrating Rapha’s impressive commitment to 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 partly by the Rapha Cycling Club (RCC).
The RCC is a huge investment in its direct-to-consumer business model, which has been key to its 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 worldwide. It is reported that by 2015, the RCC had 600 paying members. By late 2016, membership had increased to 7,600 members and today, it’s over at 24,000.
As per the Rapha Benefits page on their website, in exchange for £70 a year, members receive:
- A year-long membership to the Rapha Cycling Club, based around our global network of Clubhouses
- An active cycling community of members who share a common love of the sport
- Includes a welcome Member’s Pack with an exclusive RCC cotton cap designed by Spanish illustrator Maria Medem, inspired by the ‘free as a bird’ feeling riding gives you.
- Access to a wide array of rides, events and experiences available just to members
- Be the first to hear about our most anticipated product releases and kit collaborations.
- Organised club rides from our 23 Clubhouse and Chapter locations
- Exclusive riding trips and access to fully-supported RCC Summits, along with priority access to key Rapha events
- Subsidised members-only Club kit and early access to special editions and brand collaborations
- Clubhouse perks with half-price coffee and subsidised bike hire
- In addition to half-price coffee at all of our Clubhouses, members enjoy discounted coffee at a global network of partner cafes. These meet-up spots offer another destination to connect with other members and start or finish group rides.
- Members-only app to see what’s on at Rapha, join rides and connect with fellow members.
- Exclusive Rapha club kit. Only available to members
- Yellow Jersey Insurance. Now included with your Rapha Cycling Club membership, personal accident cover will help get you cycling again in the event of a crash or serious mechanical failure. Making a claim is simple with our insurance partner, Yellow Jersey.
- RCC kit in Zwift and join our weekly club rides on Tuesday evenings and instantly recognise fellow members in Zwift’s digital world by wearing the Rapha Cycling Club kit in the game.
- 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
- 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 half-price coffee (and high-end coffee at that) at any clubhouse in the world gives members a reason to search out and visit its stores when they travel abroad.
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 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 which, according to WWD, invites their top-spending 2% of customers into its ‘Extremely Important Person’ (EIP) programme. The EIP customers account for over 40% of sales and the EIPs shop roughly 12x more frequently than the average customer.
Rapha’s core customers get incentives such as half-price express shipping, crash damage replacements and free alterations, which is a strong tool in acquiring more members into customer loyalty programmes. Keeping members engaged after the first transaction or sign-up is often more challenging.
Different tiers for members are 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 does well and is a powerful way of keeping loyal customers is to convince them to pay for a 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 rollout of their membership scheme with admiration for 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, requiring a great deal of skill and negotiating. We were in the privileged position of having our own ‘data warehouse’ and could assure 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 touchpoints, from front-end to operations to last-mile delivery, in-store experience and so on. Naturally, Rapha wanted to ensure that its 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. We created an online portal to host six claims forms in each official Rapha language. 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 spend per customer to deliver something special.
Check out the RCC RIDER INSURANCE on the Rapha website.